It is used to determine the actual worth of
an investment after adjusting for inflation rate.
Not exact matches
It's long been established that, over the long term and
after adjusting for inflation, housing produces almost no return on
investment.
Assume their salaries grow each year by 2 % in real terms (
after adjusting for inflation), they save 10 % of their annual salaries, and their
investments earn a 3 % real annual return.
Adding 1.1 % to 1.5 % per year (real) dividend growth, the
Investment Return would rise to 10.1 % to 11.3 % per year (annualized)
after adjusting for inflation.
My total
investment at the end of Year 15 was $ 16000 (
after adjusting for inflation).
After adjusting for taxes and
inflation, most of these
investments won't give you better returns and your wealth may get eroded in long term.
The
Investment Return of the overall portfolio was lowered slightly via TIPS in order to maintain a steady income stream (
after adjusting for inflation).
The reason
for the loss is simple: TIPS have a lower
Investment Return (2 % per year
after adjusting for inflation, the same as their interest rate).
At Year 10, your high yielding
investments will still provide 6 % to 8 % per year
after adjusting for inflation.
Assuming an
inflation rate of 3 % (historically typical), your fast growing
investment yields are likely to double in terms of the original amount invested (
after adjusting for inflation).
You'd reiterate what they want their
investment portfolio (s) to do
for them (e.g., provide
after - tax
inflation -
adjusted retirement income).
Total Return (approximately, at Year 10,
after adjusting for inflation) = Investment Return + Speculative Return — I
inflation) =
Investment Return + Speculative Return —
InflationInflation.