← Back to the glossary
Glossary entry · Money in motion
Return
Definition
The gain or loss on an investment over a period, usually expressed as an annual percentage. "Nominal return" ignores inflation; "real return" subtracts it. The number to actually care about is the real, after-fee return.
Example
A fund up 8% in a year with 3% inflation has a nominal return of 8% but a real return of ≈5%.
Related
Money in motion
Compound interest
Interest paid not just on what you put in, but on the interest you have already earned.
Read →Inflation
The rate at which the general price of things rises. Same money, less purchasing power.
Read →Interest rate
The percentage something pays — or costs — per year.
Read →Time horizon
How many years until you actually need the money. Changes everything else.
Read →