What you actually gain after accounting for USD purchasing power loss
What is the S&P 500? — A stock market index tracking 500 of the largest US public companies, representing ~80% of total US market capitalization.
| Year | S&P 500Total Return | InflationCPI YoY | Real ReturnAdjusted | $1 ValuePurchasing Power | $10KNominal | $10KReal |
|---|---|---|---|---|---|---|
| 2005 | +4.91% | 3.4% | +1.46% | $1.000 | $10,491 | $10,146 |
| 2006 | +15.79% | 2.5% | +12.97% | $0.976 | $12,147 | $11,462 |
| 2007 | +5.49% | 4.1% | +1.33% | $0.937 | $12,814 | $11,615 |
| 2008 | -37.00% | 0.1% | -37.07% | $0.936 | $8,073 | $7,309 |
| 2009 | +26.46% | 2.7% | +23.12% | $0.911 | $10,210 | $8,999 |
| 2010 | +15.06% | 1.5% | +13.36% | $0.898 | $11,748 | $10,201 |
| 2011 | +2.11% | 3.0% | -0.86% | $0.872 | $11,996 | $10,113 |
| 2012 | +16.00% | 1.7% | +14.06% | $0.857 | $13,916 | $11,535 |
| 2013 | +32.39% | 1.5% | +30.43% | $0.845 | $18,424 | $15,045 |
| 2014 | +13.69% | 0.8% | +12.78% | $0.838 | $20,946 | $16,968 |
| 2015 | +1.38% | 0.7% | +0.67% | $0.832 | $21,235 | $17,082 |
| 2016 | +11.96% | 2.1% | +9.66% | $0.815 | $23,775 | $18,732 |
| 2017 | +21.83% | 2.1% | +19.33% | $0.798 | $28,964 | $22,353 |
| 2018 | -4.38% | 1.9% | -6.17% | $0.783 | $27,695 | $20,974 |
| 2019 | +31.49% | 2.3% | +28.53% | $0.766 | $36,416 | $26,957 |
| 2020 | +18.40% | 1.4% | +16.77% | $0.755 | $43,117 | $31,478 |
| 2021 | +28.71% | 7.0% | +20.29% | $0.706 | $55,492 | $37,865 |
| 2022 | -18.11% | 6.5% | -23.11% | $0.663 | $45,439 | $29,115 |
| 2023 | +26.29% | 3.4% | +22.13% | $0.641 | $57,385 | $35,560 |
| 2024 | +25.02% | 2.9% | +21.50% | $0.623 | $71,736 | $43,759 |
| 2025 | +17.88% | 2.7% | +14.78% | $0.607 | $84,563 | $50,227 |
| 21-Year Total | +746% | 64.7% | +402% | — | $84,563 | $50,227 |
| CAGR | +10.7% | 2.4% | +8.0% | — | — | — |
The percentage your investment grows on paper. If you invested $100 and it became $110, that's a 10% nominal return.
How much prices increased. If inflation is 3%, something that cost $100 last year now costs $103. Your money buys less.
What you actually gained after inflation. If your investment grew 10% but prices rose 3%, your real gain is about 7%.
What $1 from 2005 can buy today. At $0.62, a dollar from 2005 only buys 62 cents worth of stuff now.
$10,000 invested in 2005 → $84,563 today
But a coffee that cost $2 in 2005 now costs $3.30. Everything's more expensive.
Your $84,563 buys what $50,227 would've bought back then. Still a 5x gain in real terms - just not 8x.