Real Asset Return Calculator

Real assets such as property, infrastructure, commodities, and gold are often described as an inflation hedge because, historically, they have tended to maintain their real (inflation-adjusted) value. 100k in real assets returning 4% real over 20 years with 3% inflation: nominal return ~7.12%, ending value 395k nominal but 219k real - real value approximately doubled.

Real return = (1 + nominal return) / (1 + inflation) - 1. 10k at 7% nominal during 4% inflation: real return = 1.07/1.04 - 1 = 2.88%. This is lower than the headline 7%. Real assets are often discussed as an inflation hedge because, historically, their value has tended to track or outpace inflation during periods when fixed-rate bonds and cash lose purchasing power.

Real asset categories include property and REITs, infrastructure (toll roads, utilities), commodities such as gold and oil, inflation-linked government bonds, and farmland. Historical real returns vary widely by category and source: property and REITs have often been estimated at roughly 1-2% real long-term, infrastructure around 3-5%, and farmland around 4-6%, while commodities such as gold have tended to act as an inflation hedge with little real return over long periods. Real assets are often less liquid than stocks or bonds and have historically lagged during periods of falling inflation, which is one reason they commonly appear as a smaller part of a diversified portfolio rather than a core holding.

Quick example

With initial investment of 100,000 and real annual return of 4% (plus annual inflation of 3% and investment period of 20 years), the result is 219,112.31. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Initial Investment, Real Annual Return %, Annual Inflation %, and Investment Period. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

What's happening under the hood

Real and nominal compound returns; inflation drag = nominal FV - real FV. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Where this fits in planning

This is a "what-if" tool, not a forecast. It helps to test ideas: what happens to the result as the Initial Investment or the Real Annual Return % changes. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.