{"id":11202,"date":"2026-03-02T10:13:32","date_gmt":"2026-03-02T10:13:32","guid":{"rendered":"https:\/\/vitafinance.webcase.me\/?p=11202"},"modified":"2026-03-02T10:22:37","modified_gmt":"2026-03-02T10:22:37","slug":"nominal-vs-real-return-explained-simply-how-to-see-what-your-investment-really-earns","status":"publish","type":"post","link":"https:\/\/vitafinance.webcase.me\/en\/nominal-vs-real-return-explained-simply-how-to-see-what-your-investment-really-earns\/","title":{"rendered":"Nominal vs Real Return Explained Simply: How to See What Your Investment Really Earns"},"content":{"rendered":"\t\t
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Anyone who invests money usually first looks at the stated return. Whether savings account, bonds, equities or ETFs, percentages are advertised everywhere. But not every return shows how strongly your wealth is actually growing.<\/p>

The key difference lies between nominal and real return. While the nominal return shows the pure increase in value, the real return additionally takes inflation into account. Especially in Switzerland, with phases of rising inflation, this difference can be significant.<\/p>

In this guide, you will learn in a simple and understandable way what nominal and real return mean, how to calculate them and why real return is crucial for your long term wealth building.<\/p>

What is the nominal return<\/strong><\/h2>

The nominal return is the stated interest rate or increase in value of an investment without taking inflation into account.<\/p>

It shows by what percentage your invested capital has increased over a certain period of time.<\/p>

Example<\/strong><\/p>

You invest 10,000 CHF in an ETF. After one year, your portfolio is worth 10,500 CHF.<\/p>

Nominal return:
5 percent<\/p>

These 5 percent represent the pure increase in value, regardless of how purchasing power has changed during that time.<\/p>

The nominal return is the figure that banks and asset managers usually communicate.<\/p>

. <\/span><\/p>

What is the real return<\/strong><\/h2>

The real return additionally takes inflation into account. It shows how much your purchasing power has actually increased.<\/p>

When prices rise, money loses value. Even if your wealth grows nominally, you may not be able to afford more than before.<\/p>

Example with inflation<\/strong><\/p>

Nominal return: 5 percent
Inflation: 2 percent<\/p>

Real return:
approximately 3 percent<\/p>

Although your wealth has increased by 5 percent, your actual gain in purchasing power is only around 3 percent.<\/p>

Why is the real return so important<\/strong><\/h2>

For your long term wealth building, what matters is not the account balance, but your purchasing power.<\/p>

If inflation is higher than your nominal return, you are losing money in real terms.<\/p>

Example<\/strong><\/p>

Nominal return: 1 percent
Inflation: 2 percent<\/p>

Real return:
minus 1 percent<\/p>

Although your wealth grows on paper, your purchasing power declines.<\/p>

This risk is particularly high with savings accounts or conservative investments that offer low interest rates.<\/p>

How to calculate the real return<\/strong><\/h2>

For a simplified calculation, you can use the following formula:<\/p>

Real return \u2248 Nominal return minus inflation<\/p>

For more precise calculations, the formula is:<\/p>

Real return =
(1 + nominal return) divided by (1 + inflation) minus 1<\/p>

Concrete example<\/strong><\/p>

Nominal return: 6 percent
Inflation: 2.5 percent<\/p>

Real return =
(1.06 \/ 1.025) \u2212 1 = approximately 3.4 percent<\/p>

The higher the inflation, the more the real return deviates from the nominal return.<\/p>

Nominal vs real return in Switzerland<\/strong><\/h2>

Inflation also plays an important role in Switzerland. Although it was historically low for a long time, it was significantly higher in certain years.<\/p>

For investors, this means:<\/p>