Real Vs Nominal

When someone brags that an investment returned 7%, ask one question: is that nominal or real?

Nominal is the raw number on your account screen. Real subtracts inflation to show what your money can actually buy. A 7% nominal return during 3% inflation is really a 4% gain.

Once you think this way, "high-yield" loses its shine. A 4.5% savings rate during 3.5% inflation earns you a real 1%. Your money is treading water, not growing.