Inflation column in spreadsheet
I have run some models with the investment in all cash. This actually produces a negative income for each year. I assume this is due to the effects of inflation; although the negative income does not seem to correspond to the inflation rate. In any case, I was once confused before talking with Larry in that my taxes seemed very high for the level of income shown. I now know that the level of income is real income after inflation. I think it would be good to add a column, perhaps under the total income tab, that showed the amount of income taken by inflation. This would help to see that the inflation column or earnings plus the real column of earnings totaled the nominal rate expected.
RSS
The income isn't taken, the value is taken, that's why we show things in real terms rather than nominal terms.
We could provide you with a column that show the real to nominal conversion factor (multiply by that number to get the number of nominal dollars for that specific year) but I'm not sure we could show you how much value is gained or lost to inflation.
Best,
Dick Munroe
That would be great. I think this area is confusing, at least for me, to people who don't think in these terms on a regular basis. Being able to see the loss in value due to inflation would help in seeing what has to be done when forming a portfolio to account for this factor. Thanks.
I'll toss this in as a feature for later releases...
Best,
Dick Munroe