Here's the hypothetical. It's 2015. I invest $1,000 in a stock. In 2025, the investment has gone up to about $1,350. Hurrah! I've made profit. Except, no, I haven't. First of all, due to inflation, that $1,350 (in 2025) has the same buying power that $1,000 had back in 2015. Second, I have to pay taxes on my profits. So I'm actually further behind now than if I'd spent the money in 2015.
So how do I correctly calculate the "break even" point for long-term investments?