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REDDIT
How to calculate return vs inflation if I'm re-investing part of the money?
Hi!
I don't live in the US, but this is more of a math advice than a proper investing advice.
Say I have 100'000 BRL and I invest it at 14% yearly using government bonds (the norm in Brazil). I'd get 14'000 BRL a year, or just over 1100 monthly.
However, since inflation is roughly 5% a year, my actual return over inflation is closer to 8500 BRL, or about 700 a month.
Now, say I take half of these 700 BRL and reinvest in the same 14% yearly investment.
How much would this help combat inflation? Is there a formula I can use? Thanks!