Real Returns Are All That Matter

In 1980, a certificate of deposit (CD) briefly yielded nearly 19%.

Just imagine that offer today: a risk-free 19% yield. Not even Bernie Madoff promised something that sweet.

But the reality wasn’t so sweet. Inflation was running in the double digits. After adjusting for rising prices and then paying taxes on the interest, the actual return was far less impressive. What looked like easy money was in reality a modest gain in purchasing power.

Nominal returns are the headline number.

Real returns are what you actually keep.

Nominal vs. Real

Nominal return is the figure on your statement.

  • A CD paying 4%.
  • A bond yielding 5%.
  • A portfolio up 8%.

Real return is what’s left after inflation and taxes take their cut.

Example:

  • Portfolio return: +7%
  • Inflation: -3%
  • Taxes: -2%
  • Real return = +2%

That 2% is the part that actually matters. It’s what protects your lifestyle, pays for your goals, and keeps your plan on track.

Why This Matters

At the time of writing this, the Federal Reserve has signaled that it may begin cutting interest rates.

Rate cuts don’t just move markets. They also affect households directly.

For investors, lower rates can provide a short-term boost to asset prices.

For homeowners who bought in the past few years at higher mortgage rates, a drop in rates could open the door to refinancing – cutting monthly payments and freeing up cash flow.

That’s real money, not just a nominal shift on a statement.

Where You Hold Money Matters

Inflation is obvious. You feel it at the grocery store. Taxes are less visible but just as powerful.

Take a bond yielding 5%.

If that bond sits in a taxable account and you are in a high bracket, your after-tax return might be closer to 2.5-3.5% (before inflation!).

Place the same bond in a tax-deferred account, and your after-tax return improves. Put in a Roth (which we typically reserve for assets with high-growth potential), and the real, after-tax outcome can be dramatically better.

This is asset location. It does not change nominal returns, but it directly affects how much of those returns you keep.

For households with meaningful wealth, this difference is not trivial.

What You Can Do

You cannot control Fed policy or inflation.

But you can control the levers that drive real returns over time:

  1. Savings rate – the fuel that powers compounding.
  2. Asset allocation – the mix of stocks, bonds, and other assets aligned to your goals.
  3. Asset location – placing investments in the right accounts to minimize tax drag.
  4. Behavior – staying invested instead of reacting to every headline.

These are the factors that turn nominal returns into real purchasing power.

Final Thoughts

That 19% CD from 1980 looked incredible on paper. After inflation and taxes, it wasn’t nearly as generous. The same lesson applies today.

Nominal returns grab attention. Real returns quietly determine whether you can retire comfortably, fund education, take the trips you want, and live the life you envision.

So the next time you hear about a “can’t miss” yield or see markets celebrating a Fed move, pause and ask the only question that matters:

What is my real return?

That’s the scorecard that counts.

How Much to Spend on Your Health

While camping over Labor Day Weekend, I shared with my brother-in-law yet another supplement I was considering adding to my routine (sulforaphane, for those wondering!).

He laughed and said, “Where do you draw the line on this stuff?” 

It’s a valid question that stuck with me.

Because I realized he’s right – not just about supplements, but about health spending in general.

There’s always one more device, one more test, one more supplement. And while curiosity and experimentation can be good, they can also turn into a slippery slope.

This is personal for me. I’ve caught myself pricing out cold plunges, red light therapy, hyperbaric chambers, and longevity medical clinics. I’ve wrestled with hiring a concierge functional medicine doctor, joining Lifetime Fitness, and tripling down on equipment for my home gym (among many others).

Lisa, our Director of Client Care, and I laughed about this.

She admitted she does the same thing with skincare. As a trained aesthetician, she jokes that the right number of products is also always “N+1.” There’s always one more serum, one more cream, one more treatment that promises a little extra glow.

So where do we draw the line?

Two Extremes

On one end, you have people like LeBron James and Bryan Johnson, who each reportedly spend over $1 million per year on their health. Trainers, chefs, therapies, tech – the whole kit and caboodle.

On the other end, you have the minimalist who spends almost nothing yet still reaps the lion’s share of healthspan benefits by focusing on the 20% of habits that drive 80% of outcomes:

  • Sleep
  • Exercise
  • Whole foods
  • Stress management
  • Strong relationships

Those are the real pillars. There is no amount of supplements or devices that move the needle more.

A Back-of-the-Envelope Framework

My brother-in-law’s question got me thinking: what if there were a simple rubric for health spending?

Something that factored in not just someone’s interest in optimizing their health, but also tied that back to a reasonable percentage of household income.

My rough draft:

Level 1 – Minimalist (0-1%)
You invest time and discipline, but very little money. Groceries, maybe a gym membership, and that’s it.

Level 2 – Essentials (1-3%)
You add in higher-quality food, a fitness program you enjoy, maybe a few supplements or an annual lab panel.

Level 3 – Optimizer (3-5%)
You start layering on tools: regular bloodwork, wearables, coaching, and some higher-end, at-home equipment.

Level 4 – Investor (5-10%)
You make health a line item. Concierge medicine, retreats, advanced diagnostics, therapies.

Level 5 – Maximalist (10%+)
You push the limits – everything short of disrupting your broader financial goals. Think LeBron or Bryan Johnson, but scaled to your resources.

Where did I land?

If you don’t count groceries or my CSA membership, over the past twelve months (all tracked via fina.xyz), I landed squarely in Level 4.

Again, these aren’t hard rules. They’re guardrails.

The “right” number depends on your income, goals, and what you’re optimizing for.

How Much is Too Much?

The red flag is when spending on health displaces other priorities – retirement savings, education funding, even basic lifestyle needs.

If you’re commitment to physical health leaves you underfunding your financial health, you might be out of balance.

REMEMBER: 80% of your outcomes will come from the most important 20% (which cost very little).

Sleep. Movement. Whole foods. Connection. Stress management.

Nail those first, then build from there.

Final Thoughts

I’ll probably always be tempted by the next gadget, supplement, retreat, or biohacking modality.

Having gone through this exercise (which was, admittedly, somewhat self-serving), I’m now trying to check myself with one simple question:

Is this helping me live a longer, stronger, freer life – or is it just noise?

For me, that’s the line.

Invest enough to support capacity, vitality, and joy. But not overindex to the things on the fringe (a la majoring in the minors).

Because health, like wealth, compounds best when you focus on the fundamentals.