What Is 'Real Income'?

Real income refers to the wages of an individual or entity after accounting for inflation. It differs from nominal income which has no adjustments. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Real Income Real income is how much money an individual or entity makes after accounting for inflation. It is sometimes called real wage when referring to an individual's income. Individuals often closely track their nominal vs. real income to have the best understanding of their purchasing power. Read More » Related to "Real Income" How Inflation Affects Your Cost of Living The two terms are used interchangeably, but inflation is not the same thing as cost of living. Here's how these two factors work. Read More » How Inflation and Unemployment Are Related How can inflation affect unemployment, and vice versa? Here, we examine the relationship between wage inflation, consumer prices, and unemployment. Read More » Residual Income vs. Passive Income: What's the Difference? Learn how passive income can help someone keep the bills paid with little work involved. Determine how residual income affects your ability to obtain a mortgage. Read More » SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. Learn More » Related Definitions Inflation Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Read More » Purchasing Power Purchasing power is the value of a currency in terms of the goods or services that one unit of it can buy. Read More » Consumer Price Index The Consumer Price Index measures the average change in prices over time that consumers pay for a basket of goods and services. Read More » Bureau of Labor Statistics The Bureau of Labor Statistics (BLS) is a government agency that produces a range of economic data about the U.S. economy. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy