Sheet: inflation

All the research sheets

Translated from the Spanish original. Where they differ, the Spanish one holds.

• App: Horalis Growth · Reviewed: 3 October 2026
• Code (in projects/wealth-lens/): src/lib/investment.ts (inflationFor, toNominal, toReal), src/lib/assets.ts (SAVINGS_RATE, savingsRealReturn), src/lib/assumptions.ts (quotedGrowth); each country's reference inflation in packages/seed-kit/src/data/ (each country's inflation)

The question it answers

"How much will that money really be worth, with prices going up?" The app answers in today's euros: each figure is what could be bought today with it. Inflation also decides how much a savings account really yields and how growth is stated "the way banks give it".

The formula, in plain words

Everything is calculated with the rise in prices already taken out, so the figures come out in today's euros without converting anything. Inflation is only needed in three places:

1. Savings: they yield their interest (1.5 % a year) minus inflation.
2. The line "the way banks give it" under the examples: growth before inflation, the one usually advertised.
3. What the person writes: if they change inflation in More options, 1 and 2 change.

Exact (Fisher equation, no approximation):

• real = (1 + nominal) / (1 + inflation) − 1
• nominal = (1 + real) × (1 + inflation) − 1
• Savings: (1.015 / 1.02) − 1 = −0.49 % a year with the euro's 2 %.

The starting inflation is that of "Rising prices in" (More options; the Netherlands by default): its central bank's target (the ECB's 2 % for euro countries), checked in September 2026; where there is no numeric target, the 2015 to 2024 average.

Assumptions

• Monthly contributions rise exactly with prices.
• Future inflation will be the central bank's target.
• The dollar indices already come in US real terms (US CPI); the euro bonds, in German real terms (Destatis CPI). The inflation of "Rising prices in" does not touch them.
• The savings interest is fixed: 1.5 % before inflation.

Sources (dated)

• ECB, monetary policy strategy of July 2021: a symmetric 2 % target over the medium term. Checked in September 2026.
• The other central banks' targets, one per country, with their basis and date in the dataset (inflation.basis, asOf).
• World Bank, FP.CPI.TOTL.ZG, 2015 to 2024 averages where there is no target, and to mark the countries above 10 % a year.
• US CPI: Shiller (to 2022) and BLS (2023: 306.746; 2024: 315.605). Germany's CPI: Destatis.

Validation (tests)

• src/lib/investment.test.ts (17): from real to nominal and back; savings, their interest minus the country's inflation (it can be negative); the inflation of "Rising prices in" or the one written; writing only the inflation does not change an asset's growth.
• packages/seed-kit/test/cost-of-living.test.ts ("the inflation rates on their own"): each country with its reference; the default country's for any other code. The table lives in packages/seed-kit/src/data/inflation-reference.json.
• src/lib/assumptions.test.ts (9): how inflation is stated and the line "the way banks give it".
• src/lib/finance.test.ts: nominalReturn.

Limits

• A target is not a forecast: the euro area was above 2 % in 2021–2023 (with peaks close to 10 %) and below it for much of 2013–2020.
• "Today's euros" are not the euros of a particular country: each person's price rise depends on what they buy.

What is debatable

1. A mix of deflators. A plan in the S&P 500 grows in US real terms, but the person lives with the euro's inflation. The difference between the two inflations, together with the exchange rate, is not in the model (see growth, point 3).
2. Target against expected inflation. The target is a reasonable long-run reference (the IMF's 5-year forecasts converge on it), but for savings, which depend on the difference between interest and inflation, one point of error changes the sign. Cost: show the sensitivity (±1 point) on the savings sheet.
3. Savings' 1.5 % is fixed. Deposits pay very differently by year and country; the real average of savings has been negative or close to zero in the euro area. Cost: date the 1.5 % and review it every year, or ask for it.
4. Indexed contributions. Assuming the contribution rises with prices is an optimistic hypothesis for many salaries. Cost: a text that says so beside the contribution.

History

• 2026-10-03: first sheet (no change to the calculation).
• 2026-10-07: the adjustment is named by its label, "Rising prices in", so it is not confused with the wishes' "Prices in" (wishes). No change to the calculation.
• 2026-10-09 (phase A2): each country's reference inflation moves to its own seed-kit file (data/inflation-reference.json), apart from the cost of living, which now comes from official data only. It is the only hand-written table left (central bank targets, September 2026); phase A3 decides how to maintain it. No change to the calculation.