Real Income

Real Income
The income of an individual or group after taking into consideration the effects of inflation on purchasing power. For example, if you received a 2% salary rise over the previous year and inflation for the year was 1%, then your real income only rose 1%. Conversely, if you received a 2% raise in salary and inflation stood at 3%, then your real income would have shrunk 1%.

Also known as "real wages".

In other words, real income refers to the amount of goods and services you can buy today compared to the price of the same goods and services you could have purchased in another time period. For example, if it costs you $2,000 more to purchase the same amount of goods and services (i.e. food, gas, rent, utilities, interest, etc) this year compared to last year, and your annual income stayed the same, then your real income has actually decreased by $2,000.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Real income — is the income of individuals or nations after adjusting for inflation. It is calculated by subtracting inflation from the nominal income. Real variables, such as real income, real GDP, and real interest rate are variables that are measured in… …   Wikipedia

  • real income — The income of an individual, group, or country adjusted for inflation. Bloomberg Financial Dictionary * * * real income real income ➔ income * * * real income UK US noun [C or U] (also real wages [plural]) ► FINANCE, ECONOMICS the money earned by …   Financial and business terms

  • real income — A measure of the real purchasing power of nominal income; real income is nominal income adjusted for changes in the general price level, or income corrected for inflation or deflation. See also real earnings …   Black's law dictionary

  • real income — /ree euhl, reel/ the amount of goods and services that money income will buy. [1925 30] * * * real income , ● real …   Useful english dictionary

  • real income — /ree euhl, reel/ the amount of goods and services that money income will buy. [1925 30] * * * …   Universalium

  • real income — value of the income as influenced by changes in the index …   English contemporary dictionary

  • real income — /ˈril ɪnkʌm/ (say reel inkum) noun income adjusted to take account of inflation …   Australian English dictionary

  • real income — /rɪəl ɪnkʌm/ noun same as real earnings …   Dictionary of banking and finance

  • Income inequality in the United States — is the extent to which income, most commonly measured by household or individual, is distributed in an uneven manner. While there seems to be consensus among social scientists that some degree of income inequality is needed, the extent of income… …   Wikipedia

  • real wages — ➔ wage * * * real wages UK US noun [plural] (also real income [C or U]) ► ECONOMICS the value of money earned by workers in an economy at a particular time, after taking into account the effect of inflation on what can be bought with that money:… …   Financial and business terms

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