At some point in your research/writing activities it’s quite likely you found yourself needing to know how money has appreciated over the past century or more. Here’s one example I was tangling with recently:
Away back in 1872 a pair of Kentucky cousins managed to swindle $600,000 from some of the smartest, wiliest financial men of New York and San Francisco. The pair got off scot-free. And virtually none of the loot was ever recovered.
So how much is $600,000 worth today?
To find out all I have to do is go to a really useful website called MeasuringWorth. It was founded by a pair of professors back in 2006 with the mission of making reliable data available to the public about value comparison over time.
To try out one of their calculators, from the home page click Relative Values– US $ from the left-hand column.
This brings up a page that will “Compute the Relative Value of a U.S. Dollar Amount – 1774 to Present.”
In the window on the right all you have to do is fill in your parameters. In my case, the Initial Year is 1872 and the Initial Amount is $600,000. Because of the way the calculator is set up, set the Desired Year for last year or the year before.
Now click CALCULATE.
The answer is not exactly simple or clear cut. MeasuringWorth gives you nine different values.
At the top of the page it says “In 2012 the relative value of $600,000 from 1872 ranges from $10,400,000 to $1,170,000,000.” That’s quite a range!
Below that is a box that says “A simple Purchasing Power Calculator would say the relative value is $11.6 million.”
What’s the best number to choose?
Reading through the definitions of the various value categories is helpful. But for folks like me, who are not well grounded in economics, it’s seriously confusing.
It’s easy enough to pick the $1.17 billion number—a sensational eye-opener worthy of Bernie Madoff. But I think a conservative value is more realistic and better serves my purpose. So for my book about the Kentucky cousins’ $600,000 swindle I chose $11.6 million, because it relates most closely to the “real price” and the “historic standard of living value.” And by anybody’s standard (except maybe the “Top 1%’s”) eleven million dollars is a lot of money.
MeasuringWorth.com also calculates other currencies, including the British pound sterling, the Australian pound and dollar, and China and Japan.
There is also a conversion calculator from dollars to pounds. How much was one British pound worth in dollars in 1890? Answer: $4.86.
The Internet is full of sites offering these sorts of data conversions and analysis. And that’s what Finding Stuff is all about.
Happy New Year!
If this post was helpful or interesting to you, please let me know. I’m always looking for ways to improve the blog.
Disclaimer: The description of web pages are accurate as of the date of the post. Like everything else in this digital world of ours, they can change in the blink of an eye.