How much value has the U.S. dollar lost since 1913? The answer might surprise you

• On December 23, 1913 the U.S. Federal Reserve was created.
• What is the actual value of the U.S. dollar today compared to 1913?
• Conclusion: Accounting for inflation the U.S. dollar has about 2 percent more purchasing power in 2020 than it did in 1913.

On December 23, 1913 President Woodrow Wilson signed into law the United States Federal Reserve Act. Overnight the nations currency creation and policy were placed in the hands of a privately owned central bank. Over the past 107 years the United States has transitioned from the gold standard of the past to the fiat system of the New World.

Some believe the dollar has lost over 98 percent of it’s value since the Fed’s creation. But how does the dollar of today honestly compare to the dollar of 1913? The question is complex but I’ve made a dedicated effort to peel back the layers by applying hard data to give you the truth.

How do you measure the value of a dollar?

While deciding how to weigh in on the topic, I realized that the question is complex and there are several methods one could use to compare today’s dollar to the one from 1913. I thought it would be best to analyze the price of several essential commodities from 1913 then extrapolate the cost in today’s dollars.  Finally, creating several charts to compare the above data to median wages from the same period.

Crunching the factual numbers should provide a real answer to my question: How much has the value of a dollar changed since 1913?

Buying a home

*The average price of a home in the U.S. *2018 price from Zillow

The average home in 1914 was $3500 by 2018 the median home was $223,000. This means that the average home has increased by almost 64 times in cost since the inception of the Federal Reserve. Other factors to consider:

• The real estate market is global and investors now speculate world-wide.
• Millions of upper middle class homes have been built since 1914.
• The nation’s interior was still being developed in 1914 and some homes were poorly constructed and equated to cheap barns or sheds.

Buying an automobile

*Chart illustrating the average cost of an automobile from 1914 to modern times.

In 1914 the average automobile was $500 dollars. By 2018 the average brand new automobile was a little over $35,000. Without considering inflation you could have bought 70 vehicles in 1914 for the price of one vehicle today.

Cost of food

Having access to affordable and healthy food is vital to every human being. Disregarding inflation the above chart illustrates that the $2.50 spent on bread in 2018, would have bought over 41 loafs in 1914.

Cost of energy

*Chart illustrating the average price of a gallon of gasoline from 1914 to modern times.

The cost of gasoline is closely related to the cost of good and services. Increased energy costs ultimately trickle down and equates to higher prices for consumers. So measuring the cost of energy over the decades should provide a reliable piece of data. It’s also worth considering that the price of oil is complicatd and relies on global co-operation.

*Precious metals: An ounce of gold was around $20 in 1913, today in 2020 the cost is around $1,735 per ounce.  So the same ounce of gold has increased more than 86 times in cost since 1913.

Tying it together: Comparing salaries

*Chart illustrating U.S. median per capita income by decade.

The average American made $400 in 1913.  By the end of 2019 the average citizen’s salary was $48,516. But over 46 percent of the population had jobs that pay less than $30,000 annually.

Since 1913 the median salary in America increased by over 121 times. The 46 percent or ‘Middle America’ has seen a 75 percent increase in income and now earn about $30,000 per year.

By comparing the housing and automobile data to both the median income data and the income data from ‘Middle America’, we can see what inflation has actually cost the American dollar since the Federal Reserve’s inception.

*Chart displaying median income (GREEN) automobile price (BLUE) and home cost (PURPLE) since 1914.

Median income comparison

Housing:

• In 1914 the cost of a home was about 8.75 times the annual median salary in America.
• By 1964 the cost of the average home was down to 7.7 times the annual median salary.
• By 2018 the average home was 4.6 times the median salary.

Conclusion: Inflation adjusted cost of home ownership is cheaper today than it was in 1914 for median income earners. Factors that make today’s home ownership more expensive that didn’t exist in 1914 include tax rates, utilities and entertainment options such as cable and wifi services.

Automobiles:

• In 1914 an automobile was 1.25 times the median annual salary.
• By 1964 the typical vehicle had risen to 1.34 times the median salary.
• By 2018 the pendualm swung the other direction and vehicles were only .72 times the median income.

Conclusion:  Competition between automakers has driven inflation adjusted cost of automobiles down for median income earners since 1914.

Comparison for the middle 46 percent

I was curious what the numbers would look like when compared to the actual middle class and not just the median income, which could skew the picture because of the higher earning mega rich at the top.

• In 2018 the average home was 7.4 times average annual salary for those earning $30,000 dollars per year.
• The inflation adjusted cost of a home is slightly cheaper for the middle class today.
• Today the average automobile is about 1.1 times average middle class income.
• The cost of a vehicle is actually down from the 1.25 times the cost in 1914.

Conclusion: Home and automobile ownership are slightly cheaper for middle America than it was in 1913.

Ultimate comparison inflation vs income

Inflation is of course, one of the primary effects of currency printing. The chart below eloquently displays the substantial inflation the United States has experienced since 1913.

*Chart displaying inflation percentage by decade using the official statistics provided by the Federal Reserve.

For the final and most useful piece of data, let’s look at a chart and compare the rate that median wages increased with the annual inflation rates released by the Federal Reserve. Crunching the number reveals that salaries are actually up 2 percent vs inflation through 2015.

*20 year comparison: Inflation percentage in red. The green graph highlights the percentage salaries increased during the same period.

The evidence is in, the dollar has been relatively flat since the inception of the Federal Reserve in 1913. Wages are slightly up versus inflation but new circumstances exist and many American’s feel a dollar doesn’t stretch as far in 2020. But the truth is they actually have a little more inflation adjusted purchasing power today than they did in 1913. What is different is consumption on an industrial scale. The average American has taken on massive amounts of debt to finance a modern lifestyle which include far more expenses and luxuries that were unavailable in past times.

*All price data compiled from the Farmers Almanac unless otherwise noted.

Enjoying our content? Check out- Eight best safes for under $100 dollars, getting the most bang for your buck

Eight ways to survive the next Great Depression

• The extreme hardships during the Great Depression caught many families off guard.
• Expect the possibility of working longer hours for less pay during a depression.
• Learn to grow your own food.
• Become a jack of all trades.
• Friends and family will be more important than ever.
• Conserve capital and supplies, repurpose old items.
• Own animals like chickens and cows.
• Stock up on essential supplies.
• Innovate, create and seize the opportunity.

Surviving the Great Depression was every bit as rough as scholars make it sound in the history books, at least according to my grandmother it was. In order to prepare for the future, sometimes one must look at the lessons of the past. So I took a long look in the mirror and asked myself how would you survive such an economic downturn?

By combining my grandmother’s teachings with hours of research I was able to come up with eight lessons to help anyone adapt on the fly during the next Great Depression.

1. Learn from survivors of the Great Depression

Be prepared for the possibility of harder work for less money during extreme downturns.

My grandmother was a young child in Virginia during the Great Depression. Her family had to go through unrelenting hardships. The family often ate pots of beans and black eyed peas, sometimes they were lucky and had some fatback to add to the stew. Money was tight and decisions had to he made about which children needed clothes and which children could use the ones from the older siblings, sometimes which meals to skip. Her father was a watchmaker and had to take on extra jobs, like assisting rail operators with keeping time by setting and repairing watches to make ends meet. Her father’s shop also became somewhat of a swap meet, bartering his services for other items that he would use, sell or trade.

2. Grow your own food

Edna Boone

Mrs Edna Boone lived through some harsh times. During the Spanish influenza pandemic supply chains broke down and small towns like Edna’s literally could not get shipments of food. Her families potato patch fed her entire community during the peak of the outbreak. I understand that her story is from a period of time shortly before the Great Depression. However, stories like Mrs Boone’s remind us all that it’s always necessary have access to a sustainable food source, especially in the worst of times. Some of the easiest foods to grow include tomatoes and greens.

3. Do it yourself

A Swiss Army knife usually has a wide array of tools in one case. Having multiple abilities at your disposal would save you money and allow you to better hurdle any hardships you might encounter. Learning home and automobile repairs would be useful skills to barter with. Other valuable skills include:

• Plumbing
• Wood working
• Welding
• Sewing
• Hunting

4. Know your neighbors

During such a downturn you will most likely need help at some point. Getting to know your neighbors before an emergency would be ideal. Having a network of family and friends who can assist/barter with each other could prove to be invaluable during such a time.

5. Conserve and repurpose

Conservation is an important skill to have regardless of the economic times. Repurpose old or unused items when possible. During a depression conserving the capital and supplies that you have is of the utmost importantance. Simple ways to conserve include:

• Meal prep
• No baths/shorter showers
• Eat less
• Use less electricity

6. Raise animals

2020 brought some habits established during the Great Depression back to the forefront. Through the first quarter of 2020 Americans bought such quantities of live chickens that many farms sold out. Having fresh eggs on hand during periods of economic uncertainty could be crucial. If you have the room and the know-how owning other livestock such as cows or pigs wouldn’t be a bad idea either.

7. Stock up when you can

Here today, gone tomorrow? If the opportunity arises to buy essential items during a depression, it would be best to stock up. Key items like seeds, live chickens, canned food, beans, rice and ammunition would possibly be in short supply.

8. Solve a problem

People’s habits change during periods of economic depression. The one silver lining is that with every crisis an oppoutinity arises. New businesses will emerge from the ashes. Created by entrepreneurs with the foresite to see changing trends and innovate ideas. Ask yourself what the one burning need of the people is and answer that question better than anyone else and you might be rewarded handsomely.

Better prepared for the next Great Depression

In periods of recession or depression things will be different, a ‘new normal’ could emerge. Hopefully this article helps you prepare and protect yourself during the next catastrophe.

Enjoying our content? Check out another article- Five simple ways to hedge against inflation

Eight best safes under $100, getting the most bang for your buck

In today’s world safekeeping personal property is a priority for many people. Owning an effective safe can cushion the blow from tragedies like a fire or burglary. Safes can be useful for storing important personal property such as documents, precious metals, weapons and ammunition. Unfortunately, buying one on a budget can be stressful and time consuming. No need to worry we’ve scoured the web and found the eight best safes under $100.

1. Union Safe Company 1.51 cubic foot electronic lock gun floor safe

Price $94.99: This meaty safe is certified by the California Department of Justice as a firearm safety device. Union constructed this safe from heavy gauge steel with space to store all of your items. Dual entry makes accessing this safe a breeze by using a key or the digital keypad. The safes hinges and door are pry resistant. Floor and wall mount hardware included.

2. Ktaxon large digital electronic safe box

Price $79.99: Setting the code is a breeze on this spacious safe with over 1.3 cubic feet of storage. This safe also has a shelf in the middle that can be removed for safekeeping larger items. Changing the batteries are simple and the price includes floor mount hardware.

3. Fortress quick access safe

Price $99.99: This safe is perfect for mounting under a shelf in the closet. It’s state of the art biometric technology allows instant access for authorized users. The security alarm feature will alert you if an unauthorized person attempts to open the safe. The Fortress quick access safe exceeds California Department of Justice standars for security. Dimensions: 5.6″ x 10″ x 12″

4. Sentry security safe .5 cubic feet

Price $62.00: This little safe is perfect for storing small valuables like jewelry, coins or important paperwork. This little tank includes two keys and a mount kit. Another cool feature of this particular safe is that it has two locking bolts. If a smaller safe is what your looking for look no further, this diminutive Sentry safe packs a lot of punch for the price. I also noticed that the best price was at Lowe’s. Home Depot was charging $99.99 for the same safe.

5. Stack-on eight gun security cabinet

Price $79.99: This list wouldn’t feel complete without including a value option for storing rifles. Finding a safe to store rifles for under 100 dollars proved difficult. But this spacious cabinet is 53 inches tall and weighs in at 50 pounds. It’s sturdy and can house up to eight rifles. Most importantly Stack-on’s three point locking system will keep your weapons secure.

6. Union safe company digital wall safe

Price $64.99: If securing valuables inside the wall is what your looking for, Union has you covered with this .5 cubic foot digital safe. This safe has a solid steel construction, sleek profile and is perfect for storing valuables like passports or jewelry.

7. Snapsafe keypad safe

Price $79.99: This safe safe has dimensions of 8.5″ W x 11″ H x 2.25″ and a weight of only 4 pounds. This little tank is perfect for securing pistols, jewelry and important documents in places like cars or hotel rooms.

8. Speedvault digital pistol case

Price $92.24: If quickly accessing a secured pistol on a budget is what you’re looking for then the Speedvault might be for you. This case has mutiple ways to mount it, digital access and 18 gauge steel construction.

Now you know the eight best safes for under one hundred dollars. If you enjoyed this content please check out- How to barter like a pro, eight steps for success