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Real0ne -> Money Question (8/29/2007 5:20:50 PM)

Money Question


Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%

Ok so in 1960 the buying power of a buck was lets say for the sake of an argument an even buck.

1) How much money would we have to day in interest.

2) How much buying power would we have today.

Today 1 buck is worth about 3.5 cents in buying power.


rough compounded total =

Buying power =



CuriousLord -> RE: Money Question (8/29/2007 5:37:17 PM)

Compounded contineously:  ~16.777 USD, 0.587 current$/past$
Compounded monthly: ~16.66 USD, 0.583 current$/past$
Compounded anually: ~15.466 USD, 0.541 current$/past$

I perfer contineous compounding.  So about 58.7 cents per 1960 dollar, assuming your figures to be accurate (6% interest, 3.5 cents per dollar).



thompsonx -> RE: Money Question (8/29/2007 5:39:33 PM)

quote:

ORIGINAL: Real0ne

Money Question


Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%

Ok so in 1960 the buying power of a buck was lets say for the sake of an argument an even buck.

1) How much money would we have to day in interest.

2) How much buying power would we have today.

Today 1 buck is worth about 3.5 cents in buying power.


rough compounded total =

Buying power =

Real0ne:
I would like to see your math on this one.
In 1960 gasoline was about .30 cents a gallon.
A double cheese burger and a vanilla shake was fifty cents at Bobs Big Boy.
The Minimum wage was either a dollar or a dollar and a quarter an hour.  A loaf of wonder bread was .40 cents and hamburger was .45 cents a pound and three pounds for a buck on special.
I think I saw a chart somewhere that showed that money compounded quarterly at .05% would double every seven years.
thompson



Real0ne -> RE: Money Question (8/29/2007 5:46:25 PM)

quote:

ORIGINAL: thompsonx

quote:

ORIGINAL: Real0ne

Money Question


Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%

Ok so in 1960 the buying power of a buck was lets say for the sake of an argument an even buck.

1) How much money would we have to day in interest.

2) How much buying power would we have today.

Today 1 buck is worth about 3.5 cents in buying power.


rough compounded total =

Buying power =

Real0ne:
I would like to see your math on this one.
In 1960 gasoline was about .30 cents a gallon.
A double cheese burger and a vanilla shake was fifty cents at Bobs Big Boy.
The Minimum wage was either a dollar or a dollar and a quarter an hour.  A loaf of wonder bread was .40 cents and hamburger was .45 cents a pound and three pounds for a buck on special.
I think I saw a chart somewhere that showed that money compounded quarterly at .05% would double every seven years.
thompson


wow!

i used to get burgers at about 20 cents, in 1973 i used to buy gas at 19 cents per and the easiest way to calculate how many years to double is the maghic 72 rule.   also in 73 i used to get 1qt soda for a dime i think cigarettes were like 20 some odd cents per pack

72/interest = years to double at that interewt rate.   (for rough in purposes)



Real0ne -> RE: Money Question (8/29/2007 5:52:54 PM)

quote:

ORIGINAL: CuriousLord

Compounded contineously:  ~16.777 USD, 0.587 current$/past$
Compounded monthly: ~16.66 USD, 0.583 current$/past$
Compounded anually: ~15.466 USD, 0.541 current$/past$

I perfer contineous compounding.  So about 58.7 cents per 1960 dollar, assuming your figures to be accurate (6% interest, 3.5 cents per dollar).


no you got the problem incorrect or i have no idea what you did one of the 2.

the problem is:

in 1960: 1 dollar = 1 dollar of buying power.
in 2007 1 dollar = 3.5 cents buying power.

you put 1 million bucks in the back in 1960,  How much money do you have now, and how much buying power do you have now withing the domain of the numbers given above



CuriousLord -> RE: Money Question (8/29/2007 6:01:44 PM)

The 0.587 current$/past$ is a ratio comparing the value.  All you need do is multiply by the 1960 dollars you started with to find out how much it's worth today (again, using and assuming your numbers).

So, if you were asking about $1,000,000 USD, that'll become ($1000000 * ~0.587 =) ~$587,000 of buying power.

Or, more simply, if you invested a dollar back in 1960, you'd have about $16.78 now.  That $16.78 you have now will be worth about what 59 cents was back in 1960.



Real0ne -> RE: Money Question (8/29/2007 6:19:54 PM)

quote:

ORIGINAL: CuriousLord

The 0.587 current$/past$ is a ratio comparing the value.  All you need do is multiply by the 1960 dollars you started with to find out how much it's worth today (again, using and assuming your numbers).

So, if you were asking about $1,000,000 USD, that'll become ($1000000 * ~0.587 =) ~$587,000 of buying power.

Or, more simply, if you invested a dollar back in 1960, you'd have about $16.78 now.  That $16.78 you have now will be worth about what 59 cents was back in 1960.



i really should have made that more realistic huh?


It really was worth a buck in 1935

ok so you come up with 590,000 in buying power in 2007 starting with 587,000 in buying power in 1960 to keep it in the same terms


I agree btw





Real0ne -> RE: Money Question (8/29/2007 8:29:00 PM)



So is anyone picking up on my point yet?



thompsonx -> RE: Money Question (8/29/2007 8:50:41 PM)

quote:

ORIGINAL: Real0ne

quote:

ORIGINAL: thompsonx

quote:

ORIGINAL: Real0ne

Money Question


Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%

Ok so in 1960 the buying power of a buck was lets say for the sake of an argument an even buck.

1) How much money would we have to day in interest.

2) How much buying power would we have today.

Today 1 buck is worth about 3.5 cents in buying power.


rough compounded total =

Buying power =

Real0ne:
I would like to see your math on this one.
In 1960 gasoline was about .30 cents a gallon.
A double cheese burger and a vanilla shake was fifty cents at Bobs Big Boy.
The Minimum wage was either a dollar or a dollar and a quarter an hour.  A loaf of wonder bread was .40 cents and hamburger was .45 cents a pound and three pounds for a buck on special.
I think I saw a chart somewhere that showed that money compounded quarterly at .05% would double every seven years.
thompson


wow!

i used to get burgers at about 20 cents, in 1973 i used to buy gas at 19 cents per
So a double cheese burger and a malt for a half a buck was still doable in 1973.  There was always a gas war on someplace but the "goin rate" for gasoline was about thirty cents a gallon until about 1974.


and the easiest way to calculate how many years to double is the maghic 72 rule. 
So 72 divided by 6 is 12 years so every 12 years your million bux doubles so that makes the million worth 8 million.  So 8 million dollars worth of gasoline today is about a million dollars worth of gas in 1960.  A $10,000 house in 1960 would however today in southern California bring closer to $300,000 to $400,000  not the $80,000 our model might indicate.  The other aspects of the economy have not, I think, been so radically affected.

also in 73 i used to get 1qt soda for a dime i think cigarettes were like 20 some odd cents per pack
Not likely...a dime might get you a standard 12 ouncer but never a quart. 
I think that buying power today if we were to look at hours worked for goods received is still fairly constant....whith some obvious exceptions.

72/interest = years to double at that interewt rate.   (for rough in purposes)



Real0ne -> RE: Money Question (8/29/2007 9:33:18 PM)



Ok here is how i figure it out;

starting seed is 10,000 bucks in the bank untouched for 72 years.

72/6 = 12 years to double money
2007-1935=72 years
so 72/12 = 6 iterations.


Seed value       seed times .8        (for a meager 20% tax)  then sum the taxed amount to the initial. and so forth)
1    10000            8000
2    18000          14400
3    32400          25920
4    58320          46656
5    104976        83980.8
6    188956.8    151165.44

After tax and inflation over 72 years = $5291

you lost 4700 bucks off your initial investment.

after taxes you still have 151,000 if there were no inflation



1    10000       
2    20000       
3    40000       
4    80000       
5    160000       
6    320000       

With no tax over 72 years (like a 401k) = $11200

Then once again again with a meager 20% tax if withdrawn in 2007 =  $8960

Once again you lost money!


Now with no inflation and no tax = 320,000 buckeroos

Now that same 320,000 in one lump sum tax payment of 20% after 72 years and no inflation = 256000

So you wind up with 100,000 more than when the taxes are taken out every 12 years where you only got 151000.

Now we know taxes are taken out every year so that 151 figure is being "very" generous.


Inflation is that money that we pay the federal reserve, that goes out to the international \bankers and the international bankers are the brains behind the global government.  cant wait!







Termyn8or -> RE: Money Question (8/29/2007 9:49:09 PM)

Real;

It is uncanny how we agree so much, and you go into spinoffs. Of course I do too, but everyone thinks they understand money and how bad it is. This is not trure. Money is worth nothing, it is not real wealth, not anything more than a piece of paper. A promise to pay, but you cannot demand ""lawful" money for it anymore, like you could with silver certificates and the like.

The money system started getting screwed up a long time ago. It din't even really start with the Civil War. What the Union did it did. But Roger B. Taney might be rememered by Blacks who had a chance to talk to their Granparents. He rendered the Dred Scott decision, which was that if a slave escapes to a free state, he must be returned.

Wonder how he got there ? He was the fourth or fifth Treasurer, and he did what all of his fired predecessors had refused to do.No gold nor specie had to be moved immediately, what he did was to sign, in his official capacity, all the accumulated wealth of this country into the hands of internationalists.. He was rewarded with a lifetime cushy job, a judgeship, for life. ( do you think that people who care about this country would do this ?)

Dollars are worthless, and what may surprise some, so is gold. Actually gold does have a minor real value. But what do we need it for in our day to day lives ?

Our wealth cannot be stolen. Real wealth cannot be stolen.

Of course we are losing that gradually. From the Woman who can clean/gut/cook whatever you bring in, like squirrel/bear/iguana whatever, to the guy in the next hut who keeps your boat in good shape.

Our wealth lies within ourselves. The ability to build something, fix something or even in some cases concieve something. That is wealth. Money, including gold, silver salt, whatever they have is only worth anything if someone needs it.

T



Real0ne -> RE: Money Question (8/29/2007 10:07:10 PM)

Dunno man our wealth as far as real wealth is concerned is only as good as our ability to keep and protect it.

our gold system was a nice hard specie system but it left all the fucking gold go one way out of the country while citizens were asked to turn in their hard assets in exchange for paper.  what a crock.

I mean no one has to be a rocket scientist to figure thei really simple shit out.  It coun\es down to pure politics while they let this country go right down the drainl



i had to throw this little bit up so people can see how we are getting dry fucked by the federal reserve and this governemnt!



CuriousLord -> RE: Money Question (8/29/2007 10:27:30 PM)

If you want to calculate interest, you can just save yourself a lot of time.

[Final amount of money] = [Starting amount of money] * e^([Anual interest rate] * [Number of years])

Such as, if you want to find out, in your initial problem...
quote:

ORIGINAL:  Real0ne

Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%
..it'd be..
[Starting amount of money] = 1,000,000 USD
[Anual interest rate] = 6% = 0.06
[Number of years] = [This year's number] - [starting year's number] = 2007 - 1960 = 47

So, substituting the stuff in, you get..

[Final amount of money] = 1,000,000 USD * e^(0.06 * 47) = 1000000$ * e^2.82 = 1000000$ * ~16.77 = 16,770,000$

Since you want to know the final value, you then take 16,770,000$ and multiply it by the ratio of value, such as..
quote:

ORIGINAL: Real0ne

Today 1 buck is worth about 3.5 cents in buying power.
..which yields a ratio of 0.0035$ per 1$ in the past which is the same thing as 0.0035 today$/past$.

So the final equation becomes..

[Final buying power] = [How much buying power a dollar today has] * [How many dollars you started with] * e^([Anual interest rate] * [Number of years the money was invested for])

It would take a long time to explain the full implications of this sort of thing.  But, here's the basic formula.

Edit:  Bolded the final equation.  It's all you really need to even look at in the post, the rest is just an explanation.  This is contineously compounding, btw.  If your calculator doesn't have an "e^" function, you can just raise e (=~2.718) to the appropriate power ([Interest] * [Time invested]).



subfever -> RE: Money Question (8/29/2007 11:09:43 PM)

quote:

ORIGINAL: Real0ne

Money Question


Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%

Ok so in 1960 the buying power of a buck was lets say for the sake of an argument an even buck.

1) How much money would we have to day in interest.

2) How much buying power would we have today.

Today 1 buck is worth about 3.5 cents in buying power.


rough compounded total =

Buying power =


RO, where are you getting these figures from?

I've read several 3.5-4.0% current value estimates to the 1913 dollar, and 20% current value estimates to the 1971 dollar, but I've never seen your figures before.



subfever -> RE: Money Question (8/29/2007 11:13:45 PM)

BTW RO, you're not that far away from Chicago. Check this out and attend. I'll be there:

http://www.monetary.org/freeseminar.html



Real0ne -> RE: Money Question (8/29/2007 11:34:20 PM)

quote:

ORIGINAL: subfever

quote:

ORIGINAL: Real0ne

Money Question


Lets say we have a million bucks and we put it in the bank in 1960.

Now lets say we had a steady interest payment on that money of a modest 6%

Ok so in 1960 the buying power of a buck was lets say for the sake of an argument an even buck.

1) How much money would we have to day in interest.

2) How much buying power would we have today.

Today 1 buck is worth about 3.5 cents in buying power.


rough compounded total =

Buying power =


RO, where are you getting these figures from?

I've read several 3.5-4.0% current value estimates to the 1913 dollar, and 20% current value estimates to the 1971 dollar, but I've never seen your figures before.




i will try and post the chart when i get on the other puter tom



petdave -> RE: Money Question (8/30/2007 5:15:58 AM)

quote:

ORIGINAL: CuriousLord

Today 1 buck is worth about 3.5 cents in buying power...which yields a ratio of 0.0035$ per 1$ in the past which is the same thing as 0.0035 today$/past$.



It's too early in the morning for me to follow most of your math here, but watch those decimal places... The 3.5 cents/dollar figure is too low as it is, no need to make it worse
(A $5000 car, such as my '60 New Yorker (well-equipped full size sedan, comparable to a Chrysler 300C today) would cost $142,857 today using those figures. Damn that depreciation!)



Stephann -> RE: Money Question (8/30/2007 5:30:01 AM)

Why is the assumption that the US dollar is/should be worth anything?

If I wanted to take a million dollars today, and ensure that I'd have a million dollars worth of wealth in thirty years, I'd buy gold.  Period.  Not gold certificates, not gold stocks, real gold bullion.

Sure, it's a little hard to liquidate; but if/when world financial markets collapse, people simply revert back to old standbys.  The only commodity that is older, I would believe, is sex....

Stephan



Real0ne -> RE: Money Question (8/30/2007 5:40:48 AM)

quote:

elie
quote:

ORIGINAL: Stephann

Why is the assumption that the US dollar is/should be worth anything?

If I wanted to take a million dollars today, and ensure that I'd have a million dollars worth of wealth in thirty years, I'd buy gold.  Period.  Not gold certificates, not gold stocks, real gold bullion.

Sure, it's a little hard to liquidate; but if/when world financial markets collapse, people simply revert back to old standbys.  The only commodity that is older, I would believe, is sex....

Stephan




and the best you will do with gold bullion is retain your original buying power


That is the evils of a debt based fiat money structure











Termyn8or -> RE: Money Question (8/30/2007 9:39:26 PM)

Maybe my poat was a bit off topic, but if you discuss the value of something, it helps to know that it is an assujmed value. Sometimes I envision a quiet revolution in which we simply stop accepting money as payment. All barter.

Good pont thompson about the house. I'd like to explore that a bit. I think understanding the nature of the value of what we discuss is a good idea. There are things with intrinsic value. Real property, weapons, food, shelter cars, tools and other things that contribute to our well being. Even skills and abilities have intrinsic value, but that is not the point right now.

Let's take the case of real estate. The $10,000 house is now $300,000. There are less drastic examples of this which actually serve my point better, say a $20,000 house goes to about $75,000 in 20 years. Now this is not uncommon, even if nothing else has changed. There have been no improvements on the property or to the structure on it. There have been no demographic changes in the area and no improvements to the infrastructure. The region is not gaining nor losing populatiuon.

If such a property purportedly increases in value in dollars, it is plain to see that it is the dollar that is dropping.

Now folks I am no stupido, but I can't understand all the other factors that causes different things to be disparent from the obvious decline of the dollar. I will make an attempt to explain it from my point of view, as an electronic technician and sometimes engineer.

The entire computer (ECM) in your modern car, olng with the injectors, the sensor set that tell s it the parameters and all the other control mechanisms cost less than a real carberator, a distributor with calibrated spring and bellows for the vacuum advance, and all the vacuum circuitry to run it.

Your modern TV has a digital tuner and all digital controls because it is cheaper than all those potentiometers and GASP, the old turret style tuner. It would cost thousands to build a Zenith 25" floor model TV from 1978.

Everything that is manufactured has suffered from devaluation due to improving manufacturing methods and technology. In alot of cases so has quality, effectively producing a "throwaway society".

So now that we can't seem to make anything for ourselves, the cash flows outy of the country. What did you expect ? Things beark and are built so cheaply that first of all they are hard to repir, and secong the cost of a new one is so low there is no point. People used to fix toasters. Now have have to throw away a $2,000 two year old TV because parts are no longer available.

And if you smash most newer cars pretty good made in the 90s or later they are totalled.

They couldm't repair some of the ships used in WW2 in the late 1970s, they said "The technology no longer exists", had to scrap them. They even scrapped the YF17s and SR71s (they say). I might've retired them because of their flight envelope, and the relavitely poor maneuverability, but they were damn fast. With our not exactly friends in the world now possesing superior missile tachnology, how long do you think it'll take until they have an ICBM that flies like a Moskit 2 ? Would be nice to bring out a few of these old babies and fit them with a few new toys.

How is this relevant ? I bet they didn't lose all that much money. Between the time they built the and scrapped them the dollar had dropped quite a bit. But my point is they destroyed all kinds of workmanship and the results of many processes that went into building the thing. In a way that is destroying wealth.

So in the final analasys, money is not wealth, and it is not even a really accurate indicator of wealth. People who make alot of money tend to spend it. I know people who make twice what I amke and can't seem to make it sometimes. They got their bills ran up to that point.

Because you gotta keep buying stuff, for more than one reason. Look at the lines that formed to get the new video gam, PS3 or something in 05 or 06. And that was simply to get it first. Pay full retail, MSRP. They can't tell their kids no, they need this.

So the economy is better than ever, just not for us. for the tyrants.

T



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