The first question to ask when looking at your wallet and deciding if it’s time to get a new one is how much money it contains. You might start thinking about what you can afford to buy once you know how much you have.
You might not be aware that once upon a time, $100 could get you something really good and expensive. In 1960, $100 bought a lot more than it does now.
So, what was the value of a dollar in 1960?
Short Answer: In 1960, $100 was worth roughly $926.72, as of 2021!
How Much was 100 Dollars Worth in 1960?
According to data from , one hundred dollars today was worth $926.72 in 1960. So since the buying power of $100 in 1960 was around $926.72, that means that there’s been a rise of $826.72 over 61 years!
The dollar suffered an average yearly inflation rate of 3.72 percent from 1960 and today, resulting in a cumulative price increase of 826.72 percent.
As per the , current prices are 9.27 times higher than the average prices from 1960. In the current day, one dollar can only purchase 10.79% of what it could in 1960.
Use the following inflation rate formula to calculate the difference in value between 1960 and now:
CPI today x 1960 USD value = Today’s Value
CPI in 1960
274.3 × $100 = $926.72
To compute the overall inflation rate for the 61 years between 1960 and 2021, use the formula below:
100 CPI in 2021 CPI in 1960 = Cumulative inflation rate (61 years)
CPI in 1960
274.31 – 29.6 × 100 = 827%
The CPI for all items is depicted in the graphs above. The Core CPI measures inflation for all commodities except food and energy, which are more volatile. Core inflation averaged 3.67 percent each year from 1960 to 2021 (compared to 3.72 percent for all-CPI inflation), totaling 798.94 percent!
With the core inflation rate, the purchasing power of $100 in 1960 is $898.94 in 2021, a difference of $798.94. Keep in mind that the total converted value is $926.72 (with an $826.72 difference). As a result, core inflation in 1960 was 1.50 percent.
What Does Inflation Rate Mean?
refers to a widespread increase in the price of goods and services. In other words, when inflation occurs, it means that you now require more money than you did previously. That’s why $100 in 1960 could purchase more than $100 today.
The percentage rise in a price index is used to calculate the inflation rate. A price index, as the name implies, is a metric that quantifies the average change in prices for products and services over time.
A , for example, tracks changes in retail prices paid by consumers to acquire commonly used items, including food, clothing, transportation fares, and fuel. Two types of inflation are typically measured by economists: “price” or “headline” inflation (which is based on the CPI) and core inflation (based on the GDP deflator).
Core inflation excludes food and energy prices because they tend to be more volatile. Headline inflation usually gives a more accurate reading of the economy than core inflation because it tends to be a better indicator of how much consumers’ purchasing power is changing.
Steady prices are an important part of any successful economy, and individuals rely on them when making financial decisions like borrowing money or saving for the future. As a result, managing inflation is one of a central bank’s primary responsibilities.
The rate of inflation in 1960 was 1.72 percent. The current year-over-year inflation rate is 5.39 percent (2020 – 2021). If this trend continues, $100 now will be worth $105.39 next year. Although inflation keeps changing, more information about the current inflation rates can be found in financial newspapers.
Whenever $100 becomes comparable to $926.72 over time, it signifies that a single US dollar’s “actual value” has been falling. To put it another way, a dollar will allow you to Purchase less items at the store. in the years to come. This phenomenon explains why a dollar’s value depreciates over time.
How Does Inflation Affect Buying Power?
Inflation is one of the most significant economic concepts addressed in economics, yet it is fraught with ambiguity.
Let’s start with a simple question: what is inflation? Inflation is defined as a rise in the price of a specific good or service over time.
So, if I buy a cup of coffee today for a dollar, and tomorrow I buy a cup of coffee for a dollar at Starbucks, we would say that the inflation rate is zero.
But what if I bought a $20 cup of coffee last year and a $25 cup this year?
That is an increase in price (inflation), but it does not appear to be a significant increase because prices are only increasing by a tiny amount. That’s why, if you ask, “How much was a dollar worth in 1960?” you’ll get a different answer. It was more valuable.
What Could 100 Dollars Get You Over the Years?
$In 2021, a $100 bill will be worth less than it was in 1960. Nevertheless, rather than looking at pricing on a regular basis, it’s far more important to evaluate what happened to inflation throughout that time period. If you have $100 now, it will not purchase as much next year because prices are constantly rising due to inflation!
In 1960, a mattress could be purchased for $100.
In 1960, the Salt Lake City Tribune marketed a Simmons “Longfellow” mattress for $99.50, designed for adults over 6 feet tall.
For $100, you could get a cashmere topcoat.
From 1965, according to an advertising in The Indianapolis News, The Penneys in downtown Indianapolis offered 100% cashmere topcoats for $79.95 on average.
You could get 12 irons for $100.
According to an advertisement in Vermont’s Burlington Free Press, a GE Ironing with Steam and Dry Iron were priced at about $7.88 in the early 1970s. With $100, you could purchase around a dozen of them.
For $100, you could get an air conditioner.
You could stay cool without spending a lot of money in 1975. A Whirlpool 5000 BTU Room Air Conditioner cost $94.88 according to the Courier Post.
Two portable radios could be purchased for $100.
In 1980, a Sony AM/FM Portable Radio cost $40, according to an advertisement in the Detroit Free Press from Fretter Appliance.
For $100, you could get a turntable.
Paying $99 for a Technics SLJ1 Belt Drive Linear Tracking Turntable in 1985 would have seemed reasonable at that time.
For $100, you could get a single cordless phone.
A corded phone is uncommon and inconvenient nowadays, yet in 1990, a Sony Cordless Telephone cost only $97.
For $100, you could get three pairs of jeans.
In the Atlanta Constitution in 1995, Mervyns advertised women’s Bill Blass Jeans for $29 per pair.
For $100, a stereo could be purchased.
In the first year of the twentieth century, a JVC Hi-Fi VHS Stereo Player could be purchased for $99 in the year 2000.
For $100, you could get two sweaters.
In 2010, an Oscar de la Renta cabled cotton sweater cost $50, according to the Chicago Tribune. For $100, you could have purchased two sweaters.
In 2020, you can acquire an espresso machine for $100.
For $100, you can get an espresso machine from Nespresso, Delonghi, in 2020. Although the money won’t buy you the best coffee maker, it will undoubtedly save you cash on Starbucks visits!
How Much was 100 Dollars Worth in 1960 Conclusion
As you can see, the purchase power of one hundred dollars has fluctuated over time. As a result, when considering investments or projects with long timelines, it’s critical to keep inflation rates in mind.
So, what was the value of a dollar in 1960? Quite a bit!
If you want to achieve financial independence, make sure you don’t leave your money in the bank for too long!