EDITOR NOTE: What does it mean if the value of a dollar today is worth only 6% of what it was worth in 1930? It means that the dollar has lost 93.6% of its purchasing power due to inflation. And bear in mind, we’re talking about a slow moving 3% annual inflation rate! The loss in purchasing power isn’t spread evenly across the board either. As this article explores, the loss in purchasing power varies by city, country, and spending category. As we move toward a pro-inflationary environment, as per Fed framework, the risk of dollar erosion is something we need to keep in mind, as inflation is the silent wealth killer; and we often don’t notice it until it's too late; especially for those retirees who are under the impression they can depend on fixed-income to fund their living expenses for the remainder of their living years.
$100 in 1930 is equivalent in purchasing power to about $1,558.26 today, an increase of $1,458.26 over 90 years. The dollar had an average inflation rate of 3.10% per year between 1930 and today, producing a cumulative price increase of 1,458.26%.
This means that today's prices are 15.58 times higher than average prices since 1930, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 6.42% of what it could buy back then.
The 1930 inflation rate was -2.34%. The current year-over-year inflation rate (2019 to 2020) is now 1.18%1. If this number holds, $100 today will be equivalent in buying power to $101.18 next year. The current inflation rate page gives more detail on the latest inflation rates.
Buying power of $100 in 1930
This chart shows a calculation of buying power equivalence for $100 in 1930 (price index tracking began in 1635).
For example, if you started with $100, you would need to end with $1,558.26 in order to "adjust" for inflation (sometimes refered to as "beating inflation").
When $100 is equivalent to $1,558.26 over time, that means that the "real value" of a single U.S. dollar decreases over time. In other words, a dollar will pay for fewer items at the store.
This effect explains how inflation erodes the value of a dollar over time. By calculating the value in 1930 dollars, the chart below shows how $100 is worth less over 90 years.
According to the Bureau of Labor Statistics, each of these USD amounts below is equal in terms of what it could buy at the time:
This conversion table shows various other 1930 amounts in today's dollars, based on the 1,458.26% change in prices:
Inflation by City
Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1930 to 2020 (figures shown are purchasing power equivalents of $100):
- San Francisco, California: 3.41% average rate, $100 → $2,039.52, cumulative change of 1,939.52%
- Seattle, Washington: 3.28% average rate, $100 → $1,830.86, cumulative change of 1,730.86%
- Boston, Massachusetts: 3.14% average rate, $100 → $1,620.82, cumulative change of 1,520.82%
- New York: 3.13% average rate, $100 → $1,608.76, cumulative change of 1,508.76%
- Houston, Texas: 3.04% average rate, $100 → $1,474.99, cumulative change of 1,374.99%
- Atlanta, Georgia: 3.03% average rate, $100 → $1,473.61, cumulative change of 1,373.61%
- Philadelphia, Pennsylvania: 3.03% average rate, $100 → $1,468.15, cumulative change of 1,368.15%
- Chicago, Illinois: 2.97% average rate, $100 → $1,396.25, cumulative change of 1,296.25%
- Detroit, Michigan: 2.96% average rate, $100 → $1,377.94, cumulative change of 1,277.94%
San Francisco, California experienced the highest rate of inflation during the 90 years between 1930 and 2020 (3.41%).
Detroit, Michigan experienced the lowest rate of inflation during the 90 years between 1930 and 2020 (2.96%).
Note that some locations showing 0% inflation may have not yet reported latest data.
Inflation by Country
Inflation can also vary widely by country. For comparison, in the UK £100.00 in 1930 would be equivalent to £6,579.44 in 2020, an absolute change of £6,479.44 and a cumulative change of 6,479.44%.
In Canada, CA$100.00 in 1930 would be equivalent to CA$1,550.00 in 2020, an absolute change of CA$1,450.00 and a cumulative change of 1,450.00%.
Compare these numbers to the US's overall absolute change of $1,458.26 and total percent change of 1,458.26%.
Inflation by Spending Category
CPI is the weighted combination of many categories of spending that are tracked by the government. Breaking down these categories helps explain the main drivers behind price changes. This chart shows the average rate of inflation for select CPI categories between 1930 and 2020.
Compare these values to the overall average of 3.10% per year:
The graph below compares inflation in categories of goods over time. Click on a category such as "Food" to toggle it on or off:
How to Calculate Inflation Rate for $100 since 1930
Our calculations use the following inflation rate formula to calculate the change in value between 1930 and today:
Then plug in historical CPI values. The U.S. CPI was 16.7 in the year 1930 and 260.229 in 2020:
To get the total inflation rate for the 90 years between 1930 and 2020, we use the following formula:
Plugging in the values to this equation, we get:
Comparison to S&P 500 Index
The average inflation rate of 3.10% has a compounding effect between 1930 and 2020. As noted above, this yearly inflation rate compounds to produce an overall price difference of 1,458.26% over 90 years.
To help put this inflation into perspective, if we had invested $100 in the S&P 500 index in 1930, our investment would be nominally worth approximately $460,793.28 in 2020. This is a return on investment of 460,693.28%, with an absolute return of $460,693.28 on top of the original $100.
These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.
The compounding effect of inflation would account for 93.58% of returns ($431,222.22) during this period. This means the inflation-adjusted real return of our $100 investment is $29,471.06. You may also want to account for capital gains tax, which would take your real return down to around $25,050 for most people.
Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 1930 to latest available data for 2020 using average monthly close price.
Originally posted on in 2013 Dollars