2 Replies Latest reply on Apr 24, 2014 10:19 AM by JerryD

    incredible shifting decimal point


      My mother-in-law was born in 1904 and lived to age 92 (today is her birthday). She may have encountered a time when a loaf of bread sold for 4 cents, then 40 cents and today perhaps 400 cents ($3.99) for a loaf of "store bought" bread. I myself remember filling the tank of a VW bug for something above or close to $3.00 and today the Prius holds more like $30.00

      In these cases, this is essentially slow-motion shifting of the decimal point. A $30 tank of gasoline makes sense in my mind as the old $3 tank of gasoline, the $3 loaf of bread as a 30 cent loaf. That is easy enough to "do in my head" on the fly.

      Likewise, at nice $3,000 automobile now may have a price of $30,000 - which to me is that same old $3,000

      I do similar mental gymnastics to translate national numbers like billions and trillions. For example, there are somewhere around 100,000,000 individual federal income tax returns (presumably this includes all the joint returns files), so for example to make sense of $14 billion, I just translate that amount into $140 for each tax return. So, when today's TV news reference the $14 Trillion in wealth wiped out by "wall street" in our recent Great Recession, my translation into personal and household terms is $140,000 lost - he lost $140,000 and she lost $140,000 and those figures are not that far off actuality. However, there is no Loss (what is real? asked the rabbit). The only time there can be a loss (or a gain) is when shares (mutual funds in our case) are sold (and bought) and since we did not ever Sell any, we also did not lose any. In fact, the one year gains (on paper) came close in 2013 to putting back all that personal / household "wealth" that wall street "wiped out" and not only that, until our 2011 retirement, we continued to buy at maximum level. Thus, not only was there no actual Loss but in fact there was a "fire sale" of sorts because the salaries we continue to invest purchased shares at prices considerably lower than the prices otherwise would have been. About wages / salary: my father worked his donkey off as a carpenter for $100 per week, about $5,200 per year (no paid holidays, no paid vacation, no paid health insurance) after serving in World War II. By playing my game of "move the decimal point," that is roughly the equivalent of just over $50,000 which, in my dreams, we about the pinnacle of my pay / earnings that started at an incredibly high $8,500 in 1974 as a assistant programmer In Training in NJ.

        • Re: incredible shifting decimal point
          MyR Community Manager

          BoBraxton, thank you for creating a new discussion thread! We appreciate and enjoy your participation in the MyRetirement online community and look forward to your future contributions.

          • Re: incredible shifting decimal point

            "at nice $3,000 automobile now may have a price of $30,000 - which to me is that same old $3,000" Don't think so. My first car cost $3,000. It had very nice chrome wheels, large v8, stick shift, hardtop, got a "great" 14 mpg using premium. Just bought for less than $30,000 an all-wheel drive SUV, 4 cylinder, continuous variable transmission, dual AC, cruise control, anti-lock brakes, power steering, stability control, premium radio, leather, best instrumented car I have ever had that gets almost 30 mpg on the highway and (!!!) 26 mpg in tank after tank driving lots of 2-track logging roads frequently in low range. The point is that that $3,000 car was not anything like close to the $30,000 car these days can be. I would however be very interested in a comparison of what that $3,000 car might have cost with all of today's features. It would probably be astronomical since the features would have been way beyond luxury.