While reading the book WHY GOLD? WHY NOW? by E.B. Tucker I came across a very interesting paragraph that I want to propose again in today’s article to show the importance of saving in gold instead of in currency.
Disclaimer:
The information provided does not constitute a solicitation for the placement of personal savings. The use of the data and information contained as support for personal investment operations is at the complete risk of the reader.
The extracted and translated part reports the following:
My grandfather earned $600 a month as a carpenter
and with that money his family was barely middle class.I am a highly skilled designer with 2 masters degrees
and I want to calculate how much I would have to earn to have the same
purchasing power as my grandfather.An ounce of gold in 1960 was worth just over $35.
With a salary of $600 a month, my grandfather earned $7,800 a year,
including his thirteenth month’s salary. About 220 ounces of pure gold.Today 220 ounces of pure gold would be 220 x $2,246 = $494,000
E.B. Tucker, Why gold? Why now?
In reality I earn just over $150,000 a year.
Using the price of gold as a reference, we deduce that:
- The value of $1 today has decreased by -97% compared to that of 1960,
- The skilled work of the grandson is worth 30% of that of the grandfather as a carpenter,
- If the grandfather had saved in dollars, he would have left less value as an inheritance,
- If the grandfather had saved in gold, he would have left more value as an inheritance.
I leave you with this funny video, where a couple thinks they have become rich by finding old banknotes, only to discover that they only have paper in their handsstraccia.
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