You don’t have to be an economist to understand inflation and its effect on the U.S. dollar. Over time, goods and services get more expensive. Also over time, the dollar loses value. Inflation is the rate at which goods and services increase in value and at which the dollar drops in value.
Inflation affects your money in a number of ways, many of which you might not even realize. Possibly the most common way to illustrate inflation over time is to show goods you could once buy with a certain amount of money — say $1,000.
In most cases, $1,000 doesn't buy you nearly as much as it once did. However, there are some cases where one grand can actually buy you more today. Read on to uncover how the prices of some items have changed over the last century.
Steinway & Sons Model B Classic Grand
Often referred to by pianists as "the perfect piano," the Steinway & Sons Model B is used in teaching studios and homes, as well as mid-sized music venues. The 760-pound piano is nearly 7 feet long and approximately 4.8 feet wide and is made of high-quality materials.
In 1915, the Model B in an Ebony Satin finish sold for $1,100, according to the Steinway & Sons website. Today, the same model is valued at $106,500. Prices for the piano are projected to increase at a rate of 4 percent every year, which means this model will likely cost $191,900 in 2032.
An Average Sedan
Having a car has been part of the American Dream since Henry Ford rolled out the first moving assembly line for mass production of an entire vehicle in 1913. The cost of an average car — such as a sedan — in 1917 about $1,084, according to the Consumer Price Index Inflation Calculator.
The average price of a car today varies by year, make and model and a variety of other factors, so it’s difficult to make a fair comparison. According to automotive resource Edmunds, you can get a great deal on an economy sedan, paying a little less than $15,000 total. On the other end of the spectrum, a luxury sedan can cost more than $60,000 in today's market. While some Americans shell out the cash to pay for their dream car, many end up financing a car with an auto loan.
The Sears Greenview Home
It might seem hard to believe, but at one time Sears sold complete home kits ready for construction. The retailer would ship the frame, building materials (like lumber), hardware and even painting materials directly to consumers. Between 1911 and 1933, Sears also offered home mortgages.
According to the Sears archives, the Greenview home — a four-bedroom house ideal for "suburb or farm" — could be bought for just $1,152 between 1915 and 1920. Home prices today vary greatly depending on location, the size of home and the economic climate, among other factors. A July 21, 2017, search on Zillow for four-bedroom homes in West Point, Va. — a location where you can still find Sears homes today — found houses for sale between about $190,000 and more than $1 million.
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Five Classic Chanel Flap Bags
A purse is a necessity for many women. And for some women, only a designer bag will do. The Chanel Flap Bag was — and still is — an iconic bag designed with military-inspired accents and made with pure lambskin or leather. These were created in a multitude of colors and designs, including traditional black and navy, as well as floral tweed and quilted leather designs.
In 1955, you could buy the equivalent of not one, but five classic Chanel black quilted lambskin medium flap bags for $220 each, according to Racked, a Vox Media brand. Today, the same bag retails for $4,900, according to the Chanel website. A "vintage" black quilted lambskin medium flap bag from the 1980s or 1990s in very good or excellent condition retails for roughly $3,000 on Portero, an online marketplace for pre-owned luxury goods.
Private University Education
University enrollment reached record levels between 1945 and 1979, as a high number of servicemen sought a college education under the GI Bill. During these years, there were approximately 1,800 universities serving American students, according to the Business Innovation Factory (BIF) Student Experience Lab, a project that maps the experience of college students past and present. The average cost of private university tuition was $1,200, according to the same source.
According to CollegeBoard, the average published undergraduate charges for tuition, fees, room and board at a private nonprofit four-year university for the 2016-2017 school year is $45,370, though some institutions cost more. Students cover the high costs with student loans, borrowing an average of $24,600 to attend a private non-profit school.
Admiral 25-inch Color TV Set With Stereo/Radio
Color televisions made their way into American homes during the 1960s as more networks started all-color programming. Having a color TV set became a necessity, and in 1966, you could own the 25-inch Admiral TV-Stereo-Radio for $995. Adjusted for inflation, a similar product would cost about $7,600 in January 2017.
Of course, the price of televisions has actually dropped significantly over the years. You can now buy a 24-inch flat screen TV from Best Buy for less than $100 for some brands.
One Berkshire Hathaway Share
Multinational conglomerate holding company Berkshire Hathaway wholly owns several well-known companies like GEICO, Fruit of the Loom, Helzberg Diamonds and Pampered Chef, and owns a significant chunk of other successful companies. Berkshire Hathaway also manages Berkshire Hathaway HomeServices, a real estate brokerage franchise network.
When Warren Buffett bought enough shares to take control of Berkshire Hathaway, he paid about $11.50 per share. Less than 20 years later in Sept. 1983, one Berkshire Hathaway Inc. share cost $1,035, according to Yahoo! Finance.
Even novice investors know that Berkshire Hathaway Inc. is far and away the most expensive stock on the market today. According to Yahoo! Finance, investors paid a whopping $259,000 per company share in late July 2017.
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In 2007, Apple unveiled its iMac, an all-in-one desktop computer. Made with recyclable aluminum and glass, the device helped free work spaces of clutter. The 20-inch model debuted at $1,199.
Today, a 21.5-inch iMac can be purchased from Apple for $1,299. According to Forbes, PC sales are expected to drop in 2017 and beyond, as consumers continue to opt for phones and portable devices.
One Superbowl Ticket (and then some)
Ten years ago, the average ticket to Super Bowl XLI cost just $650. A budget of $1,000 could maybe also get you a hotel room for the night — or at least get you snacks at the stadium.
In 2016, the average ticket price for Super Bowl 50 was $1,325. In 2017, the average ticket price was more than $3,000 as of Jan. 31, according to CBS Sports. Tickets for the 2018 Super Bowl, which will take place at U.S. Bank Stadium in Minneapolis, are expected to cost between $800 and $2,750, according to TickPick, a ticket marketplace.
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