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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01//EN" "http://www.w3.org/TR/html4/strict.dtd"> <html> <head> <link rel="icon" type="image/x-icon" href="/images/favicon.ico"> <title>Measuring Worth - User Guide</title> <meta http-equiv="content-type" content="text/html; charset=iso-8859-1"> <link href="includes/styles.css" rel="stylesheet" type="text/css"> <meta name="keywords" content="measuring worth, inflation rates, saving comparator, relative value, worth of a dollar, worth of a pound, purchasing power, gold prices, GDP, history of wages, average wage, real wage, growth comparator, stock prices, historic stock prices, exchange comparator, stock growth rates, how much is that worth, CPI, RPI, exchange rates, relative worth, consumer bundle, interest rates, S&P accumulation, history of gold prices"> </head> <body> <div id="container"> <link rel="icon" type="image/x-icon" href="/images/favicon.ico">  <div id="header"> <div style="height:70px;padding-top:20px;"><a href="/index.php" title="MeasuringWorth.com"><img src="/images/logo.png" alt="Measuring Worth, inflation rates, saving calculator, relative value, worth of a dollar, worth of a pound, purchasing power, gold prices, GDP, history of wages, average wage, real wage, growth calculator" width="400" height="43" vspace="10" border="0" align="left" ></a></div> <ul class="menudd"> <li><a href="/index.php">HOME</a></li> <li><a href="/aboutus.php">ABOUT US</a> <ul> <li><a href="/2020x-citations-with-links.html" class="documents">CITATIONS</a></li> </ul> </li> <li><a href="/guide.php">USER GUIDES</a> <ul> <li><a href="/guide.php" class="documents">GUIDE</a></li> <li><a href="/tutorials.php" class="messages">TUTORIALS</a></li> </ul> </li> <li><a href="/glossary/index.php">GLOSSARY & FAQ</a> <ul> <li><a href="/glossary/index.php" class="documents">GLOSSARY</a></li> <li><a href="/glossary/index.php#faq" class="messages">FAQ</a></li> </ul> </li> <li><a href="/essays.php">ESSAYS</a> <ul> <li><a style="width:400px;" href="/explaining_measures_of_worth.php" class="documents">MEASURES OF WORTH</a></li> <li><a style="width:400px;" href="/slavery.php" class="messages">MEASURING SLAVERY</a></li> <li><a style="width:400px;" href="/Presidents.php" class="documents">THE RELATIVE PERFORMANCE OF PRESIDENTS</a></li> <li><a style="width:400px;" href="/parable-two-workers.php" class="messages">PARABLE OF SAVING</a></li> <li><a style="width:400px;" href="/uk-gdp-volatility.php" class="messages">THE VOLATILITY OF THE UK GDP</a></li> </ul></li> <li><a href="/contribute_donate.php">SUPPORT US</a></li> <li><a href="/sendcomment.php">CONTACT US</a></li> </ul> <p class="blog-announcement"> </p> </div>  <style type="text/css"> /* HOW TO CREATE A CSS3 DROPDOWN MENU [TUTORIAL] "How to create a CSS3 Dropdown Menu [Tutorial]" was specially made for DesignModo by our friend Valeriu Timbuc. 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The best measure depends on the question asked.</p> <p>Our five "relative value" comparators can provide several alternative answers with a guide to the best choice. Many websites and other resources will give you one answer based on a consumer price index. This simplification can be misleading, as any transaction is valued in different ways by different people and in different time periods. Thus, when making comparisons over time, these alternative ways of understanding value must be taken into account.</p> <p>For the United States we have two comparators (from 1774 on), one that gives the relative value today of a financial amount in the past.  It is called <a href="https://www.measuringworth.com/calculators/ppowerus/">Purchasing Power Today -US$</a>  Its answers change every month or quarter as soon as a new measure’s observation is announced.  </p> <p>The second is <a href="https://www.measuringworth.com/calculators/uscompare/">Seven Ways to Compute the Relative Value of a U.S. Dollar Amount</a> and gives the relative value of amounts between any two years.  It uses only annual data, and presents in-depth descriptions of our definitions of the types of relative worth and the measures we use.  For scholarly applications, we recommend this comparator be used because its annual observation-based design is more readily reproduceable.</p> <p>We also have relative worth comparators for the <a href="https://www.measuringworth.com/calculators/ukcompare/">United Kingdom</a> (from 1270 on), <a href="https://www.measuringworth.com/calculators/australiacompare/">Australia</a> (from 1828 on), and <a href="https://www.measuringworth.com/calculators/australiacompare/">Spain</a> (from 1850 on). These all use only annual data.</p> <p>For assistance on how to pick the best measure, consult the <a href="https://www.measuringworth.com/tutorials.php"><em>Tutorials</em></strong></a>.<br> <br> </p> <h4>Comparing the growth rates of economic variables over different periods and for different lengths of time</h4> <p>The growth of most variables over time, in economics and elsewhere, is usually measured as a percent increase (or decrease). To compare growth rates over different times in history and for different durations, economists use the concept of <a href="https://www.measuringworth.com/glossary/index.php">annualized growth rate</a>. The <a href="http://www.measuringworth.com/growth" class="content" title="View the Measuring Worth growth comparator">growth comparator</a> here makes these comparisons for 23 annual economic and demographic series as far back as the 13th century.<br><br></p> <h4>The year-to-year inflation rate in the United States (1775 on) and the United Kingdom (1265 on)</h4> <p>This <a href="http://www.measuringworth.com/inflation" class="content" title="View the US inflation rates comparator">inflation rate comparator</a> gives you the year-to-year inflation rate for all the years in the range you choose and the annualized growth rate for the entire time period.<br><br></p> <h4>How much would your savings grow in the past, depending on what it is invested in</h4> <p>One's savings accumulates over time at different rates depending on where it is invested. Savings accounts at banks are very safe; however, they pay a low rate of return compared to the stock market. Bonds can pay more than saving accounts, but they sometimes require investors to keep their money tied up for extended periods. Stocks are usually the most risky and for many periods have given their owners high returns; however, they can go through long periods of no appreciation, such as from 1965 to 1982 or even decline as from 2007 to 2009. The <a href="http://www.measuringworth.com/ussave/" class="content" title="View the US savings comparator">saving comparator</a> can tell you how your savings would have grown in the past depending on which type of asset you chose as an investment for your savings. <br> <br></p> <h4>How much should your 401k & IRA grow in the past, depending on what it is invested in</h4> <p> Each year millions of Americans save part of their income in a 401(k) or an IRA (Individual Retirement Account.) The money put in either of these is not subject to income tax and is one of the largest financial asset of household, worth more than $30 trillion. <br> Picking the financial assets to make a retirement account grow the most is the job of whoever is managing the funds, be it the individual, a large investment house or a hedge fund. The <a href="http://www.measuringworth.com/401k&IRA/" class="content" title="View the Retirement comparator">retirement comparator</a> is a way to compare how you (or they) have done relative to four different types of generic portfolios at different levels of fees. It also demonstates how expensive the annual fees can be. For example, if a plan that is 20 years old and has a one percent fee as a percent of the value of the fund, the owner has paid ten percent of that portfolio in management fees.<br> <br></p> <h4>What is a historic price in British Pounds worth in US dollars today (and vice versa)?</h4> <p>If you seek to know the present worth of a past monetary value that is valued in a currency different than your own, the problem becomes more complicated. Instead of dealing with only the changing value of the item in your currency, you must also deal with the changing value in the other country's currency and the changing exchange rate between the two. Thus, there are three variables to account for instead of one. The <a href="http://www.measuringworth.com/exchange"class="content" title="View the UK and US conversion comparator">conversion comparator</a> uses the CPI and GDP deflator in both the United States and the United Kingdom and gives a range of answers that depend on which year's exchange rate applies.<br><br></p> <h4>Comparing the growth rates of daily stock indexes over different periods and for different lengths of time</h4> <p>The <a href="http://www.measuringworth.com/DJIA_SP_NASDAQ" class="content" title="View the United States DJIA, SP, NASDAQ stock growth comparator"> stock growth comparator</a> can calculate the growth rate of the DJIA, S&P500 and NASDAQ in the United States between any two days from when each index began to the present. The answer is determined using the annualized growth rate between the two days compounded daily.<br><br></p> <hr /><p> Please <a href="sendcomment.php" class="content" title="Let us know how we can be more helpful">let us know</a> if and how this discussion has assisted you in using our comparators.<br><br></p> </div> </div>  <div id="navigation">      <a href="/blog.php" target="_blank"><img style="width:200px;" src="/images/blog-read.png"></a> <br> <a class='navigation' href="/calculators/index.php" title="Calculate purchasing power, savings growth, stock growth rates and more">THE COMPARATORS</a><br> <div class='submenu'> <a class='submenu' title="Measuring Worth - Annualized Growth Rates" href='/growth/'>Annualized Growth Rates</a><br> <a class='submenu' title="US Purchasing Power" href='/ppowerus/'>Purchasing Power Today - US $</a><br> <a class='submenu' title="US Relative Values" href='/uscompare/'>Relative Values - US $</a><br> <a class='submenu' title="UK Relative Values" href='/ukcompare/'>Relative Values - UK £</a><br> <a class='submenu' title="Australian Relative Values" href='/australiacompare/'>Relative Values - Australia £ and $</a><br> <a class='submenu' title="Australian Relative Values" href='/spaincompare/'>Relative Values - Spain</a><br> <a class='submenu' title="Convert dollars to pounds" href='/exchange/'>Conversion ($ and £)</a><br> <a class='submenu' title="UK Purchasing Power" href='/ppoweruk/'>Purchasing Power - UK £</a><br> <a class='submenu' title="US Savings Growth" href='/ussave/'>Savings Growth - US $</a><br> <a class='submenu' title="US Savings Growth" href='/401k&IRA/'>401k & IRA Growth - US</a><br> <a class='submenu' title="Calculate inflation rates" href='/inflation/'>Inflation Rates</a><br> <a class='submenu' title="Stock Growth Rates - DJIA, SP500 & NASDAQ" href='/DJIA_SP_NASDAQ/'>Stock Growth Rates<br />  (DJIA, SP500 & NASDAQ)</a> </div> <a class='navigation' title="Graph the value of things over time" href="/graphs/">GRAPHS</a><br> <a class='navigation' title="Data sets for measuring worth" href="/datasets/index.php">DATA SETS</a><br> <div class='submenu'> <a class='submenu' title="US GDP over time" href='/usgdp/'>GDP - US </a><br> <a class='submenu' title="US CPI over time" href='/uscpi/'>CPI - US</a><br> <a class='submenu' title="US wage over time" href='/uswage/'>Wage - US</a><br> <a class='submenu' title="US Consumer Bundle over time" href='/consumer/'>Consumer Bundle - US</a><br> <a class='submenu' title="UK GDP over time" href='/ukgdp/'>GDP - UK </a><br> <a class='submenu' title="UK RPI & earnings over time" href='/ukearncpi/'>RPI & Earnings - UK</a><br> <a class='submenu' title="Spain GDP over time" href='/spaingdp/'>GDP, Prices & Wages - Spain </a><br> <a class='submenu' title="Australia GDP, Prices & Stocks over time" href='/datasets/australiadata/'>GDP, Prices & Stocks - Australia</a><br> <a class='submenu' title="Chinese GDP & Prices over time" href='/auswages/'>Wages - Australia </a><br> <a class='submenu' title="US SAP over time" href='/datasets/sap/'>Annual S&P Index</a><br> <a class='submenu' title="Daily DJA over time" href='/datasets/DJA/index.php'>Daily DJA</a><br> <a class='submenu' title="price of gold over time" href='/gold/'>Price of Gold</a><br> <a class='submenu' title="US & UK Interest Rates over time" href='/interestrates/'>Interest Rates - US & UK</a><br> <a class='submenu' title="Dollar Exchange Rates over time" href='/exchangeglobal/'>Dollar Exchange Rates</a><br> <a class='submenu' title="Dollar-Pound Exchange Rate over time" href='/exchangepound/'>Dollar-Pound Exchange Rate</a> </div> <a class='navigation' title="Data sets for measuring worth" href="/newsletter.php">SIGN UP FOR ANNOUNCEMENTS</a><br>  </div>   <div id="footer"> <div class="footer-header">MeasuringWorth is a service for calculating relative worth over time.</div> <p><a class='footer' href="../index.php" title="Measuring Worth home page">Home</a> | <a class='footer' href="/aboutus.php" title="Learn more about the Measuring Worth project">About Us</a> | <a class='footer' href="/sendcomment.php" title="Contact the Measuring Worth staff">Contact Us</a> | <a class='footer' href="/contribute_donate.php" title="Contribute to the Measuring Worth project">Support Our Work</a><br /><br /> Copyright © <script>document.write(new Date().getFullYear())</script> MeasuringWorth. 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