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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 - Stocks or Gold</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 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, stock prices, historic stock prices, exchange calculator, 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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Williamson<br> MeasuringWorth<br> sam@mswth.org </b></p> <p>Americans have been talking a lot lately about needing to save more money, both individually and governmentally. Without getting into the national debt questions, it is worth thinking about how tricky the process of individual savings can be and how widely results can vary, even with the best of intentions. If we look at the past, we see that sometimes making the best choice entails being knowledgeable, but other times it is just being lucky. </p><p> Let me give you an example of two people, Alex and Pat, who were 27 in 1974, which was the year the government provided us with a tax-free way to save by creating Individual Retirement Accounts (IRAs). </p><p> Both Alex and Pat planned to work for 38 years and then retire when they are 66. Both decided to put $1,000 in their IRA at that beginning of each year and they stuck to the plan. </p><p> In the beginning Pat believed the stock market was the best investment and put the annual contributions in an index S&P stock fund that reinvested any dividends received. Alex, on the other hand, bought a gold fund. Both continued this strategy until 1980. </p><p> When they compared notes that year, Pat's IRA was $8,580, while Alex's had grown to $21,800. Pat then sold the stock fund and bought the gold fund, while Alex dumped the gold fund and bought the stock fund Pat just got out of. </p><p> For 20 years they stayed with this investment strategy. In 2000 they got together again. Pat's IRA was worth $18,860, a good bit less than the $27,000 Pat had sequestered over the years. Alex has holdings of $695,200. </p><p> Pat then gives up on gold and moved all the funds to the index stock fund. Alex takes the opposite course and jumps back into gold. </p> <p> In 2009, Pat was totally burned out by the stock market and converted what was now worth $20,550 into a money market account and leaves it there for the last two years. When 2012 arrives and after contributing a $1,000 a year for 38 years, Pat has an IRA worth $23,610 and can think of a modest retirement, with the help of Social Security. </p><p> For the eleven years leading up to 2012, Alex stayed in gold and now has an IRA worth $4,260,000 and sells it all. Following a different but perhaps no more logical investment strategy than Pat's, Alex is ready to retire in style, buy a condo at a ski resort and a yacht to cruise the Caribbean. </p> <p> Alex saved in the stock market for 20 years and in gold for 18 years. Pat saved in the stock market for 18 years and in gold 20 years. All these computations are made using <a href=" http://www.measuringworth.com/ussave/" class="content" title=" How Much Would Your U.S. Savings Have Grown? "> MeasuringWorth Saving Growth Calculator. </a> <p><i> First moral: It is sometimes better to be lucky than to be smart.</i></p><p><i> Second moral: Individual savings are good, but it is nice to be able to count on a guaranteed pension such as Social Security as well. </i></p> <br> <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 calculators.<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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