We have all heard that candy used to cost a dime, or a nickel, and that once upon a time gas prices were below one dollar a gallon. Inflation has certainly made its mark since the good-old days. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)
And sure, it still sounds like cheap living, but when you actually adjust for inflation, a nickel was a pretty steep charge.
This brings us to an amazing infographic Credit Sesame created to explain the cost of living like Mad Men’s Don Draper circa 1962 in today’s market.
Unsurprisingly, it’s quite expensive!
Consider, when adjusted for inflation, Draper’s $15,300 Westchester, N.Y. home increases to $117,161. But adjust for equivalent values, and you’re looking at more: $363,000.
A swanky hotel room fitting for a man of Draper’s extravagance would have gone for $10 per night. Today, expect $415.
Business Section: Investing Ideas
For investors, it serves as a reminder of how inflation can cause more demand for stocks, and less for bonds.
After all, in times of inflation bond values typically fall because they agree to pay a fixed amount of dollars in the future. Strong inflation will eat away at the purchasing power of those dollars, making bonds less attractive.
Meanwhile, stocks are known to price in inflation to the extent that the companies can raise prices on their products.
Take a look at the infographic:
(Written by Rebecca Lipman)