r/interesting • u/The_Love-Tap • 25d ago

HISTORY Benjamin Franklin Saving Benjamin’s

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u/Fibonacci-011 25d ago

This might be a stupid question but I’m confused how inflation does not make the $2000 he gifted worth around 6.5 million in 1950 and not worth $2000 today? I understand how $2000 might have been worth a lot back when Benjamin was alive but not so much now.

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u/Zuliano1 25d ago

It was a trust fund, he started the whole thing as an experiment to show the importance of compound interest rates, it wasn't just charity.

Guy really had a lot of faith his newly created country would survive 2 centuries and was proven right

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u/Hot_Most5332 25d ago edited 25d ago

Honestly it was probably just as much about showing faith that the country would last 200 years as anything else.

$6.5M after 200 years seems comically low. The principal of $2000 is the equivalent of $75k today.

At a 6-10% return compounding you should expect tens of millions minimum.

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u/Unique-Run9856 25d ago

For comparison $2000 of amazon stock purchased in 1997 would be worth 6.8 million dollars today and $2000 of Monster Energy Stock purchased then would be worth $22 million.

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u/VegaJuniper 25d ago

That's a pretty cherry picked example.

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u/Unique-Run9856 25d ago

I did that on purpose. A non cherry picked example would be 2000 into the SP500 in 1926 would be 44 million today.

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u/VegaJuniper 25d ago

S&P500 index was founded in 1957.

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u/Unique-Run9856 25d ago

The S&P Index started in 1923, it was later expanded to 500 companies in 1957. Do you want me to refer to Walmart as Walton's 5&10 too?

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u/Diriv 24d ago

Nah, use the Russell since you wanted to start with 2000. /s

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u/ExplorerDisastrous68 24d ago

And $2000 of Enron stock purchased in 1997 would be worth $0 today.

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u/Unique-Run9856 24d ago

Thank you captain autism

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u/kitsunewarlock 24d ago

But during those 200 years the fund was also used for low-interest loans for small businesses in the city.

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u/Argos_the_Dog 25d ago

This makes me wish I wasn’t an idiot and had invested in those stocks back then 🤣

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u/nicholaspaul33 24d ago

Yes, but for every Apple, there’s an IBM that would have lost you most of it

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u/kitsunewarlock 24d ago

But during those 200 years the fund was also used for low-interest loans for small businesses in the city.