During "Modern Marvels: The Seventies", a History Channel television show that aired last Wednesday, it was mentioned that an equivalent unit to today's $100 microwave oven would have cost approximately $395 in the mid-1970s.
That reduction in cost occurred through technological advances and mass production, which overcame the steady ravages of inflation.
Otherwise, by the effects of inflation, a $395 microwave oven sold in, say, 1975, would cost $1,559.90 in 2006, according to The Inflation Calculator.
A depression-era "millionaire" considered very "rich" then, would require, today, a "ten-millionaire" to achieve the same economic power, due to inflation. More specifically, if Lieutenant General Oliver "Daddy" Warbucks (approximate age, 52), the fictional character who appeared in 1924 in the comic strip Little Orphan Annie, had a million dollars in 1930, and was considered "rich", that wealth would translate into $11,391,702.40 in 2006.
This effect was explored in a fascinating article entitled "Because a million isn't what it used to be: 'Millionaire' needs an inflation adjustment to its definition", by Ruth Walker, published on August 31, 2007, in The Christian Science Monitor.
[T]hey haven't really adjusted millionaires for inflation.She concludes: "Millionaire still means what it has always meant, all right. It's just that being a millionaire doesn't mean what it used to be."
Millionaire came into English from French in the 1820s. The Oxford English Dictionary defines millionaire rather airily as "a person possessed of a 'million of money' – pounds, dollars, francs, etc.; a person of great wealth." * * *
One might wonder what was going on in people's minds that made the early decades of the 19th century the moment when it seemed relevant to think in terms of a million. * * *
But no, we've stuck with "millionaire," even as inflating prices have made the term applicable to more and more people.
In 1995, there were 3.77 million millionaires in America, according to Wall Street Journal reporter Robert Frank's new book "Richistan." Nine years later there were 9 million. That's more millionaires than Austria, for instance, has people. And they control a collective net worth of some $30 trillion – more than the total value of all the goods and services produced in Europe, China, Japan, Brazil and Russia combined. * * *
In Frank's taxonomy, it takes $6 million to be really rich, and $10 million to be comfortably rich. Serious money seems to start somewhere beyond $100 million. * * *
Is it more than a coincidence, then, that a recent proposal for application of the federal estate tax suggests a $5 million threshold per person (applicable in 2015), which would allow a couple owning $10 million to escape the tax? See: PA EE&F Law Blog posting "Fed Est Tax Reform Bill Introduced" (08/16/07).
Daddy Warbucks would still be subject to federal estate tax under such proposals.
Yahoo Finance posted an article published on March 20, 2008, in Barrons, entitled "Are You Rich?", by Tom Sullivan, who asked: "How much of a nest egg do you need to join the true elite?"
Yes, it takes more than $10 million to be seen as rich these days. It takes more like $25 million.
Not only is that the minimum for the red-carpet treatment at a growing number of banks, it is also, in the view of many experts, the sum needed for a truly cushy retirement, one free of financial worry. * * *