Avatar and the REAL value of money

This week has seen the press report that Avatar has become the highest grossing movie of all time. What does this really mean? I know that GEN X people around my age would argue that the Star Wars Trilogy, E.T and the Indiana Jones films were at least as big as Avatar. Baby Boomers would add Gone with the Wind, Ben Hur and Dr Zhivago for a start.

So as a Financial Adviser I felt this would be a good chance to show the power of inflation on money and the effect of compound interest or in this case compound inflation. As we all know, the value of $100 today is not the same as $100 in 1980. What would it be worth now if inflation had been 3.5% for the past 30 years? It would be worth $280.68 !

If you invested the same $100 with a 7% return it would grow to $761.22  

So this illustrates clearly that if you can invest (and not touch) your money it will grow substantially over time. HOWEVER inflation and the cost of living grow over time too, so make sure your investments are earnings significantly more than inflation.

If you want to find out what your investments could be worth contact us

Box Office Hits, Adjusted for Inflation
Avatar might be the highest grossing film of all time, but ticket prices are also at an all-time high. Adjusted for inflation, Avatar is only #26, just behind Grease, Mary Poppins, and Snow White.