A $10,000 bill issued by the US Treasury in 1934 just sold at auction for a record-breaking $480,000. The bill features Salmon Chase, who was President Abraham Lincoln's Treasury secretary. "Large-denomination notes always have drawn the interest of collectors of all levels," Heritage Auctions' Dustin Johnston said. The full article is here:
Collector value aside, $480 000 is nearly what $10k 1934 would buy today
ReplyDeleteAccording to these guys it's only worth $229,123.88:
Deletehttps://www.usinflationcalculator.com/
That's an annual IRR of 4.4% Not peanuts, beats longterm inflation by a percent plus, but a terrible investment compared to say, Vanguard Wellington Fund, which has been available since 1929. In 2018,, a 10K investment in VWELX made in 1929 was worth over 11,000,000 easily beating the half million return here. Roughly the same span of time. The comparable VWELX IRR is around 8.2% life of fund. So, yeah, the price on the 10 grand note today is indeed crazy money, but it's sure not a very good investment, either. While it's true that the Vanguard fund exposed the investor to some increased risk (and and investment in a market mirror fund would have even more risk), time -in this case, nearly a century- mitigates risk quite handily. Either the conservative balanced fund or the marketbasket fund greatly outperforms the US treasury note. And of course, the treasury note's actual cash value is still only $10,000 even a century later. The incremental 470,000 is for uniqueness and rarity, and is completely dependent on finding a collector who will pay that- unlike the market investments, which are really worth their valuation dollar for dollar- no opinion, rarity, or uniqueness premium needed.
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