$40,000 in 1945 is worth $544,711.11 in 2017

Buying power of $40,000 in 1945

This chart shows a calculation of buying power equivalence for $40,000 in 1945 (price index tracking began in 1635).

For example, if you started with $40,000, you would need to end with $544,711.11 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When $40,000 is equivalent to $544,711.11 over time, that means that the "real value" of a single U.S. dollar decreases over time. In other words, a dollar will pay for fewer items at the store.

This effect explains how inflation erodes the value of a dollar over time. By calculating the value in 1945 dollars, the chart below shows how $40,000 is worth less over 72 years.

According to the Bureau of Labor Statistics, each of these USD amounts below is equal in terms of what it could buy at the time:

This conversion table shows various other 1945 amounts in 2017 dollars, based on the 1,261.78% change in prices:

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1945 to 2017 (figures shown are purchasing power equivalents of $40,000):

• San Francisco, California: 3.96% average rate, $40,000 → $653,490.78, cumulative change of 1,533.73%
• Seattle, Washington: 3.85% average rate, $40,000 → $606,021.37, cumulative change of 1,415.05%
• Boston, Massachusetts: 3.82% average rate, $40,000 → $595,916.65, cumulative change of 1,389.79%
• New York: 3.76% average rate, $40,000 → $570,561.31, cumulative change of 1,326.40%
• Philadelphia, Pennsylvania: 3.67% average rate, $40,000 → $536,193.61, cumulative change of 1,240.48%
• Chicago, Illinois: 3.67% average rate, $40,000 → $534,732.67, cumulative change of 1,236.83%
• Houston, Texas: 3.66% average rate, $40,000 → $533,541.16, cumulative change of 1,233.85%
• Atlanta, Georgia: 3.63% average rate, $40,000 → $520,268.41, cumulative change of 1,200.67%
• Detroit, Michigan: 3.56% average rate, $40,000 → $495,931.05, cumulative change of 1,139.83%

San Francisco, California experienced the highest rate of inflation during the 72 years between 1945 and 2017 (3.96%).

Detroit, Michigan experienced the lowest rate of inflation during the 72 years between 1945 and 2017 (3.56%).

Note that some locations showing 0% inflation may have not yet reported latest data.

Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £40,000.00 in 1945 would be equivalent to £1,641,068.70 in 2017, an absolute change of £1,601,068.70 and a cumulative change of 4,002.67%.

In Canada, CA$40,000.00 in 1945 would be equivalent to CA$570,163.93 in 2017, an absolute change of CA$530,163.93 and a cumulative change of 1,325.41%.

Compare these numbers to the US's overall absolute change of $504,711.11 and total percent change of 1,261.78%.

Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. Breaking down these categories helps explain the main drivers behind price changes.

This chart shows the average rate of inflation for select CPI categories between 1945 and 2017.

Compare these values to the overall average of 3.69% per year:

The graph below compares inflation in categories of goods over time. Click on a category such as "Food" to toggle it on or off:

For all these visualizations, it's important to note that not all categories may have been tracked since 1945. This table and charts use the earliest available data for each category.

How to calculate inflation rate for $40,000, 1945 to 2017

Our calculations use the following inflation rate formula to calculate the change in value between 1945 and 2017:

Then plug in historical CPI values. The U.S. CPI was 18 in the year 1945 and 245.12 in 2017:

$40,000 in 1945 has the same "purchasing power" or "buying power" as $544,711.11 in 2017.

To get the total inflation rate for the 72 years between 1945 and 2017, we use the following formula:

Plugging in the values to this equation, we get:

Comparison to S&P 500 Index

The average inflation rate of 3.69% has a compounding effect between 1945 and 2017. As noted above, this yearly inflation rate compounds to produce an overall price difference of 1,261.78% over 72 years.

To help put this inflation into perspective, if we had invested $40,000 in the S&P 500 index in 1945, our investment would be nominally worth approximately $95,613,585.50 in 2017. This is a return on investment of 238,933.96%, with an absolute return of $95,573,585.50 on top of the original $40,000.

These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 92.66% of returns ($88,592,352.88) during this period. This means the inflation-adjusted real return of our $40,000 investment is $6,981,232.62. You may also want to account for capital gains tax, which would take your real return down to around $5,934,048 for most people.

Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 1945 to latest available data for 2017 using average monthly close price.

For more details on the S&P 500 between 1945 and 2017, see the stock market returns calculator.

Data source & citation

Raw data for these calculations comes from the Bureau of Labor Statistics' Consumer Price Index (CPI), established in 1913. Price index data from 1774 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University and from the American Antiquarian Society. Price index data from 1634 to 1773 is from the American Antiquarian Society, using British pound equivalents.

» Read more about inflation and investment.