How the Humble Penny Reveals a Century of Declining Wealth
The Demise of the Penny: What Inflation Has Stolen from America
The penny once meant something. Today, most of us walk past it without a second thought. Its quiet disappearance tells a bigger story about inflation, purchasing power, and what’s happening to the financial well-being of American families and retirees.
Where “A Penny Saved…” Really Came From
The famous saying “A penny saved is a penny earned” is widely attributed to Benjamin Franklin—but he never wrote those exact words.
In his 1758 edition of Poor Richard’s Almanack, Franklin wrote something similar:
“A penny saved is two pence clear.”
Over time, the phrase was shortened, simplified, and modernized until it became the form we know today. Its meaning—prudence, thrift, and wise stewardship—remains unchanged.
A Small Coin with a Big Message
The United States penny—once a meaningful unit of value—has quietly slipped into irrelevance. Children no longer pick them up. Cashiers barely notice them. Yet this tiny coin tells a story far bigger than its copper-plated shell.
Its decline mirrors the erosion of purchasing power that has quietly shaped, and in many ways constrained, the financial lives of every American family.
What a Penny Once Bought
Looking back makes the scale of inflation impossible to ignore. Here are just a few examples:
Early 1900s
- A penny could buy a newspaper.
- A piece of fruit at a street market.
- A postcard.
- A full-sized piece of candy.
1920s–1930s
- A penny might buy a loaf of bread during sales.
- Five pennies could buy a movie ticket.
- Two pennies bought a cup of coffee in some diners.
- One penny bought a local phone call on certain city lines.
1940s–1950s
- A penny bought a handful of peanuts.
- “Penny candy” jars were real—jawbreakers, licorice sticks, and more.
- A roll of Life Savers cost about 5¢.
1960s–1970s
- A penny still bought a gumball.
- Ten pennies could get you a bottle of Coca-Cola from a vending machine.
- Postage that once cost a penny climbed to 10¢ by the mid-1970s.
Today, the penny buys nothing. Not a piece of gum. Not one minute of parking. Nothing.
The Hidden Message in the Penny’s Decline
The story of the penny is the story of inflation compounding slowly, year after year, until one day the change in your pocket is meaningless.
This didn’t happen in a single moment. It happened over more than a century of currency debasement, rising government spending, repeated money creation to “fix” crises, and a Federal Reserve that has often pushed interest rates lower—until inflation becomes too painful for households to bear.
The result? Today’s dollar has lost the overwhelming majority of its purchasing power compared to the early 20th century. The penny’s demise is just the most visible symbol.
How Inflation Hits Everyday Life
Inflation is not an abstract concept. It shows up in the basic decisions families must make every day:
- Groceries: Families pay more for less, and prices rise faster than wages.
- Housing: Home affordability is deeply strained, even for dual-income households.
- Savings: Cash sitting in the bank quietly loses value every year.
- Retirement: Fixed incomes are at risk unless investments are managed intentionally.
- Healthcare: Medical costs have climbed dramatically over a single generation.
Inflation is not just financial—it is emotional. It creates stress, insecurity, and a sense of falling behind even while working harder than ever.
Why This Matters to Investors Today
The same forces that destroyed the penny’s usefulness are driving today’s inflated asset prices—from equities to real estate to bonds.
When asset prices are propped up by cheap money and inflation remains stubbornly high, it creates a dangerous environment for retirees and near-retirees. Markets priced for perfection do not mix well with rising living costs.
We are living in a time where:
- Equity valuations are historically stretched.
- Inflation has been running above long-term Federal Reserve targets.
- Central banks around the world are increasingly turning to gold.
- Government debt requires ongoing money creation to sustain the system.
- Market corrections can arrive suddenly and with devastating speed.
The penny’s demise is a warning. A currency that buys nothing is the product of decades of decisions—and investors ignore those long-term trends at their own risk.
Protecting Your Purchasing Power
Successfully navigating retirement today requires more than a simple buy-and-hold approach. It calls for:
- Active risk management across full market cycles.
- A disciplined understanding of valuation and market history.
- Thoughtful use of assets such as precious metals.
- Defensive positioning during dangerous valuation extremes.
- A plan that adapts to changing conditions rather than reacting late.
When the value of the currency erodes, protecting your purchasing power becomes the priority—not simply chasing returns. That is why Bailey Financial Services is built around independent fiduciary guidance and a full-cycle approach to investing.
If you are concerned about inflation and what it could mean for your retirement savings, this is the right time to review your plan.
Talk with Wilder About Your Plan