I have to say it.
We shouldn’t conflate the two kinds of inflation.
They’re not the same. We talk about price inflation all the time. It is the change in the price of eggs, beef, gasoline, or any other good or service that we buy and consume. We measure it with the consumer price index, mostly so we can talk about how it affects all of us. Then we argue with how it is measured because our experience is different.
But we don’t talk about asset inflation. It is the change in the price of assets that we own (or hope to own).
Price inflation is worrisome. Just watch TV. But asset inflation, if we recognized it, is terrifying.
Why is that? Simple. Asset prices are rising so fast, owning them is difficult or impossible for ever more Americans. Think homes. Condos. Beyond reach.
Priced for Mars
Then think earning assets, such as stocks. Like Tesla at 363 times earnings, ARM at 399 times or Cerebras Systems at 502 times. Why we continue to celebrate rising asset prices is beyond understanding. Today, many are priced beyond reason.
You can understand the difference between consumer price inflation and asset inflation by examining some ancient statistics. We’re going to look at 1969. So long ago the figures will seem comical.
That was then…
Back then, a new car cost about $3,200. An existing home sold for about $25,000. The median starting salary for full-time workers was about $7,600. The employment tax maxed out at $7,800. In those days about 25 percent of all workers earned more than the wage-base maximum. So about one in four workers got to enjoy a few weeks or months when the employment tax didn’t come out of every paycheck.
This is now
Today the wage-base maximum is $184,500. Only 6 percent of all workers ever get to enjoy a check without paying the employment tax. And the tax itself is higher, too.
If we use the CPI inflation calculator provided by the Bureau of Labor Statistics, we find that prices have risen about ninefold since 1969. A basket of goods that cost $1,000 in 1969 would now require $9,136.
That’s a lot. But price inflation is trivial in comparison to wealth inflation.
An ancient document from 1969
We’ll start with an 81-page document published by the Internal Revenue Service. Titled “Personal wealth estimated from Estate Tax Returns, 1969,” it followed an earlier exercise done in 1962. Both are based on a peculiar idea – that the distribution of wealth among the living can be guessed by examining the distribution of wealth among the recently dead.
An idea like this had to come from a happy hour for actuaries. Alternatively, it might be traced to the alumni association of any private university with an endowment that needs to be fed.
What matters is that you and I have a publication filled with small, understandable numbers. Better still, you can download it, free, in PDF form.
Back then, a “top wealth holder” was defined as anyone with gross assets of $60,000. Today, that could be anyone driving off a car dealer’s lot after rolling the debt from their upside-down Disappointment XE into a brand-new disaster. What’s noteworthy is that $60,000, back then, was still notably larger than the cost of a new car or existing house. And it was way more than a typical paycheck.
So $60,000 of gross assets was a big deal. According to the 1969 report, 9 million people were top wealth holders by this definition. That’s about 7.4 percent of the entire population. Using another measure, the same study estimated 8.2 million top wealth holders, or 6.7 percent of the population.
And what about millionaires back then? Only 121,000 people had a net worth that high or higher. Today, millionaires are so common they are referred to as the “semi-affluent.”
Today, wealth measurement is much more carefully focused on net worth rather than gross assets.
Can we come up with a figure that would be somewhat related to being a $60,000 “top wealth holder” in 1969? That would be someone in the top 6.7 to 8.2 percent of our population by net worth.
Compared to Now
Here’s a reasonable guess. Interpolating, the equivalent figure is a net worth of $2.6 to $2.8 million today, without considering debt. But since debt was about half the assets of the lower ranks of the top wealth holders back then, the equivalent gross assets figure is a bit more than $5 million today.
So asset inflation has raised the bar at least 43 times, not 9 times, and could be construed as high as 83 times, not 9 times, if you consider debt.
The cure for asset inflation is simple. Asset deflation. This is a good time to be careful, not daring.
Related columns:
Scott Burns, “Wealth Scoreboard” columns: https://scottburns.com/?s=Wealth+Scoreboard
Scott Burns, “The Post-Covid Wealth Scoreboard,” 11/20/2023: https://scottburns.com/the-post-covid-wealth-scoreboard/
Scott Burns, “Finding the Top of Up-Scale,” 7/8/2018: https://scottburns.com/finding-the-top-of-up-scale/
Scott Burns, “Are You Semi-Affluent?”, 10/24/1999: https://scottburns.com/are-you-semi-aflluent/
Sources and References:
https://dqydj.com/net-worth-percentile-calculator/
IRS Statistics of Wealth: https://www.irs.gov/statistics/soi-tax-stats-personal-wealth-statistics
IRS Personal Wealth, 2019: https://www.irs.gov/pub/irs-pdf/p5536.pdf
Keith Gilmour and Charles Crossed, “Personal Wealth Estimated from Estate Tax Returns, 1969: https://www.irs.gov/pub/irs-soi/13pwcestatereturn69.pdf
Fritz Scheuren, Ph.D., “Personal Wealth, 1962: https://www.irs.gov/pub/irs-soi/13pwcestatereturn62.pdf
SSA.gov, “Contribution and Benefit Base,” https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html
Bureau of Labor Statistics Inflation Calculator: https://data.bls.gov/cgi-bin/cpicalc.pl
Rank ordered list of U.S. companies by market cap: https://companiesmarketcap.com
Levy Leidy, “What an Average Car Cost the Year You Were Born,” 8/11/24: https://finance.yahoo.com/news/average-car-cost-were-born-130001087.html
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, August 2025: A luxurious display of now much more expensive tomatoes
(c) Scott Burns, 2026