Inflation 101: Why Avatar Isn’t the Biggest Movie of All Time (And What Movie Is)

This past week, the technologically ground-breaking 3-D movie Avatar was hailed across the globe as the new king of the box office world, “topping” Titanic‘s box office take by grossing over $1.859 billion worldwide.

According to the media, this week Avatar will also surpass the $600 million mark in the United States and overtake Titanic as the domestic box office record holder as well.

I understand why, when reporting box office totals, the press loves to cite gross dollars.  The problem with that, of course, is that those gross figures ignore the corrosive effects of inflation on the value of money.

After all, nobody would care if they printed the real story that said, in terms of the domestic box office, Avatar is only the 21st biggest movie of all time – which it was as of the end of January.

When Gone with the Wind came out in 1939 a dollar had the purchasing power of over $15 today.  What’s more, back then matinees and evening shows were only five and ten cents, respectively.

Based on that information, one can see that it was possible to see ten evening shows for a buck back in 1939 – or twenty matinees.

How many shows can you see for $15 today?

If we compared the US domestic movie grosses in inflation-adjusted dollars, the all-time biggest movies as of January 31, 2010, are:

Rank Movie Box Office Take Year
1. Gone with the Wind $1,507,252,900 (1939)
2. Star Wars $1,328,772,200 (1977)
3. The Sound of Music $1,062,418,700 (1965)
4. E.T.: The Extra-Terrestrial $1,058,233,300 (1982)
5. The Ten Commandments $977,260,000 (1956)
6. Titanic $957,460,300 (1997)
7. Jaws $955,468,000 (1975)
8. Doctor Zhivago $926,050,500 (1965)
9. The Exorcist $824,842,300 (1973)
10. Snow White and the Seven Dwarfs $813,140,000 (1937)
11. 101 Dalmations $745,382,700 (1961)
12. The Empire Strikes Back $732,427,600 (1980)
13. Ben-Hur $731,080,000 (1959)
14. Return of the Jedi $701,683,200 (1983)
15. The Sting $665,005,700 (1973)
16. Raiders of the Lost Ark $657,538,200 (1981)
17. Jurassic Park $643,095,600 (1993)
18. The Graduate $638,362,600 (1967)
19. Star Wars: Episode 1 – The Phantom Menace $632,800,500 (1999)
20. Fantasia $619,503,400 (1941)

So, think about this list the next time you are trying to determine how much money you’ll need to retire.

Hopefully it will remind you that the further you are away from retirement, the higher the risk that the dreaded inflation monster will completely devour your nest egg if you don’t keep contributing to it.

Never forget to feed the monster.

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