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a pound is now worth threepence - a story of twelve-sided inflation

2016 pound and 1938 threepenny bit
A 2018 pound and 1938 threepenny bit are worth about the same.

Eighty years apart, both the same size, and buying the same amount. The modern coin is fancier, but the old one cost me five times as much, and is a stronger design.

In 1938, the twelve-sided threepenny bit was worth three (old) pennies. Then, there were 240 pence (pennies) to a pound.
Now, the new twelve-sided pound coin is also worth about three 'old' pennies, with a pound having 100 (new) pennies.

Inflation in the intervening decades has diminished the pound's value so it is worth about an eightieth (1/80) of a 1938 pound.
[The British currency was 'decimalised' in 1970, so a pound was made up of 100 new pennies. Thus, a new penny is nominally 2.4 'old' pennies.]

According to the Office for National Statistics, £5 worth of shopping in 1947, would cost £100 in 1997 (or 5p worth of shopping would now cost £1 over that period, that's only 1/20).
[5p or 5 new pence are nominated to 12d or 12 'old' pence - one shilling.]
Note that this is a shorter period than the time span for the two coins above, where 3d (threepence) worth of shopping in 1938 would now cost £1.

1938 pounds now thrown in the bin

October 2018 update - There is now discussion of taking the one new penny coin and the two new penny coin out of circulation.
That is, the end of a coin nominated at less [2.4d] than the old three pence coin [3d] and a coin nominated at more than [4.8d] the old three pence coin.

This is equivalent to taking the 1938 pound, and more, out of circulation because it has now become worth so little.

I wonder when the old five pounds (£5) will be taken out of circulation and replaced with a photograph. In 1938, £5 was worth more than an ordinary person's weekly wages.

"In the normal course of the cash cycle, many denominations fall out of circulation, for example, by being placed into savings jars. Surveys suggest that six in ten 1p and 2p coins are used in a transaction once before they leave the cash cycle. They are either saved, or in 8% of cases are thrown away. To meet demand created by such losses from circulation, in previous years the government and the Royal Mint have needed to produce and issue over 500 million 1p and 2p coins each year to replace those falling out of circulation."
[Quoted from assets.publishing.service.gov.uk]

the web address for the article above is
https://www.abelard.org/news2/economics022018.php#thrupence-pound-230818

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five sensible rules for investing - warren buffett

1. Never make an investment for the sake of it
"buffettt wrote that in his search for new stand-alone businesses, he seeks durable competitive strengths, able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns, and a sensible purchase price."

2. Don't go with leveraged positions
"... it is insane to risk what you have and need in order to obtain what you don’t need."
[Note: leverage means borrowing, but borrowing for

3. Buy or sell decision is all about business, not media headlines
"... we simply believe that if the businesses of the investees are successful -- as we believe most will be -- our investments will be successful as well."

4. Value buying is a long-term game
"Stocks surge and swoon, seemingly untethered to any year-to-year build-up in their underlying value," he pointed out.

"buffettt recalled the Ben Graham’s famous saying: “In the short run, the market is a voting machine; in the long run, however, it becomes a weighing machine.”

5. Stick with big, “easy” decisions and eschew activity
"buffettt believes that if one invests in one solid business, that could save an investor thousands of buy and sell decisions."

"The simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own."