The Illusion of Wealth & How to Beat Inflation: A 100-Year Perspective
We tested 30 ideas about how to beat inflation against 100 years of US money supply data, from gold and housing to savings, the S&P 500 and Bitcoin.
Topic
Investing Overview: 100 Years in One Article
If you only read one article from our research, this is the one we would suggest.
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The series overview runs through all 30 hypotheses we tested across 100 years of data, from gold and housing to Berkshire Hathaway and Bitcoin, and links to the full research behind each answer.
Its central idea is the 6.56% rule, the average yearly growth of the US money supply, and the overview shows how nearly every result in the series follows from whether an asset compounded above or below it.
- 522x US M2 growth since 1926 From $43.7 billion to $22.8 trillion, as set out in the series overview.
- 30 Hypotheses tested Across 100 years of US market and money supply data.
- 6.56% Average yearly M2 growth The hurdle rate an investment had to beat to keep its share of the money pool.
Articles on Investing Overview
1 article from our research on this topic.
Plain-English definitions
Key terms for investing overview
- The 6.56% rule 6.56% a year
- The average annual growth of US M2 over the last century. Assets compounding faster gained ground, slower ones lost it. More about The 6.56% rule
- M2 money supply
- The Federal Reserve’s measure of cash, current accounts and easily accessible savings in the US. We use it to see how quickly new money is being created.
- Total return
- Price growth plus every dividend, rent payment or coupon put back into the investment, as opposed to price alone.
- M2-adjusted value 1.0 = break-even
- An asset’s growth divided by M2 growth over the same years. Above 1.0 it gained share of the money pool, below 1.0 it lost share.
FAQ
Questions about investing overview
Answers drawn from the figures in our research. Educational only, not financial advice.
What does the overview cover?
All 30 hypotheses we tested, in the same order as the series. It starts with the traditional safe havens of gold and property, where gold rose 168x and US house prices 83x against 503x for M2, then moves through the savings trap and the 6.56% rule, Berkshire Hathaway and IPO picking, bubbles and recessions, and the digital revolution in tech and Bitcoin, before a final verdict for investors under 50.
Each section answers a handful of the hypotheses and links to the part where the full data sits, so you can read the overview in one go and only open Parts I to VI when you want the detail behind a number.
What is the verdict for a modern investor?
The overview ends with a verdict for someone under 50, and we wrote it from the numbers in the earlier parts rather than from a view on any one company. The Nasdaq came out as the broadest way to get tech exposure that has beaten M2 reliably, with an M2-adjusted 9x since 1985, or 86x before the adjustment.
Bitcoin had the highest asymmetric upside for anyone able to hold for five years or more, since it beat M2 in 11 of 12 rolling five-year windows from 2010 but swung hard over shorter holds.
Nvidia and AI infrastructure were the higher-conviction bet, backed by real earnings and an M2-adjusted 836x since 1999. Berkshire and gold were described as conservative foundations with marginal returns after M2, which fits Part V’s figure of 1.9x to 2.1x for both between 2016 and 2026. It is a reading of the historical data in June 2026, so we would treat it as a starting point for your own thinking rather than a plan.
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