Money
How Many U.S. Dollar Bills Are There in Circulation?
How Many U.S. Dollar Bills Are There in Circulation?
When you think about it, the journey of each individual currency note is pretty incredible.
After being printed or minted, each bill is then passed between people and businesses to facilitate transactions. If it’s a $1 or $5 bill, it changes hands on average about 110 times per year – and if it’s a $20 bill, it’s more like 75. The interesting part is that almost every transaction is linked to the one before it, and the series of subsequent transactions for each bill creates a unique, broad story.
By the time a bill is retired, it would have facilitated many hundreds of transactions that enabled everything from the purchase of used cars to the shadier deals in underground markets. It’s a pretty interesting tale for such a little piece of paper.
Dollar Bills, in Aggregate
Today’s infographic from TitleMax gives a sense of what happens when all of those individual stories are combined together into one large one: the U.S. supply of currency notes, the shelf life of each type of bill, and how the whole system works as a whole.
In total, there is a total of about $1.5 trillion in U.S. physical currency in circulation, and roughly 80% of this value comes from the 11.5 billion $100 notes that are in circulation.
Note | Number of bills in circulation |
---|---|
$1 bill | 11.7 billion |
$2 bill | 1.2 billion |
$5 bill | 2.8 billion |
$10 bill | 1.9 billion |
$20 bill | 8.9 billion |
$50 bill | 1.7 billion |
$100 bill | 11.5 billion |
Of course, as we showed in All the World’s Money and Markets, this is just a fraction of the total money that exists as a whole, which includes digital deposits and liquidity added by central banks. That’s why, in the U.S. today, there’s about $14 trillion in total money supply (M2), of which physical currency makes up only about 11% of the total value.
Turnover Per Bill
Every year, the U.S. Bureau of Engraving and Printing is responsible for printing new dollars – and interestingly, 70% of these new bills are used to replace older notes going out of circulation.
That raises the question: how long does each bill last on average?
Note | Average Life Span |
---|---|
$1 bill | 5.8 years |
$5 bill | 5.5 years |
$10 bill | 4.5 years |
$20 bill | 7.9 years |
$50 bill | 8.5 years |
$100 bill | 15.0 years |
This means that printers are mostly turning out new batches of $1 and $20 bills, since there are more of those in circulation than most other bills.
At the same time, many new $100 notes are also being printed as well since they are the second most common bill. However, these last 2-3x as long as smaller denominations.
Money
How Small Investments Make a Big Impact Over Time
Compound interest is a powerful force in building wealth. Here’s how it impacts even the most modest portfolio over the long term.
How Small Investments Make a Big Impact Over Time
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Time is an investor’s biggest ally, even if they start with just a modest portfolio.
The reason behind this is compounding interest, of course, thanks to its ability to magnify returns as interest earns interest on itself. With a fortune of $159 billion, Warren Buffett largely credits compound interest as a vital ingredient to his success—describing it like a snowball collecting snow as it rolls down a very long hill.
This graphic shows how compound interest can dramatically impact the value of an investor’s portfolio over longer periods of time, based on data from Investor.gov.
Why Compound Interest is a Powerful Force
Below, we show how investing $100 each month, with a 10% annual return starting at the age of 25 can generate outsized returns by simply staying the course:
Age | Total Contributions | Interest | Portfolio Value |
---|---|---|---|
25 | $1,300 | $10 | $1,310 |
30 | $7,300 | $2,136 | $9,436 |
35 | $13,300 | $9,223 | $22,523 |
40 | $19,300 | $24,299 | $43,599 |
45 | $25,300 | $52,243 | $77,543 |
50 | $31,300 | $100,910 | $132,210 |
55 | $37,300 | $182,952 | $220,252 |
60 | $43,300 | $318,743 | $362,043 |
65 | $49,300 | $541,101 | $590,401 |
70 | $55,300 | $902,872 | $958,172 |
75 | $61,300 | $1,489,172 | $1,550,472 |
Portfolio value is at end of each time period. All time periods are five years except for the first year (Age 25) which includes a $100 initial contribution. Interest is computed annually.
As we can see, the portfolio grows at a relatively slow pace over the first five years.
But as the portfolio continues to grow, the interest earned begins to exceed the contributions in under 15 years. That’s because interest is earned not only on the total contributions but on the accumulated interest itself. So by the age of 40, the total contributions are valued at $19,300 while the interest earned soars to $24,299.
Not only that, the interest earned soars to double the value of the investor’s contributions over the next five years—reaching $52,243 compared to the $25,300 in principal.
By the time the investor is 75, the power of compound interest becomes even more eye-opening. While the investor’s lifetime contributions totaled $61,300, the interest earned ballooned to 25 times that value, reaching $1,489,172.
In this way, it shows that investing consistently over time can benefit investors who stick it through stock market ups and downs.
The Two Key Ingredients to Growing Money
Generally speaking, building wealth involves two key pillars: time and rate of return.
Below, we show how these key factors can impact portfolios based on varying time horizons using a hypothetical example. Importantly, just a small difference in returns can make a huge impact on a portfolio’s end value:
Annual Return | Portfolio Value 25 Year Investment Horizon | Portfolio Value 75 Year Investment Horizon |
---|---|---|
5% | $57,611 | $911,868 |
8% | $88,412 | $4,835,188 |
12% | $161,701 | $49,611,684 |
With this in mind, it’s important to take into account investment fees which can erode the value of your investments.
Even the difference of 1% in investment fees adds up over time, especially over the long run. Say an investor paid 1% in fees, and had an after-fee return of 9%. If they had a $100 starting investment, contributed monthly over a 25-year time span, their portfolio would be worth over $102,000 at the end of the period.
By comparison, a 10% return would have made over $119,000. In other words, they lost roughly $17,000 on their investment because of fees.
Another important factor to keep in mind is inflation. In order to preserve the value of your portfolio, its important to choose investments that beat inflation, which has historically averaged around 3.3%.
For perspective, since 1974 the S&P 500 has returned 12.5% on average annually (including reinvested dividends), 10-Year U.S. Treasury bonds have returned 6.6%, while real estate has averaged 5.6%. As we can see, each of these have outperformed inflation over longer horizons, with varying degrees of risk and return.
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