The $1 Million Tulip: Looking Back At The First Speculative Bubble

What Can The First Bubble Teach Us About Future Bubbles?

The first speculative bubble on record is just like all of the other ones. In hindsight, it’s easy to see the warning signs of the past. Rather than a stock or real estate bubble, this bubble involves tulips.

While you might not see yourself trading tulips and earning massive profits, tulips were all the rage back in the early and mid 1600s.

Dubbed “Tulip Mania,” this bubble reached incredible peaks where some tulip bulbs traded for 6 times the average person’s salary.

Just for perspective, the average U.S. worker’s salary in 2015 was $56,516 per year.

At 6 times the annual salary, some tulip bulbs were worth $339,096 apiece based on 2015 money. Step aside Bitcoin!

Believe it or not, having tulips in your garden in the 1600s was like owning a Lamborghini. It was a big social statement to have tulips in your garden. Imagine today looking at tulips in the same way you’d look at a Lambo. Sounds weird, but that’s exactly how the Dutch viewed tulips at the height of Tulip Mania.

Tulips were traded on the stock market. Some people used margin to acquire these exotic flowers and invested in tulip derivatives as well.