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You're probably thinking to deeply about this. I think most people are "storing" their money in consumable assets that they are likely immediately consuming - a

by gleenn 10y ago

You're probably thinking to deeply about this. I think most people are "storing" their money in consumable assets that they are likely immediately consuming - aka broke. Thinking about what you have your money in is pretty high level for a lot of people I think.

soundwave106 10y ago
Actually it's more like a very significant amount of people have the majority of their net worth "stored" in their homes. https://www.census.gov/people/wealth/files/Wealth%20Highlights%202011.pdf https://www.census.gov/people/wealth/files/Wealth%20Highligh... (Direct link to spreadsheet here: http://www.census.gov/people/wealth/files/Wealth_Tables_2011.xlsx http://www.census.gov/people/wealth/files/Wealth_Tables_2011...) It's kind of difficult to fully read this 2011 survey since "percent holding" and "median value" is in two separate tabs, and it's hard to get a good sense of correlations. But the spreadsheet seems to show: - Almost 70% of people owned a savings account, with a median value of $2,450 overall. - 29% of people own a checking account, with a median value of $600 - 85% of people own a motor vehicle, with a median value of about $6,800 - 65% of people own a home, with a median equity value of $80,000 - 42% of people have a 401k, with a median value of $30,000 - 29% of people have an IRA account, with a median value of $32,000. By far, it appears that housing is the most valuable asset many people own; at least, in every category, the median for housing is higher (sometimes up to 6 times higher) than the median for a 401K account. Also, it seems that a far more percentage of people have houses compared to 401Ks, the next largest category with >$10K median assets. Now, is it a bad sign? The only things I can say: A) Houses are hardly a "liquid asset". B) Home ownership for many reasons is declining (http://blogs.wsj.com/economics/2016/04/28/u-s-homeownership-rate-falls-again-nearing-a-48-year-low/ http://blogs.wsj.com/economics/2016/04/28/u-s-homeownership-...). The later point makes me wondering if future generations' preparation for retirement may be impacted. The former is not a bad thing if you do have liquid assets for emergencies etc, but I can imagine there is a significant percentage which do not. (A 401K really isn't a great "liquid asset" for instance, and some probably don't have much of that.)
- ac29 10y ago
  That percentage for checking accounts is extremely low, and suggests that half of homeowners don't have checking account, and only a third of car owners do. I cant reconcile how that large of a discrepancy is possible. Surely some people inherited houses or cars, or paid literal cash, but it cant be that many. edit: This FDIC report [0] from earlier this month suggests only 7% of households are "unbanked", meaning they dont have access to a bank account (doesn't specify what type). That number makes way more sense. [0] https://fdic.gov/news/news/speeches/spsep0816.html https://fdic.gov/news/news/speeches/spsep0816.html

by gleenn 10y ago

soundwave106 10y ago

Actually it's more like a very significant amount of people have the majority of their net worth "stored" in their homes. https://www.census.gov/people/wealth/files/Wealth%20Highlights%202011.pdf https://www.census.gov/people/wealth/files/Wealth%20Highligh... (Direct link to spreadsheet here: http://www.census.gov/people/wealth/files/Wealth_Tables_2011.xlsx http://www.census.gov/people/wealth/files/Wealth_Tables_2011...) It's kind of difficult to fully read this 2011 survey since "percent holding" and "median value" is in two separate tabs, and it's hard to get a good sense of correlations. But the spreadsheet seems to show: - Almost 70% of people owned a savings account, with a median value of $2,450 overall. - 29% of people own a checking account, with a median value of $600 - 85% of people own a motor vehicle, with a median value of about $6,800 - 65% of people own a home, with a median equity value of $80,000 - 42% of people have a 401k, with a median value of $30,000 - 29% of people have an IRA account, with a median value of $32,000. By far, it appears that housing is the most valuable asset many people own; at least, in every category, the median for housing is higher (sometimes up to 6 times higher) than the median for a 401K account. Also, it seems that a far more percentage of people have houses compared to 401Ks, the next largest category with >$10K median assets. Now, is it a bad sign? The only things I can say: A) Houses are hardly a "liquid asset". B) Home ownership for many reasons is declining (http://blogs.wsj.com/economics/2016/04/28/u-s-homeownership-rate-falls-again-nearing-a-48-year-low/ http://blogs.wsj.com/economics/2016/04/28/u-s-homeownership-...). The later point makes me wondering if future generations' preparation for retirement may be impacted. The former is not a bad thing if you do have liquid assets for emergencies etc, but I can imagine there is a significant percentage which do not. (A 401K really isn't a great "liquid asset" for instance, and some probably don't have much of that.)

ac29 10y ago
That percentage for checking accounts is extremely low, and suggests that half of homeowners don't have checking account, and only a third of car owners do. I cant reconcile how that large of a discrepancy is possible. Surely some people inherited houses or cars, or paid literal cash, but it cant be that many. edit: This FDIC report [0] from earlier this month suggests only 7% of households are "unbanked", meaning they dont have access to a bank account (doesn't specify what type). That number makes way more sense. [0] https://fdic.gov/news/news/speeches/spsep0816.html https://fdic.gov/news/news/speeches/spsep0816.html