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U.S. Household Net Worth Hits Highest Level Ever
- tbihl 6y agoWhile I'm sure there's a lot of savings in many segments, I think some addressing of inflation is needed in this analysis. You can't inflate the monetary supply for free, as housing markets are showing right now...
- sxp 6y agoNote that this is _total_ net worth which is a bad metric to track. If the small percentage of people who own stocks had an increased value in net worth due to the bull market, this metric goes up. A better metric would be tracking the median or quartile values since that would track the majority who are burning through their cash reserves due to a job loss.
- onetimeusename 6y ago> small percentage of people who own stocks According to this Gallup Poll[1], about 55% of Americans are estimated to own stocks. [1]: https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx https://news.gallup.com/poll/266807/percentage-americans-own...
- CydeWeys 6y agoThe point is more that goal $ holding in stock per household is very uneven. Most of those 55% don't have much in the way of stock, and then a very tiny number have $billions.
- 11thEarlOfMar 6y agoHow much is much? Median retirement account value at age 50 is about $100,000. https://www.synchronybank.com/blog/median-retirement-savings-by-age/ https://www.synchronybank.com/blog/median-retirement-savings...
- mehrdadn 6y agoNote this includes retirement accounts (like 401(k), IRA). Not really directly reflective of "net worth" given it's more or less locked up until retirement.
- pb7 6y agoNo need to make up your own definitions. Net worth = assets - liabilities. 401(k) and IRAs count as assets, and you can draw from them with various amount of flexibility depending on how dire your financial situation is.
- mehrdadn 6y agoJust substitute your preferred terminology if you weren't a fan of mine. I was just trying to get a point across, not debate semantics.
- jayd16 6y agoI can't read the paywalled story but did pensions count towards net worth? If not then the inclusion of retirement assets into net worth is clearly misleading when looking at historical numbers.
- 6y ago
- emilsedgh 6y agoIt doesn't say how much they own.
- sxp 6y ago20% of Americans hold >90% of stocks: https://www.visualcapitalist.com/composition-of-wealth/ https://www.visualcapitalist.com/composition-of-wealth/
- tolbish 6y agoWithout also providing the median stock value, that is a meaningless statistic.
- Keverw 6y agoI was wondering if that includes retirement accounts and checked it, looks like they consider that too. I know someone recently decided cash out their retirement account, sorta panicking with the market going down due to COVID, was stressful to check... but I guess with their type of account they didn't get to pick the individual stocks either. Not sure what type of account, back from when they used to work full time. Kinda wonder if maybe they just had a crappy broker or account person though, guess had trouble getting clear answers to things. Seems you have more control with an app like Robinhood but you lose out on employer matches and stuff like that though.
- rtkwe 6y agoThat number isn't great because it again counts people who have 1k in the 401k like they're getting the same benefits from stock market increases as million and billionaires. The majority of people have a pretty small amount of money in their 401k. https://www.businessinsider.com/personal-finance/average-401k-balance https://www.businessinsider.com/personal-finance/average-401...
- neallindsay 6y agoIt's like the old joke that Bill Gates walks into a room and now people in that room are billionaires (on average).
- throwaway6000 6y agowuhoo Trump for president!
- dang 6y agoWe've banned this account for repeatedly posting unsubstantive and flamebait comments. Could you please stop creating accounts to do that with? If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- maerF0x0 6y ago> A better metric would be tracking the median or quartile values A better for what purpose? You comment seems to imply a bias towards celebrating only some people's wins.
- mtgx 6y agoActually yours does. The numbers are raised by billionaires as opposed to the median numbers.
- StanislavPetrov 6y ago>A better for what purpose? For the purpose of accuracy in communication. Speaking in terms of "household net worth" implies that you are referring to the net worth of individual U.S. households, not the net worth of the entire country taken as an aggregate. This is especially true when the net worth of most U.S. households has been stagnant or lower for almost 40 years while the net worth of the wealthy has exploded. https://mises.org/wire/median-household-wealth-america-going-nowhere https://mises.org/wire/median-household-wealth-america-going...
- michaelmrose 6y agoIts a bias against celebrating the minorities wins by averaging and talking about everyone's wins.
- deleted 6y ago[deleted]
- fakeslimshady 6y agoReal estate has also been strong
- dannyw 6y agoFederal debt surged more than 50%.
- gruez 6y agoAnd so did fed balance sheets[1]. It's clear that this is all just printed money. [1] https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL
- anm89 6y agoYes but that debt/printed money is interspersed throughout the economy in incredibly complicated ways and cannot easily be reversed. This does not necessarily mean the debt isn't real or can't cause problems.
- camhart 6y agoWhat is a household? I've seen reports that a lot of 20-30 year olds have moved in with parents since COVID 19. That could cause this metric to spike, even if they're making less now than before. Fair warning, I didn't read the article.
- anm89 6y agoThey aren't using household that way here. Household assets simply means assets owned by people and not owned by governments or businesses.
- CydeWeys 6y agoWell technically they are using households that way here too, it's just that they're looking at the overall total household net worth, so the actual number of households doesn't matter. But start looking at the average amount per household, a closely related statistic, and now we're back to the same problem that combining/splitting households affects the figure.
- jeffbee 6y agoSo it's up .38 trillion from 119 trillion, less than a third of a percent, in dollar terms, in the same interval over which the dollar has shed 4.5% versus the Euro.
- dv_dt 6y agoSeems like another article covering the Census income and poverty data, where there was some discussion on if household income growth is correlated to a possible growth in household size. https://news.ycombinator.com/item?id=24499723 https://news.ycombinator.com/item?id=24499723
- gilrain 6y agoHey y'all, just noting that we're going to be seeing a lot of these massaged figures in the coming years. Just look around, how are the common people around you doing?
- benignslime 6y agoThese are the people that prop up this new-age techo-fascism. You aren't going to convince many with platitudes, let alone empathy.
- maerF0x0 6y agoOnce you subtract US Debt liabilities, citizens end up with -88826 per person though. https://www.usdebtclock.org/# https://www.usdebtclock.org/#
- remote_phone 6y agoRelative to GDP, US debt is still far below countries like Japan. In fact during low interest times like right now it would be almost irresponsible not to take on more debt, from a purely financial engineering perspective.
- anm89 6y agoThis is an incredibly misleading argument to make to anyone outside of the econ or finance world who lacks context. Japan is an extreme outlier in terms of debt loads for stable developed nations and they are conducting an experiment with their economy that many think will end poorly (also many argue that it won't end poorly) The US's current debt load by percentage would have been a national outrage at any time in the last 100 years and we really have no idea how this game will play out. I would not trivialize it. 135% is a staggering and unprecedented for a major international power and the list of countries who have faced issues with smaller debt loads in the past is long.
- remote_phone 6y ago135% is staggering? What are the repercussions? Zero. None. The financial world doesn’t care. MMT is right here. People keep talking about how large debt will “ruin” the US but it hasn’t had any effect on the US and other countries. That’s why Japan didn’t suffer any of the theoretical downsides and neither will the US.
- anm89 6y agoso why not go to 1000% ? 10000%?
- 6y ago
- anm89 6y agoI would imagine this is going to be true at a majority of points where markets are around all time highs. Right? This is functionally equivalent to just saying: we injected trillions of dollars into the markets in a short period of time.
- jelliclesfarm 6y agoI think it’s shorthand for ‘Americans are doing just fine’ and there is some truth to it. In other words: This is why no one wants to emigrate to Venezuela nor are there coyotes for Americans to sneak into Cuba.
- disgu 6y agoIsn't the number of Americans wanting to emigrate into other first world countries (Austria, Norway, Germany, etc) at an all time high, though?
- jelliclesfarm 6y agoAre they communist countries?