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Note 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
by sxp 6y ago
Note 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.
- Keverw 6y agoYeah but tax penalties and other fees for withdrawing early.
- pb7 6y agoNot really, as outlined here[0]. Even with penalties, becoming homeless and becoming homeless with a million in a 401(k) are vastly different despite some folks here thinking both are equally broke somehow. [0] https://news.ycombinator.com/item?id=24550715 https://news.ycombinator.com/item?id=24550715
- vecinu 6y agoNeither of those accounts are "locked up", there are ways to access your money before the government sponsored year of retirement. See rule 72(t) or periodic distributions for withdrawing without penalty. Finally you can always withdraw the money with a penalty. You can withdraw your contributions to ROTH IRA's at any time, penalty free and ROTH 401(k)s are easily rollover-able to a ROTH IRA. They are completely a part of net worth, it's in the very definition.
- mehrdadn 6y agoI thought it was obvious... I wrote "more or less locked up" precisely because I knew if I just summarized it as "locked up" without qualifiers somebody would eagerly jump in to trash my comment here. Somehow I forget people are keen to do that regardless. My bad, I thought I was trying to help people interpret that statistic but now I regret it.
- vecinu 6y agoI'm not sure I understood your point though. Retirement accounts hold YOUR money, that is money that YOU saved for YOUr own use later. Whether I put it in a savings account or taxable investing account it is still part of my net worth as it's money I will be using some time in the future. Perhaps I'm too dense but I'm not understanding why you are not including retirement accounts as part of net worth calculations.
- mehrdadn 6y agoThe sentence was "55% of Americans are estimated to own stocks", and I pointed out this includes retirement accounts, feeling (evidently quite wrongly) that that would be important to many readers to be pointed out. If you don't see any value in that, then I'm sorry, the next time I won't mention it. My apologies. I repent.
- _jahh 6y agowhy would that not be included in your net worth?
- 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