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The standard American household is now a millionaire, according to the Fed
- starbase 3y agoIf inflation keeps up we'll be billionaires soon
- datavirtue 3y agoNothing terrifies me more than waking up a billionaire.
- esafak 3y agoEnjoy it while it lasts! What usually happens is they lop off all the zeros and print new notes. https://www.npr.org/templates/story/story.php?storyId=4632069 https://www.npr.org/templates/story/story.php?storyId=463206...
- mnky9800n 3y agoWhere's my million?
- Bostonian 3y agoI can't access the article, but since median household wealth is much lower, the Fed estimate must be imputing the value of future Social Security and Medicare benefits. If you are credited with future government benefits, shouldn't you reduce that by an estimate of future taxes you will pay? Otherwise the federal government announcing that Social Security benefits are being doubled would drastically raise the net worth of households, which is unrealistic.
- tenarchits 3y agoThis is just mean ($1.1m) vs median ($0.2m) confusion. The underlying data are here: https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Net_Worth;demographic:all;population:1;units:mean;range:1989,2022 https://www.federalreserve.gov/econres/scf/dataviz/scf/chart....
- hn8305823 3y agoWhen they have to re-introduce the US $10,000 bill, I hope they keep it just like the 1928 design. It's a cool design, and much better than anything since. https://en.wikipedia.org/wiki/File:US-$10000-FRN-1928-Fr-2230b.jpg https://en.wikipedia.org/wiki/File:US-$10000-FRN-1928-Fr-223...
- brnt 3y agoI am sorry, US bills (this 10k bill included) are the opposite of cool. Dutch pre-euro bills (Antilles included) are where it's at.
- ajhurliman 3y agoThey’re both cool, they have different appeals. The Dutch bills are like an art house rendition of what hipsters would want to earn and spend, the US 10,000 is like “NYC, big buildings, big cars, capitalist empire” chic.
- akeck 3y agoMy favorite design is the reverse of the current $2 bill.
- tacticalturtle 3y agoIs it the back side that you appreciate in this design? I guess it’s all subjective, but I feel like it’s a missed opportunity to have more highly detailed “engraving” style art. Based on absolutely no artistic expertise, I really like the framing of the front and back of the 50: https://en.m.wikipedia.org/wiki/United_States_fifty-dollar_bill https://en.m.wikipedia.org/wiki/United_States_fifty-dollar_b... EDIT: It seems there’s an alternate backing to the Salmon P Chase 10,000: https://en.m.wikipedia.org/wiki/Federal_Reserve_Note#/media/File%3AUS-%2410000-FRN-1918-Fr-1135d.jpg https://en.m.wikipedia.org/wiki/Federal_Reserve_Note#/media/...
- dongobread 3y agoClickbait unfortunately, this is median not mean. If you check the source data[1], 1m net worth is at roughly 90th percentile of US households. Also interesting in the original survey - for the median household, over >80% of their wealth is in their house (and 2/3s of households have houses). Whereas stocks are mostly the domain of the wealthy. [1] https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf
- PopAlongKid 3y ago>this is median not mean. If you check the source data[1], 1m net worth is at roughly 90th percentile I think you stated it backwards. Median is 50th percentile.
- hughesjj 3y ago"mean not median" is what I believe gp meant to say
- Kon-Peki 3y agoNice data set. > Debt secured by residential property was about unchanged between 2019 and 2022. About 42 percent of families in both 2019 and 2022 had debt secured by their primary residence, and the median amount of this debt decreased by less than 1 percent to $155,600 in 2022. Man, everything is skewed by all the old folks that bought their houses decades ago.
- fnordpiglet 3y agoNot arguing the truth of that statement but I don’t see the connection between the quote and it.
- mattkrause 3y agoIt's the first third of the article too. They give the median as $192k, which is higher than I would have guessed (but probably mostly house?)
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- PopAlongKid 3y agoSome are old enough to remember (reruns of) a TV show from six decades ago called "The Millionaire".[0] In each episode, a surprise, life-changing gift of $1M from an anonymous private donor was made to someone not expecting it. That would be $11M in today's dollars, so the status that goes with being a millionaire has been greatly devalued (no surprise). [0]https://en.wikipedia.org/wiki/The_Millionaire_(TV_series) https://en.wikipedia.org/wiki/The_Millionaire_(TV_series)
- tcmart14 3y agoThis is why I wonder if 401Ks will just turn into a dog chasing its own tail. I think today, they still hammer that you need to have 1 million in your 401K when you retire, something being said my whole working life.
- dudul 3y agoI feel like we've moved on from the 1M figure. 3M seems to be the new target, at least that's what I hear the most.
- brian-armstrong 3y agoAnd yet the contribution limits are hardly changing. And your options to contribute beyond the standard limit varies from employer to employer.
- dudul 3y agoAgreed, what's the limit on an IRA lately? 6k a year?
- BizarroLand 3y agoYep. If you want to retire on a 401k alone, you have to start putting money in it as close to the day you are born as possible. If I get to have a kid I'm opening them a Roth IRA and putting all the money that I possibly can into it. $10,000 on the day they are born would be somewhere in the $250,000 - $1,000,000 range (depending on whether they average 5% or 7%, and if it were to average 10% it would be $6.47 million at age 65), assuming no further investments were made on it and that there were no management fees attached to it, and that somehow they could resist the temptation to draw down from it early to buy a house or pay student loans, cover debts, etc..
- mbfg 3y agoWhat this does say to me, tho, is that with better economic policy, taxation, etc. Everyone could live comfortably. Self Own.
- jsat 3y agoPlease. The amount of sensationalization here is beneath HN. This is average which we all know is incredibly skewed towards high net worth individuals. The median (much more representative of the "standard" qualifier) net worth of an American household is far, far lower.
- pixl97 3y ago"The average depth of this lake is 2 feet" --Said the wading man moments before his drowning death in a 20 foot deep hole.
- Manuel_D 3y agoAs per the article, median net worth is $192,900.
- bfbdkcj 3y agoThat's a lot higher than I would've thought. I wonder if negative net worth is included in the mean and median calculations, or if it's clamped to 0.
- sokoloff 3y agoYou don’t need to clamp for the median (unless you mean to exclude them from the dataset entirely, which is almost surely not done).
- HumblyTossed 3y agoHeadlines like this are to keep the masses who are far far below the $1M mark pushing hard to finally* make it. * A carrot they'll never get by hard work alone.
- say_it_as_it_is 3y agoI would gladly fill that role if the Fed would also lend to me at zero interest indefinitely while I invest the proceeds into the economy
- yumraj 3y agoMusk is currently worth $228.5B So, he alone takes care of average net worth of over 229K households.
- moomoo11 3y agoI remember when I was a kid 100k was a lot of money. Now 1 million is all right.
- shrizza 3y agoYaaay! After the celebrations, maybe we start the vote on whose face goes on a 1k, 10k, and 100k bill???
- darth_avocado 3y agoWhen everyone is a millionaire, no one is.
- malfist 3y agoThat is not what this means at all. There's a big difference between mean (with outliers included) and median.
- 7thaccount 3y agoCalling everyone a millionaire because inflation is rampant seems pretty disingenuous even if technically true. It used to mean that you were wealthy. Now it just means you have a house and a 401k. Edit: for the naysayers, a new Ford truck costs $100k.
- chrisco255 3y agoThat's what it always meant. Most people that become one reach millionaire status in their older age with a paid off house and a stock portfolio.
- chongli 3y agoIt's not at all "calling everyone a millionaire." The "Mean American household" is just the mean, not any real household. Example: If you have a population of 1000 where one person is a billionaire and everyone else has $0, then the "mean person" is a millionaire when in fact almost everyone has nothing. The real situation isn't a pure "winner takes all" like that, but it's still quite lopsided.
- kolbe 3y agoI think that wording is wrong. "Household" is not an algebraic unit, and thus there is no mean. We're left to interpret what is meant, and responsible statisticians would say "the mean net worth of American families"
- zeroonetwothree 3y ago"mean person" or "mean household" is not a thing. The wording they actually use is "mean net worth of an American household" which is much more clear.
- deleted 3y ago[deleted]
- clipsy 3y ago> Edit: for the naysayers, a new Ford truck costs $100k. What a childish, disingenuous claim. I'm sure there are Ford trucks going for over $100k -- the market for gigantic luxury "work" vehicles has been around for quite a while now. But they are also making trucks with a US MSRP as low as $23,400.[0] [0]: https://www.ford.com/trucks/maverick/?gnav=header-trucks-vhp https://www.ford.com/trucks/maverick/?gnav=header-trucks-vhp
- highwayman47 3y agoBad news for me with negative net worth.
- foobarian 3y agoThank you dear trillionaires for bringing up the average!
- cgio 3y agoMean millionaire is now poor
- mikeyouse 3y agoSilly inflation misunderstandings aside - the median net worth seems more relevant which they peg at $192k. Seems about in line with what I expected.
- swatcoder 3y agoEven then, that median net worth figure includes paper gain on primary home value. But homes are very illiquid because of mortgage rate changes and most scenarios where people can actually draw cash out of primary housing require some major change in lifestyle since both rents and replacement homes mostly track those same paper gains. This report is mostly “see, things are great! Please please please don’t panic!” spin.
- epistasis 3y agoWealth does not need to be liquid to be wealth. Particularly when that wealth is a claim to not to have to pay rent, the biggest single expense of nearly every non-home-owning household. The problem isn't that the wealth is illiquid. The problem is that housing wealth incentivizes behavior to turn housing into a zero-sum problem and thereby drive up the cost of housing, to the benefit of current homeowners at the express cost of all future generations and non-owning workers right now.
- mikeyouse 3y agoThis report is an annual survey with published methodology and unsurprising results. Why does everything involving the Fed turn into a conspiracy theory? You can see exactly the composition of the increase in net worth, there's no secret motive to publishing this report that they always publish - it's just survey data. The dataset is actually really interesting: https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Net_Worth;demographic:all;population:all;units:median https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...
- drewcoo 3y ago> Why does everything involving the Fed turn into a conspiracy theory? Because they are a secretive cabal of elites who have some control over the economy. Or maybe because they keep telling us "the economy" is great but most people's day to day lives are worse and we can tell when someone's lying to us even if we can't quite pinpoint that lie.
- jfim 3y agoThat's why the median --- which is mentioned at 193k in the article --- is a much more useful metric for household income/net worth. It's just like saying whenever Bill Gates walks into a room, the average person in that room instantly becomes a billionaire.
- astrea 3y agoReally tragic that you still fed the misleading nature of the title by repeating the median point. It was a really good article I thought and took the time to explain the numbers and related conclusions.
- marcusverus 3y agoPlease elaborate.
- astrea 3y agoSure. I agree that the title is incredibly clickbaity and misleading, but I really appreciated that the author took the time to explain the nuance of how misleading "average" can be when looked at in isolation and how the typical American actually looks like financially. With that, I was a bit disappointed to come to the comments and see that people still wanted to do the typical internet "well actually" and make the same exact point that was made in the article.
- zeroonetwothree 3y agoThe "average person" doesn't become a billionaire, but the average wealth becomes > $1 billion. Both mean and median are useful (as well as many other statistics), depending on what your goals are. Median can be very misleading in some contexts.
- naveen99 3y agoIt would be more useful if they counted expected lifetime income. Most assets are valued at net present value of discounted future cash flows. But they don’t count personal future income for the labor class in their wealth calculation. If you do, even people on welfare are basically millionaires.
- mostly_harmless 3y agoThe most important part is this article is that this is the mean. The median net worth is $192,900 (as per the article). This just shows there is an extreme wealth disparity.
- kolbe 3y agoDespite to poor wording, this DOES NOT mean the median household is a millionaire
- LindeBuzoGray 3y agoWith the Gini index, mean household means nothing. What the median US household is worth is what means anything. If only one household had all wealth, its vicissitudes and upswings would change the mean - but not the unknown median.
- benreesman 3y agoEveryone seems very focused on the (illuminating) distinction between median and mean. Are we maybe not thinking enough about there’s some level of difference between the two that’s a real issue?
- cscurmudgeon 3y agohttp://www.paulgraham.com/inequality.html http://www.paulgraham.com/inequality.html
- benreesman 3y agoA rare miss. pg doesn’t completely fuck up almost ever, I think that essay is tied with calling Altman a successful first-time founder for “even pg blows it sometimes”.
- cscurmudgeon 3y agoI disagree. This is a spot on article. If you celebrate diversity in humans and their activities and thoughts, then expect diversity in wealth. Irrational otherwise.
- benreesman 3y agoNo one (sane) is arguing for a Gini coefficient of zero. Some people are going to have more money. But the false dichotomy that Randian villains use is that it’s either that or fucking go wild. Vast wealth inequality is almost synonymous with capture. Rich people capturing the levers of society and then advantaging their dumbass kids and friends is like, what actually happens. The diversity poetry is a crinkly piece of tin foil everyone is supposed to look at while the profits get privatized and the losses get socialized. I’m all for capitalism if we can figure out how to do it without connections and shit being what really matters. But everyone who touched Loopt should have gone bankrupt, not like, take over the world.
- clipsy 3y agoI'd say plenty of people are thinking about wealth inequality, and the mean/median discrepancy is one of many relevant statistics.
- philip1209 3y agoMy gut says that this is related to real estate, where most Americans have much of their wealth, which has seen price increases, and whose value the government props up with socialist policies. [1] Is there any data exploring the relationship between real estate and median family net worth? I would be curious to see a model correlating property values to median household wealth - because I'd imagine there's a strong correlation. [1] note: socialism strictly means "centralized planning", which these government programs are. So, I use the term in an academic sense, not a derogatory one.
- mym1990 3y agoNo data to back it up at the moment but I am pretty sure that home ownership has historically been a big wealth builder for the middle class. It historically has allowed people to use leverage on a fairly stable asset, while doubling as a hedge against rent. Now this is of course excluding 2008 and whatever has happened in the last 3 years(more institutional investment in residential real estate).
- tsunamifury 3y agoSo inequality is so bad it makes mean numbers inaccurate to a 5x degree. That’s the real headline. Not this BS
- empath75 3y agoOn average, Americans have less than two hands.
- renewiltord 3y agoGo to the source and do percentiles of net worth https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Net_Worth;demographic:nwcat;population:4;units:median;range:1989,2022 https://www.federalreserve.gov/econres/scf/dataviz/scf/chart... In the 75-90th percentile of net worth, the median net worth is over a million. So that means that in the 82.5th percentile onwards, it exceeds a million dollars. There are 131 million households in the US. That's 23 million millionaires. U-S-A U-S-A U-S-A Of course, this does mean something quite interesting. If each American millionaire gave up $10k, that would be equal cash accumulated to buy out Elon Musk's net assets at current market price. That means, interestingly, that all the things people are upset that a multi-billionaire like him don't do, we could do if we all felt like it. The truth is we don't feel like it. I certainly don't. I want to keep my $10k :)
- deleted 3y ago[deleted]
- cudahater 3y ago[dead]
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- loloquwowndueo 3y agoYeah but what’s the standard deviation.
- polyomino 3y agoand there will still only be 21 million bitcoin
- outside1234 3y agoFor money laundering and drug trades
- bryanlarsen 3y agoAnd I believe those numbers typically don't include the value of pensions. The Net Present Value of a solid pension is well north of a million.
- personjerry 3y agoAn interesting observation is that if 99% of the wealth is held by 1% of people, and currency/wealth is only valuable insofar as people recognize ownership, if everyone just stopped recognizing ownership and we redistribute everything equally, 99% of people would stand to double their wealth on average
- jebarker 3y agoWouldn't that wealth become worthless if nobody recognized ownership though?
- personjerry 3y agoThe idea would be to not recognize the past wealth and start recognizing the new redistributed wealth
- jebarker 3y agoThe interesting thing about that is that it's actually independent of the current wealth distribution I think, i.e. you could allocate any arbitrary amount to each person.
- mym1990 3y ago99% of the people would double their currency, but probably lose all of their wealth because trust in the currency would be absolutely destroyed. Yay!
- throw0101a 3y agoNick Maggiulli breaks down the numbers better in "What is the Average Net Worth by Age?": > So what is the median net worth of all U.S. households in 2022? > $192,700. > This is about 1/5 of the average net worth and an inflation-adjusted increase of about $50,000 since 2019 when the median net worth was $141,145. > But, once again, these figures don’t adjust for age, arguably the most crucial variable we need to control for to do a fair comparison. So, let’s do this now. * https://ofdollarsanddata.com/average-net-worth-by-age/ https://ofdollarsanddata.com/average-net-worth-by-age/
- throw0101a 3y agoNick Maggiulli breaks down the numbers better in "What is the Average Net Worth by Age?": > So what is the median net worth of all U.S. households in 2022? > $192,700. > This is about 1/5 of the average net worth and an inflation-adjusted increase of about $50,000 since 2019 when the median net worth was $141,145. > But, once again, these figures don’t adjust for age, arguably the most crucial variable we need to control for to do a fair comparison. So, let’s do this now. * https://ofdollarsanddata.com/average-net-worth-by-age/ https://ofdollarsanddata.com/average-net-worth-by-age/
- mariojv 3y agoThose numbers make this paper net worth increase seem so ridiculous. Did the median American really become 36% richer since just before the start of covid? I suppose you could argue people spent less and were able to pay off a lot of debt. I suspect more that a housing correction is overdue, although it remains to be seen if this will take the form of housing staying flat while inflation nibbles away at the real value or an actual price drop.
- djrobstep 3y agoAll these stats really tell you is: - how expensive housing is in that country - how privatized pensions are in that country For instance, Australia has very high wealth per capita. But that's mainly because: - housing is extremely expensive - pensions are extremely privatized (via the superannuation system) So it's actually a measure of dysfunction in many ways.
- mym1990 3y agoSomewhat off topic, but if you filter by the 'Other lines of credit' distributed by 'Percentile of income' there is a MASSIVE spike for the top 10%. Wonder if this is bad data or a result of the loans given out in 2022.
- freeORcapital 3y ago[flagged]
- euroderf 3y ago> The standard American household is now a millionaire, according to the Fed In related news, chocolate rations are up.