5 ms·

That Americans on average have been horrible savers for a generation or two?

adventured 3y ago
On average Americans have gotten dramatically richer over the past generation or two. The average American is doing far better financially than the average German or Swede. The median is the relatively ugly picture. The average American has invested a lot in housing and equities, both of which have soared over the past 20-30 years. The average wealth per adult in the US is ~$550,000. That's just behind Luxembourg for #2 in the world (led by Switzerland at $685,000). That's a shocking average figure for a nation with 250+ million adults. It's closing in on double that of Sweden, and it's 2/3 higher than the UK or France. It's well over double that of Germany. It's also far higher than very affluent Norway. The US Gini figure is also lower than Sweden now (Sweden has become one of the most unbalanced affluent societies due to their horribly failed immigration integration over the past decade or so). If you're American, you definitely want to be average (or above), not median. How about the median wealth per adult? ~$107,000 for the US. That's above Austria, Germany, Sweden, Finland, Japan, Singapore, Spain, Italy. And it's below the Netherlands, France, Canada, Norway, UK, etc. Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Greece is at $53,000 and Portugal is at $70,000 for refence. The UK is up at $151,000, with France and Canada around the $135,000 area.
- probablynish 3y ago
  Median net household wealth increase far more than mean net household wealth in the 2019-2022 period: https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf Mean: about +22% Median: about +35% Median within the poorest 25% of households: +900% (!)
- chiefalchemist 3y ago
  Average is deceiving. A single billionaire and 999 with zero yields an average of one million each. With so much wealth at the too, average is going to be pulled up even when there are many with relatively near zero.
  - adventured 3y ago
    It's not deceiving, it's quite clear what it represents. Who isn't aware these days that the US is an unbalanced society in terms of wealth? I think even the typical person commenting on eg Reddit knows that story by now (which is why you'll find that - the gap between median and mean - pointed out in every single relevant thread on sites like that).
    - chiefalchemist 3y ago
      Who isn't aware? Wrong question. It's understabding how *greatly* that imbalance skews average. Most people don't know cause from correlation. They certainly don't know one billion is one thousand million. It's not safe to assume that everyome on Reddit or HN are well aware of the subtleties. Note: The discussion was on savings. Abstracting that from individual wealth adds cognitive load.
- lossolo 3y ago
  > Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Isn't that because most of that "wealth" is from inflated prices of houses? Over 50% of germans rent so over the median point, in US only 34%.
- rsynnott 3y ago
  > Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Greece is at $53,000 and Portugal is at $70,000 for refence. The UK is up at $151,000, with France and Canada around the $135,000 area. A lot of this is related to differences in (a) rate of home ownership, and general structure of the housing market, and (b) how pensions work. There's some messiness, but in general these measures of wealth don't account for defined benefit pensions (ie a pension where you get X$, inflation adjusted, per month until you die) very well.
latency-guy2 3y ago
Putting money into a savings account that netted you on average 0.2% yield APR is a great example of a dumb fucking decision. Thank God Americans aren't dumb enough to let their money rot in an account that gives virtually no benefit.
- thehappypm 3y ago
  FDIC insurance certainly has value; sure you're not getting much (or any) returns, but, it's just the extreme end of the risk/reward spectrum.
  - latency-guy2 3y ago
    If we were in an environment where the bank failure rate exceeded 1%, then I would say, sure, thats an OK investment, but that high of a BFR has not been seen. If we were then the investment landscape is much worse than FDIC could insure, rendering itself useless and in all likelihood would deplete itself within a few years (depending on which banks and how much capital gets hit of course). Then again, Americans have other options to park their assets that are far better places of retaining capital AND growth at the same time, housing being one, stocks being another, bonds being the third worst. So FDIC is about as good as BFR will ever lend you, and currently that means what I noted above - a dumb fucking decision.
    - thehappypm 3y ago
      Hmm, I’m not sure I agree. Everyone who had their money at SVB got it back thanks to FDIC insurance. Bank failures do happen, in the real world. Just because they’re currently rare doesn’t mean a black swan can’t happen
- function_seven 3y ago
  The Personal Savings Rate on this graph includes money saved via investments. It's not just a Savings Account tracker. They take what people make, then subtract out money spent on goods, services, and taxes, and interest payments. The money left over is what is considered.

On average Americans have gotten dramatically richer over the past generation or two. The average American is doing far better financially than the average German or Swede. The median is the relatively ugly picture. The average American has invested a lot in housing and equities, both of which have soared over the past 20-30 years. The average wealth per adult in the US is ~$550,000. That's just behind Luxembourg for #2 in the world (led by Switzerland at $685,000). That's a shocking average figure for a nation with 250+ million adults. It's closing in on double that of Sweden, and it's 2/3 higher than the UK or France. It's well over double that of Germany. It's also far higher than very affluent Norway. The US Gini figure is also lower than Sweden now (Sweden has become one of the most unbalanced affluent societies due to their horribly failed immigration integration over the past decade or so). If you're American, you definitely want to be average (or above), not median. How about the median wealth per adult? ~$107,000 for the US. That's above Austria, Germany, Sweden, Finland, Japan, Singapore, Spain, Italy. And it's below the Netherlands, France, Canada, Norway, UK, etc. Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Greece is at $53,000 and Portugal is at $70,000 for refence. The UK is up at $151,000, with France and Canada around the $135,000 area.

probablynish 3y ago
Median net household wealth increase far more than mean net household wealth in the 2019-2022 period: https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf Mean: about +22% Median: about +35% Median within the poorest 25% of households: +900% (!)
chiefalchemist 3y ago
Average is deceiving. A single billionaire and 999 with zero yields an average of one million each. With so much wealth at the too, average is going to be pulled up even when there are many with relatively near zero.
- adventured 3y ago
  It's not deceiving, it's quite clear what it represents. Who isn't aware these days that the US is an unbalanced society in terms of wealth? I think even the typical person commenting on eg Reddit knows that story by now (which is why you'll find that - the gap between median and mean - pointed out in every single relevant thread on sites like that).
  - chiefalchemist 3y ago
    Who isn't aware? Wrong question. It's understabding how *greatly* that imbalance skews average. Most people don't know cause from correlation. They certainly don't know one billion is one thousand million. It's not safe to assume that everyome on Reddit or HN are well aware of the subtleties. Note: The discussion was on savings. Abstracting that from individual wealth adds cognitive load.
lossolo 3y ago
> Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Isn't that because most of that "wealth" is from inflated prices of houses? Over 50% of germans rent so over the median point, in US only 34%.
rsynnott 3y ago
> Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Greece is at $53,000 and Portugal is at $70,000 for refence. The UK is up at $151,000, with France and Canada around the $135,000 area. A lot of this is related to differences in (a) rate of home ownership, and general structure of the housing market, and (b) how pensions work. There's some messiness, but in general these measures of wealth don't account for defined benefit pensions (ie a pension where you get X$, inflation adjusted, per month until you die) very well.

latency-guy2 3y ago

Putting money into a savings account that netted you on average 0.2% yield APR is a great example of a dumb fucking decision. Thank God Americans aren't dumb enough to let their money rot in an account that gives virtually no benefit.

thehappypm 3y ago
FDIC insurance certainly has value; sure you're not getting much (or any) returns, but, it's just the extreme end of the risk/reward spectrum.
- latency-guy2 3y ago
  If we were in an environment where the bank failure rate exceeded 1%, then I would say, sure, thats an OK investment, but that high of a BFR has not been seen. If we were then the investment landscape is much worse than FDIC could insure, rendering itself useless and in all likelihood would deplete itself within a few years (depending on which banks and how much capital gets hit of course). Then again, Americans have other options to park their assets that are far better places of retaining capital AND growth at the same time, housing being one, stocks being another, bonds being the third worst. So FDIC is about as good as BFR will ever lend you, and currently that means what I noted above - a dumb fucking decision.
  - thehappypm 3y ago
    Hmm, I’m not sure I agree. Everyone who had their money at SVB got it back thanks to FDIC insurance. Bank failures do happen, in the real world. Just because they’re currently rare doesn’t mean a black swan can’t happen
function_seven 3y ago
The Personal Savings Rate on this graph includes money saved via investments. It's not just a Savings Account tracker. They take what people make, then subtract out money spent on goods, services, and taxes, and interest payments. The money left over is what is considered.