Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
GDP and average income per capita
Old 11-01-2006, 08:54 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
GDP and average income per capita

Naive question:

The US GDP is 12.5 trillion. US population is 300 million.
12.5 trillion / 300 million = $41,666 per capita.

Seems extemely high to me. That means the annual average income for a family of 4 is $166,667.

Where did I go wrong? Thanks.
__________________

__________________
Sam is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: GDP and average income per capita
Old 11-01-2006, 09:21 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 8,404
Re: GDP and average income per capita

You calculated GDP/person, not income per person.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 09:31 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: GDP and average income per capita

It's extremely skewed in favor of the rich folks. Go look at mean vs. median incomes or net worths. The mean incomes and net worths are always much much higher than the median. For example, I saw a statistic lately that said the average net worth was $400,000 or so, whereas the median net worth was $85,000 or so.
__________________
justin is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 10:15 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: GDP and average income per capita

I am not able to find "average income per capita" data. I found average family income, but that's not enough info to arrive at total US income.

I think the problem is in my understanding:

Gross Domestic Produt (GDP) is the result of work done by the country population. So that's the country income. What's wrong with that understanding?
__________________
Sam is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 10:20 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,474
Re: GDP and average income per capita

Maybe this will help:

http://www.traderslog.com/gross-domestic-product.htm
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 11:12 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: GDP and average income per capita

Thanks. But it does not help. It simply defines GDP just like hundreds other definitions. But says nothing about the relation between GDP and country's income.
__________________
Sam is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 11:14 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 14,819
Re: GDP and average income per capita

Quote:
Originally Posted by Sam
Thanks. But it does not help. It simply defines GDP just like hundreds other definitions. But says nothing about the relation between GDP and country's income.
Sam, what you want to look at is personal income per capita, not GDP.
__________________
"To be a man means that you are brave, loyal and true. When you are in the wrong, you own up and take your punishment. You don't take advantage of women. As a husband, you support and protect your wife and children. You are gracious in victory and a good sport in defeat. Your word is your bond. Your handshake is as good as your word... When the ship goes down, you put the women and children into the lifeboats and wave good-bye with a smile." C Murray
brewer12345 is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 11:25 AM   #8
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: GDP and average income per capita

Interestingly, the numbers aren't that different.

Personal income in the latest quarter annualizes to $11 trillion. That number includes all sources of income, including employer contributions to pension plans, etc.

Latest numbers
__________________
wabmester is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 11:25 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: GDP and average income per capita

Quote:
Originally Posted by brewer12345
Sam, what you want to look at is personal income per capita, not GDP.
Thanks. I could not find that, so I had to improvise (incorrectly, apparently).

So, where can I find the Average Income per Capita for the USA, or Canada, or any other country.

__________________
Sam is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 11:38 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 14,819
Re: GDP and average income per capita

Quote:
Originally Posted by Sam
Thanks. I could not find that, so I had to improvise (incorrectly, apparently).

So, where can I find the Average Income per Capita for the USA, or Canada, or any other country.

Dunno about other countries, but the BLS is the keeper of this stuff for the US: http://stats.bls.gov/
__________________
"To be a man means that you are brave, loyal and true. When you are in the wrong, you own up and take your punishment. You don't take advantage of women. As a husband, you support and protect your wife and children. You are gracious in victory and a good sport in defeat. Your word is your bond. Your handshake is as good as your word... When the ship goes down, you put the women and children into the lifeboats and wave good-bye with a smile." C Murray
brewer12345 is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 12:39 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: GDP and average income per capita

Quote:
Originally Posted by wab
Interestingly, the numbers aren't that different.

Personal income in the latest quarter annualizes to $11 trillion. That number includes all sources of income, including employer contributions to pension plans, etc.

Latest numbers
Thank you wab. You're always ready with data and charts. Much obliged.

Since you're on a roll, can you help me find the missing 1.5 trillion?
__________________
Sam is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 02:03 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,487
Re: GDP and average income per capita

Quote:
So, where can I find the Average Income per Capita for the USA, or Canada, or any other country.
i'd start by looking here http://www.nationmaster.com/index.php, but believe you'll find per capita GDP the usual measure. nonetheless, this is a good site for some international data.
__________________
d is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 02:06 PM   #13
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: GDP and average income per capita

Quote:
Originally Posted by Sam
Since you're on a roll, can you help me find the missing 1.5 trillion?
Behind all the sofa cushions in the country?

GNP = GDP + income receipts from the rest of the world - income payments to the rest of the world.

National income = GNP - consumption of fixed capital.

Our nation's consumption of fixed capital was approximately $1.5 trillion this year.

Wikipedia article
__________________
wabmester is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 02:42 PM   #14
Recycles dryer sheets
perinova's Avatar
 
Join Date: Apr 2006
Posts: 406
Re: GDP and average income per capita

Quote:
Originally Posted by justin
It's extremely skewed in favor of the rich folks. Go look at mean vs. median incomes or net worths. The mean incomes and net worths are always much much higher than the median. For example, I saw a statistic lately that said the average net worth was $400,000 or so, whereas the median net worth was $85,000 or so.
yep - much different. Thanks for the data.
Have you heard of the Gini Index of a country?
http://en.wikipedia.org/wiki/Gini_coefficient
This explains why median << average

Quote:
Originally Posted by Sam
Naive question:

The US GDP is 12.5 trillion. US population is 300 million.
12.5 trillion / 300 million = $41,666 per capita.

Seems extemely high to me. That means the annual average income for a family of 4 is $166,667.

Where did I go wrong? Thanks.
Well
One thing is, not all GDP output may be distributed as income. However the average income per capita IS really about $40,000.
Check this out:
http://en.wikipedia.org/wiki/Per_capita_income
Of-course the median (not average) familly never sees that.

Even much higher in Luxembourg. By the way, as there is a high regional disparity some states are much high than that. In fact last year the per capita in the two richest US states (for this statistic) NJ and CT were about the same as Lux. if I recall correctly.
So do not ER in those areas you will feel... hum... poor.

per cap income (2006, IMF)
1. Luxembourg 69,800
2. Norway 42,364
3. United States 41,399
4. Ireland 40,610
5. Iceland 35,586
6. Denmark 34,737
7. Canada 34,273
8. Austria 33,615
9. Hong Kong, SAR 33,411
10. Switzerland 32,571
179 Malawi 596

__________________
perinova is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 03:40 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: GDP and average income per capita

Wow! Thanks perinova. That Gini index is very very informative.
__________________
Sam is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 06:06 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 14,819
Re: GDP and average income per capita

Quote:
Originally Posted by perinova
In fact last year the per capita in the two richest US states (for this statistic) NJ and CT were about the same as Lux. if I recall correctly.
So do not ER in those areas you will feel... hum... poor.
Heh, I work in one, live in the other and pay taxes in both. I'll see you a Luxembourg and raise you a Norway.
__________________
"To be a man means that you are brave, loyal and true. When you are in the wrong, you own up and take your punishment. You don't take advantage of women. As a husband, you support and protect your wife and children. You are gracious in victory and a good sport in defeat. Your word is your bond. Your handshake is as good as your word... When the ship goes down, you put the women and children into the lifeboats and wave good-bye with a smile." C Murray
brewer12345 is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-01-2006, 07:25 PM   #17
Recycles dryer sheets
perinova's Avatar
 
Join Date: Apr 2006
Posts: 406
Re: GDP and average income per capita

Sam
Here is some information to complete your question.
http://www.census.gov/hhes/income/4person.html
most recent data for 4-person household median per capita income. about $65K.

So to live a middle US class life at 4%WR you need $1.2M in NM to $2.2M in NJ. and on average $1.6M. Numbers are close to what we computed in an earlier thread.
__________________
perinova is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-02-2006, 10:02 AM   #18
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: GDP and average income per capita

Quote:
Originally Posted by perinova
So to live a middle US class life at 4%WR you need $1.2M in NM to $2.2M in NJ. and on average $1.6M. Numbers are close to what we computed in an earlier thread.
Only true if middle class equals median income I have always thought that middle class is average in terms of income. Boy, was I wrong.
__________________
Sam is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-02-2006, 10:16 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 14,819
Re: GDP and average income per capita

Quote:
Originally Posted by Sam
Only true if middle class equals median income I have always thought that middle class is average in terms of income. Boy, was I wrong.
Sam, if you get all tingly from this sort of thing buy or check out of the Library the "Statistical Abstract of the US." It is published every year by the BLS and has allkinds of interesting stuff like this in it.
__________________
"To be a man means that you are brave, loyal and true. When you are in the wrong, you own up and take your punishment. You don't take advantage of women. As a husband, you support and protect your wife and children. You are gracious in victory and a good sport in defeat. Your word is your bond. Your handshake is as good as your word... When the ship goes down, you put the women and children into the lifeboats and wave good-bye with a smile." C Murray
brewer12345 is offline   Reply With Quote
Re: GDP and average income per capita
Old 11-02-2006, 11:14 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 8,404
Re: GDP and average income per capita

Quote:
Originally Posted by perinova
Sam
Here is some information to complete your question.
http://www.census.gov/hhes/income/4person.html
most recent data for 4-person household median per capita income. about $65K.

So to live a middle US class life at 4%WR you need $1.2M in NM to $2.2M in NJ. and on average $1.6M. Numbers are close to what we computed in an earlier thread.
These numbers are for a four person family, not per capita. So, if you can ditch two or three of the four when you retire, you'll need less.

I thought it was interesting that there is about a 4X increase from '75 to '05.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 09:38 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2014, vBulletin Solutions, Inc.

Early Retirement News right to your Email!

Stay up-to-date with all the latest news to your inbox!

unsusbcribe at anytime with one click

Close [X]