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Surprising Net Worth Number
Old 06-27-2007, 08:58 AM   #1
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Surprising Net Worth Number

Jonathan Clements has an article in today WSJ with the following statistic:

Don't get me wrong: I am not claiming $1 million isn't a huge sum.

Indeed, it's beyond the wildest dreams of most Americans. Take households headed by someone 55 to 64 years old, which is America's wealthiest age group. Even for these folks, who are on the cusp of retirement, the median household net worth -- including home equity -- is under $250,000, according to the Federal Reserve's 2004 Survey of Consumer Finances.


No wonder we retirees are in the minority!



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Old 06-27-2007, 09:06 AM   #2
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Yeah, but 1MM net worth (at age 55 - 64) is most likely laughable on this board.
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Old 06-27-2007, 09:07 AM   #3
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Last time I looked at the numbers it was worse than that...there werent many people in "the median". Lots of people with under $25k and a bunch with a lot of money.

Seems you either "get it" or you dont.
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Old 06-27-2007, 09:16 AM   #4
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Quote:
Originally Posted by grumpy View Post
Jonathan Clements has an article in today WSJ with the following statistic:

Don't get me wrong: I am not claiming $1 million isn't a huge sum.

Indeed, it's beyond the wildest dreams of most Americans. Take households headed by someone 55 to 64 years old, which is America's wealthiest age group. Even for these folks, who are on the cusp of retirement, the median household net worth -- including home equity -- is under $250,000, according to the Federal Reserve's 2004 Survey of Consumer Finances.


No wonder we retirees are in the minority!



Grumpy
I wonder what the net worth number would be without home equity. Me thinks that once home equity is factored out, it gets really scary.
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Old 06-27-2007, 09:27 AM   #5
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Likely this does not include defined benefit pensions. Plenty of people in this age group are doing fine- they buy $400,000 to million $+ homes. What pays the mortgage is mostly pensions. A surprising number of them are government pensions.

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Old 06-27-2007, 09:31 AM   #6
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Except for the very lowest income levels, where home equity is zero or close to it, it ranges from 30-60%.

For a pretty large segment of the population, building home equity as a store of value as a forced savings plan IS their retirement plan. I guess it helps that shelter is a necessary expense in the first place.
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Old 06-27-2007, 10:32 AM   #7
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Well if we elect Hilary then you can share more of your prosperity. She has made quite the stump speech lately talking about shared prosperity and how we are all in this together.

Quoting her...

“Fairness doesn’t just happen. It requires the right government policies.”
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Old 06-27-2007, 10:37 AM   #8
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I saw this article on why you need $500 in the bank. I guess that we really are in the minority.
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Old 06-27-2007, 11:00 AM   #9
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I saw this article on why you need $500 in the bank. I guess that we really are in the minority.
Well, I happen to know the REAL number is $503.78...
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Old 06-27-2007, 11:48 AM   #10
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Yeah, but 1MM net worth (at age 55 - 64) is most likely laughable on this board.
I agree and from what I see in the USA the numbers quoted don't seem right to me.

HaHa also has a great point.

A couple of other things to remember. Most journalist don't know how to do financial analysis and the article needs a fear factor to get any interest.

I would really like to see an article that attempts to point out all the wealth in this country.
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Old 06-27-2007, 12:04 PM   #11
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not meant as a personal attack but just to add some humility to this thread: some people are forced into debt through no fault of their own while others never had the luck or the mental capacity to accumulate much wealth so i wouldn't be so quick to laugh, and certainly not at a million bucks.
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Old 06-27-2007, 12:46 PM   #12
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I heard that the GAO had its own study and showed people were doing better than these articles point out....Also, I think what is missed in these is that folks with a lower income rate will simply have a decent amount of social security replace their income....if you make and live off of 20k while working, social security isnt bad...

Also, this discussion is similar to all of the threads "Can I retire on 1 million"....some here would scoff at the idea of living on 30-40k/yr while others would consider it pretty damn good...
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Old 06-27-2007, 03:21 PM   #13
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I could live on $80K a year but choose to live on no more than $30K a year. So I guess I would be classified as VERY LOW INCOME. When are these journalists ever going to get the FACT that it is EXPENSES that drive the train NOT INCOME.
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Old 06-27-2007, 05:33 PM   #14
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I could live on $80K a year but choose to live on no more than $30K a year. So I guess I would be classified as VERY LOW INCOME. When are these journalists ever going to get the FACT that it is EXPENSES that drive the train NOT INCOME.


Print journalists aren’t stupid. A financial journalist is like a health writer, she must write to her audience. That audience has a short attention span, and at best they are reading to confirm whatever bias they already have in place, or stoke a lingering fear, or whatever. What they are not doing is trying to understand unfamiliar concepts.

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Old 06-27-2007, 05:38 PM   #15
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Clements writes for the WSJ. I'll bet many readers have a high income but not big savings. Saying a million dollars ain't what it used to be is relevant to that audience, who may expect to spend $100,000 a year.
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Old 06-27-2007, 05:59 PM   #16
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But if you and your wife worked for 30+ years and will both be gettin SS of about 25K combined would that not average about 1 million with the 250 average?
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Old 06-27-2007, 07:40 PM   #17
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Well if we elect Hilary then you can share more of your prosperity. She has made quite the stump speech lately talking about shared prosperity and how we are all in this together.

Quoting her...

“Fairness doesn’t just happen. It requires the right government policies.”


The Goddess of Fairness speaks. Do you really need to know anything more about Hillary?
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Old 06-27-2007, 07:55 PM   #18
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hey ha...sounds like hairballs!

Hillary?
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Old 06-27-2007, 08:13 PM   #19
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well
Old 06-27-2007, 08:20 PM   #20
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well

This doesn't take into account couples with pensions... 2 teachers or 2 federal employees or other public sector type employees... 2 pensions + SS = $100k/year in retirement pretty easily. Even 1 30+ year state/federal pension + SS = $70k/year.

How many millions of people have state and federal pensions?

I have an aunt and uncle who both work for the state in California. They live an upper-middle class lifestyle. They probably have less than $250k in assets. They spend whatever they make ($120k/year). No investment accounts or retirement accounts. But when they retire their pensions will be $120k/year and I think they just plan to spend, spend, spend forever.
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