Pew Research Report on wealth

[jollystomper]

Though this might be of interest here:

A Rise in Wealth for the Wealthy; Declines for the Lower 93% | Pew Social & Demographic Trends

From 2009 to 2011, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.

 

[heeyy_joe]

PEW!

 

[Andre1969]

Dumb question, but at what point in the year do they take those figures? My guess would be year end? As in, the 2009 figures would be as of 12/31/09 and 2011 figures would be as of 12/31/11?

Reason I'm asking, is because 2009 was a year of HUGE recovery, for me at least. From 12/31/08 to 12/31/09, I saw my NW go up about 77%. So, at what point in the year they take that reading can have a huge impact. For comparison, my NW went up about 29% in 2010, and about 4.1% in 2011.

Now, just to clarify, that's net worth and NOT rate of return. One reason NW kept going up as much as it did was because I kept on throwing in new money. Rate of return for those three years wasn't quite as rosy: 44.7% in 2009, 19.8% in 2010, and I actually lost 0.12% in 2011.

 

[TOOLMAN]

Though this might be of interest here:

A Rise in Wealth for the Wealthy; Declines for the Lower 93% | Pew Social & Demographic Trends

Thanks for the info. It's hard to nail down this information to see how I measure up. I suspect a lot of the worlds wealth is unreported.
The 16th Annual World Wealth Report 2012 is another source on the subject.
http://www.capgemini.com/resources/world-wealth-report-2012/

 

[Animorph]

Anyone with a large part of their net worth in stocks would have had a big jump. would have been better to highlight 2007-2011, but maybe not as juicy.

 

[DeborahB]

"Wealth" = "net worth" in this report. I wish they had reported on the 93% broken down into groups... But anyhow not surprised by this. The middle class is getting beaten down.

 

[HillCountry]

"Wealth" = "net worth" in this report. I wish they had reported on the 93% broken down into groups... But anyhow not surprised by this. The middle class is getting beaten down.

The detailed report is there, don't just read the overview.

 

[samclem]

From the linked report:

The different performance of financial asset and housing markets from 2009 to 2011 explains virtually all of the variances in the trajectories of wealth holdings among affluent and less affluent households during this period.

So, the big news is that stocks appreciated a lot more than home prices from 2009 to 2011.

This is germane to another thread now discussing whether home ownership should be a part of the American Dream. If fewer of the middle class had money in their homes and instead owned stocks, they would have joined the rich in doing better over this time period . . . assuming they actually have money in their homes. If they got a 0% down mortgage and simply got schwacked by the decrease in their highly leveraged positions, that's best seen as the the downside of any risky position.

 

[Gatordoc50]

The article indicates that it didn't consider pensions, DB plans, SS. In net worth calculations. Those didn't fall in 2008 and thus didn't increase dramatically afterwards. So, not all of the middle class is being left behind.

 

[kmt1972]

For the top 7% not sure mean is that meaningful. Medium would be much better. The top 1% and really top 0.1% in terms of net worth would be massive and distort the mean value.

 

[clifp]

The article indicates that it didn't consider pensions, DB plans, SS. In net worth calculations. Those didn't fall in 2008 and thus didn't increase dramatically afterwards. So, not all of the middle class is being left behind.

Yup that is always a problem with these studies, pensions and transfer payments are never considered assets.

 

[pb4uski]

....If fewer of the middle class had money in their homes and instead owned stocks, they would have joined the rich in doing better over this time period . . . assuming they actually have money in their homes. If they got a 0% down mortgage and simply got schwacked by the decrease in their highly leveraged positions, that's best seen as the the downside of any risky position.

that and I think there are many families who bailed out of stocks and were on the sidelines during the rally and saw their net worth decline (two families that I know of) whereas those who had the courage to stay the course prospered.

 

[papadad111]

Net worth / wealth recovery

I found this article to be very interesting, although pretty self explanatory as to where wealth is "stored" based on total net worth .... sharing it here.

http://www.pewsocialtrends.org/files/2013/04/wealth_recovery_final.pdf

 

[papadad111]

 

[Meadbh]

Another thread on the report has just been started (net worth/wealth recovery). May I respectfully suggest that the newer thread be merged into this one?

 

[MichaelB]

Threads merged

 

[TOOLMAN]

Threads merged

NW of the top 1% ofUSA households

 

[Khufu]

Thanks for the info. It's hard to nail down this information to see how I measure up. I suspect a lot of the worlds wealth is unreported.
The 16th Annual World Wealth Report 2012 is another source on the subject.
The 16th Annual World Wealth Report 2012 | Capgemini Worldwide

According to the Capgemini world report, $1 million investable assets puts you in the upper portion of the top 1% worldwide. Adds a little perspective.

 

[bob boag]

For the top 7% not sure mean is that meaningful. Medium would be much better. The top 1% and really top 0.1% in terms of net worth would be massive and distort the mean value.

+1

And the "top seven percent" is an odd choice - maybe the choice that best sells the position that the rich are getting richer and the poor are getting poorer?

And the fine print under the graph indicates that the actual 93rd percentile net worth dropped by $53,000 in 2011 vs 2009!

 

[bUU]

Median is really no better indicator of the whole than any of the others.

 

[Gumby]

+1

And the "top seven percent" is an odd choice - maybe the choice that best sells the position that the rich are getting richer and the poor are getting poorer?

And the fine print under the graph indicates that the actual 93rd percentile net worth dropped by $53,000 in 2011 vs 2009!

That is explained in the report. It appears the census breaks down the data that way.

(The focus in this report on the upper 7% of households rather than some other share of high wealth households reflects the limits of the tabulations published by the Census Bureau. The boundaries of its wealth categories dictated the split of households analyzed in this report.)

 

[kmt1972]

Median is really no better indicator of the whole than any of the others.

For sure median is not perfect. But I do feel it is better than mean. To say that mean NW for the top 7% is $3.17 mil does not really tell someone, say like myself, where he or she stands since the number is very much skewed by numbers at the very top 1% or 0.1%. But if we are told that the medium NW of the top 7% is, say $2 million, which would be my guess anyway, would be useful since that would indicate that the 96.5 percentile maps to $2 million. One can then try to figure out percentile he or she is. For me, back in 2011, our NW was about $3.4 mil. So if we do have the medium and it is what I assume it is above then I can derive that our NW is most likely around 97 to 98 percentile. But the $3.17 mean number carries none of that info.

 

[bUU]

For sure median is not perfect. But I do feel it is better than mean.

I would feel better with relying on no metric than a metric that explicitly ignores a vast disparity between top percentile and bottom percentile characteristics.