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Old 01-15-2021, 10:03 AM   #81
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Including homes' value skews it for HCOL areas.

My old college roommate in California bought a home for ~$300,000 a couple of decades ago & now jokes he could retire just off the proceeds of selling his home...now valued at ~$1.5 million, probably ~$2 million by the time he cashes out and moves to a LCOL in a few years.
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Old 01-15-2021, 10:28 AM   #82
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Originally Posted by MichaelB View Post
According to this WSJ report, the percentage of millionaire households (more than $1M of investible assets) by state https://graphics.wsj.com/table/Millionaires_0207

California 6.3%, NY 6,15%, Oklahoma 4.98%, Kansas 5.43%.
I'm surprised they're so close, though due to population density the actual total is significantly more in the HCOL areas. Still, I never would have guessed the odds of being a millionaire in Kansas is almost the same as in NY!
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Old 01-15-2021, 10:46 AM   #83
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I'm going to assume that by choosing where to live, you have surrounded yourself with others who have just as much, or consume as if they did.
Have you driven through a median-income neighborhood recently? You may feel more like 1% there.
My village is slightly below the median per City-Data. (Guessing the apartment complex that's about 5% of the residences keep it low as it's full of young people starting out and divorced retirees that lost the house.)
It's very nice here and I feel very comfortable with my neighbors.
I still don't feel I'm in the top 10% for some reason.
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Old 01-15-2021, 11:43 AM   #84
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I was most surprised about Connecticut, which I imagine as chockablock with gadzillionaire hedge funders and with Nevada, which I didn’t know had so much wealth.
Surprised that CT wasn't higher? If so, there are a lot of depressed areas in CT. Bridgeport is a big one. Hartford has also been on down times since most of the insurance companies left. It was once the "Insurance Capitol of the World".
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Old 01-15-2021, 11:48 AM   #85
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According to this WSJ report, the percentage of millionaire households (more than $1M of investible assets) by state https://graphics.wsj.com/table/Millionaires_0207

California 6.3%, NY 6,15%, Oklahoma 4.98%, Kansas 5.43%.
Quote:
Originally Posted by mistermike40 View Post
I'm surprised they're so close, though due to population density the actual total is significantly more in the HCOL areas. Still, I never would have guessed the odds of being a millionaire in Kansas is almost the same as in NY!

Perhaps more light will be shed on this effect if we can compare the distribution curves of different states.

I suspect that the net worth of the middle class is not too different between states, but the wealth distribution of the richer states has a fatter tail end, pushing the top 1% up a lot higher than the average for the entire state.

What the above means is that while the odds of having $1 million in Kansas is not that much lower than in California, the situation is not the same for levels of $2 million, or $5 million, etc...
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Old 01-15-2021, 11:50 AM   #86
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So, my understanding from a quick peruse is that the original data is based on government data. It is consistent with, and may have been sourced from, the calculator used at

https://dqydj.com/net-worth-percenti...united-states/

The state data used in the Newsweek article is based on a "proprietary database" that some company uses.

The two are not in any way consistent.
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Old 01-15-2021, 11:57 AM   #87
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Originally Posted by Lagniappe View Post
So, my understanding from a quick peruse is that the original data is based on government data. It is consistent with, and may have been sourced from, the calculator used at

https://dqydj.com/net-worth-percenti...united-states/

The state data used in the Newsweek article is based on a "proprietary database" that some company uses.

The two are not in any way consistent.
Right.

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Originally Posted by NW-Bound View Post
Perhaps more light will be shed on this effect if we can compare the distribution curves of different states.

I suspect that the net worth of the middle class is not too different between states, but the wealth distribution of the richer states has a fatter tail end, pushing the top 1% up a lot higher than the average for the entire state.

What the above means is that while the odds of having $1 million in Kansas is not that much lower than in California, the situation is not the same for levels of $2 million, or $5 million, etc...
I would assume that California and NY have much higher average vs median numbers compared with the other states just because of the effect of a handful of billionaires.
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Old 01-15-2021, 12:19 PM   #88
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Originally Posted by ncbill View Post
Including homes' value skews it for HCOL areas.

My old college roommate in California bought a home for ~$300,000 a couple of decades ago & now jokes he could retire just off the proceeds of selling his home...now valued at ~$1.5 million, probably ~$2 million by the time he cashes out and moves to a LCOL in a few years.
True, although selling such a house in California would have a sizable selling cost, along with the potential for an even bigger capital gains tax bill (Federal + NIIT + CA). Assuming your friend is married, the difference could be around $250K off of that "net worth", which I assume is house value minus remaining mortgage(s).
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Old 01-15-2021, 12:54 PM   #89
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Originally Posted by mistermike40 View Post
I'm surprised they're so close, though due to population density the actual total is significantly more in the HCOL areas. Still, I never would have guessed the odds of being a millionaire in Kansas is almost the same as in NY!
I wonder whether this might be because investible assets don't include primary home equity? My guess would be that most CA households with total net worth >1M USD have more than half of it in their home equity, and these households wouldn't be among the 6.3%. This exclusion would probably make less of a difference away from the coasts.
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Old 01-15-2021, 01:02 PM   #90
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Interesting that Maryland, New Jersey and 7 other states have a higher % millionaires than California or New York. I was also guessing CA and NY would top the list.
In the Maryland-DC-VA area there is a very high concentration of high paying government jobs, along with lobbyists, government contractors, and even independent consultants that pay a lot. Add that to the house prices in the "close-in" suburbs around DC and it is not surprising.
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Old 01-15-2021, 01:05 PM   #91
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I came here to feed my ire against the evil 1%ers, then read the Newsweek link to find out I am one

dammit
So, does that mean you found out you are evil
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Old 01-15-2021, 01:26 PM   #92
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Probably true, but back then I was looking at living another 50 to 70 years on that million... Now it's more like 10 to 15 years, at best... So now 2+ million, w/zero debt, is good enough to give me that feeling.


Edit: According to the inflation calculator I just used you would need $6,390,395 today to have the buying power of 1m 50 years ago. And $2,847,205 to have the buying power of 1m 40 years ago... (The 1970's were a real killer on inflation)
I have little faith in those inflation calculators. My feeling is that $1M in 1970 is more like $15M today. For example, the house I grew up in has increased in value 40 to 1 from 1970 to today and housing is the largest expense for most.
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Old 01-15-2021, 01:29 PM   #93
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To me those numbers are surprising. Don't we hear all the time that 9 out of 10 (or some variation of that maybe 8 out of 10) can't come up with $500 for an unexpected expense? To me that indicates that the 1 out of 10 that can come up with $500 is a millionaire.
I don't believe those projections of how poor everyone is. Some people are poor, but I believe these statistics are created to make it sound worst than it is.
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Old 01-15-2021, 01:46 PM   #94
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I have little faith in those inflation calculators. My feeling is that $1M in 1970 is more like $15M today. For example, the house I grew up in has increased in value 40 to 1 from 1970 to today and housing is the largest expense for most.
I pretty much feel the same way every time the government calculates the inflation rates or COLA for my SS increases.... I'd laugh about it, if it wasn't so sad.
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Old 01-15-2021, 01:57 PM   #95
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I have little faith in those inflation calculators. My feeling is that $1M in 1970 is more like $15M today. For example, the house I grew up in has increased in value 40 to 1 from 1970 to today and housing is the largest expense for most.
A dozen eggs today is nearly the same price as 50 years ago. Averages are as meaningful as you care to see them, no more or less.
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Old 01-15-2021, 01:58 PM   #96
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i haven't seen anyone mention whether these amounts are before taxes or after taxes. 1 million in a tIra is not the same as 1 million in an after tax brokerage account. with federal and state ( if applicable) taxes that 1 million tIRA may only be 5 or 600,00.
I definitely don't think these are after tax or liquidated asset values. Too many variables to calculate that number.
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Old 01-15-2021, 02:00 PM   #97
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I can't imagine what else I'd spend money on, if I had 2M investible. (psst...I don't)Years ago I feared dying old, alone, and broke, but life isn't turning out like that for me so far. Right now I have everything I could possibly need or want and in this market, that nest egg just keeps on growing.

Probably I should sign up for a "How to spend like a drunken sailor" class online. OK, the BTD thread is a good start. It's certainly educational!
I can spend that $2M in a heartbeat. I would just pay off the mortgages of friends and family.
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Old 01-15-2021, 02:17 PM   #98
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A dozen eggs today is nearly the same price as 50 years ago. Averages are as meaningful as you care to see them, no more or less.
Although eggs as a percentage as ones expenses/standard of living is quite small. It doesn't amount to.......well, a hill of eggs.
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Old 01-15-2021, 02:34 PM   #99
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Although eggs as a percentage as ones expenses/standard of living is quite small. It doesn't amount to.......well, a hill of eggs.
There are other items, such as a television. I paid less for a 45" lcd TV last year than I did in 1978 for my 15" CRT TV. And the price of a gallon of gasoline in the Boston area was $3-$4/gallon. Remember the cost for a long distance phone call? Now they are "free".

I DO think inflation calculators going back that far are inaccurate, but that is at least partially because we buy different things today than 50 years ago.

Home computers and smart phones did not exist back then, now everyone has one (or 2 or 3)
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Old 01-15-2021, 02:34 PM   #100
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I have little faith in those inflation calculators. My feeling is that $1M in 1970 is more like $15M today. For example, the house I grew up in has increased in value 40 to 1 from 1970 to today and housing is the largest expense for most.
While inflation may be higher than the stated rate I do think that house prices in the SF Bay Area are a bit of a special case. The place where I grew up in the NYC area (which is no slouch in house prices) has "only" gone up by 15x or so since 1970, by way of comparison, while I know of other areas where the factor is well under 10x.
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