Midlife 'Wealth Shock' May Lead to Death, Study Suggests

[flintnational]

Well, its official. If we have a big market decline, no need to worry about the SWR going forward. You will probably die from the "shock". Because, well a study said so.

"Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn't. The heightened danger of death after a devastating loss, which researchers called a "wealth shock," crossed socio-economic lines, affecting people no matter how much money they had to start."

NYT article quoted above (possible pay wall)
CNBC article

I will save you the trouble. It is an observational study that the researchers admit cannot show cause and effect. But that does not stop them from making recommendations. I particularly like the recommendation to shield investors from loss.

 

[harley]

All death can eventually be traced back to the causative factor, birth. Other stuff happens in between.

 

[Mdlerth]

Mors vincit omnia

Just as they do to Rome, all roads lead to death...

...eventually. But in the meantime there's bacon!

 

[copyright1997reloaded]

I particularly like the recommendation to shield investors from loss.

I know, let's somehow guarantee that they can't lose money! We can call it....social security!

 

[HadEnuff]

I need to be shielded from loss, while generating 10% yearly returns.

I mean, you are a financial advisor, right? You took courses on this stuff, right?

 

[Rianne]

Learn to live on less. This creates a knot in the stomach. When one loses 100K in a month, one might say, might be similar to a job loss. 100K over a 20 year FIRE, ok we can live on $5K less a year. 200K loss, ok !0K less a year. This outlook makes it a little easier.

 

[flintnational]

I need to be shielded from loss, while generating 10% yearly returns.

I mean, you are a financial advisor, right? You took courses on this stuff, right?

I wonder how many millions I have lost if you summed up all of the market down turns (excluding upswings) over the last 30 years. It has to be a few million. Yet, I am still kicking. So we are the exceptions to their study or just maybe their study is poo.

We need a Poll!! Is this study poo or not poo?

 

[CaptTom]

What if you don't have much wealth in the first place?

Ha! I finally found a justification for RE without FI!

 

[flintnational]

What if you don't have much wealth in the first place?

Ha! I finally found a justification for RE without FI!

You can't escape this study. We are all doomed if the market turns down.

From the article "affecting people no matter how much money they had to start."

 

[bbbamI]

Just as they do to Rome, all roads lead to death...

...eventually. But in the meantime there's bacon!

 

[pb4uski]

My BS meter is pegged. From the article:

About 1 in 4 people in the study had a wealth shock, which researchers defined as a loss of 75 percent or more in net worth over two years. The average loss was about $100,000.

Even if one was 100% equities during the great recession you would not have lost 75%... unless one was playing individual stocks and were totally undiversified.

Though I would concede that if I lost 75% or more of my net worth then I concede that my likelihood of a heart attack would be 50% greater... so maybe they are right.

 

[braumeister]

The study makes good sense to me.

I lost a dollar last year when a parking meter malfunctioned, and it's been downhill ever since. Updating my will now.

 

[Dtail]

Just as they do to Rome, all roads lead to death...

...eventually. But in the meantime there's bacon!

At least the roads in Florida don't have potholes.

 

[Bestwifeever]

My BS meter is pegged. From the article:

About 1 in 4 people in the study had a wealth shock, which researchers defined as a loss of 75 percent or more in net worth over two years. The average loss was about $100,000.

Even if one was 100% equities during the great recession you would not have lost 75%... unless one was playing individual stocks and were totally undiversified.

Though I would concede that if I lost 75% or more of my net worth then I concede that my likelihood of a heart attack would be 50% greater... so maybe they are right.

Not to mention if $100k is 75 percent of my wealth, so what, I’m left with $33k or something to pad my SS and any pension? I’d be panicking long before I lost 75 percent.

 

[Red Badger]

Not to mention if $100k is 75 percent of my wealth, so what, I’m left with $33k or something to pad my SS and any pension? I’d be panicking long before I lost 75 percent.

Middle age and $100K is 75% of your NET WORTH (not portfolio). Death was probably attractive.

 

[foxfirev5]

Evidently not a factor around here but a RE crash or serious health/accident are but a couple of the catastrophes I could envision. Lots of people are not as fortunate as our group.

 

[flintnational]

Middle age and $100K is 75% of your NET WORTH (not portfolio). Death was probably attractive.

Made me laugh out loud.

 

[Moemg]

At least the roads in Florida don't have potholes.

No just sinkholes !

 

[NW-Bound]

Not to mention if $100k is 75 percent of my wealth, so what, I’m left with $33k or something to pad my SS and any pension? I’d be panicking long before I lost 75 percent.

Middle age and $100K is 75% of your NET WORTH (not portfolio). Death was probably attractive.

If all one has left as net worth is $33K, it means all one has left is an old class A motorhome and its content.

Life would be bleak, although a lot of people still live on. Never say die.

Some people do not even have $33K, although to have more at one point then to lose it is a lot harder.

 

[splitwdw]

Maybe all in the study were lottery winners.

 

[Mdlerth]

Mmm, bacon.

At least the roads in Florida don't have potholes.

Florida is perfect for bacon. It's got a panhandle!

 

[Dtail]

Florida is perfect for bacon. It's got a panhandle!

and lots of wild hogs to supply that bacon.

 

[omni550]

At least the roads in Florida don't have potholes.

Yup, the roads here are the BEST!

omni

 

[DrRoy]

I didn't realize how lucky I was to survive the Great Recession market and my near 50% loss. I guess it helps that I am RE for a year and NW is 4.5X the 2009 low point.

 

[DEC-1982]

Fortunately, some of us are past 45-55 midlife, so we won't get that shock.