CreditKarma Survey Findings

[COcheesehead]

Some findings from recent CreditKarma
survey of Americans:

- 51% don’t know how to calculate their net worth
- 31% have net worth of $0 or less
- 30% of Gen Z care about celebrities’ net worth more than their own
- 21% aged 59 & above have net worth of $0 or less

 

[MichaelB]

Do you have a link to this study? It would be helpful for a discussion.

 

[Another Reader]

Some findings from recent CreditKarma
survey of Americans:

- 51% don’t know how to calculate their net worth
- 31% have net worth of $0 or less
- 30% of Gen Z care about celebrities’ net worth more than their own
- 21% aged 59 & above have net worth of $0 or less

If the survey is of Credit Karma users, that says something about them. If it's a survey of the general population, there could be a little bias to encourage adoption...

 

[COcheesehead]

Do you have a link to this study? It would be helpful for a discussion.

https://www.creditkarma.com/about/commentary/americans-have-a-net-worth-problem-and-its-not-positive

 

[MichaelB]

https://www.creditkarma.com/about/commentary/americans-have-a-net-worth-problem-and-its-not-positive

Thanks, that’s helpful.

This press release coincides with another recent announcement by Credit Karma. They are rolling out a new app called “Net Worth”. https://www.creditkarma.com/about/r...ericans-know-grow-and-protect-their-net-worth

March 9, 2023 — OAKLAND, CALIF. — Credit Karma (NASDAQ: INTU), the consumer technology platform with more than 120 million members in the U.S., today announced Net Worth, a new product experience within Credit Karma that will help millions of members know, grow and protect their wealth. The introduction of Net Worth brings the company one step closer to becoming a full-service personal finance management platform, with products and features to help every American make progress, no matter where they are on their financial journey. Net Worth is being rolled out to U.S. consumers with a credit score of 720 or above, with the goal to expand to a larger population over time.

 

[aja8888]

Not a real big audience in the study:

Methodology:

This survey was conducted online within the United States by Qualtrics on behalf of Credit Karma between March 20, 2023 and April 3, 2023 among 1,006 adults ages 18 and older.

 

[USGrant1962]

Not a real big audience in the study:

That is a perfectly adequate statistical sample size for the US adult population. Qualtrics is a professional survey and research firm, they know the statistics.

https://www.qualtrics.com/experience-management/research/determine-sample-size/

You can play with the stats here (I entered 250M as a guess at US adults): https://www.calculator.net/sample-s...ype=1&cl=95&ci=5&pp=50&ps=250000000&x=51&y=22

 

[jazz4cash]

Some findings from recent CreditKarma
survey of Americans:

- 51% don’t know how to calculate their net worth
- 31% have net worth of $0 or less

I’m having trouble resolving these two bullet points. Feels like a “Do Loop”.

 

[MichaelB]

That is a perfectly adequate statistical sample size for the US adult population. Qualtrics is a professional survey and research firm, they know the statistics.

I agree. We don’t know the questions and can’t tell if they were self-serving, but the sample size is certainly adequate.

I recall a couple of threads from back in the day where members here couldn’t agree on a single definition of net worth, so the 51% shouldn’t be a surprise.

 

[COcheesehead]

I agree. We don’t know the questions and can’t tell if they were self-serving, but the sample size is certainly adequate.

I recall a couple of threads from back in the day where members here couldn’t agree on a single definition of net worth, so the 51% shouldn’t be a surprise.

LOL, I thought of the exact same thing.

 

[Irishgirlyc58]

I didn’t see a category for doesn’t care what my “net worth” is?

 

[USGrant1962]

I agree. We don’t know the questions and can’t tell if they were self-serving, but the sample size is certainly adequate.

I recall a couple of threads from back in the day where members here couldn’t agree on a single definition of net worth, so the 51% shouldn’t be a surprise.

Yea, that is an issue even in an interested population like early-retirement.org.

 

[ivinsfan]

They're selling something.

 

[ERD50]

Originally Posted by COcheesehead View Post
Some findings from recent CreditKarma
survey of Americans:

- 51% don’t know how to calculate their net worth
- 31% have net worth of $0 or less

I’m having trouble resolving these two bullet points. Feels like a “Do Loop”.

My best guess, w/o seeing the underlying data and Q's, would be that we can only have some level of confidence that 15.19% have a net worth of $0 or less - that's the 49% of those that claim they know how to calculate NW and claim they are $0 or less.

As far as the discussions here at ER-Org, I think that's more one of semantics and casual use of the term. Most discussions are focused on investable assets, and many (incorrectly) use NW to describe that.

Though, even if that definition/context was made crystal clear, I'd assume that some significant percentage here could not come up with "Assets minus Liabilities", and correctly identify what their assets and liabilities are. For example - the value of your home is its after-sale proceeds (net of commissions, fees, any outstanding mortgage balance, etc) . Life insurance is the current cash value, etc.

Considering all that, I think it is surprising that 49% would get it right. Face it, many, many people just really don't need to be thinking about this at that level in their day to day lives. Knowing if they make more than they spend is more relevant to most.

-ERD50

 

[PlayinwithFIRE]

For kids today, Net Worth means how much they paid for their router and wifi extender.

 

[tryan]

hmmm ... quick google to see what percent of the population live below the poverty line: 11%.

Tells me most have the ability/income to better themselves. But choose not to.

 

[copyright1997reloaded]

I’m having trouble resolving these two bullet points. Feels like a “Do Loop”.

Given: (C#)

bool canCalcNetWorth;
decimal netWorth;
// logic to calc net worth here and set bool

if (canCalcNetWorth) 
  {
      if (netWorth < 0.0M)
        {
           //add to net worth stats
        }
   }

p.s. Fortran was the first language I learned. Well, I did read part of a JCL book prior to that.

 

[HI Bill]

When you're getting started, it's important to know how 'negative' your NW is. Net Worth is an important concept, but many of us here don't count our primary home with our retirement assets, as you can't spend it.

I have debt (a mortgage), but all I really care about is my net invested assets, and my monthly income vs. spending. My mortgage balance isn't important to me as a liability, as I could sell my home, and afford to buy another for cash with the equity from my current home, in most places except the highest cost of living locations.

 

[CRLLS]

When you're getting started, it's important to know how 'negative' your NW is. Net Worth is an important concept, but many of us here don't count our primary home with our retirement assets, as you can't spend it.

I have debt (a mortgage), but all I really care about is my net invested assets, and my monthly income vs. spending. My mortgage balance isn't important to me as a liability, as I could sell my home, and afford to buy another for cash with the equity from my current home, in most places except the highest cost of living locations.

And yet a mortgage IS a debt and should be subtracted from one's assets to calculate Net Worth. It is not surprising to me that many have a net worth of <0. According to Federal Reserve Economic Data, the median price of houses sold in 2022 is $428,700. Assuming (big assumption, I'
m generous) a down payment of 20%, that leaves a mortgage of $342960. It would take years to a) get the principle paid down a significant amount, and b) build one's assets up enough to overcome the outstanding balance. On the other hand, I think that most here have agreed that a Net Worth number is a fairly meaningless number for any day-to-day use.

 

[Time2]

And yet a mortgage IS a debt and should be subtracted from one's assets to calculate Net Worth. It is not surprising to me that many have a net worth of <0. According to Federal Reserve Economic Data, the median price of houses sold in 2022 is $428,700. Assuming (big assumption, I'
m generous) a down payment of 20%, that leaves a mortgage of $342960. It would take years to a) get the principle paid down a significant amount, and b) build one's assets up enough to overcome the outstanding balance. On the other hand, I think that most here have agreed that a Net Worth number is a fairly meaningless number for any day-to-day use.

But the house is an asset on the books, so it's $428,000 - $343,000 and shows as a + $85,000 on the net worth calculation. Assuming the value has not changed in either direction.

 

[COcheesehead]

People who say net worth is meaningless don’t get it. It’s like saying my brokerage balance is meaningless. You have assets to manage. Yes, you may not get current income from home equity, but that house can be sold to fund assisted living or LTC.

 

[Time2]

People who say net worth is meaningless don’t get it. It’s like saying my brokerage balance is meaningless. You have assets to manage. Yes, you may not get current income from home equity, but that house can be sold to fund assisted living or LTC.

I suspect many that say net worth is meaningless have a negative net worth.

 

[Irishgirlyc58]

Some of us just think it’s a bizarre thing to obsess over.

 

[MarieIG]

I would need to see the questions in the survey, before I formulate my opinion of the quality of the survey.

 

[CRLLS]

Well as far as NW being meaningless, what is it used for? Not for determining taxes, not for determining whether you can afford a mortgage. Maybe for college FAFSA? Truth be told, I do track it personally, But I make no action plan based on the number. IMO it serves no real-life purpose other than a self-feeling of good (or not).