Comparison is the thief of joy
Only if you let it. Comparison is something we can control. Comparison can be helpful and instructive.Comparison is the thief of joy
I appreciate the effort he put into his video, and if he is an investment advisor, I can understand his focus on net worth, as he has an interest in getting to invest that money. But I think it would be a mistake to entirely disregard income. If a 65 year old married household had two secure pensions totaling $150k per year, they could live a pretty darned good life, even if they had minimal net worth. Especially if they also have social security coming in.
Dumb question. Perhaps he said it, but for some reason my mind is glossing over it. Are those numbers he's posting threshholds, or the medians for those groups?
For instance, to be "Super Wealthy", is that $16.7M the point of entry to get into the top 1%, or is it the median net worth of the top 1%? I have a feeling that they're threshholds, but didn't know for sure.
I decided to listen/watch the video and thought it was well done. Pretty good job as defining the difference between mean and median which folks still seem to get confused. Still a lot of open questions as to what is/should be included in net worth.
Assets - liabilities = net worth.
Exactly. However, lots of folks overestimate their assets and underestimate their liabilities. I can name 4 of our friends that do it. The home being a big one. We personally use what we paid, even though now it is worth double. I feel it is a more realistic approach. It is the only non financial asset we include in our calculation.
I use mark to market. To me that is reality. I don’t value my investments at what I paid for them, why should I do that for a house? We can see actual selling prices of homes around us. To extrapolate a per ft price is easy.
Assets - liabilities = net worth.
He noted it was medians, and explained the difference between median and mean.Dumb question. Perhaps he said it, but for some reason my mind is glossing over it. Are those numbers he's posting threshholds, or the medians for those groups?
For instance, to be "Super Wealthy", is that $16.7M the point of entry to get into the top 1%, or is it the median net worth of the top 1%? I have a feeling that they're threshholds, but didn't know for sure.
Anyway, I'm hovering around $2.4-2.5M in investable assets. Throw home equity in there, I might get up to $2.8M. If I was to classify myself, I'd call it "Comfortable". Which, is about the same as "Well Off" I guess.
I dunno if pushing me to $3.2M would make me feel "Wealthy". But I wouldn't complain about it, either! Overall though, I'd say it was a well-rounded video.
Point taken - but income is not wealth, and he specifically said "wealthy." It's not a video about income security.I appreciate the effort he put into his video, and if he is an investment advisor, I can understand his focus on net worth, as he has an interest in getting to invest that money. But I think it would be a mistake to entirely disregard income. If a 65 year old married household had two secure pensions totaling $150k per year, they could live a pretty darned good life, even if they had minimal net worth. Especially if they also have social security coming in.
What’s the difference between income and wealth?
Income and wealth are both key indicators of financial security for a family or an individual. Income is the sum of earnings from a job or a self-owned business, interest on savings and investments, payments from social programs and many other sources. It is usually calculated on an annual or monthly basis.
Wealth, or net worth, is the value of assets owned by a family or an individual (such as a home or a savings account) minus outstanding debt (such as a mortgage or student loan). It refers to an amount that has been accumulated over a lifetime or more (since it may be passed across generations). This accumulated wealth is a source of retirement income, protects against short-term economic shocks and provides security for future generations.
Exactly. However, lots of folks overestimate their assets and underestimate their liabilities. I can name 4 of our friends that do it. The home being a big one. We personally use what we paid, even though now it is worth double. I feel it is a more realistic approach. It is the only non financial asset we include in our calculation.