U.S. Household Net Worth Hits Highest Level Ever

https://www.wsj.com/articles/u-s-household-net-worth-hits-highest-level-ever-11600705010

by lxm • 6 years ago

45 58 6 years ago

tbihl• 6 years ago

While I'm sure there's a lot of savings in many segments, I think some addressing of inflation is needed in this analysis. You can't inflate the monetary supply for free, as housing markets are showing right now...

sxp2• 6 years ago

Note that this is _total_ net worth which is a bad metric to track. If the small percentage of people who own stocks had an increased value in net worth due to the bull market, this metric goes up. A better metric would be tracking the median or quartile values since that would track the majority who are burning through their cash reserves due to a job loss.

onetimeusename• 6 years ago

small percentage of people who own stocks

According to this Gallup Poll[1], about 55% of Americans are estimated to own stocks.

[1] https://news.gallup.com/poll/266807/percentage-americans-own...

CydeWeys2• 6 years ago

The point is more that goal $ holding in stock per household is very uneven. Most of those 55% don't have much in the way of stock, and then a very tiny number have $billions.

mehrdadn5• 6 years ago

Note this includes retirement accounts (like 401(k), IRA). Not really directly reflective of "net worth" given it's more or less locked up until retirement.

emilsedgh• 6 years ago

It doesn't say how much they own.

sxp2• 6 years ago

20% of Americans hold >90% of stocks: https://www.visualcapitalist.com/composition-of-wealth/

tolbish• 6 years ago

Without also providing the median stock value, that is a meaningless statistic.

Keverw3• 6 years ago

I was wondering if that includes retirement accounts and checked it, looks like they consider that too. I know someone recently decided cash out their retirement account, sorta panicking with the market going down due to COVID, was stressful to check... but I guess with their type of account they didn't get to pick the individual stocks either. Not sure what type of account, back from when they used to work full time. Kinda wonder if maybe they just had a crappy broker or account person though, guess had trouble getting clear answers to things. Seems you have more control with an app like Robinhood but you lose out on employer matches and stuff like that though.

rtkwe• 6 years ago

That number isn't great because it again counts people who have 1k in the 401k like they're getting the same benefits from stock market increases as million and billionaires. The majority of people have a pretty small amount of money in their 401k.

https://www.businessinsider.com/personal-finance/average-401...

neallindsay• 6 years ago

It's like the old joke that Bill Gates walks into a room and now people in that room are billionaires (on average).

maerF0x03• 6 years ago

A better metric would be tracking the median or quartile values

A better for what purpose? You comment seems to imply a bias towards celebrating only some people's wins.

mtgx• 6 years ago

Actually yours does. The numbers are raised by billionaires as opposed to the median numbers.

StanislavPetrov• 6 years ago

A better for what purpose?

For the purpose of accuracy in communication. Speaking in terms of "household net worth" implies that you are referring to the net worth of individual U.S. households, not the net worth of the entire country taken as an aggregate. This is especially true when the net worth of most U.S. households has been stagnant or lower for almost 40 years while the net worth of the wealthy has exploded.

https://mises.org/wire/median-household-wealth-america-going...

michaelmrose• 6 years ago

Its a bias against celebrating the minorities wins by averaging and talking about everyone's wins.

dannyw• 6 years ago

Federal debt surged more than 50%.

gruez• 6 years ago

And so did fed balance sheets[1]. It's clear that this is all just printed money.

[1] https://fred.stlouisfed.org/series/WALCL

anm899• 6 years ago

Yes but that debt/printed money is interspersed throughout the economy in incredibly complicated ways and cannot easily be reversed. This does not necessarily mean the debt isn't real or can't cause problems.

camhart• 6 years ago

What is a household? I've seen reports that a lot of 20-30 year olds have moved in with parents since COVID 19. That could cause this metric to spike, even if they're making less now than before.

Fair warning, I didn't read the article.

anm899• 6 years ago

They aren't using household that way here. Household assets simply means assets owned by people and not owned by governments or businesses.

CydeWeys2• 6 years ago

Well technically they are using households that way here too, it's just that they're looking at the overall total household net worth, so the actual number of households doesn't matter. But start looking at the average amount per household, a closely related statistic, and now we're back to the same problem that combining/splitting households affects the figure.

jeffbee• 6 years ago

So it's up .38 trillion from 119 trillion, less than a third of a percent, in dollar terms, in the same interval over which the dollar has shed 4.5% versus the Euro.

dv_dt• 6 years ago

Seems like another article covering the Census income and poverty data, where there was some discussion on if household income growth is correlated to a possible growth in household size.

https://news.ycombinator.com/item?id=24499723

gilrain• 6 years ago

Hey y'all, just noting that we're going to be seeing a lot of these massaged figures in the coming years. Just look around, how are the common people around you doing?

maerF0x03• 6 years ago

Once you subtract US Debt liabilities, citizens end up with -88826 per person though.

https://www.usdebtclock.org/#

remote_phone3• 6 years ago

Relative to GDP, US debt is still far below countries like Japan. In fact during low interest times like right now it would be almost irresponsible not to take on more debt, from a purely financial engineering perspective.

anm899• 6 years ago

This is an incredibly misleading argument to make to anyone outside of the econ or finance world who lacks context. Japan is an extreme outlier in terms of debt loads for stable developed nations and they are conducting an experiment with their economy that many think will end poorly (also many argue that it won't end poorly)

The US's current debt load by percentage would have been a national outrage at any time in the last 100 years and we really have no idea how this game will play out. I would not trivialize it. 135% is a staggering and unprecedented for a major international power and the list of countries who have faced issues with smaller debt loads in the past is long.

not_a_moth• 6 years ago

Like all countries really. EU and UK debts are like 80% of GDP, US's about 100%, China's is 3 times their GDP.

baobrain• 6 years ago

China's national debt is definitely not 300% - checking Wikipedia it says only 48.4%. If you add ALL their debt: household, corporate, and national...then it's 317%.

Please be careful citing these figures.

anm899• 6 years ago

Debt clock lists us at 136% debt to GDP. We are long passed 100%

mempko• 6 years ago

That's not how government debt works. That debt ends up as deposits including your savings account. It's an accounting identity. Debt clock could be renamed Savings Clock.

anm899• 6 years ago

No. That's insane. That's like saying I took out a million dollar loan and my bank account went up by a million so I saved a million.

There is no rule that that money has to be deposited or will be deposited. Huge amounts of it end up in financial instruments including things like leveraged derivatives that no one would say are anything like a deposit.

The OP seems to have a perfectly reasonable understanding of how government debt works and it is absolutely reasonable to hold the assets of a thing up against it's liabilities to ascertain standing.

anm899• 6 years ago

I would imagine this is going to be true at a majority of points where markets are around all time highs. Right?

This is functionally equivalent to just saying: we injected trillions of dollars into the markets in a short period of time.

jelliclesfarm• 6 years ago

I think it’s shorthand for ‘Americans are doing just fine’ and there is some truth to it.

In other words: This is why no one wants to emigrate to Venezuela nor are there coyotes for Americans to sneak into Cuba.

disgu• 6 years ago

Isn't the number of Americans wanting to emigrate into other first world countries (Austria, Norway, Germany, etc) at an all time high, though?

NoRagrets• 6 years ago

Are they communist countries?

U.S. Household Net Worth Hits Highest Level Ever

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