Average net worth of Americans -- this is a joke, right?

[oldbeyond]

A lot of market liberals around here constantly go on about how great things would be if social programmes were abolished and taxes were lowered. A glorious nation of savers! Seems to me looking at real world data(both here and in other countries) that the likely outcome would be a spike in sales of SUVs, vacations and new kitchens coupled with very modest savings. Basically, a lot of americans seem to be as broke as the average swede, without the social safety net to back it up. But in the long run I guess we're all dead...

[steveo73]

A lot of market liberals around here constantly go on about how great things would be if social programmes were abolished and taxes were lowered. A glorious nation of savers! Seems to me looking at real world data(both here and in other countries) that the likely outcome would be a spike in sales of SUVs, vacations and new kitchens coupled with very modest savings. Basically, a lot of americans seem to be as broke as the average swede, without the social safety net to back it up. But in the long run I guess we're all dead...

I'm more of a market liberal than a socialist but you are 100% correct. People in general have no idea when it comes to saving for their futures.

[Peanut]

@el Duderino: But that jacket is worth every penny. On him, anyway

And actually I don't think he primarily did it for the money. It's more about establishing himself as an aspirational man of style... so maybe he'll be the face of Dior next year after they get tired of the vampire milksop they've got.

@thread: Back to the topic, I agree some people really don't need much savings when they have a pension they will collect. For example, 60k/yr for a firefighter is worth 2 mil in the bank.

And one thing notable to me about various measures I've seen is just how much money is concentrated at the top. You need millions to break into the top 5% in net worth after 30. You need to earn over 150k to break into the top 10% of earners, etc.

[JeanPaul]

The US and UK are uniquely bad, but other countries aren't great: http://piketty.pse.ens.fr/files/capitalisback/F140 (ignore the crappy y-axis)

[Ydobon]

The US and UK are uniquely bad, but other countries aren't great: http://piketty.pse.ens.fr/files/capitalisback/F140 (ignore the crappy y-axis)

Wow - the Japanese really like saving!

[SimpleLife]

Most people are morons. Once you've been a landlord it REALLY sets in. I am amazed some of my prospective tenants can figure out which shoe goes on which foot.

There is a reason most of these people are broke as a joke. I showed one of my rentals to a guy and his two apparent room mates; he tried to talk real big about how he has his own house, telling me what to do. Turned out he was crashing on the couch of his cousins house. I declined to rent to him on account of his stupidity and arrogance, not to mention bad credit he neglected to mention.

[TopHatFox]

@SimpleLife, if I were to be honest with myself, I'd wholeheartedly agree that the average person acts in a way which seems counter-intuitive to me and you; but then, is it because they are genetically less intelligent, had different access to education, or simply value different factors than us? For example, I know one person that is readily in debt, but is rather adept at memorizing and performing quotes from their favorite sitcoms.

I also know that placing negative labels on the majority of humanity (the 80 of the 20) is often detrimental to my state of mind; it instills a sense of anger, superiority, and frustration in my way of thinking and interacting with people. Instead, I try my best to practice patience while learning and sharing what I can with each human. I further surround myself with the people that offer a similar--or especially, higher--level of appropriate value, competence, and inspiration.

[SimpleLife]

@SimpleLife, if I were to be honest with myself, I'd wholeheartedly agree that the average person acts in a way which seems counter-intuitive to me and you; but then, is it because they are genetically less intelligent, had different access to education, or simply value different factors than us? For example, I know one person that is readily in debt, but is rather adept at memorizing and performing quotes from their favorite sitcoms.

I also know that placing negative labels on the majority of humanity (the 80 of the 20) is often detrimental to my state of mind; it instills a sense of anger, superiority, and frustration in my way of thinking and interacting with people. Instead, I try my best to practice patience while learning and sharing what I can with each human. I further surround myself with the people that offer a similar--or especially, higher--level of appropriate value, competence, and inspiration.

I came from the absolute BOTTOM. Success is a choice. Yep, I got loans to go to undergrad. I had enough money to pay that money back before I even graduated before finishing my program. Why? Because I put in the work to learn skills that built my IT career. Now, I own an ass ton of real estate, and am paying for my MBA program in cash.

Yet I see broke prospective tenants with bankruptcies and they drive cars nicer than mine, have the latest phones, clothes, and go out dinning all the time then go back to their low end job after partying it up. The difference is I was teaching myself skills to get a higher paying job and a degree while they were living it up. Now I'm the landlord, and I'm still living frugal to invest in income producing assets, while they party every weekend.

[Scott 2]

If you both get hit by a bus tomorrow, that tenant who parties every day will feel justified in their choices.

I can appreciate the mentality that leads to saving nothing. If you don't believe you'll live past XX, or you know the government's going to take it anyway, better to consume now!

[Spartan_Warrior]

Maybe it's just me, but there seems to be an inherent disconnect between the reality that most people are morons and the idea that success is a "choice" (implicitly, a choice that even morons can make and/or execute).

[GandK]

Maybe it's just me, but there seems to be an inherent disconnect between the reality that most people are morons and the idea that success is a "choice" (implicitly, a choice that even morons can make and/or execute).

It's not just you. The older I get, the more I feel this way. I don't think I'd go so far as to call most people morons, but a surprisingly high number of the people I brush up against in my daily life are incapable in some way. Incapable of restraining themselves, or of planning and executing, or of finding the information they need when they need it. The criminal cases that my husband handles alone make me worried about Average Joe's prospects. (And those are just the handful of people who got caught.) Both socially and financially, that leaves the rest of us planning for their success, too.

[EdithKeeler]

t's not just you. The older I get, the more I feel this way. I don't think I'd go so far as to call most people morons, but a surprisingly high number of the people I brush up against in my daily life are incapable in some way. Incapable of restraining themselves, or of planning and executing, or of finding the information they need when they need it. The criminal cases that my husband handles alone make me worried about Average Joe's prospects. (And those are just the handful of people who got caught.) Both socially and financially, that leaves the rest of us planning for their success, too.

I was remarking on that to a coworker just recently--we see this in our job all the time. I am constantly amazed how at how HELPLESS some people are when faced with a crisis. Their car is wrecked, and they have no idea how to even rent a car; a person's house has minor water damage from an incident and they are completely clueless what to do about repairs. You don't know how many times I hear "I think I'm hurt, what should I do?" Um, go to a doctor? Never mind that the don't have any financial cushion whatsoever to deal with something that comes up. It's not "smarts" that's missing--it's just simple common sense, and this expectation that "someone (else) needs to do something."

I've always been one of those people where, if things weren't going my way, I tried to fix it however I could, or make what needs to happen, happen.

And it doesn't seen to have a socio-economic basis (ie, it's not the "poor people who've had handouts") or even an age basis but it seems rampant everywhere.

[OxtheTank]

If you both get hit by a bus tomorrow, that tenant who parties every day will feel justified in their choices.

I can appreciate the mentality that leads to saving nothing. If you don't believe you'll live past XX, or you know the government's going to take it anyway, better to consume now!

True true, can't only live in the future! One of the best mental shifts for me has been changing WHAT I want. I LOVE a good Texas sunset complete with a whole pallet of colored clouds, a warm day to bike the trails, a stop at my plot in the urban garden, a meal I cooked with my own still and refined by my own experiment. It is extremely helpful when trying to meet aggressive savings goals to not feel like it is sacrificing the present. If anything, I feel more in the present now than ever!

[HopeForTheBest]

I'm surprised net worth was positive for folks under the age of 25 with so much student debt. I'm not on the ERE path either. According to filling this calculator out [moderator: link deleted] I'm about 10 times ahead of the average in my age range(I'm 33). But I'd say I'm on pace to retire when I'm 60 to 65. Nothing too sexy about that. But I won't have to worry where my next meal is coming from.

I have a grandma who retired with 100,000 dollars and social security and she makes it work and wants for nothing so I also think that its just a matter of living within your means.

[Farm_or]

@Steveo - Very interesting the Australian style of social security. A similar structure, often tagged as "privatization" of social security in the US is a frequent re-occuring campaign topic.

The mistake we made was allowing greedy, spend happy, and often corrupted politicians get their dirty hands in our SSI fund!

The media uses the term "entitlement" loosely. It was originally money that you put in that makes you entitled to take it out. They have warped the definition to cover anybody who feels the need to use YOUR money. Be careful to guard against that.

[BRUTE]

it's pernicious because most good (=successful) politics mixes everything up into a confusing bundle, where it's hard to detect where money is actually coming from.

it feels like humans paid for their own social security, but they actually pay a fixed certain amount, but are "entitled" to take out more than they paid in. there is no interest accumulated, even though it feels like there should. were it strictly their money + interest accrued, it wouldn't be an "entitlement" per se, but an investment.

[Jason]

(1) Net worth is invisible. We live in a society where wealth is to be seen. Credit makes wealth illusory;
(2) Net worth is opposed and undermined by the financial institutions and the marketers. The credit industry is not only based on individual's failure to accumulate money but their inability to pay back the money loaned to them i.e. more penalties, higher interest, increased cycle of borrowing. Simply put, our economy is based on people not having money;
(3) Net worth is created based on a sense of lack i.e. I do not want to lack in the future. We live in a country where we are told happiness is lacking nothing at this moment;
(4) Net worth is not subject to peer pressure. Your car, your house, your salary, your fucking phone (God Dayum) these are the "financial" indicators we compete on. No one walks around with their retirement statements;
(5) Net worth is a sign of well developed interior life. Our society does not cultivate that;
(6) Net worth is a sign of financial literacy. Our society does not teach that;
(7) Net worth is usually a sign of frugality. Our society does not value that;
(8) Net worth is a sign of the ability to discern that bumper sticker philosophy "those who die with the most toys win" "I owe I owe off to work I go" and the general "We all could die tomorrow" is a bunch of bullshit;
(9) Net worth is a sign of sacrifice. I completely fucked around in my 20's so I knew I could not have children later in life. My fault, my loss;

I went to a financial advisor and said "wow, you are doing great." And I said "No I'm fucking not. You are just giving me an "A" because everyone else in the class is an idiot." He shrugged in agreement.

[IlliniDave]

Jason, I would agree with most of that. I realized at one point that the majority of people I come in contact with outside of work interact with me only to put as much of my money in their pocket (albeit temporarily) as they can. Individuals accumulating works against the way things are "supposed" to work where the velocity of money is key for enriching the bill-dippers (tax authorities and financial institutions). The romantic lure of "experiences" I believe is an outgrowth of advertising (the goal of which is to separate people from their money). Then the people who do manage to see through all the BS and accumulate some means are promptly vilified.

[RealPerson]

the majority of people I come in contact with outside of work interact with me only to put as much of my money in their pocket (albeit temporarily) as they can.... Then the people who do manage to see through all the BS and accumulate some means are promptly vilified.

I never thought about framing it like that, but you are right. Very well put. No wonder genuine friendships are so difficult to establish.

[Jason]

The romantic lure of "experiences" I believe is an outgrowth of advertising (the goal of which is to separate people from their money).

Good point.

My guess is that because consumer products are now so cheap and/or available through credit and now everybody has the same shit, advertisers are now pushing "experiences" as opposed to sports cars, cigarettes, etc. as the new way for the consumer to "define" themselves. I have been watching Westworld on HBO which is a futuristic rumination on this idea. It's not be all you can be through pursuit or development, its be what you really are, or are not or can't be in normal day life. Of course in a contrived setting. And if you can afford it. Colleges often market themselves as "experiences" as opposed to their function to educate.

When I began to focus on net worth, I soon realized what a contrarian pursuit that it actually is. Now that is ultimately my fault for succumbing to the "World", but it really is a type of 12 step program if you want to remain committed.. And as you mentioned, it often involves dissociating with people/places/things. Consumers are drug addicts, friends are running mates, advertisers are pushers, retailers are suppliers, credit card companies are loan sharks, financial advisers are treatment counselors.

Personally, being a couch potato, I don't need to white knuckle my throw pillows when I see pictures of bright shiny happy people zip lining in Thailand or water sliding at amusement parks.. But I do find myself ogling houses which is the ultimate consumer product.