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So the total household wealth is 96 Trillion. And we have a population of 323 Million. Including babies, elderly, teenagers, etc. That equates to a wealth of 297K per ever person alive in America today, clearly an extremely wealthy country. But I know few people with 300K net worth. Much less babies, teenagers, or millennials with that level of wealth. Most are much lower. A few are higher, but not astronomically so. How can our country be so rich in terms of household wealth when everyone seems so poor?
A small percentage of people have a high percentage of the wealth.
Some people will attribute this to the greed of the rich. While there's some truth in that, it's not the whole truth.
In order to have wealth, you have to spend less than you earn. In order to keep what you have, you must allow your wealth to accumulate at a rate faster than you spend it.
Humans are bad at both of the above. Most people never save/invest any significant amount of money over a significant length of time (say, 15% of income consistently over a 20 year period). They're not interested. They don't want to take risk. They never learned personal finance in school They listen to their broke relatives and friends more than they listen to people who have actual wealth. And even when they get it, they tend to act as if it will never run out; yet it typically runs out faster than they believe it will--much faster. A perfect example is that 70% of lottery winners are broke or bankrupt within 5 years of winning:
And even if someone is good at acquiring wealth, their kids generally won't be. So in 70% of cases, wealth is gone by the end of the 2nd generation because the kids get used to an expensive lifestyle but aren't able to maintain it with either high paying jobs and/or more frugal living. Splitting up estates among heirs also waters them down quite a bit. By the end of the 3rd generation, 90% of wealth is gone. I had a friend of a friend who inherited about 750K in municipal bonds about 20 years ago. Instead of just living off the interest from the bonds, he blew through the whole thing by buying Disney paraphernalia, spending on expensive clothes, and gambling in Reno. He was broke within 5 or 6 years. This type of behavior, unfortunately, is fairly common.
TL;DR: A small percentage of people are motivated for/good at acquiring and maintaining wealth. Most people aren't.
In your opinion, is there any 'minimum' income required before an individual 'should' be saving and investing? I doubt anyone would seriously contend that homeless Americans have income capacity to invest. My readings suggest that Dr Thomas Stanley - co-author of The Millionaire Next Door - didn't expect individuals to invest at annual incomes below about $40K.
How about minimum wage earners? Do they have discretionary income to invest? Does it depend on their local COL?
Part of net worth is home equity. One need not be rich to have a lot of that if they stayed in their home a long time. For example, we bought for $190k in 1993, current value is $784k.
Without a lot of debt, that’s well over $300k net worth, not counting pensions, life insurance value and the rest.
Oh I don't know about that. I once stayed in my house for 15 years and didn't get a dime of equity.
So the total household wealth is 96 Trillion. And we have a population of 323 Million. Including babies, elderly, teenagers, etc. That equates to a wealth of 297K per ever person alive in America today, clearly an extremely wealthy country. But I know few people with 300K net worth. Much less babies, teenagers, or millennials with that level of wealth. Most are much lower. A few are higher, but not astronomically so. How can our country be so rich in terms of household wealth when everyone seems so poor?
I guess it depends on what crowd you run with....most people I know have far and away more wealth than that.
A bit disingenuous, I think. You're sort of implying that everyone starts out equal and only the sensible savers become wealthy. While generational wealth may or may not be "greedy," someone who starts out with a decent pile has far more flexibility to save and invest - even while being a little loose in their household and personal spending - than someone who starts with little and has only $5k a year in income that could be saved.
Certainly poor saving habits keep lower tiers from acquiring wealth, but having already-growing wealth along with income is a completely different situation.
I already covered generational wealth. Most of it dissipates in 3 generations.
How about minimum wage earners? Do they have discretionary income to invest? Does it depend on their local COL?
No they typically don't. But you already knew that. Although I do find it interesting that there are plenty of low earners out there who seem to find money for drugs, alcohol, tattoos, & cigarettes. Not all, of course, but more than a few.
It depends on them dropping "minimum wage earner" as part of their identities, more than cost of living. But apparently, you're not interested in that. You're afraid of who you'd be without "minimum wage earner who can barely afford rent / can't afford a house" as part of your core identity.
In your opinion, is there any 'minimum' income required before an individual 'should' be saving and investing? I doubt anyone would seriously contend that homeless Americans have income capacity to invest. My readings suggest that Dr Thomas Stanley - co-author of The Millionaire Next Door - didn't expect individuals to invest at annual incomes below about $40K.
How about minimum wage earners? Do they have discretionary income to invest? Does it depend on their local COL?
there you go with the questions again .
how about this ? instead of posting the questions why not really think things over and COME UP WITH the answers .
no one is going to give the poor or low income people magical answers and abilities to not be poor or low income .
for all purpose the questions you keep asking DO NOT APPLY TO THEM IN ANY OF THESE DISCUSSIONS .
how about this ? instead of posting the questions why not really think things over and COME UP WITH the answers .
no one is going to give the poor or low income people magical answers and abilities to not be poor or low income .
for all purpose the questions you keep asking DO NOT APPLY TO THEM IN ANY OF THESE DISCUSSIONS .
Even if someone did give freemkt the exact answers with a guarantee they would work, freemkt would say it wasn't possible.
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Much less babies, teenagers, or millennials with that level of wealth. Most are much lower. A few are higher, but not astronomically so. How can our country be so rich in terms of household wealth when everyone seems so poor?
