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right off the bat, you can see that they all had relatively little growth. where $10k, $100k and $1 million can all mean very different amounts of growth for different people; 2% always means a little growth. you can also take that 2% number and compare it to the performance of equities/bonds and see how they fared vs the growth of investment indexes. let's take a stock market that is flat, 0% return. so you figure there is a good chance that 2% increase came from additional savings vs additional investment growth. if the market gained 10% that year, you may assume they either have little money invested and/or spent more than they earned or something else.
Oh whoops, those three people all had net worth of around $100. They each picked $2 off the ground, and live paycheck to paycheck. If we changed their gains to 10%, and all three were hundredaires living paycheck to paycheck, you'd think they were excellent investors. Your analysis falls flat.
Percentage alone doesn't tell us much beyond the fantasy in your head. The real world is more complex.
Quote:
Originally Posted by CaptainNJ
how about this:
Person A gained $100
Person B gained $1000
Person C gained $100,000
What more does that tell you beyond their individual dollar gains?
I believe this is the third time ive asked you to try to demonstrate why dollar value is better and you totally ignore it. Just admit you were wrong and stop trying to argue over something just because you refuse to admit being wrong.
Again you try to pin this on me like I said it. Show the quote where I said the dollar amount should be the sole figure in determining success.
In fact, even though I never said that (even though you insist I did), do you remember how I said "assume I'm wrong, show you're right"? That's to get away from this strawman nonsense. Ready to drop that yet?
numberfive, did you know that in nyc in 2014 there were 328 murders and in detroit in 2014 there were only 300 murders? i dont understand why people pretend detroit is dangerous, clearly nyc has a lot more murders.
The standard analysis to adjust for population, typically per 100k residents. Google is your friend.
What's the standard adjustment for net worth percentages?
I guess the best of both worlds is the dollar amount at the start of the year and the dollar amount at the end.
But this seems to be more than people like to disclose. Which is weird seeing we are all pretty much anonymous.
There's no guarantee of anonyminity. Plus, the more you open up about yourself the more you're likely to be somehow judged, criticized, or even opportunized (if that's a word)
There's no guarantee of anonyminity. Plus, the more you open up about yourself the more you're likely to be somehow judged, criticized, or even opportunized (if that's a word)
Yeah, that makes sense. Although there sure doesn't seem to be a shortage of that around here!
I guess the best of both worlds is the dollar amount at the start of the year and the dollar amount at the end.
But this seems to be more than people like to disclose. Which is weird seeing we are all pretty much anonymous.
I'd argue there's more to it than dollar amounts -- to really get the full picture, you'd need other dimensions like age, income, location, etc. Percentage alone or dollar amount alone is a very narrow view, and you'd have to extrapolate like CaptainNJ attempted to do.
And it's also scary how easy it is to get doxxed. Some people re-use usernames, so it's easy to match up with social media sites based on location.
The easiest way is to just find where you used your real name with your username, find some posts about where you live, and google them. It'll list your current and prior addresses, and you suddenly have a new visitor on your doorstep!
The standard analysis to adjust for population, typically per 100k residents. Google is your friend.
What's the standard adjustment for net worth percentages?
this is very funny. you dont need to adjust the net worth percentages because they have already been adjusted from dollar figures to percentages. a very similar process to adjusting your number of murders to a murder rate.
how about this:
Person A gained $100
Person B gained $1000
Person C gained $100,000
Person C gained almost 2X the median US income, so that tells us a lot about them. Person A made no appreciable difference in terms of anything. Person B gets a decent investable amount or a small vacation. That tells a lot more than saying anyone gained 2% or 50% or whatever with no other information about them.
this is very funny. you dont need to adjust the net worth percentages because they have already been adjusted from dollar figures to percentages. a very similar process to adjusting your number of murders to a murder rate.
They've been adjusted from dollar figures to percentages, and excluding all other dimensions, makes for a very weak data point as has been explained to you on multiple occasions.
To further flesh out the example, and how horribly inadequate your interpretation is, let's look at Person A. Everything below the line is something you don't know based off the percentage alone, but significantly impacts Person A's financial standing.
Person A's net worth increased by 10% from Jan 1 - Dec 31 2015.
-----------------------
Person A is:
58 years old
Pulls in $100k/yr
Profile: Rents a home, goes on lavish vacations, buys new cars every 2 years, keeps a credit card balance, expects social security to cover all expenses in retirement, no pension, investment-adverse.
$0 in investment accounts
$100 net worth on January 1
$110 net worth on December 31
Net worth gain: 10%
Now let's use your standard template of what the 10% gain shows us. Remember, you only know what's above the line: 10% net worth growth. You don't know income, age, investment strategies, anything else.
Quote:
Originally Posted by CaptainNJ
right off the bat, you can see that they all had relatively little growth. where $10k, $100k and $1 million can all mean very different amounts of growth for different people; 2% always means a little growth. you can also take that 2% number and compare it to the performance of equities/bonds and see how they fared vs the growth of investment indexes. let's take a stock market that is flat, 0% return. so you figure there is a good chance that 2% increase came from additional savings vs additional investment growth. if the market gained 10% that year, you may assume they either have little money invested and/or spent more than they earned or something else.
You've stated prior that 10% is good growth, so let's run with that.
You therefore conclude Person A had acceptable growth.
You would then take that 10% number and compare to the performance of equities/bonds and see how they fared vs the growth of investment indexes. Looks like they knocked it out of the park for 2015, right?
Your assessment based off the percentage alone: Person A is doing great!
Reality: Person A is at a significant financial disadvantage.
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