Household net worth falls by largest amount since the Great Recession, new Fed data shows
S E E D E D C O N T E N T
In this Tuesday, March 6, 2018, photo homes stack up in a neighborhood in San Jose, Calif. NerdWallet calculated affordability for 173 metropolitan areas by comparing the median annual household income and the monthly principal-and-interest payment for a median-priced single-family home and found that the least affordable homes are in the San Jose. (AP Photo/Marcio Jose Sanchez)
Christopher Ingraham/The Washington Post
Christopher Ingraham/The Washington Post
Total household net worth in the fourth quarter of 2018 dropped by the largest amount since the fourth quarter of 2008 when the country was amid a steep recession, according to data released Thursday by the Federal Reserve.
Total household net worth is a measure of the assets — such as homes, stocks and bank accounts — owned by American families and nonprofits minus their debts. In the fourth quarter of 2018, it fell by about $3.7 trillion, a 3.5 percent quarterly decline. Going back to 1952, the start of the Fed’s data, only three quarters — the third and fourth quarters of 2008, and the second quarter of 1962 — posted bigger declines in household net worth, percentage-wise.
The data shows that change was driven by the poor performance of the stock market in the fourth quarter of last year. The flailing market erased $4.6 trillion in assets from household and nonprofit balance sheets, which was offset somewhat by gains in real estate and other assets.
The typical American household, however, may not feel much of a financial pinch as a result of the drop. For starters, stocks have since recovered much of their late 2018 losses , although they remain below the record highs set earlier in the year.
More important, most of the household wealth in the United States is owned by the country’s richest families . In 2016, for instance, the top 1 percent of families owned 40 percent of all household wealth, with the next 9 percent of families holding an additional 39 percent. That leaves 21 percent of the country’s net worth for the remaining 90 percent of American families.
Furthermore, about half of American families don’t own any stocks , while the top 10 percent of families control about 84 percent of the stock market.
Taken together, the numbers are a reminder that the stock market is not the economy , and that big national-level data sets may not necessarily reflect financial reality for typical American families, many of whom live paycheck to paycheck and struggle to meet even small unexpected expenses .
Christopher Ingraham
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The great divide.
only thing great about it, is the amount,
but again , in Trumps' make America, so sewer Grate,
he exceeds all expectations, as he is also again, accepted by the hypocritical heathens , high on how low they can go, cause blow by blow, they knock down, what they say they build up,
they lower US All, because they believe tales so tall, deficits so small, prejudice & Hate so apparent, while denying the obvious the only thing more childish
while threatening WAR, they tell us to go Fish,
while we can only
toss a coin and make a wish
that their Well Being
winds up too deep for any to hear their cries and pleas for help , and the rope winds up too long for they to hang themselves, as it all pales in comparison to comparisons of other excuses they continuously attempt to use for this ruse , that is so obvious an abuse, as they cry and grow bawled , while heir apparent and
,
in truth, we should all be
appalled
just looked up what is needed to be in the 10% club
,
not really all that much.
So Jack, i will apologize, but only for myself being ignorant,
something others might want to attempt now and then when true
You're right. It really isn't. It's a lot to me, though. It hasn't been easy getting here.
Apology accepted.
i don't currently, but i used to make far more than that annually, till i had to close my small "corporation", as i could not compete with companies employing illegals, and i, stupidly possibly, refused to go that route.
i know a little bit about 80 hour weeks, and not only was i sole proprietor in the beginning, i was also a singlparently responsible for raising a small child who is now grown, myself, with only my family for support.
So congratulations on hard work, as some of us out here, worked hard as well, and appreciate it.
Now, back to where we differ, the people who have profited via unlevel playing fields, should upset us all, just my opinion
I was an athlete growing up. I've been a coach most of my adult life. There is no such thing as a level playing field, and there never has been.
Some people are born with genetic advantages like size or speed or high testosterone or sharper minds.
Some are born with money. Some are born with good parents who support and push them, or families with high expectations. Some get to go to good schools. Some encounter mentors who invest in them. Some get their college paid for, some can earn it on the basketball court and some can earn it in the classroom.
For every person that gets a break like that, there is somebody who doesn't. The field is never level, hasn't ever been level, and is impossible to level while we still allow people to raise their own kids. There is no value in being upset by it, any more than there is value in being upset by cold weather.
There is value is doing the very best you can with the things you can actually control.
False.
your response in no way delves into the inequalities i speak of.
For one to crack the 1% bubble, doesn't even come close to those truly in control, as the top 1% of the 1% bubble is so far off the charts, you need a movie screen or larger to comprehend , how so FCKN FEW, control as much wealth as SO FCKN MANY !
It is not as simple as you try and explain it to be. So either you are not comprehending it, selling it as FAR LESS than it actually is, or barking at the moon because you are a loon, i just don't know, so ill not speculate
Two questions:
1. Why do you care?
2. What do you want done about it?
You've moved the discussion from 10% to .01%. That's a different discussion. But let's decide here whether or not you're intelligent enough to discuss without abuse. If not, let's call it off now.
And some people will do their very best their whole life and never make anymore than 50k a year.
In one breath you say people are lazy then in the next breath you say there are disadvantages.
That is trying to have it both ways.
as is the typical, when i have 'discussions' with someone who doesn't seem to know 'Jack' about some things,
but plenty about others.
Sorry Jack, guess i'm not 'intelligent ' enough to keep up with your ever varying narratives, that i varied to via a few % points
but ,
oh well Apples
is that some sort of challenge , there Jack >?//
cause , i'm self uneducated , so have at it, but please, do go easy on me, as i'm sure you've heard that line before
like a Father,speaking to an Altered Boy about his sister getting none, c'mon jack , this should be FUN
I suspect you and I have very different definitions of "their very best".
Why should those two be mutually exclusive? There are lazy people. That is a fact. There are also people born with advantages that others don't have. That's also a fact. How is this juxtaposition causing you problems, exactly?
My 'juxtaposition' is trying to blame the widening gap on lazy people. In fact, I would say the opposite. I would say it is greed. Monopolies rule.
just as i had to close a legal business, as i could not compete with those skirting laws,
this is where Jack doesn't seem to know Jack, yet again, though, he seems not to mean well.
Do businesses lying about employees equate to not enough hard work ?
There is NO equal playing field, he states, because i won't break the damn Law ?
Since Jack doesn't want to play with me any longer , i apologize to making my point via you Ender, but not allowed to return to sender, as i'm not "intelligent": enuff, oh well, maybe someday i'll be able to know Jack,
till then,
it is obvious
u n i don't know Jack
Do cite me on that. Or did you want to go ahead and admit you're just making shit up?
The widening gap is due to the failure of our public education system, and the vast disparity in the quality of "graduates" it produces. That's been going on for decades, and we're seeing the consequences.
Nah. Just checking to see if you can manage it.
Not looking good.
if you believe you can "manage" me
oh, oh i would truly n joy and love ta see
Jack, Jack "manage" me.
I know i'm self uneducated, but somehow
I MANAGE
Cite you on what? What you have been implying all along?
Did you never bring up people being lazy?
I see it is now all the fault of public education. Don't tell me, now you think all education should be private....
You mean what you have been inferring all along. Incorrectly, BTW.
Sure. Did I say they were the cause of a widening gap? Or did I say that hard work on its own has never been enough?
You should really stop guessing at what I think. You're terrible at it. Both of my kids went to public schools. And yeah...we could have afforded private.
I just think we need to raise academic standards and modernize curriculum.
When you have some kids graduating high school having taken advanced calculus and others that can't pass Algebra II, they don't have equal opportunities, now do they? Further, why aren't we teaching kids about money? Why is P.E. unchanged since 1950? Why can't kids get HVAC or plumbing training in HS so they can start journeyman programs when they graduate?
Our educational system is 50 years behind our economy, and it's usually the poor kids who get left behind.
I have never inferred anything. Just going by what others say. Including you.
I can get the gist of what is going on without having to dissect every sentence.
To me that is looking for something.
As far as PS101 I would rather not go down that route as not to derail very much.
Nothing stupid about that.
If it interrupts my sleep for a milisecond, it's gone.
So many times I could have lied or omitted information even to the demise of my deal.
Then, that ONE comes along and depressingly in the sake of honesty, you divulge to the customer what he didn't want to hear. Only to have them call back and say "fix my problem". Not "how much?" Just "fix my problem because you were the only one that was willing to walk away based on your findings, and you told us about it. To the other four I went back and they confirmed but didn't disclose.
That's when I slept best.
Subjective only. Some sit on their asses all day collecting welfare and say "Well, I did my best".
It’s hard to have net worth when you’re handcuffed to a medical system whose prices skyrocket while pay languishes. That’s just simple math.
Add to that sending kids to college at 15k or more a year.
I know people that have wiped out any and all savings just for that.
And rent. My first apartment 30 years ago was $250/mo. In my area a shitty apartment starts at about five times that amount. If wages followed that kind of growth, I’d be a millionaire by now.
Some here seem to want equal results without proper regard to education, dedication, sound financial decisions, sacrifices, work ethics, etc.
Simple fact is that anyone CAN succeed in America. There are countless stories of people doing exactly that throughout our history, and more and more people reach millionaire status daily.
There are over 15 MILLION millionaires in the US alone.
Not everyone is even interested in becoming rich. Some are content with much less.
We all don't do the same jobs the same way and shouldn't be paid the same.
Some of us don't rush out to buy the latest Apple product or a new car every couple of years.
Having $1000 rims or stereo systems in our cars isn't a priority for some.
Not all of us rent our residences our whole lives, either.
some rent, all they don't own Tex, they figure
it's the lease they can do.
Yeah, and lots of people never figure out how stupid that is.
I refuse to feel sorry for people who do the same things over and over expecting different results.
oh the lunacy, some refuse to see. It just sounds so crazy, it's almost insane, no ?
I do consider it financial lunacy to buy shit you can't afford.
I consider it lunacy to buy a better car than residence.
I consider it lunacy to have a $1000 cell phone when you can barely afford a $45 per month plan.
I consider it lunacy to take on massive amounts of debt to attend college to earn a degree that might limit your earning potential enough to make it near-impossible to pay off that college debt.
Who here has said that? Not one person that I can see.
The numbers I can gather were for 2017 that said about 10 mil. at the mil category. Out of 325 mil population, not a very impressive number.
One does not have to want to be rich yet one can still want a livable wage.
I do not equate wanting a mobile or a certain thing being extravagant or necessarily excessive.
Just because people may be 'poor' doesn't mean that they should deny themselves anything and everything. A simple one time expense of 1k is not going to have much of any overall impact on their decades long employment.
I didn't imply that it was extravagant or excessive, I stated it is a stupid financial decision. That is just a simple fact.
Personally, I don't give a shit what others do with their money. It is theirs to do as they will, but don't cry about being poor when you intentionally make decisions destined to keep you that way.
I never claimed that they should deny themselves of anything. But I know that a $400 phone will still let you surf the net, download apps, make and receive calls, and take pictures as will a brand new $1200 phone. A good used car will run just as good as a brand new one if taken care of properly. Buying a home is way better than renting for many people.
No, a single investment of $1000 isn't going to amount to too much after 20 years--probably around $5000 if invested. But that is a start. And why would it be merely a one-time thing? Invest every 3-5 years the same amount.
A stupid (overall insignificant) financial decision to some may make others very happy.
I am sure everyone, including yourself, has spent money on things others would not want.
I will admit that I actually have never bought a new car. My cousin just bought one for the first time.
My c-inlaw had a private dealership. We always did business with the big dealerships and went to the auctions. Having said that, not all have those opportunities.
As far as buying a home, not all can. Saving up for a down payment can take a while.
Sure, I was plenty stupid with money when I was younger. But I learned. And one of the things I learned that is that instant gratification is usually fleeting. Working and saving for something can be very satisfying.
I remember that when I was a kid, my parents never had a new car. We didn't go on vacation every year. When my parents wanted something, they saved up until they could afford it. And then I seemingly forgot all that when I got a little bit of credit and went nuts.
I got lucky and have bought 3--one for me and two for the wife. Mine was a Geo Metro, 1993-- a great gas mileage car. I hope you get a new one for yourself one day, it is a nice treat. But I plan on buying only one more new car in my lifetime, and that is when I retire, and getting one with a 10-year warranty. And I'll be paying cash with some of the money from selling my home. and downsizing.
That's true, but there are some decent deals to be had if you look long enough.
I think you have to make it a priority. It does take time, and I know it depends on where you live. I don't understand how anyone making less than $125k can afford a home in a place like San Jose. But my wife and I saved two years to get $1500 down on our first home, which we bought for $27k in 1992. Wasn't very big, but a decent neighborhood and the payments were way less than the rent we had been paying. That home propelled us. We refinanced it after 11 years, took out enough cash to pay off all out other debts, and then paid that mortgage off in 7 years. We rented it out for 3 years before we decided to sell it and invest the money in the market.
Maybe. I would always be afraid of the first little scratch. haha
I think that is a problem with some people. What I call a starter home. Some people think that their first house should be what they think they should have and/or will need.
Not always realistic.
LOL! I have been thinking my new one will be taking up 4 spaces whenever possible! Hell, I'll be old, that's as good of an excuse as any!
Yep. We remodeled the kitchen and bathroom, had a new roof and new windows in our years there.
We've remodeled our kitchen and bathroom at our current home. Mainly for resale value.
Sooo..... Now you object to someone inferring incorrectly.... Oh the irony.
There were 686,000 new millionaires in 2017.
Wanting a mobile? No. Buying a $1000 mobile? Yeah....that's extravagant and excessive.
A $1000 cell phone is not "anything and everything".
A simple investment of $1k in your 20's could easily be $50k or even $100k in your 60's.
Again Jack, dissecting comments, not an attractive trait.
I can do the same, and have. I just don't need to dissect every word to make a point.
Want a good conversation? Actually have one instead of
is this
is that
Is not
That is that
Very irritating.
When you have the majority of Americans unable to sustain an emergency that would cost more than 500 dollars without borrowing money, you have an economy that doesnt work.
That is not opinion, guesswork or supposition. It is truth.
People like Jack can call it laziness or stupidity or whatever they want, the reality is that the economy does not work for most people. Since we have majority rule in America, the TRUE populist politicians would be trying to think of ways to remedy the problem, not saying "those are the breaks".
For decades much of the boom in the economy has come from consumer spending fueled by debt. The average balance on household credit cards is in the many thousands of dollars. Americans are hooked on having the latest phones and tv's , even or especially when they cannot "afford" them. Most people are deluged with offers of credit , either in the mail or through advertising. Advertising works. So debt helps create the illusion of a totally prosperous population. I believe wages have not or have barely kept up with inflation. Not to the extent that can fuel a keeping up with the jones's lifestyle without debt.
Can you quote him saying that, or do you just not understand his points?
We do not have "majority rule" in America. Where did you hear we did?
This is the part where personal responsibility comes in. No one forces people to use credit to the point of detriment to themselves. No one forces them to buy products that most can live without quite easily. Are a lot of people's financial situations at least in part based on their own resolve, dedication, and sacrifice, just as much as their own greed and pride?
People are very susceptible to peer pressure, pleading from their children, and the effect of advertising. Were that not true they wouldnt get a million dollars a minute for Super Bowl commercials.
The fact is that consumer spending and the "booming" economy are largely fueled by debt. Do you really want these people to stop borrowing and spending? What will happen to trump's re-election,? lol.
Gee, so when does personal responsibility come onto play? Or should we tax the rich even more because Joe Blow wants to buy everything he sees advertised?
If people CHOOSE to go into debt, how is that anyone's fault but their own? How is that my responsibility?
And kudos, at least you made it through one post before dragging Trump into it yet again
I am sure many people are just stupid with money because of Trump..
It was an after thought. You have to give him credit for that.
Good point. I think you're right on that.
gave ya an upvote for your acknowledgement and truthfulness Tex, cause i'm a dik like that.
Riiiight. Because it has absolutely zero to do with their decisions.
No, it's definitely opinion.
Cars don't work either for people who don't learn how to drive them. Pens don't work for people who don't learn how to write.
Exactly. So do you admit it comes down to their decisions? Or do you intend to tell us all this is some sort of chemical addiction that they can't help?
Absolutely fucking terrible at basic math. They are also horribly undisciplined. That combination makes a person poor most of the time.
The only message that matters with this story is the plain and simple fact that Supply Side Economics is working perfectly and doing exactly what it was bred to do.
No doubt.
Increasing net worth seems like a good thing, and since 2001, according to the chart in the article, net worth has increased dramatically..
Can you explain why your post would lead one to assume you don't agree?
Nothing wrong with 'increasing net worth'. I did not imply that there was.
However, it depends only upon where that 'increasing net worth' ends up.
Most folks can easily increase their net worth just by making better financial decisions. It takes some personal discipline.
I fear you've missed the point of this discussion.
No surprise there.
Your fears are not any concern of mine.
They are baseless anyways.
As brought out by the recent Government shutdown, this comes as no surprise as over 50% of Americans do not have 400.00 to access in an emergency.
This is what should top the D.C. discussions, rather than their usual blither blather.
Why? The things necessary to address that problem would never pass. The "My $1000 cell phone is not an extravagance but somebody else should buy my health insurance" crowd would have an instantaneous meltdown.
We will have to color this, most likely but sadly true.
The main difficulty seems to be that at some point many folks forgot how to separate wants and needs.