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|Subject: Re: The Net Worth of American Households||Date: 1/7/2007 6:34 PM|
|Author: WuLong||Number: 19328 of 36082|
I think the OP should be allowed a certain amount of literary license in making the point that in general the majority of the population of the US does a crappy job of saving and planning for the future
I think the OP has no idea how much money most people make or how difficult it can be to get ahead.
I had no idea Americans were so poor. 49.8% of all households have a net worth under $100,000. That is very tiny money: a couple T-bill ladders and hardly adequate reserves in case of a genuine, financial hardship
When one considers that the average salary is south of $50k, how long should it take to generate a net worth of $100k? Let's assume that the individual saves 10% of their gross income and puts it into T-bills. My math says that it takes 15 years.
So, remembering that $50k is an average, this means that half of the wage earners in this country will not have that $100K savings even after 15 years of diligent effort. How long does it take if you make only $40k? 18 years.
And of course, this doesn't take inflation into account.
Tiny money? Twenty years of scratching and saving?
Why do I hear the ending soliloquy of the Ghost of Christmas Present ringing in my ears (the insect on the leaf mocking his brothers in the dust)?
What about the $500k, which is merely the size of robustly-constructed, properly-diversified portfolio? That takes about 40 years, roughly the length of a career.
Literary license? No, I think the OP needs to learn a little bit about demographics and the real value of a dollar.
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