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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76390  
Subject: Re: Boomers and their breaking of the market Date: 8/17/2006 4:42 PM
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From the article:

On the other hand, Mr. Murphy noted, some of the older groups are getting much wealthier. To be in the top 10 percent of those 80 and over, for instance, the net worth requirement soared to $1.15 million from $762,600 – an increase of 50.7 percent.

When you consider that net worth numbers include the considerable increase in real estate values over the past 8 years, the changes in these numbers for the 'old' vs: the 'young' are not really surprising. For the most part the young have had to take on enormous mortgage debt and therefore have not seen their net worth increase 1 to 1 with the increase in real estate valuations. The 'old' on the other hand (with low or non-existent mortgage debt) will have recognized the increase in their net worth.

I find the median numbers depressing, and what I would really like to see is the 75% (i.e., 1 in 4 have less than X).

Perhaps I'm missing something, but, for example, if we know that the top 25% aged 50-59 have $570,000, then I think it's safe to assume that the lower 75% have less than that. If the median is $188,000, I guess we can assume that it's a normal bell curve with approximately 1/2 having more and 1/2 having less. Although it would be interesting to see if the curve is skewed in either direction, and if those skews change by age group. For example, if the younger groups are skewed to the low end, and with age the skew eventually moves to the high end.

Nonetheless, I agree that the median numbers are quite scary. What I don't understand is if the top 25% of those aged 50-59 is $570K, then who the heck are these developers selling all these active-adult community homes to at prices of $350K +?

On a personal note, part of what inspired me to 'get off my duff' in 1998 was seeing these median numbers, and how far behind them I was. In 1998, I had only 24% of the median for my age group. In 2001, I had only 42%. In 2004, I had 185% of the median. Although I'm sure I'm still not in the top 25%, all this scrimping, saving and hard investing work seems to be paying off. At least I 'feel' more secure, however misguided that may be. ;-)

2old


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