From: zaladin@home.se (Joakim Persson)
Newsgroups: misc.invest.financial-plan
Subject: Re: PAW
Date: Tue, 13 Jan 2004 09:40:28 CST
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["Brent D. Gardner, ChFC" ] wrote:
[ 74 lines in misc.invest.financial-plan ]
===================
>> Which is why I am so skeptical of the numbers. If we are talking
>> about the mean I could heartily agree, but I still find it hard to
>> believe that the median net worth of a 37 year-old with a $60k income
>> is $220,000. For Caroline and so I can think this through, median
>> just means half the people are above and half are below. In this
>> case, for example, if we had 5 people, people 4 and 5 would have net
>> worth of more than $220K, one would have about $220K, and two would be
>> less. I find it hard to believe that 3 out of five 37 year olds have
>> a net worth of $220k or above. A mean, or average, on the other hand,
>> you could have four people each with a net worth of $50K and one
>> person with $900k and have a mean of $220K. I find something like
>> that much more believable. Maybe the numbers are correct. I'll have
>> to look for the books in the library. Thanks much for pointing them
>> out.
>
>It may be hard to stomach, but the numbers reflect reality. I find this in
>daily practice, and I see more portfolios/situations that most other
>advisors do. I see WAY MORE than the average lay person sees.
I find this kind of odd. The "Statistical Abstract of the United States",
2002 edition, states the following regarding net worth of american
families:
Table 677 -- Family Net Worth -- Mean and Median Net Worth [...]
======================================================================
1992 mean/median 1995 mean/median 1998 mean/median
All families $212.7k/56.5k $224.8k/60.9k $282.5k/71.6k
Age of family head
-35 $53.1k/10.4k $47.4k/12.7k $65.9k/ 9.0k
35-44 $152.7k/50.9k $152.8k/54.9k $196.2k/63.4k
45-54 $304.4k/89.3k $313.0k/100.8k $362.7k/105.5k
55-64 $384.9k/130.2k $404.7k/122.4k $530.2k/127.5k
65-74 $326.1k/112.3k $369.3k/117.9k $465.5k/146.5k
75- $244.4k/99.2k $273.8k/98.8k $310.2k/125.6k
Therefore, you are wrong assuming that the median net worth is $220k, when
it is in fact close to $70k-$80k. However, the mean net worth is quite
close to your figures.
>I have a lot of millionaires who have never earned a six-figure income in
>their life. OTOH, a lot of white collar professionals are living paycheck to
>paycheck.
Certainly, your clients are a happy bunch. However, as the statistics above
imply, the UAW/PAW-labels (although a good mark for ambitious people), do
not mix well with reality. The median net worth of ALL families (note: not
individuals) in the US was $71.6k in 1998.
--
Joakim Persson
M.S. student, CS/CE @ LTH, Lund, Sweden
Libertarian -- Heavy Metal fanatic
zaladin@home.se -- http://www.efd.lth.se/~d00jp
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