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Blackstone
06-23-2008, 04:57 PM
Riiiiiight. Because everyone who has a job just has fistfuls of cash. ::)

How's the weather at Versailles this summer, BTW?

You don't need fistfuls of cash. $2000 invested at 10% interest (ambitious, but certainly possible) would be nearly $100,000 after 40 years.

I'm sure there are lots of people here that make more money than me, too. I'm just a lowly government employee for the next few months.

miabella
06-23-2008, 04:59 PM
that's very misleading, blackstone. it indicates, at minimum, that half of all families have net worth below 93k.

also, that number is primarily home equity, which is frankly a magic number until you actually sell the house. and we know how well home-selling is going right now.

since it isn't real assets (and homes to live in aren't real assets, unlike commercial property purchased with cash on the barrel), the net worth of 'most americans' is much lower than that number derived from optimistic assessments of home equity.

you can see this reflected further down the table in the median net worth of families with less than 60k in income, as well as in non-white family medians (and that is about 1/4 of the population presently, so the data are even more misleading).

the fact that the mean and median are so disparate reflects the economic disparity that is real and not handwaved away by proclamations that everyone is sekritly rich.

(i derive the 'it's home equity' thing from the fact that if you divide by 2 the median for owners and renters, you get....ta-da! the 'median' net worth being about 93k!).

throw out home equity as a measure (because again, it has no in-pocket value until you sell the home, as debts against it are not wealth), and the net worth picture looks a lot worse.

as an added fillip, the median net income is for HOUSEHOLDs with (generally) two earners. that 43k is 20k/yr per earner. and to go back to the owner net worth median of 184k-- that means that people would be or are living in homes they couldn't afford on their salaries disproportionately, making the 'net worth' metric even more flawed and misleading.

home value over the long haul (50 years or so, often even 30, the length of many mortgages) pretty much just tracks inflation, and is thus not really an appreciating asset, while being less liquid.

+1 for misleading representation of the data, though!

Paris
06-23-2008, 05:00 PM
LOL!:rotfl:


This thread reminds me of someone... who is it? Hmmm...

Oh yeah!

http://media-2.web.britannica.com/eb-media/22/82422-004.jpg

Blackstone
06-23-2008, 05:09 PM
that's very misleading, blackstone. it indicates, at minimum, that half of all families have net worth below 93k.

also, that number is primarily home equity, which is frankly a magic number until you actually sell the house. and we know how well home-selling is going right now.

since it isn't real assets (and homes to live in aren't real assets, unlike commercial property purchased with cash on the barrel), the net worth of 'most americans' is much lower than that number derived from optimistic assessments of home equity.

you can see this reflected further down the table in the median net worth of families with less than 60k in income, as well as in non-white family medians (and that is about 1/4 of the population presently, so the data are even more misleading).

the fact that the mean and median are so disparate reflects the economic disparity that is real and not handwaved away by proclamations that everyone is sekritly rich.

(i derive the 'it's home equity' thing from the fact that if you divide by 2 the median for owners and renters, you get....ta-da! the 'median' net worth being about 93k!).

throw out home equity as a measure (because again, it has no in-pocket value until you sell the home, as debts against it are not wealth), and the net worth picture looks a lot worse.

as an added fillip, the median net income is for HOUSEHOLDs with (generally) two earners. that 43k is 20k/yr per earner. and to go back to the owner net worth median of 184k-- that means that people would be or are living in homes they couldn't afford on their salaries disproportionately, making the 'net worth' metric even more flawed and misleading.

home value over the long haul (50 years or so, often even 30, the length of many mortgages) pretty much just tracks inflation, and is thus not really an appreciating asset, while being less liquid.

+1 for misleading representation of the data, though!

I actually agree with all of that. I don't really think I was trying to use those statistics for anything meaningful; someone just asked for a cite, and I thought I would toss it out there.

I've always wondered why people still use household income as a predictor of anything - according to one professor I had, it's because they didn't ask about personal income when most households were single income, and they've stuck with the same metric for consistency.

For what it's worth, the median personal income for adults is $33k. Personal income, along with household income, have always been lower for minorities, women, and those who are less educated.
http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

My point is that now would be a good time for those who are employed to scale back on consumer spending in favor of more aggressive investments. You can look at the current downturn as an opportunity; simply because the market is trending downward doesn't mean that you have to.

person
06-24-2008, 04:24 AM
This thread reminds me of someone... who is it? Hmmm...
Oh yeah!

If the govt announces a new cake-eating-based (http://en.wikipedia.org/wiki/Let_Them_Eat_Cake)economic rescue package, you're fucked. :(

TheSexKitten
06-24-2008, 11:29 AM
^^^ Lmao!

Melonie
06-24-2008, 03:08 PM
^^^ it's no laughing matter really. The Democratic majorities in Washington are finalizing a 'subprime' bailout package with a reported price tag of $300 billion to US taxpayers !



Bottom line is that this bill, if passed, will provide 'free rent' to delinquent 'subprime' homeowners for 6 months or so, will slap mortgage lenders with no recourse losses, will hand out more low income tax credits, will hand out gov't subsidy money to low income first time home buyers, and will boost tax breaks on gov't issued mortgage revenue bonds (which are a favorite tax minimizer investment for those rich enough to afford the typical $50,000 price tag, and which pay a much higher rate of interest than tax free muni bonds). Something for the poor, something for the rich, and a future tax increase for the 'middle class' ... who earn too much to qualify for the subsidies, but who can't afford to take advantage of the mortgage bond tax relief.