36 percent decline in net worth
- Teetlebaum
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36 percent decline in net worth
From Wealth Levels, Wealth Inequality, and the Great Recession.
As the report explains, this "inequality" is because most American's net worth is tied up in housing. So if people would stop investing in the stock market, there would be less inequality.
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Re: 36 percent decline in net worth
Which is the reason one should never pay off their mortgage. JMOP.
Re: 36 percent decline in net worth
I read the NYTimes riff on this report: http://www.nytimes.com/2014/07/27/busin ... -less.html
I'm still trying to figure it out. I wonder if the authors are heavily influenced by their location or perhaps taking starting data from a high water mark.
Since 2007, my salary went to zero and my home has increased significantly in value. My portfolio is up and certainly more than double the value in early 2009 and quite a bit higher than the old high water mark of October 2007 (that's what 7 more years of contributions will do to it). Thus overall net worth has increased significantly since the Great Recession.
I did not do anything special except wait, so I'm still trying to figure out what others did. Perhaps it is just that home prices in the largest metro areas in 2007 were in a severe bubble and no studies should use such bubblelicious prices for comparison. Maybe an average home price from 2003-2007 would be more meaningful?
Or perhaps it is that the 25% of families who bought homes during the bubble ended up at the bottom of these charts with the most losses. Perhaps all home buying should have stopped between 2006 and 2008? I wonder what fraction of mortgages still exist on homes that are underwater in value.
I'm still trying to figure it out. I wonder if the authors are heavily influenced by their location or perhaps taking starting data from a high water mark.
Since 2007, my salary went to zero and my home has increased significantly in value. My portfolio is up and certainly more than double the value in early 2009 and quite a bit higher than the old high water mark of October 2007 (that's what 7 more years of contributions will do to it). Thus overall net worth has increased significantly since the Great Recession.
I did not do anything special except wait, so I'm still trying to figure out what others did. Perhaps it is just that home prices in the largest metro areas in 2007 were in a severe bubble and no studies should use such bubblelicious prices for comparison. Maybe an average home price from 2003-2007 would be more meaningful?
Or perhaps it is that the 25% of families who bought homes during the bubble ended up at the bottom of these charts with the most losses. Perhaps all home buying should have stopped between 2006 and 2008? I wonder what fraction of mortgages still exist on homes that are underwater in value.
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Re: 36 percent decline in net worth
There's an article with more information, centered around the real value of wages, at:
http://www.nytimes.com/2014/07/27/opini ... ility.html
There's no question in my mind that there is a real problem related to jobs, pay, benefits for middle class and blue collar workers. The article, at least judging from the people I have known and my own experience, is quite right that decades ago if you were hardworking, reasonably educated, you had the tools for a good financial life. Now things are much more difficult.
Going along with this is that a lot of major corporations are quite happy to be producing trash products and services, so they are okay with outsourcing to the incompetent.
I don;t know what the solution to this is.
http://www.nytimes.com/2014/07/27/opini ... ility.html
There's no question in my mind that there is a real problem related to jobs, pay, benefits for middle class and blue collar workers. The article, at least judging from the people I have known and my own experience, is quite right that decades ago if you were hardworking, reasonably educated, you had the tools for a good financial life. Now things are much more difficult.
Going along with this is that a lot of major corporations are quite happy to be producing trash products and services, so they are okay with outsourcing to the incompetent.
I don;t know what the solution to this is.
Re: 36 percent decline in net worth
My home has not recovered its peak value, and I doubt many homes have. Fortunately I bought 20 years ago so it matters little personally.
In addition inflation adjusted median household income is still significantly below pre-recession levels. Throw in increasing concentration of wealth and you end up with some pretty nasty looking statistics.
Speculation about the solution to this is I think a discussion not suited to this forum.
In addition inflation adjusted median household income is still significantly below pre-recession levels. Throw in increasing concentration of wealth and you end up with some pretty nasty looking statistics.
Speculation about the solution to this is I think a discussion not suited to this forum.
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Re: 36 percent decline in net worth
Welcome to a world with global competition for nearly all jobs, including white collar jobs. It's as simple as supply and demand. The global supply of labor, both blue and white collar, has increased faster than the demand for that labor. India, China and several other developing countries are competing hard. The only solution is for people to change the supply-demand balance for their labor by differentiating themselves. Learn to do things that fewer people can do.dolphinsaremammals wrote:There's an article with more information, centered around the real value of wages, at:
http://www.nytimes.com/2014/07/27/opini ... ility.html
There's no question in my mind that there is a real problem related to jobs, pay, benefits for middle class and blue collar workers. The article, at least judging from the people I have known and my own experience, is quite right that decades ago if you were hardworking, reasonably educated, you had the tools for a good financial life. Now things are much more difficult.
Going along with this is that a lot of major corporations are quite happy to be producing trash products and services, so they are okay with outsourcing to the incompetent.
I don;t know what the solution to this is.
But let's be honest -- if corporations produce trash products that aren't valued by consumers, they'll go out of business. The evidence is pretty clear that consumers like the value proposition offered by less expensive products made with outsourced labor.
Perspective is important here. The median per capita income globally is between $4 and $5 per day. If you make $34,000 per year, you are in the top 1% globally. Things have gotten harder for the U.S. middle class, but the rest of the world wants what we have.
- arthurdawg
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Re: 36 percent decline in net worth
We need your powers wizard!Ged wrote:My home has not recovered its peak value, and I doubt many homes have. Fortunately I bought 20 years ago so it matters little personally.
In addition inflation adjusted median household income is still significantly below pre-recession levels. Throw in increasing concentration of wealth and you end up with some pretty nasty looking statistics.
Speculation about the solution to this is I think a discussion not suited to this forum.
We are selling a home currently after moving. We will be in the red when all is said and done. I've always viewed a home as being valuable, but have never included it in my planning as a profit center. Good thing too!
Indexed Fully!
- HardKnocker
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Re: 36 percent decline in net worth
From 2008 to 2014 is just a eyeblink in time.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett
Re: 36 percent decline in net worth
HardKnocker wrote:From 2008 to 2014 is just a eyeblink in time.
+1 Exactly,,,,,its the length of time for many car payment schedules.72 months
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
- jimb_fromATL
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Re: 36 percent decline in net worth
Your net worth is defined as your assets minus your liabilities. So paying off your mortgage does not change your net worth. It just changes your liquidity.LongerPrimer wrote:Which is the reason one should never pay off their mortgage. JMOP.
However, that lack of liquidity until the mortgage is paid off is a big reason I suggest not paying off your mortgage too fast. I think you need to be paying yourself first by maxing all available tax-advantaged retirement plan (or have at least 15% to 20% of your income going toward retirement); have at least 6 months to a year of liquid assets in savings for emergencies so you can keep on making the mortgage payment even if you suffer a temporary job loss or cut in pay; and have paid off virtually all other consumer debts (except student loans and maybe loans on stuff you don't really need anyway) before you pay any extra on a typical mortgage ... especially at today's low mortgage rates.
Once you have used up all your tax-advantaged space and have enough in savings and few if any other debts, then you can't beat the equivalent rate of return of paying off a mortgage even today's low rate mortgages with after-tax money in taxable accounts that give a guaranteed rate of return with no risk to the principal.
The biggest caveat is that it needs to be money that you are absolutely sure you won't need for a long, long, time ... or until you sell the home and have more equity (less debt). Or else until you will have the mortgage paid off -- at which time the extra equity becomes equivalent to a guaranteed single premium annuity that will pay you enough to make the mortgage payment for the original remaining life of the loan.
jimb
Re: 36 percent decline in net worth
I read somewhere that a large part of this shift may be due to (1) single people living alone for longer periods of time, resulting in 2 poorer households rather than 1 combined, wealthier household, and (2) the first wave of baby boomers starting to retire and moving from salaries to social security.
Also, do the wealth calculations include pension value? Aren't pensions almost half of wealth for older middle class folks? If a 65 y/o has no savings, no home, no assets of any kind but a $85,000/yr COLA'd pension and another $25,000/yr from social security, I wouldn't call that person's household wealth zero. Quite the opposite, the ''broke'' pensioner would be better off than their neighbor with a million dollar 401(k).
Also, do the wealth calculations include pension value? Aren't pensions almost half of wealth for older middle class folks? If a 65 y/o has no savings, no home, no assets of any kind but a $85,000/yr COLA'd pension and another $25,000/yr from social security, I wouldn't call that person's household wealth zero. Quite the opposite, the ''broke'' pensioner would be better off than their neighbor with a million dollar 401(k).
Last edited by mac808 on Sun Jul 27, 2014 3:30 pm, edited 5 times in total.
Re: 36 percent decline in net worth
Statistics like this are notorious for being questionable, even if assembled in good faith. Wealth, even in simple terms of assets owned and debt (w/o even considering intangible elements) is remarkably hard to measure, more so than income, and even income isn't as easy as it looks. Other recent wealth statistics have been pretty convincingly challenged AFAIK, for example a lot of Picketty's results. It doesn't mean the general gist isn't correct, but the specifics are often debatable.
Another commonly publicized result is now median US household net worth, especially post crash, doesn't stack up that well with other advanced countries. Again, lots of statistics issues. US GDP per capita doesn't look that good either till you correct for domestic purchasing power at a given exchange rate when it vaults to near the top, about reasonably sized countries (eg. Luxembourg may be significantly higher, but so is Delaware compared to US average). Again though, the gist is probably correct: relatively low US *median* household wealth compared to *average* output per person.
However seems to me a big elephant in the room here is that Americans like to consume and don't like to save. When you consume and don't save, you don't have as much wealth. Stats clearly show Americans don't save as much as in many other developed countries (again as a general theme subject to arguments about particular stats). Perhaps, as some have argued, one negative effect of 'inequality' is that it puts more social pressure on more people to try to live an ever rising 'average' lifestyle, with a widening gap between average and median (the skew towards the top). But a certain POV (I still hold, though seems less and less in fashion) would say that spending too much and saving too little, then complaining you don't have enough wealth, and blaming that on 'inequality' as if some external force, would be an alternative definition for chutzpah.
Another commonly publicized result is now median US household net worth, especially post crash, doesn't stack up that well with other advanced countries. Again, lots of statistics issues. US GDP per capita doesn't look that good either till you correct for domestic purchasing power at a given exchange rate when it vaults to near the top, about reasonably sized countries (eg. Luxembourg may be significantly higher, but so is Delaware compared to US average). Again though, the gist is probably correct: relatively low US *median* household wealth compared to *average* output per person.
However seems to me a big elephant in the room here is that Americans like to consume and don't like to save. When you consume and don't save, you don't have as much wealth. Stats clearly show Americans don't save as much as in many other developed countries (again as a general theme subject to arguments about particular stats). Perhaps, as some have argued, one negative effect of 'inequality' is that it puts more social pressure on more people to try to live an ever rising 'average' lifestyle, with a widening gap between average and median (the skew towards the top). But a certain POV (I still hold, though seems less and less in fashion) would say that spending too much and saving too little, then complaining you don't have enough wealth, and blaming that on 'inequality' as if some external force, would be an alternative definition for chutzpah.
Re: 36 percent decline in net worth
I fully agree with you Jimb. Why pay off your mortgage if you have little other investments. You end up very poorly diversified, holding only 1 asset. Way too much risk for me.
A time to EVALUATE your jitters: |
viewtopic.php?p=1139732#p1139732
Re: 36 percent decline in net worth
Teetlebaum,Teetlebaum wrote:
From Wealth Levels, Wealth Inequality, and the Great Recession.
As the report explains, this "inequality" is because most American's net worth is tied up in housing. So if people would stop investing in the stock market, there would be less inequality.
I look at the same statistic and I read it differently. The answer is do not be the median 50th people. 75th decline a bit. 90th and 95th had increased.
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Re: 36 percent decline in net worth
Yeah but average SS is more like $15K and only about 22 percent of private sector employees have a defined benefit pension.mac808 wrote: Also, do the wealth calculations include pension value? Aren't pensions almost half of wealth for older middle class folks? If a 65 y/o has no savings, no home, no assets of any kind but a $85,000/yr COLA'd pension and another $25,000/yr from social security, I wouldn't call that person's household wealth zero. Quite the opposite, the ''broke'' pensioner would be better off than their neighbor with a million dollar 401(k).
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Re: 36 percent decline in net worth
I anybody else wondering why almost all the 2013 medians are down from 2009.
Even the median for the 95th percentile is down 2009 to 2013.
That has not been my experience.
I know that this can come from the people in the percentile groups being different
people, but that would not seem to explain why this is true across the board.
Even the median for the 95th percentile is down 2009 to 2013.
That has not been my experience.
I know that this can come from the people in the percentile groups being different
people, but that would not seem to explain why this is true across the board.
Re: 36 percent decline in net worth
MathWizard wrote:I anybody else wondering why almost all the 2013 medians are down from 2009.
Even the median for the 95th percentile is down 2009 to 2013.
That has not been my experience.
I know that this can come from the people in the percentile groups being different
people, but that would not seem to explain why this is true across the board.
Why 2013 is lower than 2009 is perplexing to me as well.
I can see for some that sold assets to live on because of unemployment.
But ALL income brackets?
Corrected all WEALTH brackets?
Last edited by Rob5TCP on Sun Jul 27, 2014 8:06 pm, edited 1 time in total.
Re: 36 percent decline in net worth
What income brackets? The table shows wealth brackets.Rob5TCP wrote: Why 2013 is lower than 2009 is perplexing to me as well.
I can see for some that sold assets to live on because of unemployment.
But ALL income brackets?
Re: 36 percent decline in net worth
I don't get the logic. If owning homes is what creates inequality, you should rent and invest in the stock market; avoid buying a home, don't avoid the stock market.Teetlebaum wrote: As the report explains, this "inequality" is because most American's net worth is tied up in housing. So if people would stop investing in the stock market, there would be less inequality.
Clearly, the goal of the not affluent should be to emulate the affluent and put more money into stocks. Forget buying a house, buy some Total Stock Market.Affluent households are more likely than other households to hold stocks and have large portfolios, which allowed them to benefit from the gains in the stock market.
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Re: 36 percent decline in net worth
Thank you for posting this. The conclusions are no surprise.
Re: 36 percent decline in net worth
I agree with sscritic..I don't get the logic either. If people didn't invest in the stock market, a higher percentage of their wealth would be in housing which the study says causes the variances(inequality)......Gordon
Disciple of John Neff
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Re: 36 percent decline in net worth
I once read an article suggesting that lots of investors are better off investing in real estate than investing in stocks because of bad behavioral tendencies of selling stocks during a crash. real estate takes more effort to sale and is illiquid so people prone to panic sometimes can do better investing in real estate. For some, their primary residence becomes a asset for retirement as they sell and downsize.
Re: 36 percent decline in net worth
I've always been a tad skeptical of these "surveys". Nobody ever called me. I even asked my Mom (before she died). Nobody ever called her. Who in heaven's name has any idea of our "net worth", however defined. Taken aback somewhat by the thin statistical back-up, sweeping conclusions, and Stanford blessing. If you dig into the assumptions and footnotes, you might well come away with healthy skepticism.
PS: Stanford, if it's this bad, why do you keep hitting us up for money? Ah, I get it.
PS: Stanford, if it's this bad, why do you keep hitting us up for money? Ah, I get it.
Re: 36 percent decline in net worth
I find many of these surveys hard to understand. We have been buying real estate since 1999, most recent property six months ago, i.e. Multiple properties before and after the recession. Some are rentals and some are residences. These investments have done well. We are not extremely savvy real estate gurus, do not have insider knowlege, and have not bought at auctions. Many people represented in those charts had some form of forgiveness or partial bailout or walked away from their financial obligations.
I would like to see more surveys showing the amounts that government sponsored mortgage refinances, forgivenesses, etc. have cost the taxpayers who have not played any of these cards.
What would the chart look like without those programs? I suggest there should be more emphasis on this aspect in these stories.
I would like to see more surveys showing the amounts that government sponsored mortgage refinances, forgivenesses, etc. have cost the taxpayers who have not played any of these cards.
What would the chart look like without those programs? I suggest there should be more emphasis on this aspect in these stories.
- Peter Foley
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Re: 36 percent decline in net worth
Just a guess . . . Those in the median net worth group had most of their net worth in housing. They did not benefit much from the stock market recovery. Prices in real estate continued to fall in our area into late 2011, early 2012.
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Re: 36 percent decline in net worth
Most Americans DID have most of their wealth in housing. That's what separates them from livesoft. They got hurt in the housing downturn, and didn't benefit from the stock bull market. In addition, those who got foreclosed, short sold, or otherwise had to leave their homes in the depths of the market also didn't benefit from housing's recovery. So they rode the train all the way down, then got off and watched it go back up the hill. Sad.Peter Foley wrote:Just a guess . . . Those in the median net worth group had most of their net worth in housing. They did not benefit much from the stock market recovery. Prices in real estate continued to fall in our area into late 2011, early 2012.
In these studies, I wonder if most casual readers understand that just because the 95%ile net worth changed by $X doesn't mean that there's some 95%ile household they're following around who lost $X. It means that the threshold at which one is in or out of the 95%ile changed. This chart (I didn't read any accompanying articles) doesn't capture the movement of households from one group to another - ie, from median to 95%ile to 90%ile etc.
Re: 36 percent decline in net worth
If you actually read the report you would see that it is based on the Panel Study of Income Dynamics (PSID), which is a longitudinal survey that has been tracking families in great detail since 1968. It samples over 10,000 families and is the world's longest running household panel survey. It is cited by over 3200 peer-reviewed publications. The data has been crossed checked against other surveys to verify that it provides representative coverage of up to 97% of all U.S. households.john94549 wrote:I've always been a tad skeptical of these "surveys". Nobody ever called me. I even asked my Mom (before she died). Nobody ever called her. Who in heaven's name has any idea of our "net worth", however defined. Taken aback somewhat by the thin statistical back-up, sweeping conclusions, and Stanford blessing. If you dig into the assumptions and footnotes, you might well come away with healthy skepticism.
Believe it or not, even though you as a special snowflake have never been sampled, the statistics are considered quite valid by academics.
Re: 36 percent decline in net worth
I'll excuse your comment as a minor intellectual hiccup. Data initiated incorrectly and cross-checked inappropriately and cited without much regard spreads like a virus. I actually read the report. Did you? 97% of all households? Give me a break.Jack wrote:If you actually read the report you would see that it is based on the Panel Study of Income Dynamics (PSID), which is a longitudinal survey that has been tracking families in great detail since 1968. It samples over 10,000 families and is the world's longest running household panel survey. It is cited by over 3200 peer-reviewed publications. The data has been crossed checked against other surveys to verify that it provides representative coverage of up to 97% of all U.S. households.john94549 wrote:I've always been a tad skeptical of these "surveys". Nobody ever called me. I even asked my Mom (before she died). Nobody ever called her. Who in heaven's name has any idea of our "net worth", however defined. Taken aback somewhat by the thin statistical back-up, sweeping conclusions, and Stanford blessing. If you dig into the assumptions and footnotes, you might well come away with healthy skepticism.
Believe it or not, even though you as a special snowflake have never been sampled, the statistics are considered quite valid by academics.
Last edited by john94549 on Mon Jul 28, 2014 12:04 am, edited 1 time in total.
- Teetlebaum
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Re: 36 percent decline in net worth
Instead of investing in stocks, everyone should buy homes to eliminate the class of high net worth people, and without high net worth people, we would achieve full equality.sscritic wrote:I don't get the logic. If owning homes is what creates inequality, you should rent and invest in the stock market; avoid buying a home, don't avoid the stock market.Teetlebaum wrote: As the report explains, this "inequality" is because most American's net worth is tied up in housing. So if people would stop investing in the stock market, there would be less inequality.
...of course the home values would all have to be the same price and rise and fall in tandem.
Re: 36 percent decline in net worth
It seems like the reason is simple. The 50th percent has a higher percentage of their wealth in housing which has suffered. The 95th percent has a lower relative percentage in housing and a higher relative percentage in stocks, which are at all time highs. That's my guess at least. It would be interesting to see the numbers exclusive of housing.
Re: 36 percent decline in net worth
Jack, think as if one were preparing to offer questions at orals. Line-by-line, sentence-by-sentence, footnote-by-footnote. Just a thought.
Re: 36 percent decline in net worth
I don't put much credence in surveys that compare the lowest or highest percentiles over time. People often change which percentile they are in. Even if they do nothing different over time, those around them move at a different rate (or direction) so everyone ends up in a new percentile. Heck, this study is even based on a different group of people at the beginning and end. Take into account those who died, those who started working (at the bottom of the pay scales), those who joined together/split apart to make a combined/separate household. Think of the new college grads who are in debt (assumedly the negative numbers in the table) who racked up debt during this time period, then moved back with their parents.
Jack's description of the survey being asked of the same families over time also makes the survey results a joke in my mind. What about all the people who aren't part of that cohort? I'll bet there aren't many people in that group who work in today's newer industries (tech, DNA analysis, index mutual fund, aerospace, etc) Assumedly the people in that study had a head of household who was at least age 24 in 1968. Let's see, that would make them at least age 70 1/2 now. I guess they're all taking RMDs by now!
Jack's description of the survey being asked of the same families over time also makes the survey results a joke in my mind. What about all the people who aren't part of that cohort? I'll bet there aren't many people in that group who work in today's newer industries (tech, DNA analysis, index mutual fund, aerospace, etc) Assumedly the people in that study had a head of household who was at least age 24 in 1968. Let's see, that would make them at least age 70 1/2 now. I guess they're all taking RMDs by now!
Last edited by celia on Mon Jul 28, 2014 1:20 am, edited 1 time in total.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
Re: 36 percent decline in net worth
Disclaimer: I think we were part of a statistical longitudinal study at one time:
We were just married and living in a cheap apartment. We both had professional level jobs and combined probably made 3-5 times the amount others in our apartment made. We were saving up to buy a house, saving a lot of our paychecks.
One evening a lady knocked on our door with credentials showing she was from the census bureau. In off years, they do other kinds of data collection, beside count people. We were told we "were selected at random" to participate in a survey, it was required of us, and our answers would be kept confidential. The survey involved us tracking what we spent money on for one month. Ok, I could track that. Remember the majority of our pay was going to savings and we didn't spend much except on food and rent. She came back in a month and collected our form and thanked us.
The following year, one day a lady knocked on our door with credentials showing she was from the census bureau. We were told we "were selected at random" to participate in a survey, it was required of us, and our answers would be kept confidential. It looked like the same survey from the previous year. Ok, I could track that again. She came back in a month and collected our form and thanked us.
The following year, we were still living at the same apartment and had started to look for a house. One day a lady knocked on our door from the census bureau. We were told we "were selected at random" to participate in a survey. I said "We are not selected at random. This is the third year you've come for the same survey and we aren't going to do it again."
I sometimes wondered how our non-typical data would impact their statistics. Did we represent everyone in our building? in our zip code? our age group? Well, statistically speaking, there was someone somewhere who balanced out our answers.
We were just married and living in a cheap apartment. We both had professional level jobs and combined probably made 3-5 times the amount others in our apartment made. We were saving up to buy a house, saving a lot of our paychecks.
One evening a lady knocked on our door with credentials showing she was from the census bureau. In off years, they do other kinds of data collection, beside count people. We were told we "were selected at random" to participate in a survey, it was required of us, and our answers would be kept confidential. The survey involved us tracking what we spent money on for one month. Ok, I could track that. Remember the majority of our pay was going to savings and we didn't spend much except on food and rent. She came back in a month and collected our form and thanked us.
The following year, one day a lady knocked on our door with credentials showing she was from the census bureau. We were told we "were selected at random" to participate in a survey, it was required of us, and our answers would be kept confidential. It looked like the same survey from the previous year. Ok, I could track that again. She came back in a month and collected our form and thanked us.
The following year, we were still living at the same apartment and had started to look for a house. One day a lady knocked on our door from the census bureau. We were told we "were selected at random" to participate in a survey. I said "We are not selected at random. This is the third year you've come for the same survey and we aren't going to do it again."
I sometimes wondered how our non-typical data would impact their statistics. Did we represent everyone in our building? in our zip code? our age group? Well, statistically speaking, there was someone somewhere who balanced out our answers.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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Re: 36 percent decline in net worth
They were probably followup surveys, and the person didn't explain that correctly or didn't even know it. She was a data collector, not an analyzer.celia wrote:Disclaimer: I think we were part of a statistical longitudinal study at one time:
We were just married and living in a cheap apartment. We both had professional level jobs and combined probably made 3-5 times the amount others in our apartment made. We were saving up to buy a house, saving a lot of our paychecks.
One evening a lady knocked on our door with credentials showing she was from the census bureau. In off years, they do other kinds of data collection, beside count people. We were told we "were selected at random" to participate in a survey, it was required of us, and our answers would be kept confidential. The survey involved us tracking what we spent money on for one month. Ok, I could track that. Remember the majority of our pay was going to savings and we didn't spend much except on food and rent. She came back in a month and collected our form and thanked us.
The following year, one day a lady knocked on our door with credentials showing she was from the census bureau. We were told we "were selected at random" to participate in a survey, it was required of us, and our answers would be kept confidential. It looked like the same survey from the previous year. Ok, I could track that again. She came back in a month and collected our form and thanked us.
The following year, we were still living at the same apartment and had started to look for a house. One day a lady knocked on our door from the census bureau. We were told we "were selected at random" to participate in a survey. I said "We are not selected at random. This is the third year you've come for the same survey and we aren't going to do it again."
I sometimes wondered how our non-typical data would impact their statistics. Did we represent everyone in our building? in our zip code? our age group? Well, statistically speaking, there was someone somewhere who balanced out our answers.
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Re: 36 percent decline in net worth
Or the trash is all they can afford, because they've been downsized and are working at Walmart.Louis Winthorpe III wrote:
But let's be honest -- if corporations produce trash products that aren't valued by consumers, they'll go out of business. The evidence is pretty clear that consumers like the value proposition offered by less expensive products made with outsourced labor.
It's also very difficult to find quality products of some types. One used to be able to find off the rack well made clothes. Now the seams come apart and the fabric is sleazy. You can't even sew them yourself often, since the fabric stores are carrying junk. There's some phrase about bad driving out good.
Re: 36 percent decline in net worth
I find it difficult to believe that even for the rich, who typically own stocks, net worth declined not just from 2007 to 2009 but from 2009 to 2013, even as stocks rebounded.
Re: 36 percent decline in net worth
Here's the actual survey used for 2013. Check out Section W around page 120. ftp://ftp.isr.umich.edu/pub/src/psid/qu ... /q2013.pdf
It's a self-reported answer to the question: "How much is the real estate worth, that is, how much would it sell for?"
In our area, 2013 selling season (spring-fall) is the first year that we saw big increases in RE values after the recession. It would be interested to know the timing of the poll.
It's a self-reported answer to the question: "How much is the real estate worth, that is, how much would it sell for?"
In our area, 2013 selling season (spring-fall) is the first year that we saw big increases in RE values after the recession. It would be interested to know the timing of the poll.
Re: 36 percent decline in net worth
It's likely Bogleheads were in the minority in staying the course.Beliavsky wrote:I find it difficult to believe that even for the rich, who typically own stocks, net worth declined not just from 2007 to 2009 but from 2009 to 2013, even as stocks rebounded.
Re: 36 percent decline in net worth
Yes this seems on the surface at least to contradict the Fed's aggregate numbers* for household net worth which was $80.3tril in 2013 v $59.0tril in 2009. The inflation correction from mid '09 to mid '13 would be around 8%, and the population correction around 3%, so the average net worth per capita still increased 22+% from '09 to '13. Applying the same rough corrections to the Fed's 2006 number, it's still higher than 2013's per capita, and 2007 is about the same as 2013.Beliavsky wrote:I find it difficult to believe that even for the rich, who typically own stocks, net worth declined not just from 2007 to 2009 but from 2009 to 2013, even as stocks rebounded.
It's perhaps mathematically possible that NW could nevertheless have gone down for both the 50th and 95th %-tiles from '09 to '13 if it went up enough for %-tiles above 95, but you'd figure if the authors of the study had statistically significant info at extreme %-tiles they'd show it. As presented, the median at every %-tile goes down (or up very slightly for the poor), which doesn't look right compared to Fed's numbers.
I would say that given theses doubts, and large number of papers even by ostensibly credible organizations about potentially politically controversial topics with figures later shown to have serious methodological flaws, I'd tend to discard this article as telling us anything specific, *reliably*.
I think we get the general gist pretty easily by looking at a few solid and reliable figures: how much the stock market has gone up since 2009 (to nominal all time high index levels); how much the Case Schiller home price index has gone up since 2009 (less and still well below peak); that household debt has receded but not a lot, and that population and number of households hasn't changed a lot in such a relatively short period. Thus, the conventional wisdom that people with large financial asset portfolio's, the rich, have done better in repairing net worth since 2009 than people with mainly home equity or those without much of either, is correct. What would one do exactly with more 'exact' figures in this regard?
* http://www.federalreserve.gov/releases/ ... ent/z1.pdf