The top 10% are worth a ton, there’s not getting around that. But not slicing by age really does muddy things. The US median net worth for 65-74 is over a quarter million dollars. The median net worth for under 35 is $14k. That’s about a 20x difference! Anything that doesn’t split by age is nearly impossible to interpret.
For reference the top 10% net worth splits at about $1.2M, so both of your points are important.
So you've seen the wealth gap graphic, where they slice it up into deciles? Further into percentages?
It's wrong, it doesn't account for debt. There should be a huge mass of people that are net negative. I think we're really presented with all the wrong information.
First we need to break down into a heat map of CoL which can act as an approximation of demand for the given region. Then we need to look at individual median (perhaps modal) cash flow, where your deciles land, and whether that's translating into profit when you calculate in inflationary pressures. Then you've got to look at average degrees of freedom given demographics like no-diploma, GED/equivalent, HS-diploma, and degree strata that indicate an upward move in purely economic terms. I think what you'd find is the vast majority of people are just on the treadmill, and will for the foreseeable future there remain.
I expect the median net worth (what's the method?) of a 35 year old is very much in the negative space. And I'd hope over a lifetime that the 65-74 cohort is breakeven - which is about what you've indicated - Zillow indicates the average value of a house is $264k.
To some extent this is how our system is designed to work, but the system itself is predicated on a slew of fallacious logic and wholly removed from any semblance of morality while dually being totally unaccountable for the destruction and extraction of value that it is founded on.
I should also add that power as a function of wealth had ought to be looked at. What is the effective cost of having a voice in policy? I suspect it's in the highest echelons of net worth that you can even begin thinking about leveraging the system, and locally at that. At which point, corporate personhood might had ought to be considered, how does that deform our distribution?
If someone has a mortgage on a home, their net worth is still positive (unless they're under water). If you put 20,000 down on a 100,000 home and get a 80,000 mortgage, then your net worth is still 20,000. Yes, you have 80,000 in debt, but you own an asset worth 100,000. Net worth is total assets - total liabilities.
> then your net worth is still 20,000. Yes, you have 80,000 in debt, but you own an asset worth 100,000.
No you have 20% ownership of an asset that is worth $100,000. The bank owns the other 80% of that asset. When you pay your mortgage every month you are essentially buying a portion of their stake in your house. At the end of the mortgage they will own 0% and you will own 100%.
That’s not true at all. If you buy the house for 100k and sell it for 200k, you walk away with 120k after paying off your mortgage. If you only owned 20%, then you would walk away with 40k. Similarly, in non-recourse states (which is most states) you are on the hook for the mortgage amount if the value of the house goes down.
You meant to say "recourse" states - non-recourse means that the bank can't pursue you for any remaining amount you owe on the house after they foreclose on the house. Non-recourse is not very common, but California is a non-recourse state, for example.
Debt is at best a red herring, an individual with a $30k mortgage on a $60k home is not in the same situation as an individual with $30k in the bank and $30k of credit card debt yet they both have $30k in debt.
If you have a 30k mortgage on a 60k home by selling all your assets you're 30k up, whereas the other scenario has you at zero. Net worth would arrive to the same conclusion, so I don't see net worth including wealth to be a bad metric here.
Sure, but the reason for that isn’t that they simply haven’t lived long enough to accure wealth. Younger generational cohorts have less than their parents did at the same age.
I think this can also be split by class and background to provide further clarity. For example, every single one of my classmates (we were all lower income people) and myself are head and shoulders above where our parents were at our age or at about the save level with us facing significantly less work and stress to get here. I have a feeling middle-income and upper-income people have seen something different than us.
At that point, there’s a reversion to the mean too. If your parents got lucky, you probably won’t be as lucky. If your parents got unlucky, you probably won’t be as unlucky. And luck aside, you’re still going to be (on average) closer to average than your parents.
No, you would also need to slice by top net worth percentage inside of each age group. You need to compare the percentage of people in each percentile because average/median are going to obscure the disparity. I'd bet that half the people under 35 have a negative net worth.
For reference the top 10% net worth splits at about $1.2M, so both of your points are important.