Most of us do not think of ourselves as being wealthy, and rightly so. That is reserved for the titans of industry, entertainment and sports stars, successful speculators, and the somewhat longer list of those who have inherited substantial sums of money. But the concept of “wealth” applies to all of us, no matter how princely or meager. What we hold that is valuable, minus what we owe is our net financial worth.
Wealth is a complicated topic loaded with political and personal subjectivity. Politicians of all stripes call for taxes on the wealthy and benefits for those less fortunate, and closing or widening income gaps. We all maintain a mental map of those around us even if we resist it – based on observations like house, clothing, choice in entertainment seating and so on. Marketers suggest that by driving their car or buying their watch people will gain status.
So how should wealth be defined? By annual income only? Net worth? More humanistic values? I’m a banker so I’ll stick to the numbers for now – you can fill in the other terms you regard as important.
I define being wealthy in America as “the sustainable ability to reasonably buy what you want without regard to budget – whether retired or not.” But this ability varies widely by a range of factors. For example, geography plays a large role. We all know, or at least feel this difference when considering housing costs and median income. According to the U.S. Census Bureau stats: in Fillmore County, MN, the median home price and income are $140K and $51K, respectively, while in San Mateo County, CA, the figures are $776K and $94K.
The following from the U.S. Census Bureau brings this into sharp focus.
So how wealthy are we?
Let’s take a peek at what Americans hold overall to get a feel for wealth in America.1
|Total household assets
|Total household liabilities
|Household net worth
|Average household net worth
|Estimated median net worth
|Households with over $25 million
|Households with over $5 million
|Households with over $1 million
No matter where you stack up it’s good to know the facts. And if you’re interested in finding out more, the Census Bureau has many more tables and charts than you’ll probably have time to consider.