One of my most read and most popular blog posts I’ve written was about the average retirement account size by age group. Instead of just looking at retirement accounts, I want to look at total net worth as well as debt. In 2011 the US Census Department took their latest gauge of Americans net worth as well as their debt levels. Even though the census bureau collected this information right after one of the worst recessions in US history, I still believe the results are worth looking at.
Median net worth was only $17,000 when you subtract out your home or if you keep your house in the mix, your net worth would only be $69,000. Simply put,this is not good. I know these numbers are depressed by the recession but then again I’m not sure how much they’ve gained over the last five years. Debt has been on the rise as we’ve seen record credit card, student loan and automobile debt in the last year or two. Even though home values and stock values have recovered over the past five years, I’m positive these debt levels have kept net worth’s below what they could have been or even should be.
Besides the fact of not saving enough in general, another issue I believe we can draw from the study is the type of savings we have. The majority of our net worth in this country is made up of assets, homes, automobiles and other stuff, and not cash, bank accounts, retirement accounts and the numerous of other types of investments. We will continue to struggle as a nation if all we have is stuff and very little savings. At the end of the day, our net worth’s are too low, our debt is too high and simply put we are not saving enough.
The other big issue is on the debt side. In 2011 69% of Americans were in some kind of debt. Many age groups had well over 70% of its constituents in debt. I believe this is the biggest reason for continued suppressed net worth’s. As a nation we are much better at carrying debt than we are at carrying savings. The average amount of debt in America is about $70,000. As you can see, we have more debt on average than we do savings or net worth, with or without your home added to the equation.
We are a nation that is one step away from insolvency but you already knew that. So what is the point of this article? To urge you to be weird. Be different, save more, spend less and live unlike your neighbors. Just because everyone else is doing it, doesn’t mean you have to as well.