Wealth in the United States

Wealth in the United States is commonly measured in terms of net worth which is the sum of all assets, including home equity minus all liabilities.cite web|url=http://www.federalreserve.gov/pubs/oss/oss2/papers/concentration.2001.10.pdf|title=US Federal Reserve on wealth distribution in the United States|accessdate=2006-07-12] For example, a household in possession of an $800,000 home, $5,000 in mutual funds, a $45,000 IRA would have assests totaling $850,000. Assuming that this household would have a $250,000 mortage, $40,000 in car loans, and $10,000 in credit card debt their debts would total $300,000. Subracting the debts from the worth of this household's assets, (850,000 - $300,000 = $550,000) this household would have a net worth of $550,000. The wealth, more specifically net worth, of households in the United States is varied with relation to race, education, geographic location and gender. As one would expect households with greater income featured the highest net worths, though high income cannot be taken as an always accurate indicator of net worth. Overall the number of wealthier households is on the rise with baby boomers hitting the highs of their careers.

Changes in wealth, 1989–2001

When observing the changes in the wealth among American households, one can note an increase in wealthier individuals and a decrease in the number of poor households, while net worth increased most substantially in semi-wealthy and wealthy households. Overall the percentage of households with a negative net worth (more debt than assets) declined from 9.5% in 1989 to 4.1% in 2001. The percentage of net worths ranging from $500,000 to one million doubled while the percentage of millionaires tripled. According to US Census Bureau statistics this "Upward shift" is most likely the result of a booming housing market which caused homeowners to experience tremendous increases in home equity. Life-cycles have also attributed to the rising wealth among Americans. With more and more baby-boomers reaching the climax of their careers and the middle aged population making up a larger segment of the population now than ever before, more and more households have achieved comfortable levels of wealth.

Distribution of wealth



U.S._mean_family_net_worth_by_percentile_of_net_worth_(1989-2004)Image:USmedianfamilynetworthbynetworth.gif|U.S._median_family_net_worth_by_percentile_of_net_worth_(1989-2004)
The total value of all U.S. household wealth in 2000 was approximately $44 trillion.

Income

While income is often seens as a type of wealth in colloquial language use, wealth and income are two substantially different measurement of economic prosperity. While there may be a high correlation between income and wealth, the relationship cannot be described as a causation.

ee also

*Household income in the United States
*Income quintiles
*Poverty in the United States
*Economy of the United States
*Income distribution
*Millionaire

References


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