Today, the Federal Reserve released the results of its 2004 Survey of
Consumer Finances. The report contains tables of statistical
information such as holdings by quintile of the population of various
types of financial assets. Readers of this newsgroup likely will find
this interesting reading.
www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf
Dave
Dave Dodson wrote:
> Today, the Federal Reserve released the results of its 2004 Survey of
> Consumer Finances. The report contains tables of statistical
> information such as holdings by quintile of the population of various
> types of financial assets. Readers of this newsgroup likely will find
> this interesting reading.
Very cool article, thanks for sharing! I had a couple of questions
after skimming the article:
1. Did it say in the article how many total "families" there are in the
U.S.?
2. On page 5, it says that the 2004 mean net worth of the 90-100
percentile was $256,000. Does that seem awfully low? I can see the
median being that low, but it's hard for me to imagine that the
mean/average is only $256K. With a couple of Bill Gates and Warren
Buffett's, I would have expected the median net worth of the top 10
percentile to be over $1M.
Dave Dodson wrote:
> Today, the Federal Reserve released the results of its 2004 Survey of
> Consumer Finances. The report contains tables of statistical
> information such as holdings by quintile of the population of various
> types of financial assets. Readers of this newsgroup likely will find
> this interesting reading.
>
> www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf
Thanks for posting that link Dave. One thing that jumps out for me is
the increasing gap between mean and median values for both income and
net worth, showing concentration of both at the top end. You see this
both in the overall data and within each percentile bracket. I really
think we're developing a "debt class" and an "ownership class" with the
top end continually pulling away.
And this one still surprises me...it's so monumentally dopey and easy to
avoid, but well it's the way it is, the stats from brokerage firms
confirm it: "The great majority of families owned stock in only a small
number of companies. In 2004, 34.6 percent had stock in only one
company, 59.5 percent had stock in three or fewer companies, and 9.5
percent had stock in fifteen or more companies."
Which perhaps helps explain: "Although the major stock price indexes had
declined in 2001 to about the levels of 1998 and had recovered by the
time of the 2004 survey, the median amount of directly held stock for
families with such assets was 29.6 percent lower in 2004 than in 2001;
the mean was 21.7 percent lower."
Sad sad sad. Pick up any book on investing and the first thing you read
is "diversify". But only 9.5% of people who own stocks bother with at
least 15 stocks, and 60% have just 1, 2, or 3.
-Tad
"Tad Borek" <> wrote
> Dave Dodson wrote:
>> www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf
>
> Thanks for posting that link Dave. One thing that jumps out for me is
> the increasing gap between mean and median values for both income and
> net worth, showing concentration of both at the top end. You see this
> both in the overall data and within each percentile bracket. I really
> think we're developing a "debt class" and an "ownership class" with the
> top end continually pulling away.
I am not sure how you mean this, but to me, it's not really news. Tomes like
political scholar Kevin Phillips's _The Politics of Rich and Poor... _
(1991), reflect on how the gap grew during the Reagan years. If you missed
those years, Phillips's book is a worthwhile read. (Phillips worked for
Richard Nixon in the late 1960s and, in his 1970 book _The Emerging
Republican Majority_, predicted the GOP's dominance for the next 20 or so
years, President Carter excepted. He could hardly be said to be a liberal.
He's an old school conservative, perhaps.) Discussion of this reality was
partly what gave Clinton the Presidency in 1992.
> And this one still surprises me...it's so monumentally dopey and easy to
> avoid, but well it's the way it is, the stats from brokerage firms
> confirm it: "The great majority of families owned stock in only a small
> number of companies. In 2004, 34.6 percent had stock in only one
> company, 59.5 percent had stock in three or fewer companies, and 9.5
> percent had stock in fifteen or more companies."
For those wondering where mutual funds come in, the citation says only about
15% of families in 2004 held "pooled investment funds" (excluding money
markets and including open and closed end mutual funds, REITs, and hedge
funds).
And yet to students of demographics, government, economics, sociology, etc,
it's simply not surprising. What fraction of age-eligible Americans hold a
bachelor's degree? About 21%. (How many college educated people don't know
what a minority they are is another shocker.) That the median net worth of
families in 2004 according to the above citation is only about $93k then
doesn't seem that much of a surprise. It does take education--decent math
skills, rubbing elbows with a guy/gal at the club who talks about her/is
broker, etc.--to take on investing. Most of that $93k hopefully is in
housing.
There simply isn't money to invest, for whatever reason, for most Americans.
If one hangs in circles where everyone is college educated, or works very
strictly among other white collar employees, it's very easy to have a gross
misconception about the life the overwhelming majority of Americans lead.
For my part, it's impetus to talk up, here and elsewhere, the importance of
saving, as a community service.