Trends in Household Wealth

Trends in Household Wealth

Where do the wealthiest people in the U.S. hold their wealth? According to Edward Wolff, a Harvard and Yale trained economist who teaches at NYU, the following is a breakdown of where people with a net worth of more than $7.7m hold their assets. This data can be found in Wolff’s, “Household Wealth Trends, 1962-2013: What Happened over the Great Recession?”, a working paper that was prepared for the National Bureau of Economic Research. 8.7% of their wealth is held in their principle residence. This in contrast with the middle class (net worth of $0-$401,000), who hold 62.5% of their wealth in their primary residence. 6.1% of total assets is held in cash. 27.3% is held in stocks and financial securities (This includes stocks, bonds, and assets held in various types of retirement plans). The middle class only holds 3.4% in these vehicles. 47% of their wealth is held in business ownership and real estate. The middle class only holds 8.6% in businesses and real estate. 1.9% is held in gold and other precious metals, royalties, jewelry, antiques, furs, loans to friends and relatives, futures contracts, and other miscellaneous assets. And, as a class, 75% of the wealthy say they own other real estate, and 85% say they own other securities e.g. stock and mutual funds.          ...
Keeping Interest Rate Increases in Perspective

Keeping Interest Rate Increases in Perspective

If you follow the news much, you’re aware that interest rates have recently been a frequent topic of discussion. Here’s a very helpful piece put out by the NY Times on the history of interest rates and the impact that a likely rate increase will have on the marketplace. In sum, the article helpfully points out that rates have historically been quite low, and that a small increase by the Federal Open Market Committee is not a need for concern. The interactive part of the article is especially...