Posted on 06/26/2014 6:47:21 AM PDT by george76
If you’re a typical family, you’re considerably poorer than you used to be. No wonder the “recovery” feels like a recession.
...
The median household in 2013 had a net worth of just $56,335 -- 43% lower than the median wealth level right before the recession began in 2007, and 36% lower than a decade ago.
(Excerpt) Read more at finance.yahoo.com ...
sarcasm, of course
It didn’t vanish. It went to Obamacare, Obamataxes, Obamainflation, Obamagolf, and moochelle vacations.
As long as people keep believing the welfare state is redistributing the wealth from the rich to the poor it will continue.
The welfare state redistributes the wealth from the middle class to the rich.
It’s not really a redistribution of wealth. It’s a redistribution of income. They’re not taking away any of George Clooney’s mansions. They’re not taking George Soro’s wealth. They’re taking working people’s income.
Let me count the ways I have really lost something:
1. If I was short on a down payment, and had to get a mortgage with Private Mortgage Insurance (PMI) my ability to not have to pay this extra expense evaporated when the equity fell while I was trying to remove the PMI.
2. As my assets decline, the ratio of total loans to total assets on my credit report increases, which impairs my ability to get credit for activities which will benefit me.
3. My ability to re-finance the property, especially into the fixed rate-low interest loans available a few years ago, has been removed.
4. My personal retirement planning includes diversification across a wide range of assets, including rental properties. I was on the verge of doing (3) above with several buildings, when equities fell. Instead of lower payments and putting enough cash in my pocket for a mortgage-free rental, I had to stick with the status quo.
* * * * * *
You can poo-poo these losses and say that for the average homeowner, they don't matter, but they are very real for a lot of people throughout the US.
But, small investors, just like small business, are important to the economy.
In other words, savings!
Raise taxes on the rich for the income on goods and services they provide, the rich will raise prices on the goods and services.
That causes inflation.
Inflation eats at wealth not just income.
Yes but if I tally up the net present value of my entitlements, I’m a millionaire!
/s/s/s/s
Thank you, that was an informative response.
Oooh, net worth. That’s a statistic which doesn’t come under the control of the Bureau of Political-Serving Statistics.
Speaking of George (the recent W one) the economy was awful under his 2 terms according to the leftist liars in the media. Yep that average 5.2% unemployment rate for those years was horrendous. Bammy’s economy is all peaches and cream dontchyaknow— so says the Pravda talking heads: experts at boot-licking analyses.
And yes but our Socialism inSecurity checks will keep us all happy, content and thankful to benevolent Uncle Sham just the same.
I’ve never understood why ones primary residence counted as part of their net wealth. Sell one place to live, you still have to have another. It’s only got “net wealth” value when you’re gone.
Purely as an accounting matter, if the market value of your house is greater than what you owe on it, that is “wealth.”
If you need to take out an equity loan, yes.
I’m watching my daughter’s family go through this. VEry serious situation. They are managing, thank God, and also thank Freepers who prayed for her to find a new job after being “laid off.” But other families in this situation might not be doing as well.
The accounting term for this is "equity", not wealth.
I do not believe there is an accounting term for "wealth". I would be inclined to think of wealth as net worth above a prudent reserve, and above anything earmarked for a specific purpose. But that is a very hard line to draw.
For instance, a college fund for children or grandchildren, is not wealth. OTOH, savings for retirement can be wealth at some point. $10k of savings is not wealth, but $1 million is starting to be, and $5 million definitely is. And, it also depends where it is kept. There are a lot of descriptions for $1 million in a savings account, but wealth is not one that springs to my mind. Foolishness, an invitation to overspend, and a mark ripe for the plucking, all do. That same money as equity in rental property, as a balanced stock portfolio, as working capital in a small business, can all be described as "wealth in the making".
One of the problems here is that vanishingly few newspaper writers have ever had wealth, or even aspired to wealth. Therefore they use the term loosely.
That "aspired to wealth" does not mean sitting on one's rear end, cracking a beer, and saying "It sure would be nice to be a millionaire." It means developing a real financial plan to reaching that goal, sacrificing current consumption for future security, and actually starting to build wealth.
What the article is describing is "net worth", not wealth.
I’ve read some financial experts say that the wealth effect is more psychological which would make sense. Your housing price makes you feel secure or insecure which in turn affects how you spend.
Can you refinance? I hope to pay off my house earlier but I will do it slowly.
I’ve not seen total assets on credit reports. Perhaps someone evaluating you for a loan would have that information, but the credit report doesn’t look at that.
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