I would agree, not normal and more importantly not equally exposed to the broader population. There is a reason people in certain professions have a more jaded view of other people - they are exposed to broader range of characteristics in the population.
Net worth numbers would be more indicative. This site has info based on Federal Reserve data. Average Net Worth by Age plus Median, Top 1%, and All Percentiles There are 2 sets of Net worth by age- with home equity and without. For 55-59 median net worth with equity is $321,074 and $131,460 without.
For 60-65 median net worth with equity is $392,860 and $143,640 without. This site gives some background on methodology. United States Net Worth Brackets, Percentiles, and Top One Percent - DQYDJ This net worth data does not include value of social security and defined benefit pensions. I think it's more representative than Vanguard's numbers as non-participants in 401(k)'s are included. All that said - Quinn's not wrong. Most of the median 55-65 year old's households net worth is tied up in their homes, and home equity assets are pretty paltry.
According to this website based on Federal Reserve data, $6.9M puts you in the top 3%. Net Worth Percentile Calculator – United States (and Average)The top 1% starts at $13.9M - I'll bet alot of folks at that level don't really consider themselves wealthy, but many folks below that level do.For most people I suspect a rich/wealthy person is someone who has more money than they do.Also, when the media talk about the wealthy - they usually mean billionaires. While we hear much about them, they really are outliers and distort most people's thinking. That said - I agree with your take the words don't really mean alot here. Rich and wealthy are synonymous to me. I will say that I think a sign of financial maturity is understanding that income does not equal wealth, and that wealth is relative. That said we do need some sort of objective measure - and net worth is probably the best.
Gotta agree - I can't hit the up button enough on this one. The combined business, regulatory, investing and legal environment in the US is the differentiator. If other countries had these same environments I would agree with Jonathan's view. However, in my experience with European, Asian and Middle Eastern countries that is just not the case. The US investing environment is far from perfect - but as one economist put it "it's the best looking horse in the glue factory"
From WSJ.com Things Are Quiet in Consumer Credit. Too Quiet. - WSJ "On an inflation-adjusted basis, total household debt remains more than a trillion dollars below the record high hit at the end of 2008, according to figures calculated by WalletHub. With population growth factored in, it is even relatively lower. Credit-card debt for the average household, for example, is almost 13% off its peak level." While I'm certainly not a fan of consumer debt - the picture isn't quite as dire as the absolute cc debt level seems.
I agree a guaranteed 0% cap gain is a no brainer to me, which is what we do. The other issue in our case is we also pay 0% on qualified dividends. Doing a significant Roth conversion vs cap gain harvesting would cause us to pay 15% on those qualified dividends, making the effective tax rate on the Roth conversion higher than our marginal tax rate.
DCA addresses a risk but not the one we most think about. We often equate stock market volatility as risk, but that is only true for people who invest in stocks and have a short (<~10 year) time horizon. Over long time horizons stock market volatility isn't a big risk. The real risk is the investors response to market volatility, i.e. panic selling due to an emotional response to the stock market "loss". Alot of folks sell at a loss in these situations and then don't reinvest at all or wait until the market has gone back up above their selling point which is counter-productive. This was drilled home for me in the early 2000-2008 time period when we were getting our footing professionally and financially. 4 of those 9 years had significant negative yearly returns. It was tough to keep investing our 401K dollars into the stock market and not sell. There were months where the value of our 401K's were dropping faster than we could put money in. However, the people who stuck it out have been rewarded by the returns of the last 16 or so years. The key things to remember during these declines:
1) You are buying low - which is what you want to do.
2) You only gain or lose in the stockmaret when you sell. If you don't sell you haven't lost.
3) This is long term money and the stock market is your best investment for the long haul.(assuming you have 5-10 years of expenses in cash and bonds).
That's essentially what we are doing. From reading up on the 4% strategy and their more flexible options that allow adjustments during up and down year, the whole point is to manage sequence of return risk. Additionally, if you look at Morningstar's recommended asset allocations for their Bucket Portfolios, you will notice that the "aggressive" portfolio for retirees is 60/32/8 Stocks/Bonds/Cash, which to my mind is a 60/40 portfolio with what "Cash" can earn currently in money market funds and short term T-Bills.
I made no such insinuation and if you looked at the CDC link I included you would see that I know studies are clearly being done. The point is that under normal circumstances those studies are completed before a vaccine is approved. It is the obligation of the drug provider to prove they are SAFE and effective. Given that this process was rushed due to the emergency nature of Covid, one could expect to see adverse consequences of taking the vaccine that would have been caught under a normal approval process. Folks like Mary would be the first to see them. As such when they see anecdotal evidence of adverse reaction to this vaccine they should be taken seriously and studied further, as opposed to being dismissed as potential outliers.
Comments:
I would agree, not normal and more importantly not equally exposed to the broader population. There is a reason people in certain professions have a more jaded view of other people - they are exposed to broader range of characteristics in the population.
Post: The Que sera, sera retirement planning strategy.
Link to comment from January 15, 2025
Net worth numbers would be more indicative. This site has info based on Federal Reserve data. Average Net Worth by Age plus Median, Top 1%, and All Percentiles There are 2 sets of Net worth by age- with home equity and without. For 55-59 median net worth with equity is $321,074 and $131,460 without. For 60-65 median net worth with equity is $392,860 and $143,640 without. This site gives some background on methodology. United States Net Worth Brackets, Percentiles, and Top One Percent - DQYDJ This net worth data does not include value of social security and defined benefit pensions. I think it's more representative than Vanguard's numbers as non-participants in 401(k)'s are included. All that said - Quinn's not wrong. Most of the median 55-65 year old's households net worth is tied up in their homes, and home equity assets are pretty paltry.
Post: The Que sera, sera retirement planning strategy.
Link to comment from January 15, 2025
According to this website based on Federal Reserve data, $6.9M puts you in the top 3%. Net Worth Percentile Calculator – United States (and Average) The top 1% starts at $13.9M - I'll bet alot of folks at that level don't really consider themselves wealthy, but many folks below that level do. For most people I suspect a rich/wealthy person is someone who has more money than they do. Also, when the media talk about the wealthy - they usually mean billionaires. While we hear much about them, they really are outliers and distort most people's thinking. That said - I agree with your take the words don't really mean alot here. Rich and wealthy are synonymous to me. I will say that I think a sign of financial maturity is understanding that income does not equal wealth, and that wealth is relative. That said we do need some sort of objective measure - and net worth is probably the best.
Post: Are you wealthy or just rich? By Dick Quinn
Link to comment from December 18, 2024
For those of us who aren’t bankers - nothing. :)
Post: Credit Card Debt.
Link to comment from November 24, 2024
Gotta agree - I can't hit the up button enough on this one. The combined business, regulatory, investing and legal environment in the US is the differentiator. If other countries had these same environments I would agree with Jonathan's view. However, in my experience with European, Asian and Middle Eastern countries that is just not the case. The US investing environment is far from perfect - but as one economist put it "it's the best looking horse in the glue factory"
Post: Stuck at Home
Link to comment from November 24, 2024
From WSJ.com Things Are Quiet in Consumer Credit. Too Quiet. - WSJ "On an inflation-adjusted basis, total household debt remains more than a trillion dollars below the record high hit at the end of 2008, according to figures calculated by WalletHub. With population growth factored in, it is even relatively lower. Credit-card debt for the average household, for example, is almost 13% off its peak level." While I'm certainly not a fan of consumer debt - the picture isn't quite as dire as the absolute cc debt level seems.
Post: Credit Card Debt.
Link to comment from November 24, 2024
I agree a guaranteed 0% cap gain is a no brainer to me, which is what we do. The other issue in our case is we also pay 0% on qualified dividends. Doing a significant Roth conversion vs cap gain harvesting would cause us to pay 15% on those qualified dividends, making the effective tax rate on the Roth conversion higher than our marginal tax rate.
Post: How to Not Waste a Low Income Year
Link to comment from November 10, 2024
DCA addresses a risk but not the one we most think about. We often equate stock market volatility as risk, but that is only true for people who invest in stocks and have a short (<~10 year) time horizon. Over long time horizons stock market volatility isn't a big risk. The real risk is the investors response to market volatility, i.e. panic selling due to an emotional response to the stock market "loss". Alot of folks sell at a loss in these situations and then don't reinvest at all or wait until the market has gone back up above their selling point which is counter-productive. This was drilled home for me in the early 2000-2008 time period when we were getting our footing professionally and financially. 4 of those 9 years had significant negative yearly returns. It was tough to keep investing our 401K dollars into the stock market and not sell. There were months where the value of our 401K's were dropping faster than we could put money in. However, the people who stuck it out have been rewarded by the returns of the last 16 or so years. The key things to remember during these declines: 1) You are buying low - which is what you want to do. 2) You only gain or lose in the stockmaret when you sell. If you don't sell you haven't lost. 3) This is long term money and the stock market is your best investment for the long haul.(assuming you have 5-10 years of expenses in cash and bonds).
Post: Dollar Averaging by Jonathan Clements
Link to comment from October 12, 2024
That's essentially what we are doing. From reading up on the 4% strategy and their more flexible options that allow adjustments during up and down year, the whole point is to manage sequence of return risk. Additionally, if you look at Morningstar's recommended asset allocations for their Bucket Portfolios, you will notice that the "aggressive" portfolio for retirees is 60/32/8 Stocks/Bonds/Cash, which to my mind is a 60/40 portfolio with what "Cash" can earn currently in money market funds and short term T-Bills.
Post: Sequence of Return Risk
Link to comment from September 28, 2024
I made no such insinuation and if you looked at the CDC link I included you would see that I know studies are clearly being done. The point is that under normal circumstances those studies are completed before a vaccine is approved. It is the obligation of the drug provider to prove they are SAFE and effective. Given that this process was rushed due to the emergency nature of Covid, one could expect to see adverse consequences of taking the vaccine that would have been caught under a normal approval process. Folks like Mary would be the first to see them. As such when they see anecdotal evidence of adverse reaction to this vaccine they should be taken seriously and studied further, as opposed to being dismissed as potential outliers.
Post: Jabs Anyone?
Link to comment from September 23, 2024