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How America Really Got So Wealthy

July 8, 2019

|Daniel A. White

Americans are wealthier than ever.

The Federal Reserve reported data from the first quarter of 2019 showing American households are worth $108.6 trillion, the highest mark ever recorded.

Much of the jump was attributed to stock market performance. But take those 10-year returns with a grain of salt when you hear from people wanting to sell you stocks.

That said, there’s no denying the market has been up. And if you believe Republicans and Democrats alike, then you know a rising stock market floats everyone’s boats.

Well, not exactly.

Here are two doozies – 84 percent of all U.S. stocks are owned by the wealthiest 10 percent of Americans (per the latest data from 2016), and more than half of all households own no stock at all.

In other words, for most American households, the stock market is irrelevant.

About 20-30 years ago, everyday Americans were encouraged to own stocks through individual retirement accounts and workplace retirement plans like the 401(k). And it worked.

But then the downturns of 2000 and 2008 happened. And it seems those busts have scared people off for good. Stock ownership data seem to back that up.

Then what is the real cause for the overall wealth jump?

Real estate. Simply put, home values went up. Clearly, many more Americans own homes than stocks.

So, yes wealth has increased. But the causes and true beneficiaries of the jump are more limited than the story we’re being told.

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