July 15, 2024
On the surface, the U.S. is booming. A report from the Federal Reserve confirmed net worth is at all-time highs:
American wealth is driven primarily by stocks and real estate. In 2024’s first quarter, the value of equity holdings increased by $3.8 trillion. The S&P 500 is near all-time highs. And the value of real estate held by households rose about $900 billion to a record high.
Overall, household net worth rose to $160.8 trillion, a 3.3% increase from the end of 2023. In terms of generations, baby boomers are the richest they’ve ever been, while younger generations are catching up too.
You might think it’s a great time to be an American. Not exactly.
Think about your own experiences. Things just don’t feel that great in America today, do they?
The average American today says they need to earn at least $233,000 a year to be comfortable and have a $2.2 million net worth to be considered wealthy. Meanwhile, the national average salary is $60,000 per year and nearly two-thirds of people say they’re financially insecure.
In some ways, we only have ourselves to blame. For too many folks, investments mean flat-screen televisions, new cars, and luxury vacations.
That said, life is expensive. Items like chocolate bars, mayonnaise, and bread cost about 50% more than they did in 2019. The price of sugar is up about 125%. And orange juice costs over 250% more than it did in 2019.
Big-ticket items are costlier too. Health care is horribly expensive. And saving for college is an increasingly uphill battle.
Adjusting for inflation, the average American net worth is below 2021 levels. So, while things look good, they don’t feel all that great.