The Median Net Worth Of US Households Over Time Has Gone Nowhere

Edward Wolff, a professor of economics at NYU put together a really shocking median net worth chart over time in 2013 dollars I wanted to share with everybody. The data highlights the median net worth four years after the 2009 global financial crisis.

The main takeaways are:

1) The median net worth of middle class households has dropped by a whopping 44% since 2007 and has not recovered after the worst was over in 2010.

2) The median household today is 6% poorer than their parents were in 1969.

3) There have been periods of income declines before from 1990-1995, with large rebounds over the next 10 years.

Median Net Worth Of US Households Over Time In 2013 Dollars


Let's look at why the median net worth for U.S. households did not recover four years after the global financial crisis.

Why No Rebound?

The main culprit for the median household not being able to recover since 2007 has to do with taking on too much household debt. I have a couple friends who simply walked away from their mortgages in California back in 2010 because they were so underwater on homes that were so far out of the city center.

I can't really blame them since California is one of the 12 non-recourse states that lets you default on your mortgage without the banks getting to go after your other assets.

If everybody was able to hold on to their property, I'm pretty sure the 2013 bar chart above would look much higher since so many asset classes have rebounded since the 2009-2010 lows. But those people who sold at the bottom probably didn't get back in quick enough due to liquidity issues or tremendous cynicism towards real estate and stocks. Lesson learned: don't buy property you can't afford based on realistic dire scenarios e.g. two years without a job.

I'm personally on a mission to pay off my rental property mortgage I first assumed in 2003. I thought I'd be done with this bad boy in 10 years, but I was wrong. I refinanced the property multiple times and I'm getting sick of the interest payments at 3.375%.

Were Our Parents Really Better Off?

It's hard to say. My parents were in their mid-20s in 1969. The Vietnam War was full blown, so 1969 was definitely not a time of peace and prosperity. I know they were able to go to college and get good jobs working in the foreign service after the war ended in 1975. They were squarely middle class citizens.

When I was in my mid-20s, I was thinking about giving finance up to go back to Hawaii and plant mango trees. I had saved up several hundred thousand bucks through a lucky stock pick and aggressive savings. And I was burnt out and wanted a career change.

The Move To San Francisco

But a move to San Francisco elongated my time in finance another 10 years until I left in 2012 at the age of 34. My parents and I were both able to afford a car, an apartment, and go to graduate school on our own dime, so I think our comparison is a wash.

With artificial intelligence now all the rage, it's very hard to leave San Francisco now! Massive fortunes are to be made in San Francisco over the next couple of decades. As a result, I'm trying to buy as many prime single-family homes with views as possible.

Although net worth numbers are stagnant according to the chart, there's at least been a lot of socioeconomic improvement over the past 45 years for women, gays, and minorities.

There's more freedom for anybody to be or do anything now than in the past. Furthermore, the ability to get very wealthy, very quickly is also greater thanks to technology.

I'm curious to know whether you are wealthier than your parents were at the same age.

Are you wealthier than your parents were at your age?

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The Economy Is Cyclical, Meaning The Median Net Worth Should Improve

If history is any guide, the median household net worth should tick back up beyond 2013. However, the fact remains that income growth has performed poorly compared to the cost growth of many important items such as tuition, food, and housing. Furthermore, you'll probably never see tuition and housing return to the costs seen in 1969 like net worth has. At least we can gorge ourselves on cheap electronic goods!

The good thing about our economy so far is that the long term trajectory is always up and to the right. If we hold onto our S&P 500 index funds and homes for a long enough period of time, chances are extremely high we will come out ahead. It's when we panic sell during downturns that we get in trouble.

My fear is that those who just started investing since 2009-2010 may be scarred. They've never seen a downturn, and therefore don't really know what their risk tolerance is. Having an appropriate net worth allocation is important to grow your wealth during good times, and keep your sanity during bad times.


Wealth Inequality Rising For Top 0.1% - median net worth is stagnant
The top 0.1% own just as much as the entire bottom 90%!

One of my wealthy friends is spending $5 million remodeling his enormous 8,000+, Victorian home he purchased in 2004 for $5.25 million. I told him he was nuts spending that much money during our tennis match and he said “he'll be alright.”

I remember thinking to myself years ago, maybe one day I could potentially afford a $5.25 million home if I made it big as an entrepreneur. I'll obviously never be able to afford that price as an average banker. But very recently, his 4,800 square foot neighbor sold for a whopping $11 million, making my friend's house worth probably $16 – 18 million dollars!

Decided To Become An Entrepreneur

My relatively piddly earnings and investments will NEVER catch up to that type of asset growth. It's not like I need an eight bedroom mansion in Pacific Heights. I'm just illustrating a point that where I once had hope, I'm now priced out, probably forever. My only hope is that Golden Gate Heights gets “discovered” and becomes the next Pacific Heights in 15 years.

Everything is relative when it comes to personal finance. For those of you who have much greater net worths, you should be grateful and cognizant there are plenty of households who are not getting ahead.

For those of you who mirror the data in the chart or come up short, you must make sacrifices in order to get ahead. If you're doing what everybody else is doing, you're going to end up like everybody else.

Real Median Household Income Over Time
Real median household income hasn't gone anywhere in 20 years!

The Median Net Worth Finally Climbs Back

I originally wrote this post in 2014. Thankfully, after a long bull market, the median net worth has climbed to $192,900 according to the latest 2022 Federal Reserve Consumer Finance survey. In addition, the average net worth for an American household is now over $1 million!

Talk about the benefits of saving, investing, and owning a home for the long term. The keys to the increase in median and mean net worth in America are due to participating more in retirement savings plans like a 401(k) or IRA and owning real estate.

For most Americans, owning real estate is the best way to build long-term wealth. The forced savings forces Americans to pay down mortgage debt each month, thereby building equity. Left to our own devices, we tend to spend more money than we should.

I highly recommend everyone get neutral real estate by at least owning their primary residence to build net worth. You should also consider passively investing in real estate through Fundrise, a private real estate platform that offers diversified funds. Fundrise funds primarily invest in residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher.


Free Wealth Management Tool

One of the best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Empower. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money.

Before Empower, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Empower to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.

A great feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.

Retirement Planner Personal Capital
Is your retirement on track? Check with Empower's Retirement Planner

Updated for 2024 and beyond. The reason why the median household net worth has gone nowhere is because not enough people have invested outside their primary residence. Even worse, there are people who have just rented and held cash through this recovery.

About The Author:

Sam began investing his own money ever since he first opened a Charles Schwab brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college on Wall Street. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. He also became Series 7 and Series 63 registered.

In 2012, Sam was able to retire at the age of 35 largely due to his investments that now generate over six figures a year in passive income. Sam now spends his time playing tennis, spending time with family, and writing online to help others achieve financial freedom.

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104 thoughts on “The Median Net Worth Of US Households Over Time Has Gone Nowhere”

  1. Any chance you have an update to this article? I’m so curious how we’re doing 10 years later, and I suspect it is worse. I’m getting worried about the inevitable crash of poverty when we start seeing people aging without pensions or retirement savings after the Baby Boomers.

  2. Ed Wolff’s numbers are not intellectually honest because the cost of living estimates are not the cost of replacement reproduction. Although Elizabeth Warren didn’t include the costs of courtship, divorce, etc., she did show that “the cost of living” figures paraded around in these longitudinal studies of the middle class aren’t just wrong — they’re obscene crimes against humanity as they contributed to the loss of replacement reproduction which, in turn, has been used to “justify” dissolving the people and electing a new one. That’s not merely genocide — its replacement.

    Now that I’ve been so very mean to the innocents of the economics profession, I’ll provide them the best excuse I can: The “Iron Law of Wages” is typically phrased in terms of “subsistence”. However, “subsistence”, historically included replacement reproduction. So the economists were simply caught unawares as reproduction ceased being a natural part of subsistence over the last generation or two.

  3. Pingback: Median Salary By Age And Sex In America | Financial Samurai

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  5. This is fascinating. I would actually find it a little heartening if median/ middle class household net worth has truly held even (I agree with you that it is hard to answer that question just by looking at the most recent year). Reason: household net worth is net worth relative to households, not adults and singles make up a much larger share of the adult population than they did historically. Given the decline in adults-per-household (plus the loss of the economies-of-scale benefits of marriage), I would have expected middle class household net worth to have decreased over time. I would like to know how hours-worked-per-week-per-household have changed over time. If that has gone up (say, due to women’s increased participation in the labor force) despite adults-per-household going down and net worth staying flat, we have a problem.
    This is the problem with statistics: once you bring them in, everyone wants more :)

    1. “Economists often use statistics as a drunk uses a lamppost…more for support, than illumination!” – Andrew Lang

      Hi Claire, a good place to start might be with the US Dept of Labor, Bureau of Labor Statistics There are some relevant tables (B-1, B-2…) for your use, that show number of work hours per week, and millions employed. You could then divide the working adults into the figure of combined working and non-working adults, and be disappointed at the lowest labor-participation rate in more than 30 years. Divide the number of adults into the number of households, and you will have your hours-worked-per-week-per-household. And that quote was a joke, of course, every single number in those statistics involve a real, live, human being with a story-and-circumstance.

      1. Thanks JayCeezy! I wasn’t able to find historical info on work hours. I also couldn’t find changes in adults-per-household over time (surprisingly enough).

        However, I was able to find out that married households make up just 49% of all households, now, compared to 71% in 1970. “How much” that decline in marriage has cost us in terms of household net worth is hard to figure and depends on how much of a benefit marriage is to net worth. One way to quantify it would be to compare the median net worth of married households to unmarried ones. Again, I couldn’t find historical data, but today married households have a median net worth of 5-5.5 times that of non-married households. (5.5. is the “real” number; 5 is the figure if we’re comparing apples-to-apples by looking at households of similar ages side-by-side).

        Assuming the 5x figure, one would expect household net worth to be about $19K higher than it is today IF 1970’s marriage trends had held. In other words, it may be that our households have $64K rather than $83k because we have smaller households and aren’t taking as full advantage of the benefits of marriage as we used to.

        Even if we assume that marriage yields no net economies-of-scale benefits and predict married households to have just 2x (for two adults) the net worth of non-married households, the “missing net worth” comes out to $8K. (Translation: even if marriage provides no “benefit” other than an extra owner of wealth, today’s households would have a median net worth of $72K rather than $64 if marriage trends had held).

        I know the rise in same-sex and cohabiting couples throws a wrench in all of this, but that’s the best I can do for now!

        1. Claire those are some interesting numbers. Married households have 5x not 2x the net worth. That means something else happens aside from additive and cost sharing.

      2. Claire, you might need to get creative.

        Here is a table of number of US households from 1960-2013 (52,799,000 – 122,459,000).

        Here is a table with US pop. by age, including over 18.

        A great resource for ANYTHING (i.e. crop imports/exports, electronic imports/exports, education levels, immigration levels, jobs increasing/decreasing by field, manufacturing, etc.) is the Statistical Abstract of the United States of America, found online and in two huge binders updated yearly in your local library.

        btw, it is one thing to be curious about statistics, but quite another to put the statistics to a useful conclusion. Have fun!

  6. Much much better off than my parents. My net worth is 15x theirs, and they passed 15 years ago. Father was a research eng at BellLabs, which suffered during deregulation. I went into nuclear eng then management. Management is where the payoff is for engineers. Was able to retire at 50. Could have double my. Wealth in the next 5 years but who needs the hassle?

  7. Stagnant wages….. The middle class has lived through about 20 years of stagnating wages.

    Becoming wealthy takes excess income! Median US household earns around $52,000/year.

    1. I forgot to add:

      In terms of my childhood and my parents wealth at that time; we lived well.

      My parents ran a successful small business, drove two relatively new cars, had a custom built brick home, and took frequent vacations (places like Australia, or Hawaii). They would also going out to nice restaurants/bars with their friends every week (interestingly, their friends were all business owners too!).

      In nominal terms, I believe I have much more wealth, but in lifestyle, I’m not so sure.

  8. Born in ’87 here, did our parents have it better? Yes and no…

    Yes – Cheaper education, healthcare, food, housing, no extra tech/cable/cell to pay for, plenty of solid jobs, security, benefits and pensions

    No – No tech/cable/cell, less creature comforts, harder to get into entrepreneurship with no internet

    The average college kid owes like $33,000 getting out of school and it is harder than ever to get a good job these days. I know some pretty smart folks who are unemployed with degrees in different sciences. If folks are first generation college students it is particularly hard to start off. With enough hustle, balls and risks one can find decent employment (see Sam’s post how to make 100k at any age) or start a business and find some financial success. The middle class is shrinking, while the rich get richer and poor get poorer. However, it is now easier to start a biz and make big bucks than ever before… Interesting times we live in!

    1. I remember one of my MBA professors in 1979 asserting that if one made their age in thousands of dollars they were doing well. At that time I thought this wildly optimistic – probably because I was making half that. Not only were salaries low, there were fewer double income households.

      1. I’d make the argument that back in the day, folks didn’t need a dual income household to have a solid standard of living. A lot of this is relative though, as we have much more amenities and creature comforts these days. People didn’t have cable, cell bills etc. back in the day. Houses were smaller and people didn’t have/need 2-3 cars. Different times now.

    2. If they’re smart in the sciences they shouldn’t be unemployed… If they are they didn’t build their résumé, get themselves references, have the grades to back up their smarts, didn’t get internships or perhaps chose a science with too many other students studying it! Engineering has no shortage of great paying jobs out of college for everyone going in!

      1. Engineering is one thing. Virtually everyone I know who went to school for engineering has a job :). I suppose I should be more specific… Let’s talk about biology, chemistry and environmental science majors. Hard to find opportunity with a BA/BS.

    3. I love it when readers reference and older post in a comment, and I get to help the reader link back to that older post. Whoo hoo.

      15 years ago, I never would have imagined it to be SO EASY to start a business or set up a website. If a donkey like me can do it, lots of lions can as well!

      I also never thought when I graduated from college that making 6 figures would be feasible so early. But the reality is, tech and the internet have made the demand curve HUGE for anybody who wants to create something interesting or valuable.

  9. Just wondering.. What does/did you friend do for a living that he could afford a $5 million house and then put another $5 mill into it?

  10. Todd Guthrie

    On a more abstract level, the worth of a nation and its people could be measured in terms of all the useful real stuff it has accumulated. We have apartment buildings, airports, bridges, cars, televisions, etc, etc. Our collective worth is all our stuff. To find average, divide by the population.
    Today, we certainly have more housing units and more cars now than we did 50 years ago, and although much of our municipal infrastructure has fallen into disrepair, some of our personal products are much more useful than their 1960’s equivalent (such as phones). Still, there also many many more people today than there used to be.
    So no wonder our per capita wealth is stagnant, because although total wealth keeps going up, population has grown by at least as much if not more.

    1. Population growth has really slowed down. I think there’s actually a powerful growth “crisis” emerging in the US. I’ve got to find some studies, but we’re having smaller families, and we’re getting older, much like Japan. Deflation for decades ensued.

      1. FS, this might be a good place to start for looking at US and World Population, both growth and distribution (by country, age, sex, etc.) Looking forward to reading your observations.

        My own thought is that ‘crisis’ might not apply evenly throughout society. What may be considered a ‘crisis’ (lack of pop. growth) in the U.S. is completely different from the ‘crisis’ (exploding pop. growth) in the Near/Middle East. Likewise, the ‘opportunity cost’ for a DINK couple having a child is orders of magnitude larger than a 19 year-old dropout on AFDC who already has three kids.

        Economically, your mention of pop./deflation in Japan (and relevance to the U.S.) is not often mentioned these days, but it is exactly what I foresee for the U.S. I don’t see a $500/child tax credit incenting anybody, especially since the people having the most children in the U.S. are in the bottom half for paying taxes. I am positioning my investments accordingly, and if deflation hits (I already see it in certain areas of the consumer economy) in a measurable way I will benefit. The ‘old way’ of positioning for inflation-and-growth hasn’t been predictable for my investments for quite awhile, now.

        1. The Alchemist

          What’s concerning is that educated folks comprehend the cost of raising children, and therefore make educated decisions NOT to have more children than they can afford. The result: significantly reduced population growth in the classes that have the best shot at raising highly productive members of society.

          Meanwhile, many of those with less education and fewer resources fail to see the impact of having children they cannot afford. They continue to have numerous children regardless of their ability to properly provide for and educate them, thereby perpetuating a cycle of poverty and downward mobility. Sure, some can break that cycle, but such are the exception rather than the rule.

          Some argue that the influx of illegal immigrants is a net boon to the country, given the general reduction of the U.S. birthrate. However, the rapid reduction in the market for low-skill jobs means that the one segment of the U.S. population that IS increasing is having to compete with illegal immigrants who are motivated to accept lower wages.

          Troubling trends. I understand the argument that a nation’s population needs to continue to grow in order to keep its economy humming; however, I perceive cracks in the argument when the majority of that growth is among the poorer segments of the population. Hopefully I’m just being overly pessimistic, but I’m just not seeing this going in a good direction.

  11. Great site Sam, I just found it and really enjoy it. As far as the graph of net worth the low end of the housing market in middle America never really recovered the way other areas have. The poorer people were most hurt by the housing bust since they had the least resources to get them through the worst of it. Upon recovery new regulations make loans so difficult to obtain there is no first time buyer lift to those markets. Beyond that the big divide in wealth is because of marriage, education, and ownership. Professionals marry professionals now. We have many friends where both husband and wife are doctors, lawyers, executives, etc. in our parents day maybe one was a professional but rarely both. these professional couples own retirement plans, investments, homes, and businesses. Ownership is wealth. When you own nothing you have zero and in 10 years it is still zero.

    When you look at the family of the middle class vs the upper middle class the 2 differences are the level of education of the parents and the number of parents married and living together. Married people build wealth together more than cohabitants. Unfortunately with the surge in single parent households you get a surge in poverty. I won’t get into inflation but that is a huge negative for those people who live paycheck to paycheck and own nothing. Although inflation has been tame relative to the 70s even 2-3% over time is enough to widen the wealth gap. Three percent over 10 years is enough to lift an asset almost 35% but 3% of zero over 10 years is still zero.

    Regarding our life style vs our parents they spent money differently. Mortgages were mostly 20 years, meals were prepared at home(less expensive) TV was free (programming), and you only had landlines. Today people budget off of payments, which makes you indebted to the highest standard of living your current income can support but builds no wealth. My thoughts.

  12. “At least we can gorge ourselves on cheap electronic goods!” <- I think this is a key issue except the word "cheap" should be replaced with "expensive". When I was a teen n the 80s, if I'd have gotten up the guts to ask my mom for a $700 phone, she would have laughed 'til she cried and then probably spanked me just for good measure. Hell, I couldn't even get a $100 for a pair of Doc Martens. Now every kid gets a brand new iPhone, yay! And a tablet. And a laptop. Yay! Aww, hell–might as well throw in a $500 game console every second Christmas because Ricky's "basically a good kid". Yay! And a Canada Goose jacket 'cause their friends all have 'em and they only cost $500 and every kid who spends the whole day inside on their phone needs an Arctic expedition quality coat.

      1. No he is right the phone is $700. $249 up front and then an additional $25 dollars per month on your bill to make it $40 or $50. That is $600 over 2 years. So you can end up paying $849 for the phone. You can get $25 off your bill at the end of the 24 months but you have to ask for it. They don’t volunteer that info. Dan

        1. Really?

          I thought the phone company subsidies like $450 of the phone cost if you sign up for their plan. I don’t see no $25 a month line item in my phone bill for the cost of the phone. Just service plan.

  13. Sam, in my opinion todays standard of living is the main reason for the waning middle class. First, people are to comfortable. When even most of the poorest people can come home from there job that they complain about all they have to do is turn on their tv, flip through a couple hundred channels till they find something to numb themselves with. Or they can pull out there cellphones, surf the web, find message boards with like minded people and complain about how the 1 percent are keeping them down. If they lose their job they collect unemployment. If they get sick, Obama pays for their doctor. If they can’t pay their bills they file bankruptcy. “Remember when bankruptcy was considered embarrassing and wrong?” Remember when food stamps where a social stigma? Not anymore. Today you get a debit card so no one knows your on them.

    I apologize for my rant. It’s just, when my friends were playing, I was working. When they were buying junk, I was saving. When they went on vacation, I stayed home. Fast forward 25 years, I’ve achieved financial independence and now I have to hide it for fear I might offend someone who partied more, worked less, and spent more than I did.

    I probably sound like a asshole. Maybe I am. However, I think I figured it out. Work harder than most, save more than most, you’ll end up with more than most

    1. It’s funny how life turns out no?

      Your friends might have come out ahead if they had a spanking good time for 25 years AND are now able to get some support. It’s always something to think about.

      But I’m guessing you’re like me, and you enjoy challenging yourself and seeing how far you can go.

    2. The Alchemist

      …and remember when there was a social stigma attached to having kids out of wedlock? Regardless of any morality questions, there was an excellent *financial* reason for this stigma. 90% of the sob stories one reads in the media these days about poor folks needing help contain the phrase “single mother”. Being a single mother is generally a recipe for financial disaster.

      Setting aside marital status, when you have a very large segment of the population having children they cannot afford to raise, you’re going to have a much poorer populace in general. Additionally, when you have a large swath of people who have been raised to expect the government to support them, it’s going to drag down the overall financial well-being of the nation.

      With the rapid disappearance of low-skill jobs that folks in these lower economic tiers are capable of filling, reliance upon government support increases. As the lower classes grow, the middle class gets smaller and smaller. The rich inhabit their own, totally carefree space; the poor get subsidized by the government; and the middle classes continue to be squeezed, expected to pay for everything. It ain’t a pretty picture. Basically, remaining “middle class” today requires a LOT of work.

      So I agree with you, Bill, that an awful lot of it is about the choices one makes. It’s also about the worth ethic (or lack thereof) that gets instilled in people by their parents. I think a lot of parents, starting with the Greatest Generation, really spoiled their kids. I saw a lot of people in my generation (Generation X) who didn’t seem to think it was important to do well in school or focus on going to college. And in college, I saw more than a few slackers (yes, even at Berkeley). Kids took their middle-class lives for granted, and as they grew up they continued to expect to retain their parents’ standard of living without having to work too hard for it. They figured they’d just continue to have “stuff”, and could keep up with what all their friends had/did. And if they had to use credit cards to do it… well, that’s what everybody else did, so what was the harm?

      I believe the second half of the 20th century really was an exceptional time for the United States, and I don’t think we’ll see another period like it again in our lifetimes. My parents started their family in the early/mid ’50s. Raised *9* kids on a single income, putting them all through private school (through 8th grade), and nearly all through college. Not rich by a long shot (although they might have been had they stopped at 2 or 3 kids!), but we never lacked for anything significant. I don’t reckon we’ll see that sort of scenario occurring too often in the future; it simply cannot be done any more, unless the breadwinner of the household is pulling down $1m per year.

      So yeah, I’d basically just say: It’s getting harder and harder to hold on to middle class status. And I don’t see myself having it “better” than my parents did. On my single income (which isn’t bad, just not great), I’m not even 100% confident I’ll be able to fully fund myself through my lifetime/retirement, let alone ever raise any kids. But I’ll keep making wise financial choices, and maybe things will turn out better than I expect…

      Dad grew up during the Depression, and he instilled in us all a very conservative approach to money, along with a strong work ethic.

      1. Wow, 9 kids is A LOT! This is really one of the key points. Previous generations had a lot of kids with the same inflation-adjusted income. Current generation has a lot less kids, so we should have more disposable income, all else being equal.

        Demographic trends are interesting.

        There’s always a bull market somewhere in the world. China is replicating what we did years ago.

  14. Well, yeah. Considering I came from a one-parent household with three children and living in a trailer and then a grandparent’s house growing up with the one parent stuck in a burger-flipping job (hard to go back to school or pursue better work when you have to support three children) their entire life, while I have made near and up to six figures almost my entire adult life, in the software industry.

  15. I think that you missed a big part of the story. Average household size is only 3/4 of what it was 50 years ago. So, if there was no change in median net worth per household, that is actually an increase of 33% in net worth per person.

    1. Considering most household wealth is concentrated in the parent(s), does size of household really matter?

      Once kid(s) move(s) out, they are a new household, no? (in statistics world, anyway…)

  16. Great article Sam. As an immigrant I am much better off compared to my parents. But another interesting thing is that vast majority of my friends from school/college in India have done quite well. Most of us were either poor or lower middle class are now upper middle class or even rich (factoring PPP for those in India). The problem of course is that there are too many dirt poor people in India, but it’s moving in the right direction. I am really concerned about my son though and often wonder if he will be able to do better than me. There are 2 reasons for the steady decline in America and most western countries. In the beginning it was outsourcing of well paying jobs and now it is the incredible rise in productivity thanks to technology. I have a friend who works for a robotic company right here in San Jose. They have built a robot that you can rent for $6.99 an hour. This robot will replace a security guard. It can detect smell of alcohol, patrol the building, take photos, respond to break ins almost instantly, notify 911 etc. They are working on drones that can chase criminals and taser them if they don’t stop, which means you need less cops. There are sandwich/burger maker robots that will replace humans in fast food chains. I was amazed at some of the stuff that is happening in robotics and it’s happening all in the valley. Next 20 years will see huge replacement of human jobs by robots. The only solution to this is to make human life better by reducing overall productivity. So instead of a 5 day week we should have 4 or even 3 day week, thereby giving more leisure for humans and adding to number of jobs. I remember reading that Benjamin Graham had predicted this would happen by the year 2000. Well looks like we might have to wait for few more decades!!

    1. Sounds like a good plan! I’ve found that the optimal work schedule for me is around 25 hours a week e.g. 3 days a week. Having a 4 day weekend every week is a good thing.

  17. GrandMoffHozz

    I personally think it has remained stagnant due to our peoples’ poor decision making. We live in a society that largely values extra comfort and stubborn habits over financial logic. Compare the statistics of how much people in this country spend monthly on big screen TV’s with cable, expendable items like cigarettes, the latest smart phones with indulgent plans, the BMW over the Honda, yet default on their mortgages or end up with credit card debt. Rather than saving or putting that money into something with a positive return, so many people are programmed to keep the routine they find comfortable rather than changing to improve.

    For example, I work in a Chinese Deli/Convenience store (I’m still a college undergrad) and one day I decided to calculate how much heavy smoker’s spend on 2 packs a day where I live in New Jersey. One elderly man, clearly well into his 60s, dressed in his uniform headed to work, buys two packs of Winston lights every day, adding up to over $5700 a year! That’s a maxed out IRA and change. It’s possible(just guessing here as cigarette prices have changed over the years) that if he’d invested all the money in his life spent on cigs, rather than embracing that daily habitual comfort that comes with lighting up, he wouldn’t still be working well past typical retirement age. The worst part is he’s not the only one doing this everyday, and some buy 3-7 packs a day or every other day. Crazy! I don’t think we’ll ever have to deal with extreme social unrest in income inequality because most people are too comfortable or stubborn in their ways to care… whether they’re headed towards financial ruin or not.

    1. I was shocked at cigarette price pack lately. I saw $14 in Manhattan!

      But is it so bad for smokers that they can derive so much pleasure from $8-$14? It’s not like they don’t know the risks or the costs.

      He who dies with the most debt, still doesn’t have to pay it off!

  18. The ‘Median’ is one way to look at the subject of Net Worth. For more detail, you can click on this link for Household Net Worth drill-down by Education, Race, Married/Single, Age, etc. As expected, married couples, Asians and Whites, 4-year degreed, and over age 45 households have much higher net worth. My thought is that U.S. culture (and all first-world cultures) are based on three values: 1) education; 2) family; 3) work. There are large swaths of the population in first-world cultures that reject those three values. The groups that do well embrace those three values.

    The U.S. is importing, and subsidizing, underperforming groups that don’t respect those three values mentioned above. Skills (like being able to communicate in standard English), and not acquiring things you can’t pay for (like children) are a big part of those three values and overall success, one metric being Net Worth. Continuing to import and subsidize these groups will guarantee a flat-or-decreasing mean-and-median household Net Worth.

    1. The Alchemist

      The link isn’t live in your post; can you spell it out? I’d like to see this. A Google search was unsuccessful. Thanks!

      1. Sure thing, sorry about that, here is how to find the link… Search “Net Worth and Asset Ownership of Households: 2011” and it is the first result on www dot census dot gov slash people slash wealth. Click on the bottom .xlsx file to view or download.

        Very interesting reading, I am always surprised how the ‘30,000 foot view’ metrics are so widely distributed. Makes sense that older people have longer to build their net worth, and couples that split now have their income-and-wealth divided into two households. Hope you find it of interest.

        1. The Alchemist

          Very interesting stuff! Thanks, Jay. I completely agree with what you said about critical skills, and about the grave error the US is making with regard to groups that lack these skills.

  19. very interesting numbers. I think college spending is a factor as well, as many parents want to be able to contribute the most they can to their kids tuition, which in turn is increasing at a higher rate than inflation.

  20. In my view, middle class net worth and wages have remained stagnant due to loss of labor unions and increase from global competition. Without labor union’s leverage in negotiation, private pensions have been replaced with 401Ks, many good paying middle class manufacturing jobs have been shipped to developing nations with abundant cheap labor, mass layoffs(once a rarity) became commonplace, and even in relatively high paying high tech, it turns out some of the top companies had a non poaching agreement, which probably depressed wages for the rank and file employee.

    Also as Japan and Germany and other nations economy became stronger, many top American companies had to readjust their cost structures. I do think many middle class folks have been irresponsible by spending beyond their means, but many didn’t have much choice without good paying jobs since basic necessities such as cost of housing, medical costs, and college tuition have increased much faster than inflation.

    I would think the next two decades will probably bring a lessening of the wealth gap as history has shown, such trends won’t continue indefinitely.

  21. My parents were better off. My dad was a CEO at a bank by age 30 after responding to a classified in the Wall-Street Journal in the 80’s. I’m not sure that would happen in today’s globalized and technological world where the dynamics of the playing field have shifted dramatically.

  22. Generally speaking I think we’re better off than our parents. We have way better technology and better medical care. Financially some people may not be better off than their parents because they are using their credit cards like no tomorrow and racking up a huge amount of debt.

    1. Good point about the quality of health care! Didn’t think about all the advancements over the past 40 years.

      I hope knee replacement in 20 years is painless and effective with a quick recovery time!

  23. This makes me furious. I’m staging a protest. Sammy, maybe we could combine your Honda Fit with my 14 year old Subaru and shut down a side street or something.

    And on a more serious note, have you considered drawing the distinction between MEDIAN and AVERAGE?

    1. If I post average, the numbers are too high and everybody complains. If I post median, rich people say the numbers are too low. It’s awesome.

      Subaru? I can’t roll with such a beater car. Come on now!

      1. Everything always seems comical or daunting when you’re not there. It looks like a big mountain to climb. But I can assure you that there are also plenty of people who follow my above average net worth path. It’s definitely easier to be cynical, but the figures are conservative for many people in many industries.

        I’m not opposed to 90% of the population not purchasing a new vehicle that now averages $32,000. That’s crazy expensive imo, if you compare to a median household income of $52,000. Overspending on a vehicle is a big reason for the savings/net worth figures to be so low in this country.

  24. Financial Forager

    Great article. I believe that more people need to cut their expense and start living a simpler life. Easy credit and low interest rates has ruined the middle class. There is no incentive to save your money anymore.

  25. Financiable

    High University Costs + High Debt – Lack of Jobs + Salary Stagnation + An Older Workforce – Adequate U.S. Domiciled Corporate Incentives – Marriage – Baby Making = A Nation in Serious Decline

  26. I think the middle class is stagnant because they are not invested enough. People rely on their income too much. The bulk of most middle class net worth is in their house. It’s probably better to invest in the stock market more.

    We’re doing better than my parents at the same age. My dad took too much risks with his businesses and he always had to start over.

  27. I think wealth is overly concentrated at the very top, but I’m not sure how we solve that problem. People who provide a true value to society, such as doctors and engineers, should be compensated at least as much as financial wizards. Still, we can’t create disincentives for entrepreneurs in trying to provide a more level playing field. It is comforting to see that I’m well above the mean. On the other hand, I doubt as a lawyer I’ll ever do as well as my parents, as they were entrepreneurs who took risks and reaped the benefits.

    1. The law career.. quite a conundrum given the length and cost and the pay. I’d love to learn more as I have a couple lawyer friends who are not satisfied with their career and compensation.

      1. I’m in-house and am overall WAY more satisfied than I was grinding away my life at a law firm, but not satisfied enough to think of this as anything more than a stepping stone to doing my own thing in about 5 years (time I need for my investments to cover my cost of living).

  28. Great site Sam, I enjoy reading all of your posts. One question that I wonder about is how do retirement accounts in the past play into the numbers. In 1960 there were many more defined benefit plans as opposed to defined contribution plans. It sounds like retirement accounts are factored into the net worth calculations for defined contribution plans, but were the defined benefit plans factored in 50 years ago? If not then the net worth today would be even lower than it was back then, but hopefully the calculations captured those pension plans.

    1. Good question Anthony. I don’t know for sure, but I assume everything is comprehensive on an apples to apples comparison. If not, Dr. Wolff from NYU wouldn’t have much credibility and wouldn’t have tenure.

  29. As Dr. JB says, one needs to consider the distribution around the mean of these statistics as well as the author’s specific definition of “middle class”. My read is that recent trends in labor demand and the criteria for the availability of capital are making it tougher for most people to build wealth, despite even the very best of intentions.

    When I got started in the late 70’s, stable relevant jobs with defined benefit plans and generous health benefits were taken for granted. A university degree meant something to an employer and an MBA? Well, an MBA from even a middle tier school gave an applicant a considerable leg up.

    In the 2000’s, those raised to be a special snowflake and to expect a trophy for fourteenth place, who believe they deserve to spend prodigiously on bling and borrow recklessly to do so, the world is turning out to be a cruel, cruel place.

    An underemployed, over and sub-optimally educated, and seriously indebted population’s frustration will be expressed over anything even tangentially related. Occupy and the riots are just the start. And society will really have to worry when the police ultimately recognize that they have much in common with the protesters.

      1. Knowing what I know now? Today.
        Knowing the generationally-equivalent of what I knew then? 70’s.

  30. The massive social unrest will begin when the middle class can no longer borrow enough money to support it’s artificial, consumption-based existence. This house of (credit) cards will collapse within the next 10-15 years – I predict – as prices will continue to outpace wages, and the median wage jobs will continue to be eliminated via automation and outsourcing. Combine this with the masses becoming even lazier and more tuned out, because uploading selfies to Instagram and playing Candy Crush are way easier than learning anything and improving yourself. We are in serious trouble.

          1. You’re right that it’s not rational, but people allow emotions to trump rationality all the time. Even if you consider the down and out to be lazy and undeserving, the envy they feel towards everyone who is better off could easily snowball into social unrest if channeled by skilled rabble rousers. I agree with Danny that the future doesn’t look bright.

  31. Even Steven

    I’m assuming this net worth calculates equity in your house, which makes sense to have such a large inflated number in 2007 and deflated numbers after. It does seem those numbers should have rebounded in the recent years with the stock market, but I’m thinking that fear may have driven many people out.

  32. Ryan Turner

    Sure I’m better off than my parents were at their age. But if they paid for my education, helped with my apartment, and found me a job via connections is it really comparable?

    I’ve got friends who did things the hard way and it doesn’t look fun. I think the biggest surprise was that graduating from a good university with a STEM degree provides no guarentee of employment. A frightening percent seem to end up working unrelated low-skill jobs while they search for options.

  33. Everyone is staying in the workforce longer. Jobs are vanishing to technology. Temp employment is up every year. It just does not look good.

  34. Hi Sam

    Well, I have always lamented that I am in the first american generation to do worse than his parents. My dad owned a retail store. Not fancy– more of a mom and pop kind of thing but he made it work. We had everything we needed, our tuition was paid in full and he helped with our 1st home downpayment. Not bad. I swore that i would do the same for my children.

    I have two kids of my own now and I am struggling to pay their tuition for them. I am a lawyer in a large high cost of living area and make a decent salary. But I am taxed out the wazoo and inflation for tuition costs have far outdone my small annual increases.

    My dad and mom retired in their early 60’s to florida- and never looked back. I look at my retirement savings and wonder if i will EVER be able to retire.

    Lets see- if I want to spend 75K annually ( plus social security ?) I would need about $2M in savings. And $75K is not asking to live like Donald trump ! $2M does not seem to be in the cards. I have a decent net worth but most of it is illiquid in my home. Saving , as you know, is easier said than done.

    Like most others I imagine i will be working longer, hoping for social security to remain intact and saving as much as I can after the kids college is done.

    1. That is rough that a lawyer is struggling to pay for their kids’ tuition, and feels behind a retail store owner. How much savings do you have currently?

      Florida is a pretty cheap place to live if you were to move.

      State school all the way!

  35. A lot of factors are at play. One of the big ones- I think- is that the middle class doesn’t always do itself any favors. We spend lavishly on things we don’t need, put pleasure about responsibility, finance anything and everything. I know so many people who would do well financially if they just made better decisions. An acquaintance of mind, for example, has her house for sale and is hoping to break even after paying her realtor. She told me last month that she has zero dollars to bring to closing if it doesn’t sell for what she needs (she’s being forced to sell due to divorce). A few days ago, she posted that she splurged on a Disney cruise for her and her kids. I could give 1,000 examples similar to that one.

    1. Have you asked her why she splurged on a Disney cruise if she has no money?

      I have to believe the answer is that she does have money, otherwise she wouldn’t spend money she doesn’t have and get into suffocating debt.

      1. No, I definitely did not ask. However, she went into great detail about how she doesn’t have any cash to bring to closing and that her only collateral is her Chevy Suburban. I suppose she put the cruise on a credit card. But no, I definitely did not ask!

    2. Jay @ ThinkingWealthy

      Every 30 year old waitress has a smart phone. What comes with smartphones? Mandatory data plans. Things like this are “necessities” now but they were not then. I would argue that people keep themselves down because they just don’t know any better. Chances are that their parents are not financially literate and for some reason, our schools think I need to learn a fine art instead of a mandatory personal finance course! (Excuse the rant!)


      1. But think about the cost of a cellphone when they first came out. It’s relatively cheap now.

        I was just thinking about my cell phone bill and how much it is. Just got down with my 2-year contract with AT&T. I plan on negotiating hard.

        1. Jay @ ThinkingWealthy

          I’d hardly call $200 cheap, though. Relatively to the $500 iPhone, sure, I’ll give you that. But $200 is a big amount to drop that many people do!


  36. 1) On the comparison to parental wealth at similar age, my parents purchased my childhood home with a mortgage with double digit interest rates in the early 80s. The low and stable-by-comparison rates now have made real estate more accessible and investable today.

    2) In response to the stagnant middle class net worth, it should be acknowledged that in a fairly economically mobile market, most individuals/families are passing through the defined percentile, in this case 50th, either on their way up or down. Exceptions are at the extremes. Based on this view, I would be interested in the distribution of a longitudinal cohort data taking a group starting around 50th percentile over different time periods.

    3) I think “massive” social unrest is happening just across the bay from you, as this article was published.

    1. In Oakland? Those are protests from the inexplicable non conviction of the police officer who strangled Eric Garner to death. The system is very rigged, and I hope more people realize this so they can save and get out.

      1. Social unrest is very possible. Remember Germany radicalized when the middle class went bankrupt in 1930.

        And it’s not about blacks causing social upheaval. They just want equal treatment under the law. It’s the 100 million Americans who will live a life far worse than their parents, as this chart indicates.

        4 trillion pumped into the economy and the velocity of money barely budged. Only the wealthy have benefited.

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