than most millennials - wordpress.com · h r m m e w s j h t p: / b l o g s. w j ... sign up for...
TRANSCRIPT
5/20/2015 It Only Takes $10,400 to be Richer Than Most Millennials Real Time Economics WSJ
http://blogs.wsj.com/economics/2014/09/04/itonlytakes10400tobericherthanmostmillennials/ 1/3
Subscribe Sign InU.S. EDITION Wed May 20 2015 07:55:13 GMT0400 (Eastern Daylight Time)
ECONOMY CENTRAL BANKING
5:00 pm ETSep 4, 2014 ECONOMY
COMMENTS (30)
It Only Takes $10,400 to be RicherThan Most Millennials
CB RESEARCH MILLENNIALS WEALTH
By JOSH ZUMBRUN
Are you a millennial with a net worth of more than $10,400? Congratulations, you’rewealthier than half of your generation.
The figure comes from the Federal Reserve’s Survey of Consumer Financesreleased today, which tracked the net worth and income of American families in 2013.The report breaks down finances by age, income, home ownership and a range of otherfactors.
Why so low?
• First, obviously, incomes. Incomes for most Americans, adjusted for inflation, havebeen falling in recent years. If you earn more than $35,300, you’re bringing in morethan half of millennials, according to the Fed’s survey. In 2010, those under age 35 hadmedian earnings of $37,600. That’s a drop of $2,300 during the past 3 years. (As anaside: These Fed statistics cover families headed by someone under age 35, roughly
SEARCH REAL TIME ECONOMICS GO
Latest Economy News
About Real Time Economics
Follow
Real Time Economics
Becky Bowers Editor
Neil King Editor
Nell Henderson Editor
BrianHershberg Editor
Sudeep Reddy Editor
TimothyAeppel Reporter
Pedro Nicolacida Costa Reporter
MichaelDerby Reporter
Jon Hilsenrath Reporter
Real Time Economics offers exclusive news, analysis andcommentary on the U.S. and global economy, central bankpolicy and economics. Send news items, comments andquestions to the editors and reporters below oremail [email protected].
Read more Economics coverage.
Sign up for Grand Central newsletter
Sign up for Real Time Economics newsletter
Real Time Economics on Twitter
Home World U.S. Politics Economy Business Tech Markets Opinion Arts Life Real Estate
The U.S. HousingMarket in 10 Charts
Where Are GlobalInterest RatesHeaded?
MINIMUM WAGE EMPLOYMENT INFLATION FED EDUCATION
HOT TOPICS: WSJ ECONOMIST SURVEY GRAND CENTRAL NEWSLETTER CENTRAL BANK WATCH CENTRAL BANK CALENDAR
ARTICLE
1. 1k 800
News, Quotes, Companies, Videos SEARCH
xRecommended post
Weak FirstQuarterGrowth Due toSeasonal Issues AfterAll, SF Fed Says
5/20/2015 It Only Takes $10,400 to be Richer Than Most Millennials Real Time Economics WSJ
http://blogs.wsj.com/economics/2014/09/04/itonlytakes10400tobericherthanmostmillennials/ 2/3
encompassing the entire adult millennial generation and some of the oldest members ofGeneration X, depending on the definitions used. It excludes millennials still living athome and thus counted as part of their parents’ families.)
• Second, the rise of student debt, which now burdens 41.4% of those under 35. In2007, only 33.6% of people under 35 had loans and in 1998 it was 23.3%. The balancesof those who borrow have been growing as well, to $17,300 in this survey, up from$13,000 in 2007 and $10,000 in 1998. For those beginning thousands of dollars in debt,it can take years for net worth to climb into positive territory.
• Third, many millennials have avoided stocks and missed out on surging equityprices over the past five years. Today 38.6% hold stocks, either directly or indirectly.That’s down slightly from 2010 (even though prices have climbed relentlessly in thatperiod) when 39.8% held stocks. In 2001, about half of people under age 35 ownedsome stocks.
• Fourth, few people in this age group own their homes (and many of those whobought homes earlier than 2010 did not do well on the investment). Only 35.6% of thoseunder age 35 own homes, compared with 40.6% before the recession.
It only takes $10,400 to be wealthier than half of millennials (the median) but it takes$75,500 to be richer than millennials on average.
Why is the average so much higher than the median? Take a simple example of threeguys: Tom, Steve and Mark. Tom has a net worth of negative $10,000 due tooutstanding student loans. Steve has a net worth of $10,000. Mark (let’s say his lastname is Zuckerberg) has $33 billion. Their median net worth is $10,000. Their averageis $11 billion. A few outliers (like Mr. Zuckerberg) can earn enormous amounts morethan the median and drag the total up for everyone; conversely, it’s rather difficult to getyourselves millions of dollars in debt and drag the figure down.
Are millennials doing worse by every measure? Here’s one spot of good news: fewercarry credit card debt. According to the Fed’s survey, 36.8% of those under 35 havecredit card debt, down from 38.7% in 2010 and 48.5% in 2007.
And finally, remember that many of those under age 35 are just starting out. Thesavings cutoff to be richer than half of your age group rises with age. Among those 3544, it takes $47,000 to be wealthier than half. Among those age 4554 the cut off to bericher than half is $105,000 and it’s $166,000 for those 5564.
Follow @WSJecon 628K followers for economic news and analysis Follow @WSJCentralBanks 64.6K followers for central banking news and analysis
Get WSJ economic analysis delivered to your inbox:
Sign up for the WSJ's Grand Central, a daily report on global central banking
Sign up for the Real Time Economics daily summary
REAL TIME ECONOMICS HOME PAGE
JonathanHouse Reporter
Ben Leubsdorf Reporter
KathleenMadigan Reporter
William Mauldin Reporter
Josh Mitchell Reporter
Eric Morath Reporter
DamianPaletta Reporter
Sarah PortlockReporter
Neil Shah Reporter
JeffreySparshott Reporter
Matt Stiles Reporter
Ian Talley Reporter
Nick TimiraosReporter
Josh Zumbrun Reporter
David Wessel Contributor
Real Time Economics Categories
Wall Street JournalFacebookTwitter LinkedInGoogle+YouTubePodcasts GooglePlay AppStoreBack to Top
SubscribeWhy Subscribe?
WSJ+
Corporate Subscriptions
Apps
Professor Journal
Student Journal
Customer ServiceCustomer Center
Live Help
Redesign Guided Tour
Tools & FeaturesEmails & Alerts
Guides
My News
Portfolio
RSS Feeds
Topics
AdsAdvertise
Advertise Locally
Commercial Real Estate Ads
Place a Classified Ad
Sell Your Business
Sell Your Home
MoreConferences
Content Partnerships
Corrections
Jobs at WSJ
Make Time
News Archive
1. 1k 800
Fed 5179
Global 4272
Credit Crisis 3725
Employment 3208
Business Cycles 2746
Consumption 1835
Inflation 1621
Trade 1477
Housing 1323
ECB 1208
Economy 1124
central banking 1110
Budgets 721
GDP 702
Vital Signs 651
Federal Reserve 643
Manufacturing 619
Economy & Business 618
U.S. 557
Bank of England 507
Subscribe / Sign In
5/20/2015 It Only Takes $10,400 to be Richer Than Most Millennials Real Time Economics WSJ
http://blogs.wsj.com/economics/2014/09/04/itonlytakes10400tobericherthanmostmillennials/ 3/3
Video Center
Watchlist
Recruitment & Career Ads Register for Free
Reprints
Privacy Policy Cookie Policy Copyright Policy Data Policy Subscriber Agreement & Terms of Use Your Ad Choices
Copyright ©2015 Dow Jones & Company, Inc. All Rights Reserved.
Updated 5/5/15 Updated 5/5/15