70k in the South is balling imho

Just read through that article you posted. God life looks bleak if you aren't making good money by the time kids come along.

Even the one percenters are skewed by the super wealthy.

HUGE difference between a professional married couple or a gas station chain owner being a one percenter vs. Guy Laliberte.

$74k. Remember, this includes just graduateds and all unemployeds.

Ok, *I'm* not the one saying anything. It's the Federal Reserve. I'm merely quoting them.

Yeah, politically or socially-oriented blogs aren't really the place to look for nationwide, factual data on households.

http://www.federalreserve.gov/pubs/b.../PDF/scf12.pdf

This report was widely referenced in the press recently as virtually everyone's net worth fell from 2007-2010, if only due to the housing crisis.

Data is collected tri-annually by the Fed BoG along with the UST, and data is actually gathered by research groups at U of Chicago.

The decline in mean income was most pronounced at the top 10% of the distribution, and for higher education groups for the time period [noted on pg.1], contrary to much of what is reported in the press.

Yeah, absolutely, but as noted the average 2nd highest quintile NW is still $294k. So, no top 1%, 5% or even 10%ers in there.

Interesting - the big drivers of net worth are:

1) Market value of home (net of mortgage)
2) Market value of cars (net of car loans)
3) Retirement savings (401k/IRA)
4) Liquid savings (checking/savings/money market/CDs)

I can barely see this getting to $294k for the 2nd highest quintile. Then you still have to back out the following typical liabilities:

1) CC Debt
2) Student Loan Debt
3) Back-Taxes/Liens against you

Am I missing a category? Either way, although CC debt isn't that high for most households, isn't student loan debt usually a net worth killer for 2nd quintile households?

The $294k wouldn't be as surprising I think pre-2008, as there was a ton of equity in home values and retirement accounts. But a lot of this value has since been wiped out.

Keep in mind that is for families/households not individuals. So a good portion of those include households with two college educated earners.

Thanks for posting this, enjoyed reading it - especially relevant for me as I live in LA! I'm in my 30s and make a good amount over $100k. It's pretty much agreed upon in my social circle that you need at least $250k household income to be truly comfortable in LA if you're married with a couple kids. (Not baller, but very comfortable.)

The post proves that out, imo.

As I've gotten older and my friends have had their 1st and 2nd kids, very few of them have truly considered the cost structure implications of having a child. They just do it. Which is fine, but of course from a household economics POV, can be pretty stressful unless you're over that $250k threshold in LA - YMMV in other metros obviously in SF and NYC that number is much higher.

That's how I was looking at it - consider the following:

The benefit of 2 college educated earners in a household (vs. 1) for the "top line" of the net worth calculation would typically be 1 more car's market value (net of car loan), and 2x retirement savings and liquid savings. Obviously no change (typically) to home market value net of mortgage, one of the biggest drivers of total NW.

Then I assume many of these 2 college educated earner households have children, which very much challenges the household's ability to save into retirement and liquid savings because of high cost structure - "cash poor" households.

And this would then be offset by double the student loan debt, CC debt, etc.

For 2nd quintile US Households, $294k still seems quite high - if that number is in the realm of reality, Americans are way better at saving and paying off student loan debt than I had previously thought!

I am on my phone and admittedly didn't read the PDF and skimmed most of the posts but is $294k the 2nd quintile net worth or the net worth of 2nd quintile household income?

With the baby boomers retiring there is probably a sizable part of the population with low incomes and high net worths. Are the present value of pensions included in net worth? I think they are but I could be wrong. Lots of older people have pensions.

ashin - from a Naj post:

Ah, good point - baby boomer wealth.

It would make sense to me to include the PV of pension values (and I guess Social Security as well?) in net worth calculation, don't know if that is in the $294k figure....

Re - Baby Boomer Wealth

First, I think maybe a lot of us (I know I did) completely whiffed in accounting for baby boomer households in average stats. Obviously these homes have had decades to save/invest, and their net worths will reflect that fact.

Also, and I've always wondered about this and if this has been measured - but anecdotally, seems like there is a significant transfer of wealth from the baby boomer generation (let's say 60yo+) to the tail-end of Generation X (let's say ages 30 to 40 or so). At least 25% of my friends (I'm in my 30s) have received help from their parents in some form - whether in the form of a downpayment for a home, or even helping offset cash flow issues.

I live pretty damn well off my base salary in NYC and then save my whole bonus. Breaks down as follows:

Salary: $125k
After Tax: ~$75k (I get a higher tax hit than most as I hit AMT with bonus)

Expenses
Rent: $36k (big 1-bedroom in great area in doorman building)
Monthly bills: $6k (cable, electric, cell phone)
Food/Alcohol (at home): $6k (buy from Whole Foods / farmers market, drink at least 2-3 bottles of wine with each week)
Restaurants/Bars: $10k (high as I am a foodie)
Travel: $4k
Clothes: $4k (typically one nice new suit, pair of shoes, replacement dress shirts and a bit of casual clothes)
Miscellaneous: $8k (dry cleaning, tp/toiletries/etc., cabs)
Total: ~$74k

Add in things like a new couch I bought this year or a couple of nice presents for GF and I easily exceed my base take-home in a year. I am the first to admit I live very well for my age even in NYC. Also have an apartment that is super nice and big for someone my age in NYC. That being said, even with a studio or walk-up place which would save me $6k to $8k a year I still am close to break even with incidentals mentioned above.

I could definitely live in NYC on $100k but would require me to cut back on restaurants and miscellaneous quite a bit. Lived with roommate s my first two years and wasn't going to dinner nearly as often as no GF yet and was fine on $70k. That being said, $125 is pretty much the minimum for me to "do whatever I want" within reason. To me this means this like:

- Going into whole foods and spending $100 on some beer, cheese and crackers for a weekend because I feel like it
- Going out to a $150-$200 meal every weekend but not hesitating to go for a $300-$400 once a month if I want
- Being able to buy made-to-measure suits, custom shirts and really nice shoes when things start to wear out a bit (not like I buy things I don't need but I don't hesitate if I do need something)
- Being able to buy pretty much anything I want on Amazon (i.e. if I want a DVD or book, I buy it, new cookware as old stuff was wearing out, nice toiletries, etc.)
- Also being able to splurge when I want to, such as buying an iPad on a whim (I do agonize a bit over these purchases given my nature/being a saver but never because I can't afford them)

I have always been a saver and as a result like to live well but agonize over any larger purchases. As you can see, my travel is pretty modest for my take home as main cost is expensive flights to visit family ($600 to $800 roundtrips a couple times a year, plus one small vacation). I don't really buy clothes beyond what I need but am willing to spend $1,500 on a nice suit or $400 on nice shoes when needed. The miscellaneous stuff really adds up for me. I spend ~$4k on Amazon each year on stuff that nothing special, books, DVDs, toiletries, TP, candles, cleaning products, electronics cables, etc.). I am really fortunate as I still max out my 401k and save well with bonus but would have to make compromises to live on $100k. That being said it would not be that tough and other than travel I am unlikely to have significantly higher expenses over the next few years while my salary may still increase a bit.