Tuesday, January 23, 2018

US Household Assets by Net Worth

This is a great graphic by Visual Capitalist.  You can see how assets are spread across income groups.  Note that this Makkimoto chart shows the relative distribution across groups, it doesn't show the spread of total assets or of the size of the groups (it would be cool if the vertical dimension were used to have the areas correspond to the actual amounts, but probably the top group would become very hard to distinguish.


Not surprisingly, less well off folks have a greater share of their wealth in liquid assets (everyone needs some cash and checking) and in "use" assets, those assets that, while they have financial resale value, are really a form of consumption (transportation and shelter).

It is also pretty clear that if you want to be really wealthy, you need to have a successful business in which you are a significant shareholder or control person.  Since large, successful businesses are pretty rare (even small successful businesses are tough to operate, I speak from experience here, but will start another business soon), very few people can be truly rich.  But passive investments, particularly cashflow real estate (which is also a business but except for skyscrapers or PUDs are also small) can make you quite comfortable.

You have to think about your personal strategy and what you want.

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