TheFed tells usour net worth each quarter (Table B.100) but does not adjust it for federal, state, and local debt (D.3). I have adjusted it. I'm working under the assumption that if the government takes on more debt then eventually I'll be asked to pay for some of it. Crazy thought I know.
I was most interested in seeing the real net worth of the average person. This chart doesn't exactly do this justice.Income and wealth inequalityhas been growing. The average person therefore is probably not doing as well as this chart would imply.
From what I can see, the real net worth of the average person has not risen since 1997 (other than temporarily through a dotcom bubble and a housing bubble).
I would also argue that the future doesn't look much better.
1. Real interest rates are extremely low. When adjusted for inflation and taxes, it is very difficult to grow net worth safely right now.
2. Stocks have doubled in the last few years. It is very difficult to grow net worth if you own stocks that aren't exactly cheap.
3. The housing market still looks bad to me. TheNAR tells usthat sales activity is up 3.7% in March but prices are down 5.9% from last year. Talk about painting lipstick on a pig. If the stock market did that we would call it panic selling. If is very difficult to grow net worth if your home's price is declining.
4. I believe theemployment party ended in 2000and nothing we do can bring it back to its former trend. It is very difficult to grow net worth if the employment situation is bad.
5. At some point, taxes will need to rise and the "free" lunch must end. It is very difficult to grow net worth when taxes are rising.
6. At some point, the baby boomers will stop investing for the future and instead will begin to sell off what they have in order to fund their retirements. It is very difficult to grow net worth when a rather substantial portion of the population is hovering over the "sell" button.
7. And lastly, there's ourtrade deficit. As seen within the link, "America’s Growing Trade Deficit Is Selling the Nation Out From Under Us." Those are Warren Buffett's words from 2003. I'm a believer in his theory. It is extremely difficult to grow net worth if our nation is being sold out from under us.
Is it any wonder that I am still bearish long-term?
I am not a financial advisor. I am not offering investment advice. Although I have attempted to provide accurate information, that's all it is, an attempt. Please do not trust the opinions, numbers, and/or charts of a random anonymous blogger on the Internet. Make your own opinions. Make your own charts. Do your own due diligence. Thank you.