January 03, 2006
The American dream: The only dream alive
A recent article by Stephen Moore and Lincoln Anderson titled The Great American Dream Machine reveals that according to the latest Federal data, six of every ten families in the United States have a net worth (the value of their assets minus their debts) over $100,000. In other words, today most American families’ wealth exceeds €85,000. In 1967 the number was only one in four. During this period, the percentage of families earning $75,000 or more a year increased from 9 to 27 percent. If we divide US society in five parts, each with an equal number of people, the middle fifth, representing the middle class, which in 1967 earned between $28,000 and $39,500, now earns between $38,000 and $59,000. To call an American “poor”, one has to include in this category people with the same standard of living as an average Spanish family.The United States is a dynamic and creative society. It allows its citizens to make considerable progress in a single generation. But if we look closer at this country’s millionaires, we see the extent to which the American dream is alive and well. Thomas J. Stanley and William D. Danko are the most respected experts on American millionaires; their book, The Millionaire Next Door, is an ambitious and complete study of this group. More than three and a half million US families have assets worth a million dollars or more.
From the Spanish Herald.
Posted by Carine at January 3, 2006 02:51 PMJust a couple of cautions about that book:
1.) It picks the winners retroactively. The millionaires they examine succeeded in risky endeavors, but many others failed in similar endeavors, did not become millionaires, and thus were not featured in the book.
2.) The authors note that these millionaires encourage their children to take another route and enter a profession like medicine or law, where great rewards are also possible but the risks are less. American parents will make great sacrifices to ensure their children receive a good education. It lasts longer than any but the largest inheritance.
Regarding US household assets, I wonder whether they include the value of our retirement accounts. Regular pensions are becoming more rare in the US. Instead, workers save in their individual accounts and the employer may match part of it or pay some amount of shared profits. I don't mind a bit. In fact, I withdrew from a pension plan and invested the money myself. Europeans do not generally have that risk or that opportunity. In theory, those assets are held by the state for the workers' benefit in most countries. In practice, I would rather have possession than promises.
Posted by: Mitch at January 5, 2006 01:25 AMThis is crap. America is prosperous compared to other countries in many ways, but certainly not by the margin suggested in this article.
The average income in America is considerably lower than this. Also,the average American is in debt up to his/her eyeballs and is barely making the minumum payments on all of his/her bills.
Posted by: Tracy Twyman at January 6, 2006 02:29 AMSaving rates quoted in government statistics do not include 401(k) and similar retirement investment accounts. Actually, Tracy US GDP is twice that of Japan, the second most prosperous country. And Japan's GDP is twice that of Germany, the third most properous.
Posted by: interventor at January 8, 2006 02:01 AM
