How Much Is The Average American Worth?

Here we discuss a little about the worth of an average American citizen. Figures taken from banks in Massachusetts and other banks in America can give us a rough idea about the average American.
To find how much the average American citizen worth, we can have a look at the figures of banks in any given state…such as the banks in Massachusetts. In states such as Massachusetts there are different types of account holders from the rich to the poor. Hence it becomes feasible to get an average income by taking all account holders into consideration. In order to find out what an average American is worth we have to calculate the total value of the person’s assets (including liquid cash) and then subtract all his liabilities. The net worth of the person is the difference between the assets and liabilities.

Many banks in Massachusetts also take into consideration the median household net worth. As of now the median household net worth is $77,000. Median household net worth is the half way amount where half of the Americans are above it and the other half are below it. However median is not to be taken as a mean average. In order to calculate the mean the total of household worth is divided by the number of households. 

However median is normally used to calculate the average in banks of Massachusetts since the average (mean) is distorted by concentrated wealth. The average household net worth as of today is roughly half a million dollars. The median net worth in America varies according to different factors such as gender, location, education and race besides others. Household that have greater incomes obviously have higher net worth than households that have lower income. However higher income is not always an accurate indicator of net worth.

Wealth is unevenly distributed across the country. 25% of the US households own 87% of the country’s wealth and the value was around $54.2 trillion in the year 2009. From the year 1989 to 2001, studies show that there has been a rise in the number of wealthy individuals and fall in the number of poor households. In 1989 the percentage of households with negative wealth was 9.5% while the figure had come down to 4.1% in the year 2001. The percentage of households having net worth between half a million and one million doubled and the percentage of millionaires almost tripled.

Studies further show that this increase can be attributed to the booming housing market that help homeowners to get tremendous home equity. The changing life cycles have also attributed to the increasing wealth. However after 2007 the household net worth fell down by a total of $17.5 trillion. However by the end of 2010, the household net worth recovered by a total of $56.8 trillion or 1.3%. In the year 2007, the top 1% of the American households had 34.6% of America’s total wealth and the next 19% owned 50.5%. Hence the top 20% held around 85% of America’s wealth.
After the recession in 2007, the top 1% owned 37.1% and the top 20% owned 87.7%. the great recession also caused a decline of 36.1% in the median household wealth.  

This article was written by Katlyn Renner, an economist and Massachusetts resident with an interest in the banking sector. Katlyn believes strongly that banking with a local Bank in Massachusetts will help our economy and give you the best personal financial options, including a basic checking account.