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Saturday, June 6, 2015

Average American Adult Net Worth

I've wondered what the average American net worth was. By Net Worth, I mean a man's total assets minus his total liabilities. A quick Google search pulled up this article from CNN from June 2014. It looks like the average Net Worth for an American adult is $301,000.

Upon seeing this number, the first gut reaction is either going to be one of two things.

1. This number is clearly wrong.
2. What does this number actually mean?

By mean, I do mean mean. $301 is the mean income of American adults. This takes into consideration the fact that America has the most billionaires of any countries and their wealth and success skews the average way up compared to the average Joe. In this situation, it is more useful to look at the median Net Worth. This way, you ignore all the million/billionaires and the government welfare recipiants in order to zone in on the typical American. Thankfully, this articles provides that figure as well.

The median Net Worth for American adults is $45,000. This figure looks like a much closer represenation of reality. America has more than 5 million millionaires living here but we have 45 million Americans living in poverty. I think that the Net Worth for the average American adult should be a little closer to $60,000 because the number of welfare recipiants skew the figure downward.

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