What Is Your Net Asset Household Grade?

According to a November 2008 poll by Spectrem Group of 750 households with over $1 million in net worth (excluding house), last year saw a 30% drop in their asset values. Twenty percent of the respondents lost more than 40%.

Interestingly, more than half said they would not be able to support their lifestyle. A wake up call for America? Looks like most of us will have to scale back our lifestyles until this country figures out a way to revitalize itself.

In Spectrem's Affluent Marketing Insights Report For 2008, affluent households continue to grow but the pace has slowed.

Looking at the number of affluent and millionaires households chart which goes to 2007, it appears to me the numbers will continue to decline. Since I do not have permission to print the chart nor do I have a 2008 data point, I can only assume that all data points fell at least 10% in 2008 due to the falling stock market, if not more.

The interesting thing about the chart is the pace at which the number of very wealthy people have grown in this country since 2002. The number of households (excluding primary residence) with assets over $5 million dollars grew by 141% in that period. Households with $1 million dollar or more (excluding primary residence) grew by 81%. Households with $1 million or more in investments grew by 48% while affluent households with more than $500,000 (excluding primary residence) grew by 72%.

Clearly, the growth in percentage of the number of wealthiest households is growing far faster. In the United States, according to the 2007 census, there were 111,162,259 households. To get a sense of overall wealth in numbers in this country using the household data in Spectrem we can arrive at the following:

• Affluent (NIPR): 14%
• $1M investment assets: 8%
• $1M NIPR: 5%
• $5M+ NIPR: 1%

NIPR = Not Including Primary Residence

You can pretty much say that 80% of America does not have more than $500,000 in assets and 20% of the households in this country hold 80% of the wealth. That is a sad figure given this is America.

A Measurement In Household Success

It's like being assigned a grade when you were in school:

99% = A+($5M+)
90% = A ($1M+)
80% = B ($500K+)
70% = C ($100K+)
60% = D ($0+)
50% = F (in debt)

What is your net asset household grade? According to an April 2008 US Census report, the median net worth for Americans in 2002 was $58,905.

Using the grading scale above, this would put most Americans in comparison to the most wealthy, a C- grade.

About Kerry Kobashi

Kerry is the founder of KerryOnWorld. He lives in Silicon Valley and has worked as an engineer and project manager. He owns Kobashi Computing a consulting company.