ARE YOU WEALTHY? IT'S ALL RELATIVE
August 14, 2006
If you're young, there's good news: You don't need as much money to be considered well off as you did a few years ago. A 20-something is in the top 25 percent with a net worth of only $30,000. That's down from $37,800 only three years earlier, says columnist Scott Burns.
The other side of that coin is that the wealth gap between young and older Americans is growing, according the latest update of the Wealth Scoreboard.
Here's how the Scoreboard works:
- Households in the United States are divided by age groups and then by the net worth required to be in the top 1 percent, top 5 percent, top 10 percent and top 25 percent of all households in those age groups.
- A median figure is also provided so you can tell whether you are in the top or bottom half of your age group.
- If you are 50 to 59 years old, you'll need a net worth of at least $188,000 to be in the top half of households that age.
- You'll need three times that, $570,000, to be in the top 25 percent; and you'll need a whopping $9.6 million to be in the top 1 percent.
VIP Forum, a Washington-based group that researches wealth and wealth management practices, does the number crunching to create the Scoreboard. The basic data come from a Federal Reserve survey done every three years, the Survey of Consumer Finances.
The last survey was in 2004. The first article on the results was published early this year. The Scoreboard is assembled from the survey data tapes.
Source: Scott Burns, "Are you wealthy? It's all relative," Dallas Morning News, August 13, 2006.
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