If you thought Americans were better off financially than a few years ago, the following chart shows that's not the case for most of us.
Instead, it looks like an economic recovery for the rich.
According to a new Pew Research Center study, the wealthiest 7% of Americans saw their net worth increase 28.2% from 2009-2011, while the net worth of the other 93% declined 4.3%.
During that span, the average net worth of the 8 million households in the richest 7% rose to about $3.2 million from about $2.5 million while the average net worth of the 111 million households in the bottom 93% fell to $133,817 from $139,896, the study said.
That means the average net worth of the wealthiest 7% of American households in 2011 was 24 times greater than the average wealth of the other 93%, up from roughly 18 times greater in 2009.
"The income recovery thus far for a wide swath of U.S households has not existed," Richard Fry, senior research associate at the Pew Research Center, told the Huffington Post. "One of the reasons is because most Americans households own a home [and] very few own stocks."
Indeed, among households with net worth of $500,000 or more, 65% of their wealth comes from financial holdings such as stocks, bonds and 401(k) accounts, while only 17% comes from their homes.
By contrast, for households with net worth under $500,000, just 33% of their wealth comes from financial assets and 50% from their homes.
Bottom Line: If you're not already invested, you need to be in the market and in it for the long run.
Related Articles and News:
- Money Morning:
The Frightening Picture of U.S. Income Inequality
- Pew Research:
A Rise in Wealth for the Wealthy; Declines for the Lower 93%
- Huffington Post:
Wealth Inequality Drastically Rose In Early Years Of Recovery, As Only Richest Americans Saw Gains