Ranking Your Position in the US Economy

Imagine life is a game (or a race), and the objective is to make the most money you can in your lifetime. Your adversaries are other people in the race as well. In other words, other people making money. Of course, this is not reality. But if it was, it might be helpful to know your rank or position in the race.

There are two basic measures to evaluate your position in this economic race. How much you make and and your net worth. But first, let's begin with some statistics.

According to the Federal Reserve Economic Data, as of May 2017, there are 205 million people aged 15-64 in the United States. The BLS states as of May 2017, the labor force participation rate is 62.7 percent. This makes 128.5 million people aged 15-64 that are working in the United States. If we take the GDP of the United States, currently 18.57 Trillion dollars (World Bank, 2017), and divide that by the number of people aged 15-64 working, we get $144,513. We are not factoring in people 65 and older and people working part time are included.

If everyone who was working got paid the same, we could each expect about $144,000 a year. According to Wikipedia, about 12% of households make that much or more a year. If you personally make that much a year, you are most likely in the top 10%. Life is not fair, and some people making an extraordinary amount of money skew the average. Therefore, it might be helpful to look at the median incomes as well.

The median personal income in the United States in 2014 was $30,960 and median household income is $59,039 as of 2017. (Wikipedia)

Now let's discuss your net worth. Net worth is calculated by adding up everything you own, assigning a dollar amount to it and then subtracting the liabilities (or debts) you owe. This is harder to caculate than incomes because some creative accounting can take place which could over value assets.

According to The Montley Fool, 2017, the median net worth of an American household is approximately $80,000, most of which is from equity in peoples' homes. While "total household weath equals $90.2 trillion" - Forbes, 2016.

If you have $80,000 or more in assets, little or no debt and are making well into the six figures, Congratulations! You are getting your fair share of the pie.

References
https://data.bls.gov/timeseries/LNS11300000
https://fred.stlouisfed.org/series/LFWA64TTUSM647S
https://en.wikipedia.org/wiki/Household_income_in_the_United_States
https://en.wikipedia.org/wiki/Financial_position_of_the_United_States
https://www.fool.com/retirement/2017/07/03/how-does-your-net-worth-compare-to-that-of-the-ave.aspx
https://www.forbes.com/sites/timworstall/2016/12/08/us-household-wealth-at-record-high-of-90-2-trillion-housing-and-stock-wealth-up/#7ff37dc26c24

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