Although the vast majority of today’s adults earn more than their parents did at their age, only 4% of adults from homes at the bottom rung of the economic ladder were able to reach the top, according to a new report released by Pew Charitable Trusts. Words: 429
So says Mandi Woodruff (www.businessinsider.com) in edited excerpts from her original article*.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Woodruff goes on to say, in part:
No storyline is more ingrained in the American Dream than that of the man or woman who rises from rags to riches but new research [from Pew‘s Panel Study of Income Dynamics which has analyzed household wealth between 1968 and 2009] suggests we might be putting far too much stock in fairytales [as seen in the graph below]:
- “The ‘rags-to riches’ story is more often found in Hollywood than in reality,” Pew says. “43% of those who start in the bottom are stuck there as adults, and 70% remain below the middle quintile.”
- On the flipside, it’s just as unlikely for the rich to fall from grace over time as it is for a poor person to strike it rich. Just 8% of wealthy adults dropped from the top quintile to the bottom, Pew found, part of a phenomenon it calls “stickiness at ends.”
Most of the regular factors that determine wealth are at play here as well, with:
- education and
still impacting income levels more than any other.
- Go here to receive Your Daily Intelligence Report with links to the latest articles posted on munKNEE.com. It’s FREE!
- An easy “unsubscribe” feature is provided should you decide to cancel at any time.
A four-year college degree proves to be:
- the best chance at financial security for those at the top income level as Pew found it “prevents downward mobility from the middle and the top” for consumers, and
- the best shot bottom-rung consumers have at clawing their way to the top.
On the bright side, there are nearly twice as many “upwardly mobile” households in the U.S. as there are downward:
- “35% of Americans have higher income and move up at least one rung on the ladder relative to their parents,”
- compared to 16% of those falling in wealth, the report says.
Pew also confirms what we’ve long known about the swiftly growing divide between America’s rich and poor:
- “Wealth has decreased at the bottom and middle and has increased at the top two rungs of the ladder. The wealth compression is especially notable at the bottom:
- Median wealth for those in the lowest wealth quintile decreased from just under $7,500 in the parents’ generation to less than $2,800 in the children’s generation.
- Conversely, at the top of the wealth distribution, median wealth increased from just under $500,000 in the parents’ generation to almost $630,000 in the children’s generation.”
*http://www.businessinsider.com/pew-report-sheds-light-on-economic-mobility-in-the-us-2012-7#ixzz20L5UeW9V (To access the above article please copy the URL and paste it into your browser.)
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
New research by the Pew Research Center of government data from 2009 shows that the median wealth of white households — the value of home equity and all other assets, minus debt — was 18 times that of Hispanic households and 20 times that of African-American households… To express it more vividly, between 2004 and 2009, the median net worth of Hispanic households dropped by 66% (that is correct, 66%!), and Asian and African-American households by 53% (yes, 53%) compared to “only” a 16% decline for the median white household. Let’s take a closer look. Words: 692
Welcome to the new model of retirement. No retirement. In 1983 sixty two percent (62%) of American workers had some kind of defined-benefit plan. Today less than 20% have access to a plan. The majority of retired Americans largely rely on Social Security as their de facto retirement plan [and the 35 and younger cohort are not able to save, or save enough, to eventually retire. True retirement is now a thing of the past except for a privileged few. Let me support this claim.] Words: 1091
Rising education and medical costs, on-going credit card interest payments, well used personal lines of credit and large mortgage debt and home equity loans – most a penchant for living beyond their means – is keeping 75% of American households in some degree of debt. Take a look and then pass it on to your friends, neighbors and co-workers.