Hello, welcome to Arista Advice! Question of the week is: "Paul, is it true that the net worth of US households is close to a record high?" The answer is yes, unbelievably high! Let's look at some numbers.
The US household wealth is much higher than it was before the pandemic. The net worth of US households have risen by 2% in the first three months of the year to $148 trillion. The biggest asset is their individual home that they own. This net worth of $148 trillion is close to a record high and suggesting that the economy might have enough fuel to keep growing or at least to avert and to sidestep a recession. There's a lot of positive news out there, but the media is just scaring people and worrying them when they don't need to be.
However, the term average can be a bit deceiving. While the average returns on equity funds over a long period may seem attractive, there is a wide range of returns depending on the type of fund and the market conditions. What's important is to just stay invested and not worry about short-term events. Most of the increases in net worth in the first quarter was tied to a rebound in the stock market. The value of equities held by households, jumped by $2.4 trillion. A drop in the value of real estate due to higher interest rates, meanwhile, shaved off a portion of the household wealth. Household debt did increase at a 2.2% annual rate in the first quarter to $19.2 trillion, marking one of the smallest increases in the past decade. Debt had grown as fast as 8% as the US emerged from the pandemic.
In conclusion, the US households boost a higher net worth and reduction in debt. Most of the increase in net worth was tied to a rebound in the stock market. The value of equities held by households jumped $2.4 trillion.
Please remember to go to AristaWealth.com to get other videos, tools, tips, and resources to help you live a life of significance.