How does this make the slightest bit of sense? Counting property but ignoring debt is going to exaggerate the wealth of many Americans by an order of magnitude, for example. Beyond that, one person's debt is another person's investment, so you're double counting all that money.
Once debts have been subtracted, a person needs only USD 3,210 to be among the wealthiest
half of world citizens in mid-2015. However, USD 68,800 is required to be a member of the
top 10% of global wealth holders, and USD 759,900 to belong to the top 1%.
See page 11 from: https://publications.credit-suisse.com/tasks/render/file/?fi...
To offer a slightly extreme example, I'd consider a recently minted surgeon with $300k in loans, a mortgage, and a $500k base salary to be considerably wealthier than the debt-free small-town auto mechanic making $35k.
The fact that not everybody can go get an $800,000 mortgage is pretty much accounted for by the fact that you have to put down some sort of down payment, which translates into equity in the house. If you have an $800,000 mortgage then the purchase price for the house was probably $1 million or more, and if the value has held then that's at least $200,000 in net worth.
It's true that the owner stands to profit from any gains the price sees in the real estate market, but they also stand to suffer from any losses.
It really just makes no sense to count a house's value but not the (negative) value of the mortgage on it. For an extreme case in the other direction, someone with a $1 million house that has a $1 million mortgage on it (because, for example, they bought at a higher price and then prices fell) and who can barely afford their payments (perhaps because they took part in mortgage fraud, or just lost their job) should not be counted as wealthier than somebody with a $100,000 house and no debt.
Fortunately, it looks like the actual study does count debt and the wording in the article was just horrible.
Is this your perception or is it reality? If your hypothetical surgeon overleverages himself to the point where he has less on paper than the auto mechanic, his financial position sounds very brittle. What if there is a large unexpected expense? Like $50k to clean up a mercury spill...
I actually crunched some numbers so you can see exactly what I mean. The surgeon's going to make about $26,000 per month after taxes in Texas (picked somewhat arbitrarily as that's where I live). They're going to pay about $3400/month in loans. And if they got an $800k mortgage, their mortgage payment is going to be something like $4800/month.
Net income: $17800 (i.e., almost 4x their mortgage payment).
Now for the mechanic. Net income: $2400/month. Let's say he gets a $100k home. His payment is about $540/month. So he's got $1860/month left over (i.e., about 3.4 times his mortgage payment).
He's actually less equipped to handle any sort of financial duress than the surgeon, all while living a much more constrained and frugal lifestyle and occupying a house with literally one tenth of the value. The mechanic's situation is actually vastly more brittle than the surgeon's, as on top of all of this the surgeon also has drastically better job security.
Now, sure, you can cook up an example where the surgeon is stretched too thin (e.g., $3-4M home instead of a $1M home, or a collection of exotic sports cars, etc.). However, the fact that the surgeon was even capable of making those unwise purchases in the first place means that they cannot be lumped into the same financial category as the mechanic.
Poor people are not allowed to go into all that much debt. If you have somebody who is $2M in debt, chances are they are wealthy and were only allowed to accumulate all that much debt because of their influence and reputation or some other kind of leverage.
The average graduate who is $40K to $50K is not actually poorer than the homeless beggar who is in the green. They don't live as poor of a life and they have the potential to earn for more.
Sure, that student isn't poorer than a beggar. But they are poorer than their classmate who has the same degree, same skills, and same financial situation in all other respects, but has no debt.
Somebody with a $500,000 house and a $400,000 mortgage and no savings isn't five times wealthier than somebody living an apartment with $100,000 in savings.