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Comment by jwr | Hacker News Reader

The really shocking quote from the article is the part of the caption below one of the charts:

"Data for families in the first quintile (bottom 20%) are not shown. Their median wealth was as follows: 1989 — $0; 1998 — $0; 2007 - $36 and 2016 — negative $1,099."

BOTTOM 20%. Has has zero or negative wealth. And that has only changed for the worse during the last 30 years.

If one FIFTH of your country has $0 or negative wealth, and your country is the richest country in the world, I would say there is a significant problem.

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If you are in depth, your wealth is negative.

After I finished school, as a software engineer I bought a home and a car (by taking a loan) and effectively I had negative wealth. I was by no means in a bad situation, I just consciously took a loan against my future earnings to improve my life quality now rather than after I saved up.

Many of these charts ignore this.

> Many of these charts ignore this.

From https://www.pewresearch.org/social-trends/2020/01/09/methodo... :

> Wealth, or net worth, is the difference between the value of assets owned by households and the value of the liabilities (or debt) held by the household. Assets include items such as the value of an owned home, value of a business, accounts in financial institutions, stocks and bonds, 401(k) and thrift accounts, individual retirement accounts and Keogh accounts, rental properties, motor vehicles and other personal property. Liabilities include home mortgages, credit card debt, student loans, vehicle loans and business debt. The SCF does not account for the discounted values of Social Security benefits or defined benefit pension plans.

Exactly. Which means when you finish school, if you have a student loan you have negative wealth. If you finished a good school and can expect a decent career you are not in a bad situation even though your wealth is negative.

The point of the parent was that you aren’t in net debt if you own a tangible asset, like a house or a car, on loan. If push comes to shove you could sell off your house, move into a cheaper rental house, and clear the debt.

Student loan gets you into negative wealth territory but not housing loan.

We forget so soon! Housing debt (which is secured with a tangible asset) can easily bring you into negative territory when your home value falls below your loan balance, which happens regularly, as real estate is cyclical.

Also, I'd bet many, if not most, car loans are underwater the first day the car is driven off the lot. Lots of people have to pay additional money to satisfy the loan, after selling their car.

> After I finished school, as a software engineer I bought a home and a car (by taking a loan) and effectively I had negative wealth.

I mean, sure... but your wealth was only negative for a VERY short period of time. Your car still had value and you could close that gap in probably a few months and be net-worth positive.

I think there are way more people who are paycheck-to-paycheck at best. The average credit card debt in the USA is thousands of dollars. I don't think that's because people are just stupid with money, I think a lot of that comes out of necessity because they can't keep their head above water.

The graph for middle incomes is also pretty shocking, going from 32% to 17% share of aggregate wealth.

I really wonder why we haven't seen so many pitchforks yet.

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