This is a chart by economist Gray Kimbrough from 2019. I recently saw it resurface and so I thought I would reshare it here on the blog.

The y-axis is the percentage of US household wealth (by demographic cohort). And the x-axis is median cohort age. So one way to look at this chart is as follows.

When the median age of a Baby Boomer was 35 (which happened in 1990), they owned about 21% of US household wealth.

When the median age of a Gen Xer was 35 (which happened in 2008), they owned about 9% of US household wealth.

Millennials haven't yet hit a median age of 35, but in 2019 they owned about 3.2% of US household wealth.

Of course, one thing to keep in mind is that these demographic cohorts are not the same size. In 1990, Boomers represented 31% of the US population. And in 2008, Gen Xers were only 22% of the population.

But even if you normalize, there are some intergenerational wealth gaps here.

Global household wealth is currently estimated at about $360 trillion, according to Credit Suisse's 2019 Global Wealth Report. This represents an increase of about $9 trillion (~2.6%) from 2018-2019.

Over the last decade, much of this growth in household wealth has come from two countries: the United States and China. 40% of the world's US dollar millionaires reside in the United States, and China now has the second highest number of dollar millionaires. (If there are any curious Canadians reading this, Canada represents 3% of the world's total.)

The number of ultra-high-net-worth individuals -- individuals with a net worth greater than $50 million -- exhibits a similar pecking order. The US is by far the most dominant.

Of course, dollar millionaires represent a small percentage of the world's total population. Credit Suisse estimates that there are about 5.1 billion adults in the world. About 56.6% have a net worth under $10,000 and about 0.9% (okay, 1%) are millionaires. This 1% controls/owns about 44% of global wealth. Thinking back to figure 7 (above), consider this math: 50% of the world's millionaires are now in the US and China.

Fluctuations do happen, however. Australia lost some 124,000 millionaires last year largely because of a (-6%) drop in home prices, which tends to correlate pretty closely to the real asset part of household balance sheets. Australia shed about $443 billion in household wealth since 2018, making it the biggest loser in Credit Suisse's report.

The other thing that you may find interesting from this report is the wealth/GDP ratio that they use. Household wealth and GDP tend to correlate. But the ratio of wealth to GDP also has a tendency to increase as a country develops. This makes sense because things like the rule of law and access to capital tend to increase people's willingness to invest/borrow. But in developed countries, it could also be a signal for asset inflation.

If you'd like to download a PDF of the full wealth report, click here.

Note: Credit Suisse's definition of household wealth is your typical net worth calculation: assets (financial assets and real assets) minus liabilities. For most people, the real asset part is principally housing.

Charts: Credit Suisse Global Wealth Report 2019

“People get income for doing stuff, and they get income for owning stuff. Increasingly the latter. And the ownership share of income goes to a small slice of households that own almost all the stuff.”

This is a quote from a recent article by Steve Roth over at Evonomics, where he breaks down the share of US household income that is derived from “labor” vs. “capital.” In other words, how much money do households make from working (trading their time for money) and how much do they make from their existing wealth (that is, owning stuff)?

If I were to oversimplify how he calculates this (you can read all of the details, here), it is: (Income - Labor Compensation) / Income. Take all of the household income. Subtract the money made from doing stuff. And then divide it by total income to get the percentage made from “unearned property income.” There are gray areas and others things to consider, but that’s the gist of it.

What he discovers and argues is that basically 50% of household income comes from simply being wealthy and owning stuff. He also reminds us that approximately 60% of US wealth is… “earned the old-fashioned away: it’s inherited.”

This is a chart by economist Gray Kimbrough from 2019. I recently saw it resurface and so I thought I would reshare it here on the blog.

The y-axis is the percentage of US household wealth (by demographic cohort). And the x-axis is median cohort age. So one way to look at this chart is as follows.

When the median age of a Baby Boomer was 35 (which happened in 1990), they owned about 21% of US household wealth.

When the median age of a Gen Xer was 35 (which happened in 2008), they owned about 9% of US household wealth.

Millennials haven't yet hit a median age of 35, but in 2019 they owned about 3.2% of US household wealth.

Of course, one thing to keep in mind is that these demographic cohorts are not the same size. In 1990, Boomers represented 31% of the US population. And in 2008, Gen Xers were only 22% of the population.

But even if you normalize, there are some intergenerational wealth gaps here.

Global household wealth is currently estimated at about $360 trillion, according to Credit Suisse's 2019 Global Wealth Report. This represents an increase of about $9 trillion (~2.6%) from 2018-2019.

Over the last decade, much of this growth in household wealth has come from two countries: the United States and China. 40% of the world's US dollar millionaires reside in the United States, and China now has the second highest number of dollar millionaires. (If there are any curious Canadians reading this, Canada represents 3% of the world's total.)

The number of ultra-high-net-worth individuals -- individuals with a net worth greater than $50 million -- exhibits a similar pecking order. The US is by far the most dominant.

Of course, dollar millionaires represent a small percentage of the world's total population. Credit Suisse estimates that there are about 5.1 billion adults in the world. About 56.6% have a net worth under $10,000 and about 0.9% (okay, 1%) are millionaires. This 1% controls/owns about 44% of global wealth. Thinking back to figure 7 (above), consider this math: 50% of the world's millionaires are now in the US and China.

Fluctuations do happen, however. Australia lost some 124,000 millionaires last year largely because of a (-6%) drop in home prices, which tends to correlate pretty closely to the real asset part of household balance sheets. Australia shed about $443 billion in household wealth since 2018, making it the biggest loser in Credit Suisse's report.

The other thing that you may find interesting from this report is the wealth/GDP ratio that they use. Household wealth and GDP tend to correlate. But the ratio of wealth to GDP also has a tendency to increase as a country develops. This makes sense because things like the rule of law and access to capital tend to increase people's willingness to invest/borrow. But in developed countries, it could also be a signal for asset inflation.

If you'd like to download a PDF of the full wealth report, click here.

Note: Credit Suisse's definition of household wealth is your typical net worth calculation: assets (financial assets and real assets) minus liabilities. For most people, the real asset part is principally housing.

Charts: Credit Suisse Global Wealth Report 2019

“People get income for doing stuff, and they get income for owning stuff. Increasingly the latter. And the ownership share of income goes to a small slice of households that own almost all the stuff.”

This is a quote from a recent article by Steve Roth over at Evonomics, where he breaks down the share of US household income that is derived from “labor” vs. “capital.” In other words, how much money do households make from working (trading their time for money) and how much do they make from their existing wealth (that is, owning stuff)?

If I were to oversimplify how he calculates this (you can read all of the details, here), it is: (Income - Labor Compensation) / Income. Take all of the household income. Subtract the money made from doing stuff. And then divide it by total income to get the percentage made from “unearned property income.” There are gray areas and others things to consider, but that’s the gist of it.

What he discovers and argues is that basically 50% of household income comes from simply being wealthy and owning stuff. He also reminds us that approximately 60% of US wealth is… “earned the old-fashioned away: it’s inherited.”