The “Slap in the Face” Award: Why You’re 40% Poorer in 2015

Steve McDonald
by Steve McDonald

Let’s start the new year with a few cold water slaps in the face about the financial state of the little guy. If you follow my work you know this isn’t going to be pretty.

I call this the best of the “you better be sitting down for these numbers” SITFA. Or, maybe, "how to destroy your children’s futures."

First up, Americans are 40% poorer now than before the Great Recession started back in 2007.

I know the news says we are doing well. So much for the news!

Yup, 40%! The average net worth of American families’ homes, investments and liabilities is about $81,000, versus $135,000 in 2007.

And I’d believe these numbers; they are from the Fed, not some right-wing, hate-the-White-House group.

How could we have lost so much money? Easy: We are a nation of money morons. And most of the blame falls on our education system that taught us about widgets and how banks create money instead of how money really works.

Come to think of it, did you know any wealthy college instructors or professors? I doubt they knew anything about money, either.

And don’t forget our national obsession with cutting and running at the worst possible time - at the bottom of a sell-off. That didn’t help.

That alone is a giant slap in the face.

Considering those, the next slap should not be too much of a shocker.

The median amount saved by middle-income earners - not those at or below the poverty level, but the middle class in this country - between the ages of 24 and 74, is less $10,000!

I swear, I am not making any of this up - less than $10,000. That group encompasses almost the entire working part of this country.

What are these people thinking about? Obviously not 25 to 30 years at the poverty level!

The average Social Security check is about $1,200 a month. That and $10,000 should get them through about one year of 25 to 30 years of unemployment. And that one-year guesstimate assumes the roof doesn’t start leaking and there are no major medical problems.

If any one of these folks was suddenly faced with being unemployed for even one year, they’d be in a panic. But retirement? Someone else will pay for that.

I don’t get it! I know most Americans are spoiled when it comes to our sense of entitlement, but come on: $10,000 saved?

Well, at least they won’t be sued for anything.

By the way, that $10,000 number also came from a recent Fed report, not some crazy extremist with an ax to grind.

And the biggest surprise of surprises - I'm being facetious, you should be used to that by now - before we check out of this “race for the most toys,” 70% of us will require some type of long-term, inpatient care. 70%!

The most basic care is about $300 a day. Add inflation to that number and the increasing demand for the services from the 10,000 boomers who are retiring every day - 10,000 a day for 20 more years - and these costs have to go crazy.

And only 13% of us have any way to pay for it.

So, $10,000 saved to cover 25 years of unemployment, no way to pay for long-term care and 40% less wealth now than six years ago to make it all happen.

I’ve got to get another job. This is getting too depressing. I want to be one of the blissfully ignorant, too!

Welcome to 2015!

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