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Every quarter the Federal Reserve publishes the Flow of Funds Reports, in it is a very interesting section on household net worth.  The latest reports covered the period ending March 31st, 2016.  It showed household worth of 102.6 trillion an all-time record high.  Subtracting the 14.5 trillion in liabilities left a net worth of 88.1 trillion.  Of the total net worth figure 69% was in financial instruments, stocks, bonds, mutual funds and the like in various accounts including pension and retirement funds.  31.5 trillion was real tangible assets businesses and real estate of which 26 trillion was real estate proper.  What the Flow of Funds doesn’t show is how skewed income, wealth and asset distribution has become.  The CBO or Congressional Budget Office looked at this data and noted the following.  In 2013 aggregate family wealth was 67 trillion with the median family net worth of $81,000.  Breaking this distribution down further we find that the bottom 50% held just 1% of the wealth.  Of this 50% the top half had a net worth of $36,000 the bottom half or 25% of the population had a negative net worth, aka debt, of $13,000.  The 51st to 90th percentile held 23% of the net worth while the top 10% held 76% of all household net worth.  During the period 1989 through 2013 on a real or inflation adjusted basis and these figures skewed as follows.  The top 10% saw wealth increase by 54%.  The median saw just a 4% increase.  The bottom 50% saw wealth fall by 6%.  None of this is really a surprise and the Pew Foundation noted a similar reality concluding the wealth and income inequality was at record levels in the USA historically.  On the subject of history inequality such as this does not end peacefully or quietly.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast.  KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.

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