The Profile Of An Average Wealthy American

Here's your chance to compare yourself against the average wealthy American, who can be defined as a person with assets amounting to $1,000,000 and with $200,000 in debts, for a net worth of $800,000.

Forty percent of that million dollars in assets ($400,000) are actually in financial assets while the remainder is generally in non-financial assets like property. And the $200,000 in debt is also mostly in properties.

The average wealthy American has only 11% of his assets in individual stocks while 36% is either in retirement accounts or being managed by someone else such as in mutual funds.

Of the $400,000 in financial assets, here is a rough breakdown of how that money is invested:

$84,000 is in Retirement Accounts
$60,000 is in Mutual Funds
$48,000 is earning interest in money market funds or CDs
$60,000 is in Bonds
$44,000 is in Stocks
$16,000 is in cash value Life Insurance
$88,000 is in other things like savings bonds or partnerships

So we can see from these numbers that the average investor would be far better off by devoting his or her time to allocating their assets rather than trying to pick the next big stock winner!

As for non-financial assets, here's what the average Wealthy American has:

$192,000 in a Home
$168,000 Equity in a business
$108,000 in a second residential property
$78,000 in non-residential property
$18,000 in Vehicles
$30,000 in other things such as jewelry, artwork, collectibles, etc.

It is interesting to note that the median value of vehicles they own is merely $18,000 - which goes to show that as a rule, wealthy people don't drive rich because they know that a fancy car's depreciation in value will only slow down their wealth creation.

Some other interesting facts about wealthy Americans:

The self-employed are the wealthy people of America. The average net worth of a family where the head of the family works for someone else is $52,400. In the case of the self-employed, the average net worth is $248,100.

All of the wealth in America is concentrated among homeowners, and the difference is amazing. The average homeowner's net worth is $132,000, while the average renter's net worth is a measly $4,200.

Education is also valuable. The net worth where the family head did not graduate from high school is only $21,000. But the net worth where the family head did graduate from college is $146,800.

So what should you do with this information?... Well first of all, you should take a look at your own assets and see how you compare. It may be an eye opening experience - or, you may be pleasantly surprised.

While there is no "magic formula" that will work for everyone, we can see from these numbers that the average wealthy American spends more time on asset allocation than you may think. Also, the average wealthy American does not live beyond his means, which means he has NO credit card debt, and he also passes on expensive cars!

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