Talk:Mass affluent/Archives/2012

Suggested sources for this article

If you are interested in contributing to this article, here are some of the best free information sources that I have found on the Web:

• Here come the mass affluent, CNN/Money
• Schwab: Courting The "Mass Affluent", BusinessWeek
• Wealth Management: The Race to Serve the Mass Affluent, Financetech.com
• Mass Affluent Investors Appear at Significant Risk Should Real Estate Bubble Burst, Spectrem Group
• MasterCard Analysis of Mass-Affluent Consumers Reveals Importance of Customization
• Attracting the mass-affluent (U.K.), Business.scotsman.com
• Definition of High Net Worth Individual, Investopedia.com - Includes definition of "affluent".
• You're Not Rich, but Now You Can Fake It, Slate.com
• What's (Not) the Matter With the Middle Class?, The American Prospect

If you want to buy a book on the topic, here's one:

• Mass Affluence: Seven New Rules of Marketing to Today's Consumer, Amazon.com

Differences between upper middle class and mass affluent discussion

Discuss the relevent section of the article here.

Mass affluent in the United States discussion

How did the income bar graph change since yesterday? That shouldn't have changed based on our investable assets vs. net worth discussion. JHP 01:08, 13 August 2006 (UTC)

Let me check... Signature^brendel 01:21, 13 August 2006 (UTC)

Okay, I overcounted- 23.99% had incomes between $75k and $200k-that mass affluent-sorry-I'm doing to many things at one time. Signature^brendel 01:26, 13 August 2006 (UTC)

According to the Businessweek article, there are only 22 million households in the US with $100,000 to $1,000,000 in investable assets. How many households are in the USA? JHP 01:29, 13 August 2006 (UTC)

There are 113 million so that changes the graph drastically, the article states that 33 million mass affluent households. This means only 19.46% are mass affluent. I have revised the graph again. Signature^brendel 01:30, 13 August 2006 (UTC)

I take it back. The BusinessWeek article and the Spectrum Group press release disagree, but Spectrum Group press release is newer. JHP 01:37, 13 August 2006 (UTC)

Okay, and I revised the graph. Uh... could it be the Spectrum Group release counts net worth? Becuase these two differ drastically and unless they have different definitions of mass affluent I don't see how such a discrepancy could exsist between the two. Signature^brendel 01:40, 13 August 2006 (UTC)

Sorry about the confusion. I say either revert your change or change the citation. If you change the citation, we have to remove the claim that they own 37% of America's liquid financial assets, so I say just revert. Spectrum group says it measures "investable assets". I prefer to use the newest data. JHP 01:42, 13 August 2006 (UTC)

It could be due to an increase in the stock market during that time. That will change the numbers a lot from one year to the next. JHP 01:44, 13 August 2006 (UTC)

Yeah, but 10 million households. Anyways, I agree we should use the most current data. I revised the graph again after the first of your two posts above, so it uses Spectrum. Signature^brendel 01:48, 13 August 2006 (UTC)

Mass affluent graph discussion

Gerdbrendel, thank you for doing the work of looking up the Fed data and putting together a graph. There is a flaw in the graph, though. The income bar is fine, but the net worth bar measures the wrong thing. You created a bar graph showing net worth, but the $100,000 - $1 million figure refers to investable assets (also called liquid financial assets). To get an idea of the difference between the two, read about net worth vs. financial assets.

This gets to one of the several differences between mass-affluent and upper-middle-class. Remember, mass-affluent is a marketing term. Financial service companies are interested in how much a client can invest. Money that is tied up in real estate is useless to them. Since for most Americans their home is their biggest investment, there should be fewer households with over $100,000 in investable assets than households with over $100,000 in net worth. JHP 07:50, 12 August 2006 (UTC)

Okay, I understand the difference between Net Worth and liquid assests- aw/ net worth 7% of US households are millionaires-w/ assest its 2%. I'll revise the graph. One question though, how come the table shows "Primary Residence"- I though thise referes to equity? Regards, Signature^brendel 16:38, 12 August 2006 (UTC)

The data comes from here. What it shows is that on average, people who meet the mass affluent standard ($100,000 - $1,000,000 of investable assets) have their total net worth distributed as shown in the table.

As a simplistic example, let's say we have a guy. We'll call him Mr. Massaffluent. He meets the minimum standard of being mass affluent ($100,000 in liquid financial assets), but his total net worth is divided exactly according to the mass affluent norm. According to the table, he has 22% of his total net worth in liquid financial assets (a.k.a. investable assets). So we can divide his investable assets by 22% to determine his total net worth: $100,000 / 0.22 = $454,545.45. At least, that's how I interpret the data.

Okay, the examples are true-I'm just gonna use the data from that article and revise the graph a little later tonight-according to the source primary residence equity is counted. Of course on average people who have more than $100k in home equity tend to have other assets as well. On average the mass affluent have 37% of their total wealth in equity-so actually, I thinks its net worth-becuase primary residence is included-it just so happens that those who are mass affluent also have other assets. Also, if you think about it-equity can be accessed thorugh a loan and used to say buy an investment property-real eastate is an investment so it makes sense, in a way, to count equity as it is done in the article. Anyways-the graph should be fixed later tonight. Cheers, Signature^brendel 22:43, 12 August 2006 (UTC)

I had posted a response here, but I'm not sure if I understood you correctly so I'll wait until I see the graph.

JHP 23:47, 12 August 2006 (UTC)

One final note, the net worth vs. financial assets article I pointed you to includes things like cars, furniture, and investment real estate in the measurement of financial assets, but they do not count when measuring liquid financial assets.

Of course, you can't just count people with a net worth of $454,545 and up as mass affluent, because someone who owns no house and no car could theoritically be mass affluent when having a net worth of $100,000. Someone else who has a net worth of $500,000, but has all that money tied up in his home would not be mass affluent because he has no money he can invest with a financial services company. Liquid assets give a person more flexibility than fixed assets. The key point is which people are desirable potential customers to the financial services company. -- Who has liquid financial assets that they can invest (or spend)?

JHP 19:15, 12 August 2006 (UTC)

I actually read you reponse in the history-I re-read the source and see what you mean-it is clearly stated that equity is not included. Wether or not equity is an investable assets-well not a good one-I agree. (Though lots of people finance the pucharse of investment properties through equity-the equity then gained by those investment properties yields profit if the market goes up and once the property has been sold)-anyways-I just included liquid investable assets. The graph should be allright now. Signature^brendel 00:46, 13 August 2006 (UTC)

In the millionaire article, the reason for not counting home equity toward being a millionaire is that you would have to sell your house or take out a loan to get access to the money. Since few people trade down to cheaper houses, it is rare that they get access to cash by selling. They could take out a home loan, but then they have to pay a bank every month for the priviledge of having access to their own money. In this sense, it's just a less-costly version of a credit card.

By the way, the Spectrem Group press release uses the term "investable assets" in their table, but I changed it to "liquid financial assets" in ours for two reasons. First, Wikipedia has an article for "liquid assets", but not for "investable assets". Even more importantly, I wanted to avoid an exact copying of their table for copyright reasons. JHP 04:40, 13 August 2006 (UTC)

Ture, I think liquid assets is probably the most commonly used term. As for millionaires, I understand the problem w/ equity in your primary residence-the perhaps only reasons you can count it are because a) it provides a saftey net (you can always sell your homes-and move) b) An increase in equity makes it easy to trade up c)Many people in this country do use their equity to consolidate loans (though you're right-staying out of debt is definitely prefereable ;-)) and d) It gives an inhertiance to heirs. For this particular artcile, of course, liquid assets are much more relevant as this term pertains to the marketing strategies conducted by the investment houses. In the millionaire article I think its good to have both-at least I can see both sides of the argument. Regards, Signature^brendel 05:05, 13 August 2006 (UTC)