Succinct Summations of Week’s Events 5.18.18 (plus "How Much Money Do You Need to Be Rich?")

It's that time for the weekly summation with the positives being lower jobless claims, lower crude inventories and industrial production above expectations.  The negatives are higher yields on 10-year Treasuries, higher gas prices and lower growth in retail sales.  The bonus this week is a Bloomberg article that surveys about how much money people think they need to qualify as being rich.  This survey adds a twist by being cross-generational.  It seems there's a consistent trend that people's perception of wealth, no matter what the age group, is almost exactly $1 million dollars more than how much they think they need to be comfortable.

In 2012 AOL published a similar article with a similar survey but got slightly different results.  It found that, no matter what the income group, real wealth was perceived as having exactly twice as much money as they already had.  I wrote about the topic in my personal blog in 2013 and if anyone's curious about how the standards have changed in the past six years, I include the link below.  Meanwhile, enjoy the link to this year's survey; it is quite entertaining.

2-8-13 MGrogie: The New "Rich"

I also need to add an addendum to yesterday's post about the eBook on making money fast in the markets.  I spent some time today reviewing the book and, though I think it contains some useful information, it is essentially a commercial, giving enough to pique curiosity but not enough to be practical because, of course, they want you to buy a course.  So just a heads up -- it's not really free, they're selling.



Succinct Summations of Week’s Events 5.18.18

May 18, 2018 5:30pm by Barry Ritholtz

Succinct Summations for the week ending May 18th, 2018

Positives:

1. Same store sales growth rose 4.9% y/o/y, up 0.7% from previous 4.2% increase.
2. Jobless claims came in at 222k, sending 4-week average down 2,750 to 213,250.
3. Crude oil inventories fell 1.4 million barrels w/o/w to 432.4 million,
4. E-commerce retail sales rose 3.9% in the first quarter, up from previous quarter’s 3.2% rise.
5. Industrial production rose .7% in April, beating expectations.
6. NAHB builder survey rose to 70, up from prior revised 68.

Negatives:

1. Yield on the US 10 year Treasury bond breaks out to a 7 year high.
2. Gasoline prices rose every day this week; average per gallon price is now $2.91, up 24% y/o/y and is at the highest level since November 2014 (according to AAA).
3.Housing starts fell to 1.287 million, lower than the expected 1.336 million.
4. Retail sales rose 0.3% m/o/m as expected, down from previous .6% increase.
5.  MBA Mortgage applications fell a seasonally adjusted 2% w/o/w.
6. Business inventories remained unchanged m/o/m, lower than expected .2% rise.

Sun 5-20-18 BigPic: How Much Money Do You Need to Be Wealthy in America? - Bloomberg

(click on link above for survey graphics, text is below)

Personal Finance -- Bloomberg  

How Much Money Do You Need to Be Wealthy in America?

A few million should do it. But for some, it’s not just about the cash—it’s what you do with it.

By 

Suzanne Woolley

May 15, 2018, 7:00 AM EDT

Many Americans cite leading a stress-free life and having “peace of mind” as their personal definition of wealth. That doesn’t sound too money-centric on the face of it—until you consider that money, or specifically the lack of it, is a major source of stress.

Americans don’t like to admit that assets can buy happiness—just 11 percent of those surveyed for the second annual Modern Wealth Index from Charles Schwab chose “having lots of money” as their definition of wealth. But while most respondents selected more high-minded concepts as their keys to contentment, they weren’t afraid to put a number on what they needed to get there.

To be financially comfortable in America today requires an average of $1.4 million, up from $1.2 million a year ago, according to the survey. The net worth needed to be “wealthy”? That’s an average $2.4 million, the same as last year in the online survey of 1,000 Americans between age 21 and 75.

There were some heartening signs amid the numbers. While 18 percent defined wealth as being able to afford anything they desired, 17 percent said it was “loving relationships with family and friends.” That jibes with how Joe Duran, chief executive officer of money manager United Capital, said he likes to think of “wealth.” After building and selling his first company, “I realized that money is nothing more than fuel,” he said. “It is a resource that lets you have choices, but if you don’t think about what you are working for, you will die rich but not live rich.”

The survey asked people to choose which of the below statements came closest to their personal definition of wealth. When asked about what made respondents feel “wealthy” in their daily lives, the survey found that spending time with family was most commonly cited, at 62 percent overall. That was followed by what can be the most elusive of things, cited at about the same level across generations: “taking time for myself,” which came in at 55 percent. Hard to do either of those without some bank, though.

Life’s little luxuries matter, too—but they are called “luxuries” for a reason. Having meals out or food delivered made 41 percent of people feel “wealthy” in their daily lives. Even services such as Netflix, Spotify or Amazon Prime made life feel richer for an overall 33 percent—particularly for millennials, at 44 percent, compared with 29 percent and 23 percent for Generation X and baby boomers, respectively. Write-in comments for what made people feel “wealthy” included “access to healthcare,” “being able to help close friends and family financially” and “just waking up in the morning.” Only one of those doesn’t require money—sort of. 

Millennials displayed some youthful optimism when it came to their financial future. Some 64 percent of twenty- and thirty-somethings believe they’ll be wealthy (the cash kind) at some point in their lives, compared with 22 percent of boomers. Maybe better financial habits will help that happen, since more millennials than boomers said they regularly rebalance their portfolio—49 percent compared with 43 percent, respectively. The same percentage of millennials and boomers, 24 percent, felt “very confident” about reaching financial goals.

In line with many other surveys put out by financial services firms, the Schwab survey stresses how people who have a written financial plan feel more stable and are more on top of their daily finances. Some 52 percent of boomers, however, said they didn’t have a plan because they didn’t have enough money to need a plan. People that chose “other” to explain why they lacked a financial plan wrote in responses such as “I have trust issues with financial people, especially after the 2008 crisis” and “all my information has been compromised by criminals.” Not a lot of “peace of mind” there.

Still, in these troubled times, there is hope. The survey found that the American Dream is not dead, at least the one that dictates that making money is indeed the path to bliss. Some 49 percent of respondents said that saving and investing is “the key to wealth,” with another 40 percent choosing “hard work.”

Eleven percent, however, cited luck.

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