Personal Wealth

Pg 19-20 of “Who’s Sitting on Your Nest Egg?”

In January 2006, the Consumer Federation of America (CFA) and the Financial Planning Association (FPA) released two surveys on the topic or personal wealth accumulation. One survey was aimed at individual consumers and the other at financial planning professionals.

The surveys revealed that only one-half of Americans even grasp the concept or personal wealth and, surprisingly, more than 20 percent believe the most practical way to achieve wealth is to win the lottery! Among those over fifty-five years of age, that number jumps to 31 percent, a statistic that underscores what journalists and social critic H.L. Mencken once noted: “The older I get, the more I distrust the familiar doctrine that age bring wisdom.” Cartoonist Tom Wilson put it this way: “Wisdom doesn’t necessarily come with age. Sometimes age just shows up all by itself.”

According to the CFA, a nonprofit association of 300 consumer groups with combined membership in excess of 50 million, and the FPA, the membership organization for the financial planning community, only about one-half of Americans are even aware of what personal wealth constitutes. Yet, the formula for determining it is a simple one-financial assets plus home equity and other tangible assets, minus consumer debts.

Even after learning the formula, fewer than half are even aware of approximately how much wealth they have. Obviously, it’s hard to know how much money is enough if we don’t even know how much – or how little- we have already.

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