P&G’s Hour Glass Strategy: Shrinking Middle Class

[UCGal]

[quote=flyer]Another stat to support this strategy reveals that less than 5% of US households have “investable assets” (obviously excluding real estate) of $1M+. It really amazes me that this percentage is so low.[/quote]
It doesn’t amaze me.
I’m an engineer. So my coworkers are reasonably well paid. I’m always surprised by the number of them that are NOT maxing out their 401ks. I hear about how they can’t afford it so they only put enough in to get the match. And they’re not saving or investing much outside their 401ks. It’s hard to build up $1M in investable assets if you don’t SAVE some of your income.

[Coronita]

[quote=UCGal][quote=flyer]Another stat to support this strategy reveals that less than 5% of US households have “investable assets” (obviously excluding real estate) of $1M+. It really amazes me that this percentage is so low.[/quote]
It doesn’t amaze me.
I’m an engineer. So my coworkers are reasonably well paid. I’m always surprised by the number of them that are NOT maxing out their 401ks. I hear about how they can’t afford it so they only put enough in to get the match. And they’re not saving or investing much outside their 401ks. It’s hard to build up $1M in investable assets if you don’t SAVE some of your income.[/quote]

What do they do with it? Do they all drive around in BMW’s or do they have big medical bills/dependant care bills?

Side note…I don’t know, but lately with just a slight downtick in interest rates, I’ve been spotting more euro car’s on the road the Toyota Camry’s…. And I doubt these these things are all paid off….

[Coronita]

[quote=joec]I think the hourglass has more to do with how we spend. People will still spend a lot on things they really like or hobbies and be cheap in other areas they don’t care about.

People in CV spend for stuff they don’t care about at 99 cent stores, but will still buy nice Lexuses, send their kids to private schools, property investments, fine dining, trips, etc…on the high end.

Like I use cheap 1 dollar shampoo and wear mostly cheap/free shirts. A $10 haircut is $10 too much. But I don’t mind spending on a lux car or nice tech toys…[/quote]

I disagree…The marshall’s in Solana Beach next to the Henry’s is pretty popular among some of the CV crowd.

Unfortunately, a 99 cent store probably would never make it in CV, because I believe the rent is way too high.

[Coronita]

Well, I recently visited Cleveland… Pretty damn depressing.

Well, aside the fact of the lebron james ban, a lot of old auto manufacturing just gone. I mean, the Cleveland Clinic medical facility was nice and probably the third largest employer in the state, but the parts of the city was just depressing being all shuttered up.

[UCGal]

[quote=flu]

What do they do with it? Do they all drive around in BMW’s or do they have big medical bills/dependant care bills?
[/quote]

Lots of bmw’s and audi’s in the lot. A smattering of volvo’s mixed in there. I’d say over 1/2 the cars in the lot fit that bill.

Don’t know about medical bills – but yeah, child care is probably an issue.

A couple of divorced folks where the 2 households, support payments, etc impacts their cashflow. Or having had to wipe out savings to buy out the ex.

And some of these coworkers have houses that they stretched far to get into… Carmel Valley, La Jolla, even 4S bought at peak is a stretch for a lot of engineering salaries. Perhaps I should say it’s beyond my personal comfort zone. But then again, I’m trying to save for retirement and pay off my house. Feeding that mortgage is making them cash poor and so there isn’t a lot of saving going on.

My observations are that it’s a small percentage that has $1M in investable assets.

[KSMountain]

[quote=Nor-LA-SD-GUY2]The Automation economy, I coined it first I think, anyway it does not matter.
This will be the main cause, not offshoring in the future, Robots don’t have citizenship.

http://singularityhub.com/2011/09/12/robotic-labor-taking-over-the-world-you-bet-here-are-the-details/%5B/quote%5D
The Automation economy. I like it. I have mentioned myself recently that I think this has an impact on the demise of the MC. Certainly if you’re *making* almost anything physical, robots are eying your job (or parts of it). But your article goes further to talk about service jobs.

[blahblahblah]

[quote=flu]Well, I recently visited Cleveland… Pretty damn depressing.[/quote]

Cleveland Tourism Video #1

Cleveland Tourism Video #2

[Fearful]

[quote=flyer]Another stat to support this strategy reveals that less than 5% of US households have “investable assets” (obviously excluding real estate) of $1M+. It really amazes me that this percentage is so low.[/quote]
1 out of 20 households have investable assets of more than $1M? If that’s true I am shocked it’s that high.

[Fearful]

[quote=Fearful][quote=flyer]Another stat to support this strategy reveals that less than 5% of US households have “investable assets” (obviously excluding real estate) of $1M+. It really amazes me that this percentage is so low.[/quote]
1 out of 20 households have investable assets of more than $1M? If that’s true I am shocked it’s that high.[/quote]
I’ll be damned. 5.6M households out of 113M.

[flyer]

The report I read in the WSJ actually put the number at 5.5M with investable assets of $1M+ out of around 114M households in the US, but 5.6M is even better.

Instead of saying this number “amazes” me, I should have said it alarms me, as it reveals how millions of people are still financially unprepared–for the many reasons other posters mentioned, along with many more we haven’t even touched upon. Just speaking for myself and my family, I know I’d be very concerned if we were below that seven-figure mark.

[Fearful]

[quote=flyer]The report I read in the WSJ actually put the number at 5.5M with investable assets of $1M+ out of around 114M households in the US, but 5.6M is even better.

Instead of saying this number “amazes” me, I should have said it alarms me, as it reveals how millions of people are still financially unprepared–for the many reasons other posters mentioned, along with many more we haven’t even touched upon. Just speaking for myself and my family, I know I’d be very concerned if we were below that seven-figure mark.[/quote]
The numbers I picked up were from the Census (2006-2009) and a UBS presentation. Probably older data. I would believe that both the number of households with more than $1M has gone down and that the number of households has gone up.

You wouldn’t believe how many people have essentially $zero midway through their careers. I wasn’t even particularly fortunate, just frugal and halfway wise about my investing.

[CardiffBaseball]

Dammit I’m trying to convince my kid to play ball at Case-Western Reserve and that Cleveland has a great Indie/punk scene (which it does).

We need to keep these depression things off the net. Actually I don’t think I’ll want to pony up for 4 years at a high-end institution if he doesn’t get some kind of break.

I like Cleveland but it’s awful looking in some areas.

[Coronita]

[quote=CardiffBaseball]Dammit I’m trying to convince my kid to play ball at Case-Western Reserve and that Cleveland has a great Indie/punk scene (which it does).

We need to keep these depression things off the net. Actually I don’t think I’ll want to pony up for 4 years at a high-end institution if he doesn’t get some kind of break.

I like Cleveland but it’s awful looking in some areas.[/quote]

Case has a great engineering school

[Author]

Posts