The chart below shows the wealth components of Americans. What is the difference between the Top 0.1% and the bottom 50%? Why? What are the lessons?

The top 0.1% hold less than 15% of their net worth in physical items.  (Real estate and Consumer Durable goods).

The bottom 50% hold almost 75% of net worth in physical items  (Real estate and Consumer Durable goods).

Why?

All animals including humans have evolved to be territorial and possessive about physical items; land, food, water, and shelter. It was about survival.

The most powerful and richest empires ruled over large swathes of land and accumulated all things precious that could be touched and felt.

For thousands of years, wealth was synonymous with physical items.

Humans broke away from other animals, and we have created an entire asset class that exists only in imagination (Equities, mutual funds, pensions, and private business).

Imagination is unlimited but reality has limitations.

The top 0.1% hold the majority of their wealth in imagination.

What about you?

1. How does your net worth stack up?
2. Are you living in the past?
3. Have you got the balance right?

That is it for today, see you next time.

Note: Views are personal and certainly not investment advice.

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