Saving up

It’s Just The Facts: December 2019

  1. SOME DO IT ON THEIR OWN – 61% of 1,000 workers surveyed in January 2019 are working with a financial advisor(s) or expect to work with an advisor(s) as they prepare for their eventual retirement (source: Employee Benefit Research Institute).
  2. MAKE IT OFFICIAL – The Federal Reserve implemented an official annual inflation target of 2% on 1/25/12 (about 8 years ago). Then Fed Chairman Ben Bernanke announced the change, moving the Fed from a “desired target range” for inflation to a “2% target inflation rate” (source: Federal Reserve).
  3. A LITTLE SURPRISING – The Fed has had 8 “tightening cycles” in the last 50 years (i.e., since 1969), including the most recent cycle that included 9 rate hikes through 12/19/18. During 6 of the 8 “tightening cycles” over the last 5 decades, the S&P 500 was “up” on a total return basis, including the last 4 cycles (source: BTN Research).
  4. THE YOUNG AND THE OLD – There were 3,791,712 births in the USA in 2018, an average of 10,388 per day. An estimated 10,100 Americans turned 65 years old each day in 2018 (source: Center for Disease Control, Government Accountability Office).
  5. WAS PRIVATE, NOW PUBLIC – The cost of tuition, fees, room and board at an average public 4-year college for the current 2019-2020 school year is $21,950. The cost of tuition, fees, room and board at an average private 4-year college for the 1999-2000 school year, i.e., 20 years ago, was $21,475 (source: College Board).
  6. THE NEW-HOME PREMIUM – The median sales price of a new home sold nationwide in October 2019 was +17% more expensive than the median sales price of an existing home sold nationwide in October 2019, i.e., $316,700 for a new home vs. $270,900 for an existing home (source: Census Bureau, National Association of Realtors).
  7. ALMOST A MILLION BUCKS – If the nation’s aggregate net worth of $113.8 trillion was spread equally across all 122.7 million US households, every American household would be worth $927,000 (source: Federal Reserve).
  8. MIND BOGGLING – Our national debt is $23.1 trillion as of Thursday 12/12/19. If the United States was to pay down the national debt by $1 million a minute, i.e., $1.44 billion a day, it would still take 44 years to extinguish $23.1 trillion of debt (source: Treasury Department).
  9. RATE HIKE CYCLE – The Federal Reserve began a rate hike cycle on 12/16/15 (4 years ago today), eventually raising short-term interest rates 9 times with the final rate hike taking place on 12/19/18. Each of the 9 rate hikes was 0.25 percentage points, a total increase of 2.25 percentage points over the 3 years. Over the entire 3-year rate hike cycle, i.e., 12/16/15 to 12/19/18, the S&P 500 gained +28.6% (total return) in aggregate, an annualized +8.7% per year (source: BTN Research).
  10. POPULATION PROFILE – 13.7% of the US population (44.7 million individuals), approximately 1 out of every 7 people, was born outside the United States (source: Census Bureau).
  11. TRADE SCHOOL, NOT COLLEGE – There are 30 million full-time jobs in the United States today (19% of all jobs nationwide) that pay at least $55,000 per year and don’t require a bachelor’s degree from college (source: Georgetown University Center on Education and Workforce).
  12. JUST THREE – The top company in the Fortune 500, an annual evaluation based upon total revenues for the previous calendar year, has been held by just 3 different companies over the 64 years that the magazine has published the rankings (source: Fortune).
  13. REAL ESTATE – Builders began construction on 876,000 single-family homes in the United States in 2018, the 7th consecutive year of increasing housing starts, i.e., 2012-2018. The peak in housing starts (1.716 million) took place in 2005 (source: Joint Center for Housing Studies of Harvard University).
  14. WAY BEHIND – After adjusting for the impact of inflation, an average millennial in 2019 has a net worth 41% less than the net worth of a similarly aged adult 30 years earlier in 1989. Millennials were born between 1981-97 and are age 22-38 in 2019 (source: Federal Reserve Bank of St. Louis)


Courtesy of Mortgage Market Guide