Worthy: U.S. Net Worth Reaches Record High

In a year that saw the worst pandemic and economic downturn in decades, somehow Americans got wealthier overall. According to the Federal Reserve, total U.S. household net worth reached a record $123.5 trillion in the third quarter, up 7.6% from a year ago.

KTRH Money Man Pat Shinn credits three big factors for the growth in Americans' worth. First is the growing stock market. "Stock portfolios are up by 2.8-trillion dollars," he says. "Most Americans' biggest equity investment is inside their 401(k), and it's no secret if you have a 401(k) it's probably up for this year."

Shinn tells KTRH there is good reason the stock market has rebounded to record levels after plunging in the early weeks of the pandemic. "Twenty percent of the stock market is actually just in five names---Apple, Amazon, Microsoft, Facebook, and Google," he says. "And those five companies have thrived during this period."

The second major factor in Americans' larger net worth is growing home values, thanks to the surging real estate market. "For most Americans, their biggest investment is their home," says Shinn. "Nationwide home values are up 400-billion dollars over this time frame."

The third factor Shinn credits is reduced spending on leisure, which has led to more savings. "Most Americans are not traveling, they're not going to restaurants, not taking cruises, vacations, etcetera," he says. "So for many Americans, spending is down substantially."

"I've seen that in my own experience as well, as a financial advisor," says Shinn. "Our clients are not spending as much money."

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