wealthymatters

What Makes You Well Off In America ?

May 30, 2012 7 Comments

The calculator in the post How Wealthy Would You Have Been In America ? puts out median figures of net worth of Americans depending on age and income.The median value is the quantity lying at the midpoint of a set of observed values or quantities.

The figures in the post What Americans Consider Rich are the opinions of the people surveyed by Gallup.

The figures below reveal the ground reality.They show where ,what a person makes puts them on the income pyramid and what a person has salted away puts them on the net worth pyramid. Read more of this post

Filed under Tool Kit Tagged with Income, net worth, postaday, real worth, wealthy Americans

Julius Baer Lifestyle Index

May 29, 2012 8 Comments

The government may publish inflation figures fortnightly,but these are for industrial workers,agricultural workers etc.Inflation obviously varies depending on a persons lifestyle and consumption habits.Have you ever wondered whether there is an increase in the cost of living a luxurious lifestyle?If so by how much?

Now there is a way to answer all these questions.The Swiss Private bank Julius Baer has constructed a Lifestyle Index to capture the rise in price of luxurious living in Asia.

The Julius Baer Lifestyle Index is based on a basket of 20 luxury goods and services that represent discretionary purchases of HNWI in the four major Asian cities: Hong Kong, Shanghai, Singapore and Mumbai. Properties are accorded the highest weight of 30% and cars the next highest weight at 10%.The list does not purport to represent the comprehensive spending patterns of HNWI in the region,but rather an indication of how various items they spend on have risen by. While properties and cars have a combined 40% weight, Julius Baer has given an equal weight for the other 18 items in the index to sum to 60%. Read more of this post

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Confusing Real Wealth And Paper Wealth

May 29, 2012 9 Comments

Often people see the SENSEX/NIFTY values,property prices etc. and the GDP as one and the same or as proxies for each other.After all if the economy is good, the GDP and stock indices , property prices etc. are expected to rise.By doing so people are confusing real wealth and paper wealth.This confusion especially happens to people who own stocks.And today an increasing number of people own stocks,if not directly than through mutual funds.Incidentally, even debt mutual funds might have an equity component.In the insurance front, not just ULIPS but also the bonuses in traditional products are dependent on stock market returns.Blended funds in child plans and pensions also have an equity component.So today, many people with no intention of dabbling in stocks still have an equity exposure and are prone to confusing the rise in paper wealth due to valuation gains with a rise in real wealth. Read more of this post

Filed under Theory Tagged with asset price inflation, claims, paper wealth, postaday, real wealth

Talking To Children About Money

May 28, 2012 2 Comments

“Parents need to make talking about money a rite of passage with their children.The most successful families talk about finances early and often, making children feel involved, empowered, and better prepared for the future.”

—-Michael Farrell, Managing Director for SEI Private Wealth Managemen Read more of this post

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Doomsday Investing

May 28, 2012 1 Comment

The world economy is far from the pink of health,but I don’t think that the end of the world ,as we know it, is upon us.However I do believe in having a wealth pyramid in place.If your are coming in late,you can read more about it in an older post here: https://wealthymatters.com/2011/09/30/wealth-pyramid/#more-1948.And the time for building an ark is long before the deluge…..

The wealthiest in the world have the most to lose in a crisis.They also often care the most about not losing it all.Moreover they have the money and the contacts to put in place the most elaborate fall back plans.The following are some actions that wealthy people in different parts of the world seem to be taking to limit the damage to their fortunes.( http://www.reuters.com/article/2011/10/04/us-wealth-summit-investment-idUSTRE7933LS20111004) Why not be influenced a little bit by them?Especially with a little part of the funds lying at the bottom of the pyramid?The worst that could happen is that nothing happens and we feel foolish.On the other hand if we wait till there is blood on the streets,it might be too late to do anything much. Read more of this post