[skx001]

https://archive.md/EzGW2

- A drop in nominal values on the same scale as the dotcom bust would wipe out $16T, or 8% of American household wealth. Foreign investors would lose $7T.

[toomuchtodo]

The wealthiest 10% of Americans own 93% of stocks even with market participation at a record high - https://finance.yahoo.com/news/wealthiest-10-americans-own-9... - January 10th, 2024

> The richest Americans own the vast majority of the US stock market, according to Fed data. The top 10% of Americans held 93% of all stocks, the highest level ever recorded. Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023.

(the vast majority of wealth for the non wealthy in the US is someone's primary residence real estate)

[coredog64]

In 2022, entry into the top decile required a net worth of $1.6M. My gut says folks in the top decile are over-represented here on HN.

https://www2.census.gov/library/publications/2024/demo/p70br...

[bachmeier]

You have to use caution when interpreting those numbers. The bottom 50% doesn't have much wealth, so a big chunk of their wealth will decrease. It also tends to be unevenly distributed, so for those trying to improve their situation (think someone 60 years old with $50K in retirement savings), it would hit really hard. Plus a lot of those people would lose their jobs when the highest 10% cut back on spending.

[czbond]

> (the vast majority of wealth for the non wealthy in the US is someone's primary residence real estate)

But this is not solely on the top 10% to be maligned. We should force everyone to save.... even $5-10/month adds up for the least privileged over time. We force everyone to immediately pay taxes because the money would not be there year end - we should do the same for saving because it is easier than changing human behaviour.

A lack of education at most societal levels to: be taught the impacts of forgoing now for later, think long term, act long term, resist impulse to spend on consumer or ego level goods for societal "approval" or mating.

Home are the primary source of wealth for families because it is forced payment.

It is what a good parent would do - and every person needs a "parent" for some aspect of our lives (we're all bad at something).

[skx001]

- The above totals do not include indirect holdings-such as investments via pension funds and life-insurance companies-of which American households have some $20T.

[IAmBroom]

Which is not to say it wouldn't have repercussions downhill from the gilded palaces, but - yeah, mostly wealth of the wealthy would be harmed.

Unfortunately, any market dip means jobs lost, at least temporarily.

I personally stay all-market, and long-term, so if anything it would be a buy opportunity for me.

[anovikov]

This is a stat that we should take with a huge grain of salt. Poorer people indirectly own stocks through their participation in various pension schemes.

[kiba]

Land prices are subject to speculative bubbles as well. The only way to get rid of speculation in the real estate market is to drive the price of land down to zero by taxing it.

You also need a lot of money to purchase land, so this effectively allows banks to make a lot of money on overly inflated price of land.

Land by itself doesn't generate wealth, only improvements on top of it does. Only problem is that we tax improvement along with the land, leading to the perverse incentive that building anything increases your tax burden. We call them property tax.

[anticorporate]

"Household wealth" is such a sneaky little phrase from the Economist to make it sounds like we're all equally exposed to this risk.

[skx001]

A rule of thumb suggested by one study is that every $100 drop in stock market wealth leads, on average, to a $3.20 drop in consumer spending. Under such an assumption, a dotcom-style crash would cut American consumption by about $890bn, or 2.9% of GDP.

[koakuma-chan]

What does "wipe out" mean? Money doesn't disappear when someone sells.

[IAmBroom]

First, wealth and money are not the same. If you live in a mansion, but your bank account is zero, you can be wealthy and money-poor at the same time.

Money isn't some fixed object, like the amount of bills in circulation. It's the gross valuation of all sales, whether you trade a dollar bill or swipe a debit card or take out a small loan with a credit card tap.

And money can disappear, if something valued at $10 only sells for $9.

[luka598]

Not sure, but one example I can think of is gov bailout, if the gov just prints the money and the asset becomes worthless.