Slowly, Americans are regaining their lost wealth

This is an interesting article related to this economic bounce back. I have always said that good or bad news about the economy depends on who you talk to. Some people are so angry and yet, some are tickled pink for their own reasons.

This article is stating the fact the some of us, and I stress some of us learned how to manage our money better than others during these last fifteen months such that now, some of us are reaping the benefits. Not me of course, I’m not that savvy, or am I? Either way, there is a light at the end of the tunnel. Things are getting better but I must caution that by saying that this recovery will take a very very very long time.

In the past I’ve blogged about how we need to get used to the way things are just as we did in the ’70s. In the seventies, most of us had a credit card or two and little to zero debt. Why can’t we live like that again? I know why. Because we are used to living with ten credit cards and a mountain of debt. Ever notice the way you drive to work and the way you drive home after work? Stressed, that’s how you do it.

This economy is changing for the better but it will be years before things get back to normal. Besides, what is normal?

Read this article:

Jeannine Aversa and Dave Carpenter, AP Business Writers, On Thursday March 11, 2010, 3:27 pm
WASHINGTON (AP) — Americans are recovering their shrunken wealth — gradually.

Household net worth rose last quarter, mainly because the healing economy boosted stock portfolios. But the gain was slight. And it was less than in the previous two quarters.

The Federal Reserve said Thursday that net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. It marked the third straight quarter of gains. But economists say consumers would need a stronger and more prolonged increase in their wealth to persuade them to ratchet up spending.

Net worth had risen by a more robust 4.5 percent in the second quarter of 2009 and an even faster 5.5 percent in the third quarter. Net worth is the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards.

Even with the gain, Americans’ net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of $65.9 trillion. That illustrates Americans’ vast loss of wealth from the worst downturn since the 1930s.

Growth in stock portfolios delivered the biggest lift to net worth in the October-to-December period. The value of stocks rose by nearly 4 percent to $7.7 trillion. Higher home prices helped a bit. The value of real-estate holdings edged up 0.2 percent.


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