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Home Ownership and
are Keys to Becoming Affluent
One of the easiest ways
for Americans to gain wealth is by purchasing a home.
That's according to
Stephen Brobeck, executive director of Consumer
Federation of America (CFA).
"Only 40% of the public understands
home equity is the most important source of wealth for the
affluent (those with assets over $100,000)," Brobeck said.
Americans define affluence by
income, not wealth, and they overestimate the difficulties of
building wealth. The key to wealth building is automatic, regular
saving deposits over many years, Brobeck said.
There is a simple way to build
wealth, according to CFA:
- Start saving
-- any amount. The
key is to start;
- Buy a house
-- start building
your down payment; and
- Participate in retirement
plans--either an employer-sponsored plan and/or individual
retirement accounts (IRAs).
overestimate [the number of] millionaires and grossly
underestimate [the number of] affluent people," said Shailesh
Mehta, chairman and CEO of Providian at the news conference.
According to a Federal Reserve
survey of consumer finances, 36% of Americans believe middle age
and older Americans have six-figure assets. In reality, 64% of
Americans older than 45-years-old have more than $100,000 net
assets. Of that wealth, 44% is in home equity; 17% in retirement
accounts; and 6% in stocks, bonds, or mutual funds.
Americans believe 15% of the U.S.
population has at least $1 million in assets. The reality--only 4%
are this wealthy. The main sources of wealth for them are business
assets and holdings of stocks, bonds, and mutual funds. They also
patiently built their assets over decades. Their wealth is due to
high incomes, education, and family inheritance.
CFA's national savings program,
America Saves, seeks to enroll 100,000 low- to- moderate-income
savers and encourage millions of Americans to build wealth.
Credit union members also have a
nationwide savings program available--The National CU Foundation's
"Plan it. Save 4 it. " It's a part of the foundation's
Building Member Wealth campaign.
(Source: Consumer Federation of
America, Credit Union National Association)
Consumer Federation of
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