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Home Ownership and
Savings
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:
Americans "grossly 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) Related
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One of the easiest ways
for Americans to gain wealth is by purchasing a home.
