Every year, American Express publishes an in depth “Survey of Affluence and Wealth in America.” The 2012 version is notable for the attitudinal differences between the top 1%, 10% and everyone else (aka the 90 or 99%).

A few quick bullet points:

• Incomes up 6% for top 1% in 2011. Slightly lower among everyone else;
• Investing dollars down from 71% to 39% of portfolio;
• In ‘2007 savings was only 12% among the top 1%, now at 34%;
• Even after recession ended, savings has stayed high, unlike 1981 recession when consumers spent aggressively. (back then, passive income tax rates dropped from 70% to 20%);
• Almost $6 trillion in personal savings account by year’s end. Another $3-4 trillion in cash among business. Getting 0.3% interest and not complaining

Here is how this looks graphically:

 

Click to enlarge:

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No judgement here — I simply find the differences between the top 1% and the rest of the country intriguing.

 
Previously:
Invest in stocks? FORGET ABOUT IT (May 8, 2012)

Source:
American Express Publishing and Harrison Group
The 2012 Survey of Affluence and Wealth in America
Press Webinar, May 9, 2012

Category: Digital Media, Psychology, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

22 Responses to “Is Cash the New Black?”

  1. snider92 says:

    Anyone have a link to the complete report?

  2. eddiebe says:

    Sure guys, stuff the mattress with paper IOU’s I’m sure Benny loves it, so he can devalue what you have even more. For my money, I’ll go for the gold thank you very much.

  3. Moopheus says:

    According to the BEA information they are basing these charts on, personal saving peaked (both in nominal dollars and percentage of dpi) in the middle of 2010 and has been declining since then. Consumption has been slowly increasing.

  4. DarthBeta says:

    Thorough research, really the 1% has the ability to save more, intriguing indeed.

  5. rd says:

    Does this kill “trickle down economics” for good?

    The low tax rates for the rich were touted for the past 30 years as a way of keeping money in the “job creators” hands so they would either spend the money or invest it, thereby making lots of new jobs. Last time I checked my basic economics texts, putting money into banks so that London Whales can speculate it on bond spread differences doesn’t create new jobs except for a handful of JPM traders. Dramatically increased savings in a depression is a rational move for an individual but I believe that W, Bernanke, Geithner, and Obama have all tried to get the bottom 99% to spend!spend!spend! to avoid the paradox of thrift while they shift income into the pockets of the wealthy so that they can save and increase their unproductive wealth.

  6. jaymaster says:

    Going Galt.

  7. BennyProfane says:

    Those charts are very confusing, especially the last. I’m guessing that the 90% don’t save squat.

  8. PeterR says:

    Duh, those with an abundance of cash are saving at a higher rate?

    What is so “intriguing,” Anna, about this much-to-be-expected dynamic?

    The Rich Get Richer.

    PS — To quote Anatole France, “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”

    PS2 — and to save what they don’t have!

  9. DeDude says:

    @ BennyProfane;

    The 90% save on average 10% of their income. In that group (of 90%’ers) 59% save less than 10% and 11% save more than 25% of their income. For the top 1%’ers the average is to be saving 34% of their income and 60% of them save more than 25% of their income.

  10. DeDude says:

    May I suggest that we demand that the top 1%’ers take that cash out of the mattresses and hand it over to the IRS – let these “job-creators” sleep on the job on mattresses stuffed with hay. Then “we the people’s government” can afford to create some jobs by repairing and building new infrastructure – and we will ALL be better off.

  11. Moopheus says:

    Benny–the BEA tables show the aggregate savings rate at 3.9 % of disposable (post-tax) income, for the last quarter reported. And remember that “savings” in this case, as with the Fed flow of funds report, includes debt payments (but not interest). This chart appears to gloss over that. My guess is they’re using the numbers for “net purchases of financial products” (which is declining) and lumping everything else to “savings.” Indeed, many people still have little or no savings.

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  13. cognos says:

    All working just as it should.

    Fear, creates low prices and good long-term investments.

    “Avg income” guy gets super cheap housing at 2.5% interest rates.

    In many industries its FULL employment… programmers, healthcare esp nursing, restaurants and hotels, etc.

    Grandpa invests in cash and gold. Looks back 20 years later… And wonders why he is poor.

  14. BennyProfane says:

    @DeDude and Moopheus

    Thanks. I believe Moopheus’s explanation more. If 59% of the 90% saved any kind of substantial amount, the average IRA/401k would be worth far more than the about $50,000 figure I understand is the sad reality. And, thirty percent of Boomers would not have zero savings to draw on besides Social Security.

  15. willid3 says:

    thinking that the 90% couldn’t save much any way. since they don’t have much income (and its going down) they are doing well to just survive

  16. Init4good says:

    DeDude = hit nail squarely on head. Also, Rich get richer by having better grip on their money; iow they’re cheap.

    Infrastructure = good jobs and good investment. Obama needs to grow some….

  17. constantnormal says:

    Michael Pettis’ CFA comments about China, and the savings rate there (hoarding cash counts as a form of savings), and the whole process being reinforced (if not dictated) by the imposition of below-market interest rates for extended periods, seem especially relevant here.

    http://cfapodcast.smartpros.com/web/live_events/Annual/Pettis/index.html

    It is no surprise that the velocity of money remains depressed …

    http://research.stlouisfed.org/fred2/series/M2V

    Hat tip to Stanley Kubrick … “The thing’s hollow—it goes on forever—and—oh my God—it’s full of dollars!”

    I suppose this is what it takes to allow our banksters to continue in the manner to which they have become accustomed. To do anything else would bring ruin upon them, and the Powers-That-Be would look as if they were admitting error, to change course at this point … we certainly can’t have THAT ….

  18. constantnormal says:

    cognos, you are an idiot if you think that programmers have good employment prospects. That is the case only if they are in India.

  19. constantnormal says:

    I am more worried about the present than I am the future. Unless we can get through the current situation, the future has no relevance.

    And THAT’s the kind of mindset that makes one fuggedaboud stocks and turn to cash in the mattress …

    It’s not a passing fear that can be talked down … it will take a prolonged spell of extraordinary demand for workers, paying rising wages to attract them … and what are the odds of that happening?

    All the nifty technologies that are coming are going to go nowhere if there is nobody willing to spend money on them …

  20. constantnormal says:

    It’s possible to get more than minimal interest rates without choking on risk.

    You just have to go outside the US. And stay away from the tar pits and fiscal quicksand … which is admittedly difficult, but not impossible. There are nations whose finances are under control, that have reasonable interest rates from their central banks … they are just not within the set of {US, EU, China, Japan} … Australia has a decent fiscal situation, also Chile, even Canada is not too bad, despite all the concern about a housing bubble there … I’m sure that are a few other nations where reasonable (if not excellent) rates of return are possible …

  21. dead hobo says:

    BR pondered:

    No judgement here — I simply find the differences between the top 1% and the rest of the country intriguing.

    reply:
    ——–
    Please look up the concept of disposable income and how it relates to income levels in general. Once you understand rich people have more income available for discretionary purposes than poor people, it pretty much explains your question.

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