The period since the end of the financial crisis has seen considerable growth in US household wealth, with the total sum expected to exceed $100 trillion by the end of 2019. A new report [download page, purchase required] from Packaged Facts estimates that total US household wealth in 2019 will have risen by 62% from 2010’s numbers, with the average household’s wealth expected to reach $783,000 – representing a 48% increase during the same time period.
Packaged Facts reports that in the past 9 years, the number of affluent households (those households with $150K or higher income) has increased by 90%, with average affluent net worth rising 12%. This means that the total wealth held by affluent households – a group that comprises only 14% of US the total – has more than doubled (up 110%).
Broken down even further, the number of base affluent ($150K – $249K household income), middle affluent ($250K – $499K household income) and upper affluent ($500K+ household income) households have each grown by more than 60% since 2010, with upper affluent households making up about 2% of all households in the US.
But while there are now a greater number of affluent households, growth in segments below these levels hasn’t been anywhere near as strong. In this period, non-affluent households’ wealth will have grown by a paltry 3%, contributing to greater inequality.
Despite the keen marketing interest in Millennials, the figures show that this group is lagging behind considerably. Even though household wealth for Millennials has grown a stunning 500% from 2010 to 2019, this cohort only captures 4% of total US household wealth – and just 2% of affluent household wealth.
Separating out net worth along generational lines, it’s Baby Boomers who possess more than half (54%) of all of US household wealth. Affluent Baby Boomer households also make up 57% of the total household wealth in this category, and those Boomers in high net worth households make up 56% of total household wealth.
These Baby Boomers are also spending more than the other generations, with Epsilon reporting that Boomers spend $548.1 billion annually, a figure nearly $200 billion more than the next highest spending generation (Gen X).
Gen Xers are also playing catch up with Baby Boomers as they become more established in their careers. Their wealth is expected to have grown 500% between 2010 and 2019. They possess 22% of total household wealth, putting them slightly ahead of the Silent Generation (21%).
Higher-Income Adults More Apt to Use the Internet and Mobile
Good news for digital marketers who are looking for consumers with disposable income – there is a trend towards those adult consumers with higher incomes to use the internet and mobile more than those with lower incomes. Some 90% of adults with more than $50K+ household income and 97% of affluent households ($150k+ in household income) use the internet, compared to 85% of adults with less than $50K household income. Smartphone ownership for those adults with less than $50K household income stands at 67%, per the report, while 90% of adults in $100K+ households have a smartphone.
Purchasing online is also dominated by affluent households. More than half (52%) of $250K+ household income consumers had made a purchase online within the 30 days prior to the survey, with 44% making more than 6 purchases during that time period. This is compared to 38% of all adults making an online purchase in the same 30-day period, and just 28% of adults in the <$50K bracket making at least 6 online purchases in that time.
Indeed, marketing professionals do appear to be following the money here, as advertisers are spending more of their dollars on targeting Boomers.
Other Research Highlights Growth in High Net Worth Households
It’s not just the data from Packaged Facts that illustrates the increasing number of prosperous households. New data [download page, purchase required] from Spectrem Group backs up the growth in wealth in the US, reporting that the 2.5% increase in the number of households with a net worth between $1 million and $5 million (not including their primary residence) means there are now 10.2 million in this bracket.
Here are some examples of how wealth has grown between 2017 and 2018 from Spectrem’s report:
- Growing by 200K from 2017, there were 31.2 million US households with a net worth (not including primary residence) between $100K and $1 million.
- Households with a net worth of between $5 million and $25 million, grew by 47K households to nearly 1.4 million.
- The number of households with a net worth of more than $25 million reached 173K last year, 1,000 more than the year before.