Debt in the US is down from the bubble induced credit highs of 2007 to the lowest in 6 years. From the years post Dot-com Bust until the credit bubble burst in 2008, Americans were depleting their savings & piling up debt in record amounts. US savings went to an all time low of 1.4% of net worth. We are now back up to 5.8% of net worth.
This is helping to build some financial security for individual households. The average US household is worth $505,000 down $90,000 from the pre-crash high in 2007. If you consider our recommendation of a conservative 10% to an aggressive 20% of your net worth in a Tangible Asset Portfolio, $50,000 to $100,000 on average for each household. If every household followed this recommendation imagine the peace of mind and financial security you would enjoy.
The markets are looking at this new savings in a much different way. The Wall Street Journal wrote on the increase in savings, Joseph Carson, an economist at Alliance-Bernstein in New York told the WSJ You’ve seen a steady improvement in household balance sheets in the U.S., that should set the stage for better consumer spending in the year ahead. They went on to report he expects consumer spending to grow at an inflation-adjusted rate of 2.8% in 2011, up from 1.8% last year.
Apparently instead of holding saving levels higher and increasing, economists and Wall Street are salivating at increased spending. Sound familiar? Exactly the type of thinking which led us into the Great Recession in the first place. Those who keep their savings at the current level or higher will survive the next recessionary cycle that is guaranteed to arrive. One of the best ways to insure against future down-turns is with your own personal Tangible Asset Portfolio.
Read more here – WSJ: Families Slice Debt to Lowest in 6 Years