Visual Lender’s figure clearly shows what the FED has prepared to see what kind of portfolios are being created by people in different assets, where they are willing to invest, how they keep their money. It is worth pointing out at the beginning that these information are the most interesting, not the potential ideas for the future. We have to accept that people in different income situations have different opportunities and information that would not necessarily make the same favorable opportunity available to everyone.
The average or poorer are trying to solve the basic challenges!
From the table we can see that the less money you have, the greater the proportion of your assets in cash. The reason for this is probably the lack of disinformation and the lack of financial literacy of the investor. There is a possible causal relationship between having little wealth and not trusting the players in the money market.
Housing and retirement pension is the decisive factor.
He tries to find answers to these problems. Therefore, as a first step, you want to settle your own home, get your own vehicle, accumulate a reassuring amount of cash and secure your pension in the long run. These are the basic financial culture settings , stand by mode. At this level there are no miracles, and the primary goal is not to mobilize, multiply, but to accumulate and possess the essential wealth.
Over $ 1M of wealth, they put their money in real investment
For me, this statement, on the one hand, is not surprising, and on the other hand, I would warn everyone that we are not experiencing the different features of financial literacy among the poorer and richer. It is clear that wealthier people have first solved their basic wealth needs (such as creating a home when they were born in the case of a multi-generational family).
So it is not
that the wealthier man spends less on the home than the poorer. Rather, we can see that the average or poorer mothers are deprived of their financial resources by owning a home and a car. In practice, it consumes more than 60% of the total assets.
They say that money can only be made from money. From that point on, he has been given a greater wealth, so much more than providing basic wealth to turn his money. It is in a completely different state of mind, has other information and tries other options.
The richer ones skip mediators and avoid structures
However, the compilation of the investment portfolio may be an interesting finding. We can see that the richer someone is, the more he is looking for business shares, the more he avoids structured forms of investment, where typically an intermediary can achieve results, but in return pay his fees and abandon all control.
The more limited the financial means someone has, the more they say that they choose those structured systems that require less “life-to-death investment decisions”, because someone “overheads” already has the result.
I think people can be divided into three main groups based on the table:
- group who want to own things at all costs (money, flat, car)
- who want to earn passive additional income (see investment funds)
- who want to take an active part in decision-making, risk and win (see business share)