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A bit OT: How much CASH does the average American adult have?

A buddy of mine and I had an intersting convo at work yesterday. He had heard/read that the average American adult has a cash balance of $20,000 in the bank. I was blown away by such a high number, and disputed its validity immediately. After getting home to crunch some numbers, I have calculated that if 65% of this nation is over age 18, then $20k each gets us to a total of about $4 trillion in personal cash assets. Anyone have a better guess/estimate on how much actual CASH (not net worth or 401k balances) the average adult American holds?

Comments

  • BearBear Posts: 18,954 ✭✭
    Perhaps that sum represents pension plan 401Ks, money in the bank

    and what is collected and sitting in old milk bottles.
    There once was a place called
    Camelotimage
  • gecko109gecko109 Posts: 8,231
    Bear, I even asked him if he meant net worth, or at least the total value of all liquid assets such as 401k's. He said that the number he had heard was strictly cash only.
  • leftofdialleftofdial Posts: 442 ✭✭
    I think Bear is clarifying to differentiate betwen cash meaning actual USD laying around vs. any kind of paper numbers in accounts , regardless if IRA, 401K, Savings acct, checking balance, etc...



  • OPAOPA Posts: 17,104 ✭✭✭✭✭
    I'll ask Bill Gates for his opinion, that should give us a more reasonable amount.image
    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • gsa1fangsa1fan Posts: 5,566 ✭✭✭
    No way $20K liquid cash in the bank average. Most I know 2K would be a stretch.

    I'm talking about sitting in a savings or checking account. Not CD's etc..
    Avid collector of GSA's.
  • gecko109gecko109 Posts: 8,231


    << <i>I think Bear is clarifying to differentiate betwen cash meaning actual USD laying around vs. any kind of paper numbers in accounts , regardless if IRA, 401K, Savings acct, checking balance, etc... >>




    It goes without saying that it is impossible to arrive at those numbers with physical cash. There is only around a total of $2 trillion in total money stock. We are way over that number. I asked my friend to clarify...he said $20,000 in cash in a bank account........above/beyond the value of any retirement accounts such as 401k.

    So to clarify even further.......does the average American have a total of $20,000 in liquid cash in his/her savings and/or checking accounts right at this moment? I highly doubt it.
  • gecko109gecko109 Posts: 8,231


    << <i>I'll ask Bill Gates for his opinion, that should give us a more reasonable amount.image >>




    And then i'll go survey the Chicago ghettos and we'll compare numbers.


    By the way, the VAST majority of Gates' wealth is in company stock....not cash....which is the subject of this discussion.
  • WeissWeiss Posts: 9,924 ✭✭✭✭✭
    Mean, median, or mode?

    I suspect a "typical" 40-something white male, some college, home buyer, has less than $5k in readily accessible cash.

    http://en.wikipedia.org/wiki/Average_Joe#Income
    We are like children who look at print and see a serpent in the last letter but one, and a sword in the last.
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  • secondrepublicsecondrepublic Posts: 2,619 ✭✭✭
    Way under $20,000.
    More than half this country lives paycheck to paycheck.
    And most of the rich don't keep tons of cash sitting around earning 1% interest, either.
    "Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
  • TWQGTWQG Posts: 3,145 ✭✭
    I can't imagine that 20K value is correct. I'd bet the real number is more like 2K if that.
  • aj2525raj2525r Posts: 120 ✭✭
    Hello,

    Maybe someone took the amount of money that supposedly sits in passbook savings and checking accounts and divided by the adult population.

    I've heard the amount of money in those accounts and it is in the Trillions. Considering the current interest rates a lot of people are accepting very little return for FDIC insured safety.

    Hmm, bankrate thinks those who save have a lot
    Link to bankrate article

    Whereas Answers.com thinks it is very little
    Answers.com

    Depends on who you ask and what question you ask them.

    Informal poll: I'm pretty happy to have a bit north of $7K in my checking account after just having entered everything into the register.
    I still call my accumulation my collection!
  • I think you should probably have asked for a source. I think it is significantly less than $20k.
  • storm888storm888 Posts: 11,701 ✭✭✭

    There are few "average" folks on this board. They likely have
    a lot more cash than most folks; they can certainly raise LOTS
    more cash than most folks.

    Wealthy/rich folks DO keep lots of cash.

    My WAG is that most folks have almost NO cash stashed away;
    certainly not $20K.

    Most working folks would starve in less than six-months, if they
    lost their job and the govt refused to feed them.

    ..........................................

    Some Fed Numbers From 2009:



    According to the Federal Reserve, there was $908.6 billion in the M0 supply stream as of July 2009 [source: Federal Reserve].

    According to the CIA, there were 307,212,123 Americans alive that month [source: CIA].

    If you took all the cash and divided it up equally, each person should have about $3,000 in cash.

    The Federal Reserve says that at any given time, between one-half and two-thirds of the M0 money stock of U.S. dollars is held overseas [source: Federal Reserve].

    The rest of the money is held in bank accounts of various types, and the Federal Reserve tracks these funds in three different values known as the M1, M2 and M3 money supplies:

    M1 represents all of the currency in the M0 money supply, plus all of the money held in checking accounts and other checkable accounts, as well as all of the money in travelers' checks. In July 2009, the M1 money supply for U.S. dollars equaled about $1,655.6 billion [source: Federal Reserve].

    M2 is the M1 supply, plus all of the money held in money market funds, savings accounts and small CDs. In July 2009, the M2 money supply was about $8,326.8 billion [source: Federal Reserve].

    M3 is M2 plus all of the large CDs. As of March 2006, the Fed no longer tracks the M3 money stock as an economic indicator. That month, M3 totaled around $10.3 trillion [source: St. Louis Fed].

    All of the U.S. dollars in the world in July 2009 totaled about $8.3 trillion [source: Federal Reserve].



    ..................


    It is not possible that non-saving/spendthrift/dole-addicted Americans own $20K.










    Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
  • OldEastsideOldEastside Posts: 4,602 ✭✭✭✭✭
    This is a very interesting question, I look forward to all comments.
    Promote the Hobby


  • << <i>According to the Federal Reserve, there was $908.6 billion in the M0 supply stream as of July 2009 [source: Federal Reserve].

    According to the CIA, there were 307,212,123 Americans alive that month [source: CIA].

    If you took all the cash and divided it up equally, each person should have about $3,000 in cash. >>



    I believe he was talking about adults.

    According to the CIA fact book, people aged 15+ represent 79.9% of the population. A rough estimate of 18+ would put that number at around 75%.

  • RedTigerRedTiger Posts: 5,608
    It is a meaningless number. One guy with ten million in the bank boosts the average for everyone else, the median would likely be much lower even if the made up number is correct. Hear say numbers or stats tend to be near useless, because folks have so much bad info, and misremember good info. There are also all the business accounts which are mostly in cash or equivalents, and they might be factored into the "average American." There are also retirement accounts in CDs and similar, and there is a lot of money there. A lot.

    Anyway, I didn't find a number in a quick search. How a person defines "cash" is so fungible, and do business accounts count? Do retirement accounts count? In anycase, it might be difficult to compile an accurate number because of privacy concerns.

    Some more widely known and accepted numbers are that credit card debt averages $14k per household that carries a balance, which is about a third of all households. That third of the country pays an average of 14% a year in interest, or about $2k in interest every year. About 70% of households have credit cards, about half of them pay off every month, half carry a balance. The percentage and number of folks with cards is declining because of a number of factors.

    Another survey found an average of $104 of cash in the wallet or purse, but I think that may skew high because of online sampling. Poor folks tend to be ashamed to say they have nothing and will not reply. That could be the case with the $20k answer coming from some online survey that wasn't scientific, but just took numbers from anonymous replies and averaged them without filters, without documentation. A few jokers lying and putting in seven figures would skew the results and make the number worthless.

  • dragondragon Posts: 4,548 ✭✭
    <<< He had heard/read that the average American adult has a cash balance of $20,000 in the bank. >>>



    My guess is the 'average American adult' doesn't even have a total net worth of $20,000.00 much less that amount in liquid funds.
  • dragondragon Posts: 4,548 ✭✭
    <<< He had heard/read that the average American adult has a cash balance of $20,000 in the bank. >>>






    Perhaps he meant credit card balance, not cash balance. image
  • JustacommemanJustacommeman Posts: 22,847 ✭✭✭✭✭
    I recently read that most Americans have less then 25k saved for retirement.

    source

    MJ
    Walker Proof Digital Album
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  • $20k sounds way too high for the average joe to me.
  • dontippetdontippet Posts: 2,581 ✭✭✭✭


    << <i>Mean, median, or mode?

    I suspect a "typical" 40-something white male, some college, home buyer, has less than $5k in readily accessible cash.

    http://en.wikipedia.org/wiki/Average_Joe#Income >>



    I fit this description perfectly, and am not strapped for money at all. But, I rarely have more than $5k in my checking account, and if I do, it is right after the first of the month, and the money is on its way out as quickly as it came into the account. Personally, I don't understand why anyone would have $20k of cash in their bank account. I understand the rainy day theory and the need to have six months of salary that can be accessed quickly, but my credit cards and my 401k can be accessed fairly quickly if I needed to replace my income.
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  • dragondragon Posts: 4,548 ✭✭


    << <i>I recently read that most Americans have less then 25k saved for retirement.

    source

    MJ >>









    I think those stats are way off considering the millions of those still out of work, foreclosed upon, or both. The great majority of those have probably (and unfortunately) ripped through most or all of their retirement accounts by now.
  • Downtown1974Downtown1974 Posts: 6,688 ✭✭✭✭✭


    << <i>

    << <i> Personally, I don't understand why anyone would have $20k of cash in their bank account. I understand the rainy day theory and the need to have six months of salary that can be accessed quickly, but my credit cards and my 401k can be accessed fairly quickly if I needed to replace my income. >>



    I would rather have 20k in the bank earning .50% interest than racking up 20k in credit card debt that I have to pay 18% interest on. As far as 401ks go, IMO it should not be viewed as readily available funds. I think that an emergency fund is crucial and is essential for everyone to obtain. Not for the interest you will make off of it, but for the peace of mind.
  • AhrensdadAhrensdad Posts: 2,583 ✭✭✭
    I would say the average J6P has between $2k-$5k in savings (cash, checking/savings account or CD's). This number probably jumps to $20k if we add in 401(k) and that's probably too high.
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  • bestmrbestmr Posts: 1,761 ✭✭✭
    No way. If I had 20k in cash, I'd be pretty well off. I agree with most everyone else saying that the average person has around 2k.
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  • ranshdowranshdow Posts: 1,431 ✭✭✭✭
    I expect to hit 20k in cash by mid year. Currently a little north of 16k.

    This does not include any retirement assets, bullion, or collectibles. Just cold hard (electronic) cash.

    Is it enough? Not really. I view the cash pile as the first line of defense protecting the above. I haven't done the math in a while but I suspect I'd run through it in six months if I were immediately unemployed, without any other source of income.

    Am I average? No. Late 30's, renter, employed professional in one of the most expensive metropolitan areas of the US. But it wouldn't surprise me in the least if there were a metric a**ton of old folks sitting on huge piles of cash which would skew even the median.

  • secondrepublicsecondrepublic Posts: 2,619 ✭✭✭


    << <i> it wouldn't surprise me in the least if there were a metric a**ton of old folks sitting on huge piles of cash which would skew even the median. >>



    Good point. Retirees and older people tend to have bigger cash positions.

    However, as to another earlier point about looking at the total supply of cash "out there" and dividing by number of Americans. That doesn't work because companies and institutions keep lots of cash around too. Big companies often have millions or billions in cash, and other entities -- including even things like condo associations -- often keep large cash reserves.
    "Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
  • I'm currently 27 married, just had my second daughter this weekend! My wife and I make about 75,000 combined, live in a good neighborhood in the midwest. Currently am sitting on 26oz of gold, 20oz of silver, and about $23,000 in cash. Have no debt other then our 180,000 house payment. I don't think i'm above avg by any means, but from the people around here and some friends of ours, i would be willing to bet the avg cash holding is in the 2,000-3,000 range. Just seems to me, people we know are just working to get by and pay bills and have put retirement and savings on the back burner! Sad to see to be honest!
    "When someone tells you nothing is impossible, ask them to dribble a football"

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  • RedTigerRedTiger Posts: 5,608


    << <i>I'm currently 27 married, just had my second daughter this weekend! My wife and I make about 75,000 combined, live in a good neighborhood in the midwest. Currently am sitting on 26oz of gold, 20oz of silver, and about $23,000 in cash. Have no debt other then our 180,000 house payment. I don't think i'm above avg by any means, but from the people around here and some friends of ours, i would be willing to bet the avg cash holding is in the 2,000-3,000 range. Just seems to me, people we know are just working to get by and pay bills and have put retirement and savings on the back burner! Sad to see to be honest! >>



    Congratulations on the new baby. You sir are way above average. Median household income is about $50k. That pile of gold probably puts you in the top 3% of Americans, and top 0.1% for your age group. That cash pile probably the top 20% overall and top 3% for your age group.
  • DrBusterDrBuster Posts: 5,301 ✭✭✭✭✭
    I got a few hundred in change laying around the house that's spenders. Anybody counting those change jars too? Last year I cashed in coins for a $600+ set of tires and didn't touch anything over a quarter. I do not count that change though as cash-assets.

    We did blow through about 17k in cash last year though for some failed IVF. Them's wife dollars though.

  • secondrepublicsecondrepublic Posts: 2,619 ✭✭✭


    << <i>I'm currently 27 married, just had my second daughter this weekend! My wife and I make about 75,000 combined, live in a good neighborhood in the midwest. Currently am sitting on 26oz of gold, 20oz of silver, and about $23,000 in cash. Have no debt other then our 180,000 house payment. I don't think i'm above avg by any means, but from the people around here and some friends of ours, i would be willing to bet the avg cash holding is in the 2,000-3,000 range. Just seems to me, people we know are just working to get by and pay bills and have put retirement and savings on the back burner! Sad to see to be honest! >>



    Wow - you're doing great at your age. Much better than 90% of the people out there. $75k will get you a lot in some parts of the Midwest, though not here in Chicago.

    Congrats on the baby!
    "Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
  • Thanks for the kind words RedTiger! I didnt want to come across as i was bragging or boasting, just thought i would chime in, on where our family is at, and maybe get others to let us know what its like for different ages and different parts of the country! Thanks again for the congrats!
    "When someone tells you nothing is impossible, ask them to dribble a football"

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  • Thanks secondrepublic! We live in northwest missouri! Cost of living is pretty low around here!
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  • Downtown1974Downtown1974 Posts: 6,688 ✭✭✭✭✭
    DrBuster, My wife and I do that too. We save our silver change all year, then cash it in around the first week in December and put it towards Christmas shopping. Usually its around $400. Nice little Christmas club.
  • yellowkidyellowkid Posts: 5,486
    "They" used to say that you should keep the equivalent of six months salary available for rainy days. Probably harder to do these days.

    My town has a real cross section of people, from welfare recipients to millionaires with lake front homes, and I know many in both camps. I am surprised at the number of people towards the lower end who do have money saved, and those nearer the other extreme who don't. One friend and his wife make over 500k between them, and probably more. He says "I can't save any money," and then will go on to list the middle six figure mortgage on the house, a smaller one for the summer house, until last summer a half share in an airplane, a month in Hawaii every winter, golf trips to Scotland, and on and on. He likes to blame his wifeimage

    When I was still working I was always "cash poor," I had a good size retirement account from my early thirties on but everything else went for collectibles!
  • derrybderryb Posts: 36,072 ✭✭✭✭✭
    If the average American had $20k saved up there would be no housing or Bernanke crisis.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • BaleyBaley Posts: 22,658 ✭✭✭✭✭
    It's prudent to keep some crispy small bills, coins, and bars on hand

    image

    and be able to access more with a phone call or a visit somewhere.

    We know the average reader of this forum are above average in preparedness.

    I'd say the "Average American" has maybe $200 in cash within reach, can lay hands on $3000 more on short notice, and could raise $15k with a little more advance planning (but not having to sell "stuff" like personal posessions). Note that the average is skewed by some high rollers on the right side of the bell curve. The median numbers would be lower, IMO.

    Liberty: Parent of Science & Industry

  • gecko109gecko109 Posts: 8,231


    << <i>

    << <i>I'm currently 27 married, just had my second daughter this weekend! My wife and I make about 75,000 combined, live in a good neighborhood in the midwest. Currently am sitting on 26oz of gold, 20oz of silver, and about $23,000 in cash. Have no debt other then our 180,000 house payment. I don't think i'm above avg by any means, but from the people around here and some friends of ours, i would be willing to bet the avg cash holding is in the 2,000-3,000 range. Just seems to me, people we know are just working to get by and pay bills and have put retirement and savings on the back burner! Sad to see to be honest! >>



    Congratulations on the new baby. You sir are way above average. Median household income is about $50k. That pile of gold probably puts you in the top 3% of Americans, and top 0.1% for your age group. That cash pile probably the top 20% overall and top 3% for your age group. >>




    Agree on all points.
  • gecko109gecko109 Posts: 8,231


    << <i>Thanks for the kind words RedTiger! I didnt want to come across as i was bragging or boasting, just thought i would chime in, on where our family is at, and maybe get others to let us know what its like for different ages and different parts of the country! Thanks again for the congrats! >>




    Ok, i'll bite. Married, both work, both are 36, 1 young son, $178k household income. We too live in the midwest (Chicago) and have about $70k in physical bullion along with $110k-$130k in retirement accounts thus far. Now for the funny part.....we never have more than $5k or $6k in cash in the bank at any time! We give alot of money away to family, and we probably eat out far too much. In reality, I dont know where all the money goes! We have a relatively small mortgage ($1630), but car notes that would make most people blush ($1300). I would think that overall (except for the income), we are about "average" for our age group.

    Now, to be fair, it wouldnt take very much to have $20,000 in the bank.....but I cannot bring myself to let that much money sit in a 1% interest bearing account when there is gold and silver to be bought up. My brother is the polar opposite of me. He is 33, has about half the household income we have, and has north of $80,000 cash in the bank. He has zero metal, and zero retirement accounts though. I guess the moral is that its not "difficult" to aquire $20k in cash, but the question is at what sacrifice would you make to accomplish this? And just how important is actual cash to you?
  • A few years ago I used to be a service tech for RESIDENTIAL HVAC and refrigeration, it was always interesting to go to the "Rich" side of town when they had an A/C or Furnace issues, most of them would pay with Credit Card...rarely debit, cash, or check. I think this speaks volumns to how alot of people in the US spend money. I think the average American is way over burdened with Credit card debt to have 20K in the bank.....I bet alot of them have 20K of accessible credit to them but not cold hard cash. I grew up being taught that credit was the devil I do have an emergency card for travel, however I do most everything with cash or Debit. I think people treat their line of credit or credit available to them as a make shift savings account.
    theres no such thing as a stupid question is there?
  • AUandAGAUandAG Posts: 24,506 ✭✭✭✭✭
    I'd like to see where he got that information. I'll bet the average adult has under $2,500 in cash.

    bobimage
    Registry: CC lowballs (boblindstrom), [email protected]
  • I've got the cash cow!image
  • mhammermanmhammerman Posts: 3,769 ✭✭✭
    "I've got the cash cow!"

    Wow...I've been lookin' for one of those!
  • Not sure but I heard that 56% of ALL American FAMILIES have less than $25,000 set aside for retirement. image
  • BearBear Posts: 18,954 ✭✭
    Nothing like a retirement fund of 25,000 dollars.

    Why you could be retired for 4-8 whole months

    if you include social security. I guess after that you

    are supposed to evaporate like the morning mist.image


    Actually it is a rather sad commentary on the present

    state of affairs of the American working people. They

    are scrambling to just hang on, let alone fund a retirement

    fund.
    There once was a place called
    Camelotimage
  • DrBusterDrBuster Posts: 5,301 ✭✭✭✭✭


    << <i>DrBuster, My wife and I do that too. We save our silver change all year, then cash it in around the first week in December and put it towards Christmas shopping. Usually its around $400. Nice little Christmas club. >>



    Yeah it's a nice thing. I wish my wife used cash and threw on the jar pile. It's all me.

  • jdimmickjdimmick Posts: 9,582 ✭✭✭✭✭
    Most of the people coming into the store selling, theyd be lucky if they had 200 bucks.

    even most of my stronger hands that buy gold/silver dont have 20k liquid.

    Then on the other hand I have a few customers that have 500k liquid, ( I mean in cash) on hand.

  • JCMhoustonJCMhouston Posts: 5,306 ✭✭✭
    I almost never have $20k in cash, and I make a pretty good living, maybe top 2% or so. Now my retirement account (and my wifes) is very well funded, and I have bits and pieces of shiny metal laying around that could be easily converted to coin of the realm, but rarely would we keep $20k in checking or savings accounts. Even when bonus time comes around we always have an investment plan ready to go for it.

    As for a median income family in the US I would be very surprised if most could lay hands on $2500 (of their own money) with a days notice.
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