25 things vanishing in America, part 2: Your net worth

Do you feel as if you're worth less than you were just one year ago? Speaking in a monetary sense, nearly all of us Americans are. Net worth, the result of that calculation which subtracts liabilities from assets to reveal true equity value, has taken a nose dive for most Americans. For some of us, the change has been negligible. For others of us, the change has been particularly devastating.

I myself have not suffered much loss in the decline of our national net worth levels. My household debt load is very light, and our meager retirement investments have always remained in very conservative portfolios. Although our household budget has taken the same beating as most budgets, reeling from reduced purchasing power and increased prices, our actual asset to liability ratio has remained fairly constant.

My net worth situation seems to be an exception to the rule, however. Perhaps that's due mainly to the fact that when the decline started to snowball, I didn't have much to begin with. However, some people have been forced to witness extreme changes in the status of their personal net worth. An article provided in February, by CBS News, paints a grim picture of America's current net worth scenario.Not surprisingly, the greatest net worth losses have been felt by people within the higher income brackets and by those who are closest to retirement age. The reasons for this are quite easily understood. These are the two groups of people who tend to have the greatest amount of capital value invested in stocks and real estate. These two investment vehicles are the most prevalent value holding structures. They are also the two value bases which have recently suffered the greatest losses.

The question of the day is, will these net worth declines continue? Of course, I don't have the answer to that. If I had to make a guess, I'd say that I think the decline will continue. I don't believe that our stock markets have bottomed out yet, and real estate values are directly tied to the broad and healthy income levels which are currently taking a beating on a nation wide scale.

Right now, the best advice I can give you is to keep eliminating debt you have on assets which historically depreciate in value. Beyond that, I'd highly recommend that you keep income creation at the forefront of your personal economic plans.

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