Can a Median Expectation set you free?
I live in a household with a teenager who knows his actual numerical rank in his class. Can you imagine that kind of pressure? The pressure to be in the top 5%, to know exactly the number of students and who precisely you are competing against to have the, I guess bragging rights and college prospects, of being in those limited top seats?
Is there any room for creativity or exploring new ideas in that intense position? Is there the promise of greater happiness than in a seat in the top 25% or even the top 40%?
There are 131 Million households in the United States. The average (mean) wealth of the TOP 5% is just over $1 Million. That means that even in the top 5% of American households (6.5 Million), some have less than $1 Million and some have more. Yet it is the top 1%, those with an average net worth of over $10 Million, that dominate our screens, our comparisons and our baseline expectations.
How much money do you think you need to make work optional (retire), start your own business or to go tiny? Does the number in your head match the top 5% of America's wealthiest households? Does this mean that you have to be in the top 5% in order to accomplish what you expect?
Confession: I am a glutten for unrealistic expectations. The bar I set for myself and my storybook life came straight out of some really idealistic 1990's scripts. It's pretty damn hard to manage all the details in order to achieve a well executed plot in which you land squarely in wealth and happy ever after at the age of 50. And it is pretty miserable all the years that the top 5% of outcomes aren't materializing. I am starting to realize that happiness lies in a lower bar and noticing the delights that do show up.
So, what if we understood the Median (mid point) wealth in an average (or even above average) larger segment of the population and stopped comparing ourselves to the minuscule minority? Could we find greater happiness in simply being the best, bravest and richest version of ourselves. The Census Bureau published the medians by percentile. Here's a refresher. The 75th percentile means that 75% of the household net worth totals are below, and 25% are above the total of $604,900. A further median breakdown by age group is in the report.
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June 2023 P70BR-183 By Briana Sullivan, Donald Hays, and Neil Bennett C
As we can see, even if we consider ourselves above average in our professional and personal achievements, our wealth is highly unlikely to soar to the total numbers we might have expected. Living in disappointment due to unrealistic expectations is a voluntary sentence. Finding financial confidence to make smart and values-based decisions for your unique life is a gift of freedom.
