WSJ: Americans are Getting Their Finances in Shape

From Today’s WSJ:

U.S. households’ net worth—the value of homes, stocks and other investments minus debts and other liabilities—rose $1.2 trillion to $58.5 trillion from October through December, the first improvement in two quarters. The increase came as the Dow Jones Industrial Average rallied nearly 12%. A measure of households’ disposable personal income jumped, helping Americans keep a lid on debt, which fell to 113% of disposable income from 118% at the end of 2010.

5 thoughts on “WSJ: Americans are Getting Their Finances in Shape”

  1. How about finding a similar story titled “Americans Are Getting In Shape” with the body of the story talking about how people are working out more, but also eating more fast food than they used to.

    This year for my family is the last year we plan on having any debt of any kind. We are tired of any portion of our income going to interest.

  2. The financial crisis really brought home an old adage for me (can’t recall where or whom I heard it from):

    “Debt is HARD; Assets are SOFT”

    Meaning that we might think we’re sitting on great assets, but those values are more volatile than anybody imagined. Debt, on the other hand, is usually pretty static (you have to become a deadbeat to get an debt forgiveness and such).

    I saw a precipitous drop in my assets during the financial crisis and recession, making my debt levels (mortgage only) suddenly feel very out of place. Although the assets (securities and r.e.) have largely recovered, the lesson is still pretty fresh in my brain.

    I have way too much debt. In fact, I’ve decided (for the moment) that any debt is too much debt, even a mortgage. My jumbo mortgage will be with me for some time – I am not going to cash out securities to repay debt. But, debt reduction is a much higher priority now. As is having a sizable cash cushion for emergencies. The world seems very different to me now and that has affected my behavior.

  3. The folks over at Zero Hedge contend that the stock market is being artificially pumped up by money printing by the Federal Reserve. If that is the case, then any gain in “wealth” is an illusion.

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