One in seven U.S. households has a negative net worth, as student loans and credit cards plunge a diverse group of people—including those with good jobs—into the red.
There are really two ways to be poor. Some people just don’t earn much money. Almost 15 percent of Americans, or 47 million people, live below the poverty line1, according to the U.S. Census Bureau.
Then there are the people loaded up with debt. Even people with good jobs can owe so much on credit cards, student loans, or mortgages that, on paper, they’re worth less than zero.
About 14 percent of U.S. households fall into this category, with a negative net worth, according to an analysis this month by the New York Federal Reserve. Add up all their possessions—cash, property, retirement accounts—and subtract all their debts, and one in seven Americans ends up in the red.
Overall, U.S. households have $12.3 trillion in debt, according to another New York Fed report, released this week.
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Time For Truth: (Bloomberg) – You May Be Broke and Not Know It