Written By: Jay L. Zagorsky
How accurate are individuals’ perceptions of their wealth holdings? Data from the National Longitudinal Surveys show approximately 70% of all respondents believe they hold far less and 25% believe they hold far more wealth than they actually possess. For every dollar of wealth owned, typical individuals believe they hold only 62 cents. Increasing an individual’s wealth by one dollar raises perceptions by just 27 cents. Most individuals need to calculate their net worth to correct their perceptions. Results show older individuals have a smaller perception gap than younger individuals, and Blacks and Hispanics have a higher perception gap than whites. Key Words: Net worth, Perceptions, Attitudes, National Longitudinal Survey
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