When people talk about finance and economics, they bring up things like Gross Domestic Product and stocks and jobs. But, when you really get down to the essence of why people care about those things, it’s because they care about how the broader trends might directly impact them.
Do people care about what the stock market is doing? Or do they really care about whether their portfolio is up or down?
Do people care about unemployment? Or do they really care about whether or not they have a job?
The big picture is important to us because we want to know how it might affect us personally. And, believd it or not, there is an awesome metric that captures this personal impact:
Household net worth is a great thing to measure because you can quickly see how the US population is doing at a quick glance. Since the bottom of the financial crisis, net worth has basically doubled.
To me, that’s fascinating to see because the typical narrative is that the post-crisis recovery has been slow from a GDP perspective relative to history. Maybe it’s slow but at least we are still getting richer as a population - I mean, it sure beats having less money.