For wealth rebels like you and me, financial statistics help us understand our own finances better.
For us to be ahead of the curve, we need to know where the curve is. We need to know how to sort through the bulls***. That’s where statistics comes in.
For example, simply knowing about how different asset classes have performed over a period of 50 years can help you make better investment choices than those of a large part of the population out there.
Knowing key statistics on personal finance can help you set a personalized baseline for success.
Understanding the odds is what generating wealth is all about.
Enough said about the importance of finance statistics, let’s dive right in to know some of these statistics.
General Finance Statistics
1. The U.S. GDP expanded 2.3% in 2019
GDP is the value of all the goods and services produced in an economy. It gives us a perspective of how big the American economy is and how we compare it with the world.
America, the largest and richest economy in the world, grew its GDP by 2.3% in 2019. That compares with China’s 6.1%, Britain’s 1.3%, and Europe’s 1.5%.
America’s dollar GDP reached a level of $21.43 trillion followed by China at $14.14 trillion. The country’s real GDP has grown at an average rate of 3.1% from March 1948 to Dec 2019, reaching an all-time high of 13.4% in Dec 1950 and a low of -3.9% during the financial crisis in Jun 2009.
2. American Labor force is 163 million large with an unemployment rate of 3.7%
America’s economy has become much more robust than it was in the aftermath of the subprime crisis when almost one out of ten people in the labor force were unemployed.
This number is the lowest since 1970 when the unemployment rate was 4.9%. It touched a high of 9.7% in 1982 and has hovered between these numbers in the interim.
3. Average weekly earning of American employees is $973.18
An average American earns that much in a week. That data was published by the BLS (Bureau of Labor Statistics) in its latest report in Nov 2019.
This was a growth of over 3% from last year.
The report also puts some light on part-time workers (workers working 35 hours or less in a week). There are 24.8 million part-time workers in America who make an average of $272 per week.
4. Median Household income of United States is $63,179 in 2018
Median household income combines the incomes of people in a household aged 15 years and above. The data varies from state to state and some states have much higher median household income than others.
5. 11.8% of the U.S. population was living below poverty in 2018
The U.S. population poverty rate is measured in the BLS using a poverty threshold or minimum income needed to cover the basics. People with an income below the defined threshold are considered poor.
The child poverty rate, people aged below 18, was higher than the overall poverty rate at 16.2%.
Historically, the poverty rate touched a high of 22.4% in 1959 and a low of 11.1% in 1973. It declined rapidly after 1964 when the War on Poverty program was launched and has since then settled between 11% and 15%.
Personal Finance Statistics
6. More than half of Americans live paycheck to paycheck
As per a survey conducted by Charles Schwab, a whopping 59% of Americans live paycheck to paycheck. That’s glaring because it means that a large part of the country’s population is struggling to keep its expenses under control.
The same study states that only 38% of Americans have built up an emergency fund and only 28% of the survey respondents had some sort of financial plan.
Another study by NORC states that 67% of Americans will find it difficult to pay $1000 in emergencies.
Clearly, we need to work a lot more on our savings for a better financial future.
7. A third of the U.S. population has saved nothing for retirement
Around 33% of the American population has saved zero money for their retirement.
Add another 23% of the population who have saved only negligible sums for retirement, you get a worrying 56% of the population that can potentially struggle in retirement.
Asset allocation is also really important when it comes to retirement and people struggle with how much to allocate to stocks, bonds, and other assets like crypto IRAs, precious metals IRAs, and gold IRAs.
8. More than a third of American households have credit card debt
A worrisome 38% of Americans have towering high-cost credit card debt.
If the trend continues, these people will end paying a lot more than what they actually spent on their credit card in the long-term.
What should bother the Millenials and Gen Z is that with this kind of indebtedness, saving for emergencies, big crucial expenses and a distant retirement will become a lot more challenging going forward.
9. Three-fourth of Millennials lack basic financial literacy
Only 24% of the respondents in a survey conducted by NEFE (National Endowment for Financial Education) cleared a test of basic financial literacy.
That’s not it, an alarming 69% of these respondents thought they knew finance pretty well before they took the survey.
There is clearly a need to educate people on basic finances to help them get their financial lives in order.
10. More than three-fourths of home buyers purchase their home on mortgage
Of that number, 58% are still making payments for their mortgages.
The average home in the U.S. costs $234,500 and the average mortgage debt is $202,84, which varies from state to state with the highest median mortgage of $416,848 in Washington D.C. and lowest mortgage debt of $110,158 in West Virginia.
Start-up Finance Statistics
Starting your own business is one of the best ways to achieve financial freedom and grow your wealth.
Working for someone else will rarely result in millions in the bank.
If you have such plans, we present here a few start-up statistics as a heads up before you take one of the biggest steps of your life.
11. About nine-tenths of the start-ups fail; of them, 10% fail within one year while over 70% fail within 2-5 years.
However, that does not deter entrepreneurs with unique ideas and distinct sparks to start new businesses.
12. Nearly a third of small businesses get started with less than $5,000 in start-up capital and more than half (58%) get started with less than $25,000.
You don’t need huge capital investments to get your startup off the ground.
Hustle and sales can get the job done 9/10 times.
13. 75% of small businesses get started with personal savings of founders
Like we just said: you don’t need massive investments to start. If you are confident in your market research, business plan, and drive, you can turn small amounts of savings into huge profits.
14. Individual venture capital firms receive more than 1,000 proposals a year.
Businesses that require a minimum investment of $250,000 are of primary interest to them. The average funding in seed rounds for start-ups is around $2.2 million.
15. Only about 1% of the start-ups achieve unicorn status, getting valued more than a billion-dollar in any of their funding rounds.
Entrepreneur Finance Statistics
Entrepreneurs have a special place in the economy due to their unmatched dedication to building new businesses, scaling those businesses and generating a lot of employment, and adding prosperity to the nation.
Here are some good-to-know entrepreneur finance statistics that will help you enhance your knowledge of the entrepreneurial world, and become a better one yourself.
16. 62% of U.S. billionaires are self-made.
Only a fifth of the U.S. billionaires got their wealth in inheritance.
While it may be easy to claim “they’re just rich because they were born rich,” it’s actually rarely true.
Most Americans who have achieved financial success have worked for it, day in, and day out.
17. The idea of being their own boss was the biggest motivator for nearly 25% of people who became entrepreneurs.
One out of five entrepreneurs ventured into the entrepreneurship world to pursue their passion and around 6% started businesses because they were laid off from their jobs.
18. 33% of entrepreneurs have only a high-school diploma.
This means that these entrepreneurs never made it further than high school education.
19. As per The Global Entrepreneurship Index (GEI), the U.S. is the best country for entrepreneurs with an index value of 83.6.
They don’t call it the American dream for nothing, right?
20. By 2020, 27 million Americans will be self-employed.
The number currently stands at 15 million. 20% of the workers plan to completely change their careers once they get into entrepreneurship.
SaaS (Software as a Service) Finance Statistics
Established back in the 1960s when it was called a time-sharing system, software as a service became popular only in the 1990s.
The model combines convenience, security, utility, and cost-savings for businesses of all sizes. No wonder, SaaS market surpassed its revenue projections by 10% in 2018 reaching the $100 billion mark.
Because of its Business-to-business (B2B) nature, the general public doesn’t know much about SaaS, which is why we present here some important statistics specific to SaaS. Keep them in mind to flaunt your knowledge in your next friends and family gathering.
21. Microsoft leads the service providers as the biggest SaaS player followed by Salesforce at the second place and Adobe at the third place
These are some of the biggest brands in SaaS of all time. While there are thousands of others, these three giants dominate the market.
22. The public SaaS market is expected to reach $157 billion in 2020.
This will be a 149% jump from $63.19, the market size in 2014. The corporate mobile market within SaaS is estimated to reach $7.4 billion in 2021
23. Four of five businesses in the U.S. already use at least one SaaS application.
24. Nearly 40% of companies base their prices on the value provided by their product while 26% of companies rely on judgment and 25% copy the prices set by the first two kinds of companies.
25. 93% of Chief Information Officers (CIOs) have adopted or planning to adopt a cloud SaaS as per a Deloitte survey. Agility and Scalability are the most important driving factors for Cloud SaaS adoption amongst CIOs.
COVID-19 Finance Statistics
26. One in four small businesses have shut down temporarily in response to COVID-19.
27. 51% of small businesses state they can only operate for six more months (as of April 2020) if the quarantine continues before filing for bankruptcy
28. 41% of small business owners feel “uncomfortable” with their current cash flow due to the Coronavirus
The Final Word
Statistics are boring and interesting at the same time.
While the initial thought of reading through a lot of numbers puts a lot of people away, when these numbers are put into perspective, they throw up a number of eye-popping surprises.
A serious look at statistics once in a while can truly help avert some of the major problems faced by economies, businesses, and individuals alike.