All sorts of numbers and predictions have been made comparing the impact of a dismal 2008 economy, but let’s examine what the losses were for the typical American in 2008:

- Stock Market: Anyone who was invested in the stock market last year probably is still cringing every time a statement arrives in the mail. The value of American’s holdings in the stock market dropped by about 40%, from $20.6 trillion to just over $12 trillion. The drop represents a combination of market losses and investors selling stock positions and moving into cash or other asset classes. These numbers are just for 2008-the market has fallen almost another 20% since then.

- Bank Balances: One of the few numbers that increased in 2008, bank deposits are up 5.5% from 2007. The main reason for this is that people bailed out of the stock market, feeling safer in cash. In addition, the savings rate in the U.S. increased dramatically during the past year, as people spent less and put some away in case of even tougher times ahead.

- Home Equity: A falling housing market meant a lower amount of equity for most Americans in their home. As of the end of 2007, Americans owned on average of 49% of their homes. During 2008, that number fell to 43%.

- Household Assets: This measure fell 15% during 2008, mostly a combination of the falling value of homes and retirement and investment accounts.

-Net Worth: The difference between assets and liabilities for Americans declined by over 11 trillion from 2007, or about 18%. The average American then suffered a decrease in their overall net worth of just under 20%.

Your personal changes in net worth last year could be much better or much worse than 18%. Several factors could affect this number for people, including geographic location, job status, whether or not you own your home, and your level of participation in the stock market.

Overall, 2008 was one of the most difficult economic years in our nation’s history. There are probably areas in your lifestyle that have changed as a result, some more dramatically than others. Although it’s hard to imagine these numbers repeating themselves in 2009, the first few months of the year indicate that we could easily see further declines in asset values and net worth this year.

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Tags: assets, Home Equity, Net Worth, stock market

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