I was looking up the average networth of 30 year olds in the United States and it said: “The average net worth is $122,000 and the median net worth is $35,112” my brain is too smooth please help.
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Median – If you lined up every person in order of their net worth, take the guy in the very middle and use his net worth. No math involved really. You just pick the guy in the middle and that’s it.
Average (mean) – If you added up everyone’s net worth together and divided it out equally so everyone had the same amount, how much would each person have? There’s math involved with this one. Adding it up and dividing.
So what does it mean when the median is far lower than the average? Well, it means that there are a few people with loads of cash, and most people are very poor in comparison to the rich. The median will ignore the billions of dollars that the richest have as part of their net worth because they aren’t the middle guy. But the average will redistribute their wealth among everyone and that money will show up in the average! That’s why it’s so much higher.
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