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.
In: 8
A lot of these seem more like “ELI25” rather than 5.
For median, you just line them up in size order. The one in the middle is the median.
For mean, you take an average: add them up and divide by the number of individuals.
Mean is good for things that are a little more stable. Say, the average high temperature. That gives you a good idea what the high is likely to be on a given day.
The problem is, the mean can be skewed by outliers. If you have a neighborhood where everyone except for one person is making $50k per year, but one person living up on a hill on the edge of town makes $1,000,000 per year, the mean (average) could be $100k. That’s not really a good representation – everyone except one person makes $50k. It’s just one person throwing the average off. The median (of $50k) is a better representation.
Another neighborhood where everyone makes $100k will have both a median and a mean of $100k. In that case, $100k is a good representation. And you can see how those two neighborhoods could be very different.
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.
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.
“Median” is one kind of average – it’s the number that’s smack-dab in the middle.
Another kind of average is “Mean”, which is adding up all the numbers (in this case, net worths) and dividing by the amount of things you have (in this case, thirty-year olds). I’d guess that the “average net worth” was reached by this method because all the thirty-year old tech billionaires and children of inherited wealth weight the mean towards more wealth, making up for all the thirty-year olds who are barely making minimum wage.
The third type of average is “Mode”, which looks at which value repeats itself the most, so that would be whatever minimum wage is multiplied by 35 hours a week in this case, because that’s the most common wage thirty-year olds are getting these days.
“Median” is one kind of average – it’s the number that’s smack-dab in the middle.
Another kind of average is “Mean”, which is adding up all the numbers (in this case, net worths) and dividing by the amount of things you have (in this case, thirty-year olds). I’d guess that the “average net worth” was reached by this method because all the thirty-year old tech billionaires and children of inherited wealth weight the mean towards more wealth, making up for all the thirty-year olds who are barely making minimum wage.
The third type of average is “Mode”, which looks at which value repeats itself the most, so that would be whatever minimum wage is multiplied by 35 hours a week in this case, because that’s the most common wage thirty-year olds are getting these days.
You, me, and Elon Musk are in a room.
Let’s say my net worth is $20k, yours is $30k, and Elon Musk’s is $184 billion.
The median net worth is the net worth of whichever of the 3 of us isn’t the richest or poorest.
The median net worth is that of the person who is exactly in the middle.
Half of the people are poorer, and half of the people are richer.
That’s you.
You’re the median in this example.
The median net worth is $30k.
The average net worth is all of our net worth’s pooled together and divided by 3.
The average net worth is about $61 billion.
Of note, it’s quite possible that *nobody* has the average net worth.
A lot of these seem more like “ELI25” rather than 5.
For median, you just line them up in size order. The one in the middle is the median.
For mean, you take an average: add them up and divide by the number of individuals.
Mean is good for things that are a little more stable. Say, the average high temperature. That gives you a good idea what the high is likely to be on a given day.
The problem is, the mean can be skewed by outliers. If you have a neighborhood where everyone except for one person is making $50k per year, but one person living up on a hill on the edge of town makes $1,000,000 per year, the mean (average) could be $100k. That’s not really a good representation – everyone except one person makes $50k. It’s just one person throwing the average off. The median (of $50k) is a better representation.
Another neighborhood where everyone makes $100k will have both a median and a mean of $100k. In that case, $100k is a good representation. And you can see how those two neighborhoods could be very different.
Average/Mean refers to the sum of all quantities divider by its number, i.e: mean of 2 4 6 8 10 will be 30/5=6. Median is the the middlemost number in the group, which here is 6.
Average/Mean refers to the sum of all quantities divider by its number, i.e: mean of 2 4 6 8 10 will be 30/5=6. Median is the the middlemost number in the group, which here is 6.
You, me, and Elon Musk are in a room.
Let’s say my net worth is $20k, yours is $30k, and Elon Musk’s is $184 billion.
The median net worth is the net worth of whichever of the 3 of us isn’t the richest or poorest.
The median net worth is that of the person who is exactly in the middle.
Half of the people are poorer, and half of the people are richer.
That’s you.
You’re the median in this example.
The median net worth is $30k.
The average net worth is all of our net worth’s pooled together and divided by 3.
The average net worth is about $61 billion.
Of note, it’s quite possible that *nobody* has the average net worth.
Latest Answers