Every time a political candidate asks if you’re better off than four years ago, I can’t help but chuckle. Their implication, regardless of party, is always that you’re worse off and that they are the answer to your problems.
The Democrat argues that things went downhill under the Republican, and vice versa, and we’re often inclined to believe these claims from our favored party.
But as a rational thinker who is not easily swayed by politics, you know that most people are almost always better off today than four years ago. We can approach the argument from a financial perspective, which is straightforward to assess. Then we can consider other examples from our lives.
Are you ready to look on the bright side of things? After all, you are the answer to your problems, nobody else.
You’re Richer Four Years Later
On November 1, 2020, the S&P 500 was at 3,509. Four years later, the S&P 500 is at about 5,800. Given that the majority of us are passive index investors, the majority of our public equity investments are up ~65%.
In Q4 2020, the median home price in America was $338,600. Four years later, the median home price is over $420,000. Given that the majority of us also own real estate, we are 24% richer on average. However, if we bought our homes with a mortgage, our home equity returns are likely up 70%–110%+.
You Can’t Help But Stay Focused Financially
It is highly unlikely that readers of Financial Samurai or any other personal finance site are poorer four years later. You’ve read posts such as How To Predict A Stock Market Bottom Like Nostradamus right after COVID hit, suggesting the bottom was near and that you should be buying. At the very least, you weren’t panic selling.