Quantifying What Success Means, According to 2,000 Americans
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Quantifying What Success Means, According to 2,000 Americans

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The pursuit of success is a part of our cultural DNA.

Almost everyone wants to be successful – and many see it as the basis of the American Dream, which promises that every person can achieve success and prosperity through hard work, determination, and initiative.

However, despite a drive for obtaining success in our culture, the meaning of success isn’t fixed. It can be different things to different people, and there is no possible way of defining success in a way that is representative of every individual person.

Quantifying Success

Although there’s no objective definition of success, there are other ways to arrive at a more impartial meaning.

Today’s infographic from Thermosoft uses data from a survey of 2,000 Americans to show what “making it” means to them – and in the process, it gives us a baseline for what success means to the average person.

Quantifying Success: What It Means, According to 2,000 Americans

Survey respondents were asked what “making it” in America meant to them, and then that was compared to what they have.

A variety of individual factors were measured, and each fell within certain categories that could be important to one’s success, including career, family life, wealth, and travel.

Success, on Average

The survey data gives us a view of what success means, on average – and how close people are to “making it”.

Money
Respondents viewed $147,104 of income as “successful”, and this is the area people were furthest away from their ideal.

The average income of respondents was $57,426 – and 67% of respondents said that money was the major missing part of their equation for success.

Work
Respondents viewed 31 hours of work per week, a 10 minute commute, 5.3 weeks of time off, and working more from home as their ideal situation.

However, respondents were a little off on most of these measures, and far off for vacation time. The average person is working 34 hours per week, commuting 17 minutes, taking 2.8 weeks of time off, and working more from the office.

Notably, for 22% of people, a dream job was the missing part of their success equation.

Friends and Family
Respondents viewed marriage and kids, as well as four best friends, as ideal. On average, respondents fell slightly short here, though.

Property
How much would your home and vehicle be worth, if you “made it”? About $461,000 and $41,986 respectively.

Respondents fell short here, with $248,000 and $15,789 values for their home and vehicle.

What’s Missing?

Since success is subjective, the sense of what is “missing” varies considerably.

On average, income was the most important missing factor (67%) and a dream job was also a popular response (22%). Relationships and recognition were both 7%, respectively.

Answers also varied by group – for example, millennials were more likely to say their dream job was the missing factor.

While success may never be defined exactly for all people at all times, this is still an interesting amalgamation of the views that people have towards the subject.

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Household Income Distribution in the U.S. Visualized as 100 Homes

This visual breaks down U.S. household income categories as 100 homes, based on the most recent data from the U.S. Census Bureau.

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Household Income Distribution in the U.S. Visualized as 100 Homes

Income inequality and wealth disparity have been frequent topics of conversation, even before the pandemic upended the economy.

Now, rising inflation and interest rates, and a possible recession on the horizon are bringing these societal divides into sharp focus.

In the above visualization, U.S. households are parsed out into a neighborhood of 100 homes and then grouped by income brackets, using recent data from the U.S. Census Bureau.

The Neighborhood Breakdown

American households vary widely on their respective incomes. The largest cluster of homes, representing nearly 20% of all American households, are in the $25-$49.9k income bracket.

Here’s a look at the share of households in each income bracket and the number of homes they represent.

Household IncomeShare of TotalNumber of Homes
Under $25K18.1%18
$25K-$49.9K19.7%20
$50K-$74.9K16.5%17
$75K-99.9K12.2%12
$100K-$149.9K15.3%15
$150k-$199.9K8.0%8
Over $200K10.3%10

In our hypothetical neighborhood, 18 of the households are in the lowest income bracket. People in this category have a wide variety of jobs, but personal care aides, cashiers, food and beverage positions are some of the most common. As a point of reference, the poverty line for a family of four currently sits at $26,496.

On the flip side, in this small community of 100 houses, 33 earn six figures and typically have at least one family member in a corporate or medical role.

The American Middle Class

The middle class in America has shrunk significantly in the past 50 years, going from 61% of adults being middle income in 1971 to 50% in 2021.

Here’s a look at the economic class breakdowns by annual household income, based on households with three people (Note: the average U.S. household has 2.6 people):

  • Upper class: >$156,000
  • Middle class:  $52,000-$156,000
  • Lower class: <$52,000

Although these definitions and conditions don’t align exactly with the buckets we use in the main houses visualization, they come pretty close.

In the neighborhood of 100 homes, 38 homes could be considered low income, while 18 are high income. Meanwhile, sitting in the $50-149.9k middle range of household income are 44 homes.

The Larger Trends

The pandemic had an extremely adverse impact on earnings and income worldwide, and the U.S. was no exception.

Median household income decreased 2.9% to $67.5k between 2019 and 2020, the first decrease since 2014. Additionally, the number of people who worked full-time jobs, year-round decreased by around 13.7 million.

That said, when looking at the longer-term trend, the median income for those considered middle class has jumped by 50% over the last five decades. Here’s a look at the median incomes in each economic class in 1970 vs. 2020:

 1970 Median Household Income (in 2020 $)2020 Median Household Income% Change
Low Income$20,604$29,96345%
Middle Income$59,934$90,13150%
Upper Income$130,008$219,57269%

With a recession⁠ highly likely to occur in the U.S., and rising inflation causing increases in the cost of basic, everyday goods, budgets may get tighter for many households in America, and incomes are likely to be impacted as well.

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Interest Rate Hikes vs. Inflation Rate, by Country

Inflation rates are reaching multi-decade highs in some countries. How aggressive have central banks been with interest rate hikes?

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Interest Rate Hikes vs. Inflation Rate, by Country

Imagine today’s high inflation like a car speeding down a hill. In order to slow it down, you need to hit the brakes. In this case, the “brakes” are interest rate hikes intended to slow spending. However, some central banks are hitting the brakes faster than others.

This graphic uses data from central banks and government websites to show how policy interest rates and inflation rates have changed since the start of the year. It was inspired by a chart created by Macrobond.

How Do Interest Rate Hikes Combat Inflation?

To understand how interest rates influence inflation, we need to understand how inflation works. Inflation is the result of too much money chasing too few goods. Over the last several months, this has occurred amid a surge in demand and supply chain disruptions worsened by Russia’s invasion of Ukraine.

In an effort to combat inflation, central banks will raise their policy rate. This is the rate they charge commercial banks for loans or pay commercial banks for deposits. Commercial banks pass on a portion of these higher rates to their customers, which reduces the purchasing power of businesses and consumers. For example, it becomes more expensive to borrow money for a house or car.

Ultimately, interest rate hikes act to slow spending and encourage saving. This motivates companies to increase prices at a slower rate, or lower prices, to stimulate demand.

Rising Interest Rates and Inflation

With inflation rates hitting multi-decade highs in some countries, many central banks have announced interest rate hikes. Below, we show how the inflation rate and policy interest rate have changed for select countries and regions since January 2022. The jurisdictions are ordered from highest to lowest current inflation rate.

JurisdictionJan 2022 InflationMay 2022 InflationJan 2022 Policy RateJun 2022 Policy Rate
UK5.50%9.10%0.25%1.25%
U.S.7.50%8.60%0.00%-0.25%1.50%-1.75%
Euro Area5.10%8.10%0.00%0.00%
Canada5.10%7.70%0.25%1.50%
Sweden3.90%7.20%0.00%0.25%
New Zealand5.90%6.90%0.75%2.00%
Norway3.20%5.70%0.50%1.25%
Australia3.50%5.10%0.10%0.85%
Switzerland1.60%2.90%-0.75%-0.25%
Japan0.50%2.50%-0.10%-0.10%

The Euro area has 3 policy rates; the data above represents the main refinancing operations rate. Inflation data is as of May 2022 except for New Zealand and Australia, where the latest quarterly data is as of March 2022.

The U.S. Federal Reserve has been the most aggressive with its interest rate hikes. It has raised its policy rate by 1.5% since January, with half of that increase occurring at the June 2022 meeting. Jerome Powell, the Federal Reserve chair, said the committee would like to “do a little more front-end loading” to bring policy rates to normal levels. The action comes as the U.S. faces its highest inflation rate in 40 years.

On the other hand, the European Union is experiencing inflation of 8.1% but has not yet raised its policy rate. The European Central Bank has, however, provided clear forward guidance. It intends to raise rates by 0.25% in July, by a possibly larger increment in September, and with gradual but sustained increases thereafter. Clear forward guidance is intended to help people make spending and investment decisions, and avoid surprises that could disrupt markets.

Pacing Interest Rate Hikes

Raising interest rates is a fine balancing act. If central banks raise rates too quickly, it’s like slamming the brakes on that car speeding downhill: the economy could come to a standstill. This occurred in the U.S. in the 1980’s when the Federal Reserve, led by Chair Paul Volcker, raised the policy rate to 20%. The economy went into a recession, though the aggressive monetary policy did eventually tame double digit inflation.

However, if rates are raised too slowly, inflation could gather enough momentum that it becomes difficult to stop. The longer high price increases linger, the more future inflation expectations build. This can result in people buying more in anticipation of prices rising further, perpetuating high demand.

“There’s always a risk of going too far or not going far enough, and it’s going to be a very difficult judgment to make.” — Jerome Powell, U.S. Federal Reserve Chair

It’s worth noting that while central banks can influence demand through policy rates, this is only one side of the equation. Inflation is also being caused by supply chain issues, a problem that is more or less outside of the control of central banks.

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