Datastream
The State of Household Debt in America
The Briefing
- U.S. household debt stands at $14.56 trillion, and has doubled since 2003
- Student loan debt has expanded a colossal 550% in the same time frame
The State of Household Debt in America
American households are becoming increasingly indebted.
In 2003, total household debt was $7.23 trillion, but that figure has recently doubled to $14.56 trillion in 2020. With just under 130 million households in the country, this equates to an average of $118,000 of debt per household.
Here’s how the various forms of U.S. household debt compare.
| Type of Debt | 2003 (in trillions) | 2020 (in trillions) | % Growth |
|---|---|---|---|
| Mortgage | $4.94 | $10.04 | +103% |
| Home Equity Revolving | $0.24 | $0.35 | +45% |
| Auto Loan | $0.64 | $1.37 | +137% |
| Credit Card | $0.69 | $0.82 | +18% |
| Student Loan | $0.24 | $1.56 | +550% |
| Other | $0.48 | $0.42 | -12% |
| Total | $7.23 | $14.46 | 100% |
Mortgages: Steep Price to Pay for Home Ownership
Making up roughly 70% of all household debt, and growing $5.1 trillion since 2003, mortgage debt now stands at $10.04 trillion.
A fundamental driver of mortgage activity is interest rates. Given the two variables tend to have an inverse relationship with one another, interest rates have a big impact on the affordability of housing. As long as U.S. interest rates remain near 200-year lows, its likely mortgages will maintain at elevated levels.
Students Continue Struggling with Student Debt
The second-largest form of debt is student loans. Although not quite the size of mortgages in raw dollars, student debt is the fastest growing as a percentage, having shot up 550% from 2003 to 2020.
The topic of debt is highly discussed in today’s political and economic climate. That’s largely because debt has risen on all fronts to unprecedented levels. For example, the U.S. national debt has recently passed $27 trillion while corporate debt stands at $10.5 trillion.
Throw the aforementioned household debt into the mix and you have a $52 trillion debt pile. That’s a big bill to pay.
Where does this data come from?
Source: Federal Reserve Bank of New York
Notes: Data ranges from Q1 2004 to Q4 2020
Datastream
The Link Between Entrepreneurship and Mental Health Conditions
Research explores the link between entrepreneurship and mental health conditions such as ADHD and bipolar disorder
The Briefing
- Prevalence of ADHD, substance use disorders, and mood disorders appears to be higher in entrepreneurs than in the general public
- One-third of entrepreneurs reported two or more co-occurring mental health conditions
The Link Between Entrepreneurship and Mental Health Conditions
Entrepreneurship has long been associated with traits like risk-taking, persistence, and creativity. It’s no surprise, then, many of the world’s most successful companies were brought to life by neurodivergent founders.
Neurodivergence refers to natural differences in brain function among individuals with conditions such as autism, ADHD, dyslexia, and bipolar disorder. As this 2019 study demonstrates, entrepreneurs appear to experience mental health and addiction issues more frequently than the general public, and tend to have families with these illnesses at a higher rate.
Nearly half of entrepreneurs included in the study have one or more mental health conditions. Below the are the numbers for four of the conditions studied.
| Entrepreneurs | General Sample Group | |
|---|---|---|
| ADHD | 29% | 5% |
| Depression | 30% | 15% |
| Bipolar | 11% | 1% |
| Addiction | 12% | 4% |
The research also looked at anxiety, but found that levels were similar between entrepreneurs and the sample group.
Obsessive-compulsive disorder (OCD), dyslexia, and Asperger’s Syndrome, which are not included in this research, are other noteworthy conditions that are sometimes connected with entrepreneurship.
Asperger’s, in particular, is present in a number of successful founders, including Elon Musk and Bill Gates. Peter Thiel, billionaire investor and serial entrepreneur, has argued that this mild version of autism could be an asset in founding successful companies.
An Open Question
There are two competing ideas around the link between entrepreneurship and mental health conditions.
First, some posit that traits associated with mental health conditions (e.g. hyperfocus for ADHD, or attention to detail for Asperger’s) are assets in the startup world.
Secondly, it is also thought that because neurodivergent individuals have more trouble succeeding in conventional frameworks in academia and business, they are more likely to forge their own path by founding companies and pursuing self-employment.
It’s entirely possible that both these ideas are true. The more research that is published around mental health and entrepreneurship, the clearer view we have on the traits associated with creating successful businesses.
The more open the conversation is around mental health, the more we can create conditions in the workplace that empower neurodivergent individuals.
Source: Freeman, M.A., Staudenmaier, P.J., Zisser, M.R. et al. The prevalence and co-occurrence of psychiatric conditions among entrepreneurs and their families. Small Bus Econ 53, 323–342 (2019).
Data notes: Data was analyzed from 76 MBA student and faculty pool participants, 149 psychology students, and 110 entrepreneurs not affiliated with the university. Participants from either recruitment group who reported a history of self-employment or founding or co-founding a for-profit or non-profit business were categorized as entrepreneurs (n = 242).
Hat tip: We discovered this research via The Generalist who published a fantastic post on who becomes an entrepreneur.
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