-: All right, so up next I'm gonna give you a masterclass
in chart selection and charting sort of more broadly,
essentially in three charts, all right?
So here's the first chart.
Now this chart, look at the title: Wealth by Age.
Terrible title. (instructor laughing)
So don't do that.
We talked about that already.
But let's see what's in this chart, okay?
We have, on the Y axis, vertical trillions of dollars.
On the X axis, we have time.
We have colors depicting the different generations, okay?
The darker green is the silent generation, 70 and older,
boomers are the lighter green,
gen X, my generation, in yellow,
millennials in red.
Okay, so let's read this chart
and let's learn what we can from it, all right?
So over here, 1990, the silent generation had about,
I don't know, 5 trillion, maybe a little bit less.
Over time, they had more trillions, okay?
Maybe they ended up with like 25, a little bit more.
Boomers.
They had more trillions in 1990, a little bit,
and over time, they got more.
Gen X started with less, got more.
Millennials, started with less, got more.
So the only lesson so far is over time you get more money.
Okay, fine.
What else do I notice about this chart?
Well, I notice that the silent generation has less trillions
than the boomers.
In fact, the boomers have more than everybody.
Now, one thing that's important when I'm reading charts,
I don't turn my brain off, right?
I know things about the world.
I'm a smart human
and I know the boomers are the largest generation
or they are a large generation.
So maybe that's why they have more than these guys.
What else do I notice?
Gen X has less, but again,
maybe because we're a smaller generation.
Millennials have the least.
That matches a lot of stories that I've read about.
But millennials are also a lot younger, right?
They're under 40.
These guys are older,
so, of course, they have less than them we can see
on the chart over time to get more money.
So I don't know that there's any real problem here
for millennials in this chart.
That's pretty much the extent of what I learned.
One thing I may realize as I'm looking
at this chart is that comparing the boomers here
to the silent generation here isn't really right, right?
Cause in 2020, the boomers are however old they are.
The silent generation were that old back,
like, here somewhere.
So it's a little bit hard to compare apples to apples
in this chart.
All right, let's look at the next chart.
This next chart is the same underlying data
but look at how different it is
and the different stories that come out of it.
Instead of trillions of dollars on the Y-axis,
now we have percentage share of wealth on the Y axis.
Remember how I talked about the dollars,
the values sometimes are way less useful
than a rate of some kind,
percentage share, okay.
Down here, instead of time flowing by,
we have millennial age, sorry, median age.
Okay, let's read the chart and watch what happens.
In 1990, the boomers were a median age of 35
and they had 20% share of national wealth.
Okay, as their median age increased,
their share of national wealth increased.
So that's similar to the story I saw on the other chart,
maybe, I think.
Over time, as you get older, you get more money.
Fair enough.
And a larger share in this case.
Okay, fine.
Gen X, actually, I don't know what year it was
but whenever we were 35, okay, median age,
we had about 8% share of national wealth.
By the way, this reveals the genius
of putting median age down here.
It solves that problem I was pointing
to on the previous chart.
Where do I compare boomers to?
The boomers at the end are younger
than the silent generation that are right above them.
I had to move it over to figure out where,
and I don't know exactly where to compare them
to on that other chart.
Here, I can compare apples to apples in this vertical line.
So we had 8% share of national wealth
at the same age as boomers.
Listen, we're a smaller generation.
Maybe that's why I'm not concerned yet.
As we're getting older,
our share of wealth is also going up.
Now, it's not as steep a line.
This is a much steeper line.
But I'm not quite sure what that means yet.
Okay, millennials, they're not 35 yet,
but a few more years have gone by
and if the line continues in the same angle,
and we learned about the danger of extrapolating lines,
right, back when we talked
about data literacy several weeks back.
But even so, I think maybe this line
is pretty consistently going like this.
If it keeps going like that, millennials will be lucky
to have 5% share of national wealth.
By the way, millennials are another giant generation.
In fact, they may be larger than the boomers.
So now for the first time, I am seeing the problem.
Millennials are down here.
They should be up here somewhere.
Okay, let's look at the next chart.
Here we have share of national wealth.
The same thing we saw in the vertical axis
in the previous chart is now in the horizontal axis.
And now we're finally factoring in population.
I don't have to know what I think I know
about population size.
Here it's accounted for as a percentage again.
So share of population, share of national wealth.
Okay, so let's read the chart.
Boomers 1990, median age of 34.
Hold on.
I thought the last chart said the median age was 35 in 1990.
I'm gonna pretend I didn't see that.
Let's just ignore that for now.
So median age, whatever it is, 1990,
boomers had almost 50% share of population
and they had about 20% share of national wealth.
Okay, over time,
as their share of population is decreasing,
their share of national wealth is increasing.
Aha.
That's weird.
We would not expect as your share of population decreases
that your share of wealth would increase.
So in other words, a line in this particular chart
which is a weird type of chart,
which I'll talk about in a second,
the lines should not go this way.
And in fact, what the lines should do is
what the silent generation line is doing.
Look at them.
In 1990, they had 50% share of population.
They had 80% share of national wealth.
By the way, that's an interesting insight right there.
80% share of wealth the silent generation had at one point.
Now, as their share of population decreased,
their share of national wealth also decreased.
And in fact, it's nearly, like, a one to one ratio.
For every 10% they lose this way,
they lose 10% that way pretty much consistently.
So lines on this chart should go down into the left
if it was behaving in what feels like a normal way.
Gen X increasing share population peaked
in, like, 2000 or so.
Already starting to come down.
Our share of wealth is increasing.
But look at all these dots,
all these markers right next to each other.
It's not moving a lot.
It's not looking too promising compared to the boomers
as an example.
Millennials, skyrocketing share population.
It's gonna go all the way up and up and up and up.
I don't know how high it's gonna get at some point,
but boy, there's very little movement to the right.
Their share of wealth is not changing at all so far.
Now, this data does not factor in inheritance.
This is not the entire story, but the story is clear.
Boomers have more
and are gaining more over time than one would expect.
Everybody else is not doing so well.
Okay,
these are three wildly different stories, right?
This chart taught us almost nothing useful.
Maybe not even, almost.
It taught us nothing useful, okay?
This chart revealed that millennials have a problem.
This chart really brought it home
by factoring in population.
So these charts, this one and this one,
this is a particular chart type.
It's called a connected scatter plot.
It's just a scatter plot.
I have two variables, Y axis, X axis,
percentage of population, percentage of national wealth
and I have dots showing the correlation
between those two things.
But because the dots are the years,
I'm able to connect them and even show the directionality.
So this is a weird chart type,
not a chart I would put in USA Today
but it's a chart that if I had time to explain it to people,
it reveals interesting things
about how things are changing over time
while showing the correlation
between these two primary variables.
Gen X, look at our line, it goes up,
and then it does a little loop-de-loop
before it comes back down.
This line goes in one direction.
This line goes in another direction.
It's a weird chart type
but incredibly powerful when used properly.
By the way, why does this chart suck?
What's so wrong with this chart?
Well, it's trillions of dollars instead of a rate.
It's time instead of a median age.
So I can't compare apples to apples.
It's a variety of things.
But what happened?
Can we imagine what happened
to the person making this chart?
I'll tell you exactly what happened.
It's a guess, but I'm, like, 99% sure.
I guarantee you the data in the spreadsheet
that this person was working with had one row
per generation per year.
So 1990, silent generation, 5 trillion,
1991, silent generation, 5.2 trillion,
et cetera, et cetera, et cetera.
So in other words, the raw data was exactly what we see.
Trillions of dollars, time, generation.
So all they did, this person,
was they said, "Okay, these are my variables."
You know, stacked area chart.
In other words, they put zero intentionality into it.
Zero thought.
These charts they put thought into.
What do we need from this data?
I don't need to know that over time you get more money.
That's useless.
What I need to see is how are these guys doing compared
to each other?
And factoring in the rate, the median age,
and in this case, also the population.
These are fantastic charts.