WEBVTT

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<v ->All right, so up next I'm gonna give you a masterclass</v>

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in chart selection and charting sort of more broadly,

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essentially in three charts, all right?

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So here's the first chart.

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Now this chart, look at the title: Wealth by Age.

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Terrible title.
(instructor laughing)

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So don't do that.

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We talked about that already.

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But let's see what's in this chart, okay?

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We have, on the Y axis, vertical trillions of dollars.

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On the X axis, we have time.

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We have colors depicting the different generations, okay?

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The darker green is the silent generation, 70 and older,

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boomers are the lighter green,

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gen X, my generation, in yellow,

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millennials in red.

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Okay, so let's read this chart

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and let's learn what we can from it, all right?

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So over here, 1990, the silent generation had about,

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I don't know, 5 trillion, maybe a little bit less.

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Over time, they had more trillions, okay?

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Maybe they ended up with like 25, a little bit more.

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Boomers.

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They had more trillions in 1990, a little bit,

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and over time, they got more.

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Gen X started with less, got more.

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Millennials, started with less, got more.

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So the only lesson so far is over time you get more money.

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Okay, fine.

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What else do I notice about this chart?

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Well, I notice that the silent generation has less trillions

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than the boomers.

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In fact, the boomers have more than everybody.

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Now, one thing that's important when I'm reading charts,

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I don't turn my brain off, right?

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I know things about the world.

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I'm a smart human

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and I know the boomers are the largest generation

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or they are a large generation.

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So maybe that's why they have more than these guys.

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What else do I notice?

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Gen X has less, but again,

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maybe because we're a smaller generation.

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Millennials have the least.

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That matches a lot of stories that I've read about.

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But millennials are also a lot younger, right?

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They're under 40.

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These guys are older,

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so, of course, they have less than them we can see

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on the chart over time to get more money.

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So I don't know that there's any real problem here

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for millennials in this chart.

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That's pretty much the extent of what I learned.

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One thing I may realize as I'm looking

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at this chart is that comparing the boomers here

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to the silent generation here isn't really right, right?

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Cause in 2020, the boomers are however old they are.

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The silent generation were that old back,

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like, here somewhere.

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So it's a little bit hard to compare apples to apples

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in this chart.

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All right, let's look at the next chart.

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This next chart is the same underlying data

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but look at how different it is

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and the different stories that come out of it.

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Instead of trillions of dollars on the Y-axis,

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now we have percentage share of wealth on the Y axis.

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Remember how I talked about the dollars,

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the values sometimes are way less useful

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than a rate of some kind,

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percentage share, okay.

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Down here, instead of time flowing by,

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we have millennial age, sorry, median age.

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Okay, let's read the chart and watch what happens.

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In 1990, the boomers were a median age of 35

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and they had 20% share of national wealth.

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Okay, as their median age increased,

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their share of national wealth increased.

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So that's similar to the story I saw on the other chart,

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maybe, I think.

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Over time, as you get older, you get more money.

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Fair enough.

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And a larger share in this case.

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Okay, fine.

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Gen X, actually, I don't know what year it was

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but whenever we were 35, okay, median age,

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we had about 8% share of national wealth.

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By the way, this reveals the genius

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of putting median age down here.

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It solves that problem I was pointing

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to on the previous chart.

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Where do I compare boomers to?

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The boomers at the end are younger

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than the silent generation that are right above them.

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I had to move it over to figure out where,

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and I don't know exactly where to compare them

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to on that other chart.

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Here, I can compare apples to apples in this vertical line.

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So we had 8% share of national wealth

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at the same age as boomers.

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Listen, we're a smaller generation.

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Maybe that's why I'm not concerned yet.

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As we're getting older,

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our share of wealth is also going up.

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Now, it's not as steep a line.

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This is a much steeper line.

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But I'm not quite sure what that means yet.

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Okay, millennials, they're not 35 yet,

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but a few more years have gone by

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and if the line continues in the same angle,

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and we learned about the danger of extrapolating lines,

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right, back when we talked

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about data literacy several weeks back.

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But even so, I think maybe this line

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is pretty consistently going like this.

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If it keeps going like that, millennials will be lucky

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to have 5% share of national wealth.

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By the way, millennials are another giant generation.

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In fact, they may be larger than the boomers.

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So now for the first time, I am seeing the problem.

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Millennials are down here.

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They should be up here somewhere.

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Okay, let's look at the next chart.

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Here we have share of national wealth.

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The same thing we saw in the vertical axis

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in the previous chart is now in the horizontal axis.

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And now we're finally factoring in population.

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I don't have to know what I think I know

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about population size.

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Here it's accounted for as a percentage again.

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So share of population, share of national wealth.

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Okay, so let's read the chart.

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Boomers 1990, median age of 34.

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Hold on.

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I thought the last chart said the median age was 35 in 1990.

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I'm gonna pretend I didn't see that.

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Let's just ignore that for now.

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So median age, whatever it is, 1990,

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boomers had almost 50% share of population

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and they had about 20% share of national wealth.

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Okay, over time,

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as their share of population is decreasing,

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their share of national wealth is increasing.

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Aha.

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That's weird.

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We would not expect as your share of population decreases

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that your share of wealth would increase.

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So in other words, a line in this particular chart

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which is a weird type of chart,

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which I'll talk about in a second,

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the lines should not go this way.

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And in fact, what the lines should do is

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what the silent generation line is doing.

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Look at them.

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In 1990, they had 50% share of population.

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They had 80% share of national wealth.

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By the way, that's an interesting insight right there.

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80% share of wealth the silent generation had at one point.

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Now, as their share of population decreased,

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their share of national wealth also decreased.

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And in fact, it's nearly, like, a one to one ratio.

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For every 10% they lose this way,

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they lose 10% that way pretty much consistently.

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So lines on this chart should go down into the left

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if it was behaving in what feels like a normal way.

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Gen X increasing share population peaked

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in, like, 2000 or so.

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Already starting to come down.

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Our share of wealth is increasing.

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But look at all these dots,

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all these markers right next to each other.

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It's not moving a lot.

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It's not looking too promising compared to the boomers

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as an example.

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Millennials, skyrocketing share population.

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It's gonna go all the way up and up and up and up.

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I don't know how high it's gonna get at some point,

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but boy, there's very little movement to the right.

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Their share of wealth is not changing at all so far.

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Now, this data does not factor in inheritance.

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This is not the entire story, but the story is clear.

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Boomers have more

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and are gaining more over time than one would expect.

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Everybody else is not doing so well.

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Okay,

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these are three wildly different stories, right?

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This chart taught us almost nothing useful.

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Maybe not even, almost.

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It taught us nothing useful, okay?

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This chart revealed that millennials have a problem.

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This chart really brought it home

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by factoring in population.

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So these charts, this one and this one,

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this is a particular chart type.

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It's called a connected scatter plot.

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It's just a scatter plot.

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I have two variables, Y axis, X axis,

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percentage of population, percentage of national wealth

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and I have dots showing the correlation

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between those two things.

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But because the dots are the years,

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I'm able to connect them and even show the directionality.

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So this is a weird chart type,

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not a chart I would put in USA Today

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but it's a chart that if I had time to explain it to people,

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it reveals interesting things

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about how things are changing over time

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while showing the correlation

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between these two primary variables.

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Gen X, look at our line, it goes up,

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and then it does a little loop-de-loop

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before it comes back down.

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This line goes in one direction.

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This line goes in another direction.

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It's a weird chart type

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but incredibly powerful when used properly.

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By the way, why does this chart suck?

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What's so wrong with this chart?

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Well, it's trillions of dollars instead of a rate.

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It's time instead of a median age.

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So I can't compare apples to apples.

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It's a variety of things.

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But what happened?

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Can we imagine what happened

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to the person making this chart?

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I'll tell you exactly what happened.

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It's a guess, but I'm, like, 99% sure.

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I guarantee you the data in the spreadsheet

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that this person was working with had one row

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per generation per year.

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So 1990, silent generation, 5 trillion,

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1991, silent generation, 5.2 trillion,

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et cetera, et cetera, et cetera.

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So in other words, the raw data was exactly what we see.

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Trillions of dollars, time, generation.

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So all they did, this person,

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was they said, "Okay, these are my variables."

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You know, stacked area chart.

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In other words, they put zero intentionality into it.

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Zero thought.

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These charts they put thought into.

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What do we need from this data?

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I don't need to know that over time you get more money.

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That's useless.

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What I need to see is how are these guys doing compared

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to each other?

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And factoring in the rate, the median age,

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and in this case, also the population.

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These are fantastic charts.