The G650 Gulfstream is the latest in luxury for the ultra-rich.  Even at $65 million a plane there is a three-year wait to purchase the 14-passenger aircraft. Apparently there are a lot of people who need to get places at Mach 0.95.

The economy has officially recovered. Sort of.

The distribution of recovery is one of today’s most controversial and widely discussed topics. 

Unless you own a G650 or collect food stamps, most people consider themselves to be some degree of middle class. It is easy to define “rich” as anyone who has more money than I do. There is a huge difference, however, between the millionaire next door and Warren Buffett.

A recent Fed study noted that the wealth of the top ten percent of the American population has now fully recouped any losses from the recession. 

The net worth of the bottom 90 percent is still below 2007 levels.

Blame the American dream.

The most valuable asset most Americans will ever own is their house.

Average home prices in the largest metropolitan areas, as measured by the Case-Shiller index, fell more than a third from their pre-recession peak and are still down more than nine percent from their previous highs. 

Nine percent may not sound like much, but leverage magnifies the net worth effect. If you own a house worth $200,000 with an 80 percent mortgage, a nine percent price decline wipes out almost half your equity.

This helps explain why the net worth of the median household remains down 40% from 2007.

Compounding the wealth effect is another trend—the declining home ownership rate among the bottom 90 percent of American wealth holders. Homeownership rates fell across all income groups between 2007 and 2010. 

However, over the subsequent three years—the years when house prices began their recovery—home ownership only increased among the top ten percent of the income distribution; it continued to fall for the rest of the American population, depriving them of those price increases.

Other trends have also worked against the average American.  While the value of direct and indirect holdings of stocks increased between 2010 and 2013, the actual ownership rate declined.  Only 48.8 percent of Americans owned stocks in 2013, down from the peak level of 53.2 percent in 2007. 

Retirement plan participation has also continued its downward trajectory from 48.2 percent in 2007 to 40.2 percent in 2013, disproportionately impacting the bottom half of the income distribution.  These lower levels of stock ownership and retirement participation have left many Americans unable to participate in the rising tide. 

In total, 90 percent of Americans began reducing their investments in stocks and residential real estate at the absolute worst time—when prices were at their lowest. And when stock and housing prices began to recover, they didn’t participate in that recovery.