A reader and I had an interesting conversation a week or so ago about what it takes to be wealthy. We talked about both net worth (which is wealth IMO) and income (which may or may not be related to wealth) and what the top percentages of people in America own and earn. I thought the information in one of his comments was very interesting, so I thought I'd share some excerpts of it with you all. Here goes:
It seems that it requires somewhere in the realm of $300,000 to be in the top 10% of Americans in wealth.
The top 10% of income earners make $120,000 per year.
Interestingly, the top 1% of households average about 15 million dollars per family.
It is always a little mind blowing to be reminded of how different the top 1% is from the rest of the country.
It's also worth looking at his sources a bit more for some additional information. For instance:
The top 1% had average wealth of $15 million per family in contrast to the $22,800 average wealth of the least wealthy 50% of families or the $313,500 in wealth for families ranked between 50% and 90%.
I was also fascinated by this:
Only 17.8% of all U.S. households make more than $118,200 a year. Only 2.67% make more than $200,000. The fact that only 34% make more than $65,000 is astounding given how expensive other cost of living items have gotten over the past decade. That is why the middle class is feeling squeezed from all different sides.
What is even more fascinating, is how even amongst the super wealthy income is not distributed evenly. There are approximately 146,000 (0.1%) households with incomes exceeding $1,500,000 a year. Even at that, the top 0.01% of households had incomes of $5,500,000 and accounted for 11,000 households. The 400 highest tax payers in the nation brought in a stunning $87,000,000 a year. Now that is wealth.
So what does this all mean? Not much really -- at least not much when it comes to managing your money. It is interesting to see where everyone stacks up and compare yourself to the masses. Doing this, it turns out that I'm "wealthy" (as is anyone with over $300k in net worth). But that's only relative wealth, not the I-have-so-much-money-I-can-do-whatever-I-want wealth most people think of as being "wealthy."
Where do you stack up in these numbers?