Are You Rich?

I saw a post the other day pointing to the Global Rich List. This is a site I see come up in the media once a year or so. Each time it does, I get irked a bit because it uses income to determine wealth instead of looking at net worth. But I'm getting over that issue (slowly.) I do agree with what the site is trying to do -- show people how much they earn compared to most others and encourage them to give a bit of it to those who are less fortunate.

I plugged in the national US average of $50,000 income per year to see the results. A person with this income is:

• The 59,029,289 richest person in the world.
• Within the top 0.98% richest people in the world.

It also shared this tidbit:

Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of American households combined.

Ha! Nerds rule!!!!! Take that you jocks!!!!! ;-)

This site reminds me of Andy Stanley's sermon series on how to be rich (my summary here, another summary here, order the series here). The one-sentence summary: every American is rich by world standards and as such we need to take some of our extra money and help those less fortunate.

Both the Global Rich List and Andy Stanley have good points. This is one reason why FMF continues to give all profits to charitable causes all around the world. And in particular, I want to focus more on giving to those who are poor and needy. As such, much of my giving in 2010 will be going to Samaritan's Purse, Mel Trotter, and the Salvation Army.

Comments

[Holly]

Someone who earns $50,000/yr. is "within the top 0.98% richest people in the world."?

WOW...that is truly amazing!

We (in the U.S.) often don't view our world through this 'macro'lens...we're so used to accepting our lives as they are in comparison to the guy who lives next-door. That puts things into perspective.

[Harm]

Of course, it is more expensive to live in the U.S. (and much more in Mr.
Gates' neighborhood, LoL) than many poorer areas of the world. That said,
we in ANY area of the U.S. ARE much, much more fortunate than so many others
in terms of opportunity.

[aa]

Top 0.98% in income but I would like to see how the US saving rates go against the rest of the world, LOL!!!

[Old Limey]

The downside to $50,000/yr. putting Americans into the top 0.98% richest people in the world is that the salaries of American factory workers are probably higher than well over 90% of the world's factory workers. This is why, as Bloomberg reported yesterday, that recently bailed out GM, as well as Ford, announced that they are moving more auto production to Mexico, i.e. we have priced ourselves out of most of the highly paid manufacturing jobs that used to exist.
Production line jobs in highly automated and computerized factories using numerically controlled machines don't require college degrees and highly specialized skills for the most part - they require a pair of hands and a normal brain. Net result is that manufacturing companies are happy to be able to increase their bottom line and their share price at the expense of American factory workers, particularly union workers with nice contracts, expensive benefits, and excellent working conditions. You can't have it both ways in the current world. I never cease to be amazed at the high quality of products of the most respected brands that we can buy at excellent prices, all with the tag "Made in China", or of some other country where the workers make a fraction of what we do. Other than personal service professionals, innovators, educators, defense workers, military & government workers whose jobs can't be exported, or food production where we use a lot of illegals, can we continue to prosper as a nation by just selling things to each other, bagging groceries, or flipping burgers?
Just check many of the things you own, "Made in the USA" is very hard to find these days.

[bearded]

.98%? Less than one percent?!

[Matt]

Sad fact is that people in poverty here in the USA are wealther than the middle class in China. Here in the USA someone in poverty could have two TV's while a middle class person in China may not even have one.

All a matter of perspective.

I am wealthy due to the fact of a beautiful wife and two beautiful sons.

Who cares about the rest.

[texashaze]

@Old Limey - You make a great point... but what is the solution?

To all - to put the article in real perspective go visit other countries and you will see REAL poverty. The poor in the US have it made when you see the shanty towns in India, Brazil, et al. As native US citizen who grew up poor by US standards I can honestly look back and say life was actually quite good. These facts really go to the heart of the ridiculus entitlement programs we are wasting our money on today. Poor in the US have AC, refrigeration, heat, television, microwaves and other things considered luxury around the world. I'm not against helping the poor but there is a difference in what is really a need and really a want.

[Matt]

to texashaze
you don't even need to go that far. Just look a couple hundred miles from your home land. I was on a cruise last year out of Gavaston and was in Jamacia on an architectural tour and talk about scary. The shanty town was disturbing, worst than the worst neighborhoods in Detroit where I live, all the nice houses were like prisons with bars and security barbed wire. I definetly did not feel safe being there and I wonder why ANYONE would want to visit there.

Definetly a big difference between the haves and have nots.

Even worse than the USA where the have not have something.

[Old Limey]

@texashaze
As I think you know by now I am considered quite wealthy by most standards and I am very happy with a wife that I love dearly that I have been married to for 54 years. Actually though I was very happy when we left England in 1956 and stepped off the boat with just $450 between us. We still live in the same house that we bought in 1977, most of the furniture is the same, our cars are 12 and 19 years old, and we are happy to eat out in inexpensive neighborhood restaurants a couple of times/week. Our house wine is no longer Two Buck Chuck from Trader Joe's, we have now moved up to an Australian chardonnay that we like a lot better, it's $2.49/bottle at Lucky's supermarket. All that lots of money really gives us is a lot of peace of mind and maybe the means to solve problems in the years ahead. Sure, when we drive by the Mercedes dealership and see the new, shiny ones outside I think about trading in what we have, but what we have look great and do everything we need, and run perfectly, so what would be the point.

One of our favorite destinations years ago was Bali in Indonesia. We fell in love with the island and went there five times and became very friendly with the families of some of the workers where we used to stay and drivers that we hired. Their one room homes would apall most Americans but they were some of the nicest and happiest people that we have ever known. The only toy I ever saw young boys playing with was an old tire and a stick. I learned from them that money doesn't buy happiness. My parents never owned a home and died with just enough to cover their final expenses but they lived a good and very happy life and we always had great family vacations.

I guess the future solution in this country may well turn out to be that some people will have to learn to live well within their means - a new concept for many I'm afraid.

[Squirrelers]

I agree with you that income is not the best way to measure wealth. Net worth is the most commonly accepted. That said, I like other alternative measures, such as months of covered expenes (net worth divided by monthly expenses)- which tells you how long someone can survive on what they have, based on their individual expense needs.

As for the giving part - I'm a big believer in giving without expecting anything directly back. With the right intentions, it shouldn't be viewed as a low ROI proposition. Glad to read that you're giving some resources to some that are truly in need.

[Roy]

I know this is off the subject but it made me think about giving, so I am going to try this without sounding Judgemental, but as a Christian it is hard to find Charities that are aligned with my beliefs. For instance I will not give to other religious organizations like Salvation Army even though they do a lot of good work and operate efficiently. I feel they promote the Idea that good works will get you salvation instead of the Grace of God that I believe the Bible teaches. As a Christian I want to give out of love so I try to give to non religious organizations like Red Cross.

I would like to know what others use as a litmus test for charities they choose to give to.

[Mike Hunt]

I find that statistic of $50k salary being in the top percent in the world hard to believe. According to the Wall St Journal online today there are now 11.7 million millionaires in the world - or about 0.2% of the world population.

Therefore I think it's unlikely that $50k puts you in the top 0.98%.

Mike

[Mike Z]

Because so many live beyond their means and have massive debt (huge mortgages, student loans, credit cards, loans on new SUV's, etc), we should look at net worth instead of income...especially since job security of that income is very low in this age. Additionally, we need to add in each family's share of the national debt. Just because we shift the debt from private corporations (think bank bailout) and individuals to the government (public debt) doesn't mean the debt exists.

I WOULD ARGUE THAT AMERICA IS THE POOREST NATION IN THE WORLD, but we just don't know it yet. Wait until China decides to stop loaning us the money we need to pay our bills.

[Paul]

Just using some rough estimates, Bill Gates's wealth is approx $50B. And 45% of American households represents approx 135M people. Dividing $50B by $135M gives $370. So this suggests that the average wealth for the people in the bottom 45% of American households is on the order of $370 per person, or less.

I assume the number is that low due to debts exceeding assets for too many people.

[Yefim]

Pointless and misleading estimate. One is corrcet that life in USA is more expensive. You just do not know how much more expensive and different. How much we spend to maintain the car? Health care? We live in houses-it may b enice but how much costs to maintein them in good condition? $50000 income do not pay taxes for a family of four people below $40000 get tax credits, which is part of their income. Consumer products ar emuch cheaper in USA than anywher elese in the world, So TV in US is often less than 50% of the price in Europesame goes for cloths. my friends in Europe work limited hours and so, they do not live in houses, they enjoy life, while I go from work at the company to th ework in my side business to the work on my backyrad. I had to provide for my children education and now to collect for my grandchildren, think about my retirment and and medical bills in retirement. You are loafers if you do not understand all of it. Damn your soull for this falsification of American riches, whoever wrote this article

[jim]

Mike is right. The site's information can't be very accurate.

If you put $50k into the salary figure (US$) then it says you're the 59,029,289 richest person in the world. However houeshold median income in the USA is over $50k so half of US households make that much. And thats not even looking at all the high income households across the world.

[bearded]

It just can't be right. It would be nice if it were, because it would mean I'm well beyond rich, but it doesn't add up.