I hate when these sorts of statistics point to “the top 10%” as the problem based on numbers like this. It’s simply much less broad than that. Of all wealth, the top 0.1% holds 14.5%. The next 0.9% holds 17.3%. The bottom 50% hold only 2.5%. The top 1% of households hold 12.72x as much wealth as the bottom 50%. And, notably, the bottom 10% of households have less than $1000 in net worth. The bottom 8% of people have $0 or less.
A household which is at the 90th percentile for Net Worth has a net worth of roughly $2,000,000, including equity in their home. You get to the 95th percentile before you double that to $4M. The 90th percentile has 1000x higher net worth than someone with $2,000 to their name, which seems obscenely unfair when described in that way. However, a net worth of $2,000,000 would provide a retiree a mostly-safe withdrawal rate (4% or $80,000) of around the median income of ~$84,000. (This doesn’t actually check out since it includes equity in the home, but as a simplification.) Retirees have access to social security and tax-advantaged accounts and the like, but someone who ends up with a net worth of $2M could live only a median lifestyle without working.
Is a net worth of $2,000,000 a very large number and a large chunk of wealth? Of course it is. But it’s not like, obscene wealth. If I gave a random American $2M it would change their lives profoundly, but the people who have a net worth of $2M aren’t the ones who are ruining our lives. They’re just not.
The top 0.1% hold 14.5% of the wealth. The top 1% hold 31.8%. The bottom 10% hold less than 0%. That’s the ball game.
Disclaimer: I have not rigorously cited my sources, nor verified all my figuring. However, most of this is pulled from the Fed data linked in the article. Other stuff is pulled from sources which cite the same, though I’ve not run a rigorous analysis of the maths. My work should not be cited as correct, it is intended to be illustrative. That said, I’ll happily remedy any errors that others might notice!
The ‘mostly safe 4% rule’ actually includes inflation. It’s based on the assumption that assets are invested in a mix of broad stock market and treasury bonds, and allows the retireee to increase their annual spending by inflation, It usually results in the retiree dying with substantially more wealth (inflation adjusted) than they started out with. The stock market is a natural inflation hedge and, in this day of multinational conglomerates, a currency hedge.
cam to say 9% of that 10% is reliant on the 90% doing better so it keeps shrinking. Its insane when you look at the top wealthiest individuals just to see the jumps from the first few. Its why musk keeps staying on top even with stupid moves. the others have to make so much to get to where he is if he does not grow at all. That is the problem with wealth equality. Its not just rich and poor its about the general hollowing out of the middle. When I was young being doctor meant a real nice life but for many gp’s its like they can get what a typical middle class was like. they have a nice house and can have a car or two and actually put away from retirement but having a vacation home and those cars being new luxury cars is not a given. The new middle class is like yesterday upper middle class while the middle class and working class form back then are trying to just stay above water now.
(2) They are not aiming to convey facts - which we’ve known for several decades, like the wealthy have all of the um, ah, wealth - and rather to convey an emotional punchline. So just one sentence phrase, without any compound portions.
(3) I do not know about this source in particular but in general all news media is owned by oligarchs, and presumably the author felt that a story talking about the top 0.1% would not be published, so they misrepresented the situation in order to make it more tolerable. This serves the oligarchy by redirecting anger away from billionaires that you will never see, to the local millionaires in <insert your local area name here>, or even to Taylor Swift that you will see in entertainment. Meanwhile, people like The Musk still control the outcome of the Russian vs. Ukrainian genocidal war… but sure, show a picture of Taylor Swift as if that is remotely comparable as the literal “face of this issue”.
I hate when these sorts of statistics point to “the top 10%” as the problem based on numbers like this. It’s simply much less broad than that. Of all wealth, the top 0.1% holds 14.5%. The next 0.9% holds 17.3%. The bottom 50% hold only 2.5%. The top 1% of households hold 12.72x as much wealth as the bottom 50%. And, notably, the bottom 10% of households have less than $1000 in net worth. The bottom 8% of people have $0 or less.
A household which is at the 90th percentile for Net Worth has a net worth of roughly $2,000,000, including equity in their home. You get to the 95th percentile before you double that to $4M. The 90th percentile has 1000x higher net worth than someone with $2,000 to their name, which seems obscenely unfair when described in that way. However, a net worth of $2,000,000 would provide a retiree a mostly-safe withdrawal rate (4% or $80,000) of around the median income of ~$84,000. (This doesn’t actually check out since it includes equity in the home, but as a simplification.) Retirees have access to social security and tax-advantaged accounts and the like, but someone who ends up with a net worth of $2M could live only a median lifestyle without working.
Is a net worth of $2,000,000 a very large number and a large chunk of wealth? Of course it is. But it’s not like, obscene wealth. If I gave a random American $2M it would change their lives profoundly, but the people who have a net worth of $2M aren’t the ones who are ruining our lives. They’re just not.
The top 0.1% hold 14.5% of the wealth. The top 1% hold 31.8%. The bottom 10% hold less than 0%. That’s the ball game.
Disclaimer: I have not rigorously cited my sources, nor verified all my figuring. However, most of this is pulled from the Fed data linked in the article. Other stuff is pulled from sources which cite the same, though I’ve not run a rigorous analysis of the maths. My work should not be cited as correct, it is intended to be illustrative. That said, I’ll happily remedy any errors that others might notice!
this comment should be a mandatory copypasta for such articles
If inflation and dollar devaluation eats away faster than investment growth they may find themselves just scraping by.
The ‘mostly safe 4% rule’ actually includes inflation. It’s based on the assumption that assets are invested in a mix of broad stock market and treasury bonds, and allows the retireee to increase their annual spending by inflation, It usually results in the retiree dying with substantially more wealth (inflation adjusted) than they started out with. The stock market is a natural inflation hedge and, in this day of multinational conglomerates, a currency hedge.
For those curious as to additional reading, the origin of the 4% rule comes from the Trinity Study, a finance research project from the late 90s.
Not to be confused with the Trinity Test, which occurred in the 40s and had very little to do with finance.
cam to say 9% of that 10% is reliant on the 90% doing better so it keeps shrinking. Its insane when you look at the top wealthiest individuals just to see the jumps from the first few. Its why musk keeps staying on top even with stupid moves. the others have to make so much to get to where he is if he does not grow at all. That is the problem with wealth equality. Its not just rich and poor its about the general hollowing out of the middle. When I was young being doctor meant a real nice life but for many gp’s its like they can get what a typical middle class was like. they have a nice house and can have a car or two and actually put away from retirement but having a vacation home and those cars being new luxury cars is not a given. The new middle class is like yesterday upper middle class while the middle class and working class form back then are trying to just stay above water now.
(1) clickbait title gonna clickbait
(2) They are not aiming to convey facts - which we’ve known for several decades, like the wealthy have all of the um, ah, wealth - and rather to convey an emotional punchline. So just one sentence phrase, without any compound portions.
(3) I do not know about this source in particular but in general all news media is owned by oligarchs, and presumably the author felt that a story talking about the top 0.1% would not be published, so they misrepresented the situation in order to make it more tolerable. This serves the oligarchy by redirecting anger away from billionaires that you will never see, to the local millionaires in <insert your local area name here>, or even to Taylor Swift that you will see in entertainment. Meanwhile, people like The Musk still control the outcome of the Russian vs. Ukrainian genocidal war… but sure, show a picture of Taylor Swift as if that is remotely comparable as the literal “face of this issue”.