Folks - you're rich. Just say it.
45
If you earn a decent salary, save 20% of salary, and don't get divorced, you can be pretty comfortable at 60. This with never having a trophy job or trophy salary.
125
As a “rich doctor” caring for children with rare diseases, I enjoyed calculating my net worth at -$312,000. Nothing like seeing how far behind your peers you are to drive home the wise choice you made to become a physician.
157
The wealth bar in the first interactive questions stops at $10.5 million. Is NYT making sure the the top 1% have no fun playing this game, as they will always come out "poor" in their view?
55
One big thing. I've felt a lot poorer from the events of the last two years, and the increasing divisiveness of this country. Money can't buy happiness, but it can help ruin the country; and if used to abuse it can cheapen so many of the better qualities of life in America.
193
Question regarding definition of 'household' .
Are these results from analyzing households comprised of couples ?
What if the household is a single individual ?
62
The bailout of Wall St. and the NYC unions ruined millions of Americans.
Having a million in CD's or T-bills might get you little more than $20,000 per year. Compare that to pension benefits paid to New York's civil servants.
Boeing outsourced some of it's engineering jobs to workers earning $9.00 per hour.
We're in a race to the bottom!
59
Wealth is being able to cope easily if disaster strikes. Could you pay for an unexpected operation, a replacement vehicle, help a child in trouble, cope with a few months unemployment, or fly to an unexpected funeral, without a problem. If so then you are wealthy. I live in a cheaper rural area, and I feel wealthy. If I lived in a city, the price of a house would make me poor. I would hate it and I love what I have now.
104
I am retired and my net asset places me among the very comfortable. But what really makes me feel comfortable is that I am covered by the health care plan of Japan. Without it I would not feel comfortable at all. And there are other expats here who cannot afford to return to the US.
140
It would seem reasonable to include a question about the number of people in a household. A single person worth one million dollars is probably considerably wealthier than someone with the same figure in a 5-person household.
71
I learned, by reading this paper, that my SS income exceeds that of an Italian high school teacher. Based on forty hour work weeks, I make just shy of $11.00/hr on SS. My 2000 sq ft house was paid off long ago. The kids are raised and out of the house. We have no debt. My wife and I live modestly but feel that entails no real sacrifice. I retired at sixty after almost thirty years in industrial sales. We have a very nice house (though not extravagant by any means) in a nice area of a large Midwestern city. We have a goodly amount of savings and feel ourselves fortunate. We have friends that are successful doctors, dentists, lawyers and business people. They are significantly better off financially than we are. Many of them continue working although they could comfortably retire today. Our guiding principle has always been to spend less than we earned.
87
@h king: The 0.1%, having mined out the poor, have set their Republican minions to work on the middle class. Therefore, if you want to keep what you have, vote Democrat.
135
Like most superficial net worth calculators, this analysis does not recognize deferred taxes as a liability. Just because they are somewhat uncertain, doesn't mean they aren't real. One's deferred taxes in their traditional IRA is their most senior liability. The government's tax claim comes before all others.
Someone who has a high income in a high tax state like New York, might have a total marginal income tax rate around 50% on their traditional IRA distributions. As an extreme example, someone whose entire assets are $3 million in a ROTH account, arguably has a higher net worth than someone who assets are $5 million in a traditional IRA.
77
"In periods when home prices are rising, wealth inequality tends to shrink as the wealth in the middle class grows. But during periods when the stock market outperforms real estate, wealth inequality tends to increase"
How counterintuitive considering the much lower barriers of entry of buying stocks vs. buying a house.
11
@Don Camillo
Really? Every household needs a place to live. Also, buying a house was encouraged in the past as a tax break. Right now, rents are much higher where I live than mortgages. That does not mean that you necessarily have any disposable income, or income that can be set aside for retirement or for the stock market. If you are in the upper 10%, you definitely have all of those, and you house is not the dominant part of your wealth.
9
Wealth should include the present value of any future pension/medical retirement income. This is one glaring weakness of this study-- personA having to sock away as much as possible in a 401K (counts as wealth) vs. personB a government worker/union worker/politician or the rare private sector worker with a defined benefit plan who can avoid the expense of massive saving efforts for retirement income/medical (pension/medical retirement doesn't count as wealth here). This is a very significant difference for the bottom 50-70% of the population; not so much for the 1%.
So, many people may be "disappointed" by their wealth classification only because they don't include the large stored wealth in a defined benefit retirement plan. Those without that option-- well, you chose the wrong job. I hope to have better luck next time too.
65
Net worth is a good number to consider, but not necessarily a perfect measure of "rich" because spending habits can affect net worth. I have known people who I thought had very high incomes, but to hear them talk you would think they were barely scraping by. However, they bought very expensive cars, bought very expensive homes and took very expensive vacations. I'm not suggesting that they live "poor" but there actually is a middle ground.
19
Not pure science. I'm not "wealthy" but I have a home paid off, no credit card debt (pay off each month), no car payments, solar panels which means I have no electric bill, no sewer bill (septic system runs on electric), no water bill (water pump, again electric), and kids all grown and college grads (I paid the tuition, they paid the room and board). Add in a government pension for servicing my country for 30 years (still working and saving) and I sleep well each night. My wife and I have always saved, even when my peers had flashy cars and we did not. Bottom message is live below your income and save. That's wealthy. Peace of mind.
175
@Cormac65: That's one way to look at it, and in a better world it would be sufficient. But meanwhile in this world the 0.1% are working to take the future from your children and their children.
28
@Cormac65 🙌🏼 That’s how it’s done
19
Interesting stuff, depends on several factors such as location etc. Common Sensical (If this is a word) financial planning and diligent saving absolutely helps to get into the top percentile sooner than later. Would be happy to discuss ideas or help think through these.
2
What is unstated here is what a 'family' is. The wealth and income of a family has different stressors and different meaning depending upon the number in the family.
I would imagine that a single person with the same wealth and income as a "family" would be better off than the family. Would be interesting see how much a difference that makes, given I am a retired single person.
18
I'm not "Rich". But I am comfortable, and lucky. One reason for this is that I have a pension - which many people do not have. I also have no debt - again a position few people find themselves in. If you wish to retire, I feel it is essential to get rid of debt. You can live on a lot less income and have fewer assets if you don't owe anyone any money. My investments, while not huge, also are not required for day to day living expenses. I look at it as my nursing home fund...Additionally I live on a small farm that generates minimal income from the renter - but it's enough to pay the taxes and insurance. I also live in an area where the taxes are not sky high. If I lived in a place like Seattle where the taxes on a modest, 1950s home could be $1,000 a month, that would have a serious impact on my standard of living.
15
Keep in mind that this only gives the distribution within the USA. Make it world wide and a lot more of us would be in the top 1% or 10%. Compared to the whole world, even those in some of the lower percentiles here may be well off although greatly disadvantaged here.
As other respondents have suggested Social Security and Pension benefits do in effect add to wealth.
Price of an annuity providing the same benefits gives a good estimate of the value.
Value for a female with a $2000 per month benefit would be about $374,000. If the benefit included an annual cost of living adjustment like social securities it would be worth about 25% more. Expectation of a shorter life would make a similar annuity for a male cost a bit less.$357,000
11
Truism: Money cannot buy you happiness.
Truth: Money cannot buy you happiness, but it sure does put you in a better bargaining position.
Being hungry, tired, cold, fearful, does make a person unhappy. Take these away and happiness will go up. US Constitution guarantees "pursuit of happiness" but does not guarantee happiness...
18
You say you aren't keeping this survey data. Does that mean you are giving / selling it to someone else, instead?
20
After having lived in a developing country as a youth and worked in several of the poorest areas of our country as an adult, I have always considered myself wealthy. I guess it’s all a matter of perspective for me. I have a roof over my head, health care, a good education - and enough income to live a very satisfying life.
Funny. A similar sense of perspective occurred after having lived in Los Angeles. After that, everything (especially housing costs!) seemed inexpensive - and spacious. =)
Please note that, in making these statements, I am not saying that all Americans should feel wealthy. In fact, far from this. I have seen poverty in our country up close and personal. And because of this, I understand the advantages I was given from which I could work hard and proper - rather than work hard and still barely make it from month to month, if at all.
23
A very interesting article, the primary omission is a careful description of the wealth owned by the top 0.05 %, Americans would be astounded to see how much of the national wealth the oligarchs and the oligarch wannabes have acquired. These people have acquired enough to buy the media, and they are doing exactly that. This allows them to shape and distort the information that the public receives, and this in turn allows passage of such things as the recent Trump/GOP tax law. This tax law will increase US national debt by over one trillion dollars (that is over 1000 billion dollars), and the foolish lower group will have to pay off this debt. Trump and 'the donors', as Moscow McConnell calls them, are taking the suckers to the cleaners.
81
Almost anybody who owns a home in the Bay Area, Ca., is at least a millionaire. But if they sold it , they could not live here. The study is biased because the meaning of wealth varies depending where you live!
15
@TW And if you sell your home in the Bay Area you are taxed to such a degree that your net worth takes quite a hit. It'd cost roughly 800k$ for us to sell our home given the fees, state taxes (cap gain taken as regular income), and fed capital gain tax. Hence we will never move while we are alive and our home will never be available for others to move into.
16
There seems to be an obsession with black vs white. What about Asians who are mainly recent immigrants to the country? Most did not arrive as upper middle-class. Yet today Asians, as a group, have the highest average family incomes of any racial group. Dare the Times or others investigate or explain why that might be? Might there be some uncomfortable truths that would upset orthodox dogma?
25
@tomp (Asian immigrant speaking here) Having heard enough of this, by the way, I'd suggest this is an overly simplistic argument which misses many points. The social capital and networks that many immigrant groups possess is one inbuilt advantage. Many of the 'recent immigrants' you speak of also come with higher degree of skills and education when they entered life in this country, and that skews the numbers a lot. So, please stow away your political baggage for a bit and seek more after causes and effects.
42
@tomp Many of my friends are from India where they attended heavily subsidized (by the govt) medical schools. They arrived here as MD's!! I suspect you don't know any immigrants!
18
My granddaddy was a sharecropper and part time deputy and general laborer in Verbena,Al. Actually they lived 20 miles out side of that little hamlet.
My daddy finished the seventh grade and then went to work on the farm. He joined the US Army at sixteen after his older brother helped him convince the recruiter he'd kill a lot of Nazis. The recruiter just asked them to lie about my daddy's age.
My daddy used the GI Bill to learn sheet metal and roofing. He eventually became the Superintendant of A-1 Roofing.
I joined the USAF in 1973. The Air Force trained me to maintain computer systems and I worked on highly classified and cutting edge hardware. I also took advantage of the GI Bill and completed two BS degrees in COmputer Science and EE.
That is the American dream. Each generation moves a step up.
But it only works when you work.
It also only works when the US Government assists the dream.
Without the GI Bill I would not have been able to retire when I did. In fact I might still be struggling.
Thanks for all the fish
Dave
USAF RET
119
@David Bone Well done, Dave -- and thank you for your service!
22
I'm glad to see this Upshot feature and other things that increase awareness about distribution of wealth.
I first noticed Federal Reserve studies on it a couple of decades or so ago, but they only seemed to be published every couple of years and were difficult to correlate with dollar amounts. However they did clearly show the pattern and that minorities had far less wealth which seemed shocking then as it does now.
Although those reports were publicly available there was little news about them although about a decade or so ago awareness of how lack of access to housing and inherited wealth affected minorities began to increase.
I hope that the present level of attention will increase and that wealth will become spread out more evenly by shifting from the top 1% to the lower levels. That won't be easy given the most conservative or right wing portion of the 1% plays in our political system and in shaping information.
7
How do you value your pension plan?
7
@gordon
Easy! It's income, not wealth. It's a "salary" you're receiving every year. But it's not a tangible or financial asset (e.g., house or mutual fund) sitting there, which is key to your wealth!
1
@Marsha Pembroke I'm not quite sure about that. I believe pensions and social security can be lumped in as a 'present value' calculation. Of course, mortality age is a complication, I do grant that.
7
@gordon
Actually, it is a key to my wealth and many others. Somewhere a calculation exists that uses pensions, social security, etc. as part of your wealth factor. Thanks for your thoughts.
4
I find it interesting to say the least that NYT says "Don't worry, we're not recording your responses."
And yet if I skip the survey and go right to the results, it places me in the correct age bracket.
To have done that, you must have collected and kept data about me regarding some previous quiz or survey.
So which is it? Are you collecting data or not?
14
@Jack
That's because you happen to fall into the one age bracket they chose to illustrate.
5
@Jack
My age did not agree with the NY Time's default age and I am a subscriber (both digital and print).
6
Discussions of wealth almost always neglect to include the net present value (NPV) of annuities, pensions, Social Security, and other periodic income streams. This is silly.
If you don't think a pension or Social Security has any value, then give it to me and in exchange I'll give you $10. Don't want that deal? Then these periodic payments do have value to you. But how much? Is it hard to calculate?
Yeah, it's a little tricky, because based on amount of money you expect to get each month, your age, expected rate of inflation, and whether your income, like Social Security, is indexed for inflation.
But this article already had you enter numbers before it gave you answers, and adding a few more questions (with reasonable default values for inflation and interest rates) would make it's calculations much more realistic.
For example, say you're 66 and expecting say $20,000 a year from Social Security (which is inflation indexed) You can expect to live another 15 years, or so, and the NPV of that Social Security income stream is somewhere in the neighborhood of $200,000.
That's a lot of wealth to leave uncounted.
11
Interesting indeed.. I am in the 95th percentile at age 34. Granted it might be a little skewed since I am at the top end of youngest age-range .. *sigh...middle age nearing*
I wish this was broken down by 5 yearly age periods instead. I am sure the 18-20 year old net-worths are making me go in the 95th percentile.
3
I'm in the 90th percentile but I'm thinking of dropping my NYT digital subscription since they jacked the price up from the introductory/teaser rate.
16
@Dennis
LOL! 😎
6
I do not hear any gratefulness among these comments of the rich or "poor", it is all about what others have that you do not. Guess what, most of work hard out here. Eliminate all the help from your mommies, daddies and grannies, and where would you be ? Life is the same grind it has been all along for centuries, and will always be in the future except for the financial royalty among us who have no interest in the rest of us getting just a little bit more ahead. What good are all these rich people doing for society, for the most part absolutely nothing. Oh but I forgot they are not really rich, because they cannot take the fourth European trip this year, or send Biffy and Greta to their first choice private school, or afford the third new lexus this year. What world do they live in anyhow?
14
After watching "The Big Hack" about Cambridge Analytica's manipulation of Facebook questionnaires, I'm done providing personal like this. In the future, I hope NYT's online editors will avoid these questionnaires and simply use charts and tables.
22
You show me in the top 10 percent, but a huge part of my "wealth" is in a 900 square feet 2 bedroom one bath home that is worth $750,000-$850,000. I'm definitely wealthy if I decide to sell and move away, but until then I am definitely lower middle class in my daily life.
8
@Deborah Taylor Yea, Santa Cruz is way inflated! Although, incredibly, not as much as San Jose or San Francisco. Hope you bought that house a good while back. For some perspective, you could by a small mansion (say, 3,000 to 5,000 sq feet) with nice appliances and furniture and a sea view for less than 750K here in Puerto Rico. Oh, and your property tax would be under $1,000 per year--way under if it were your principal residence.
5
Want a taste of reality?
http://www.globalrichlist.com
$32,316 a year puts you in the %1.
So, if you're American, you're probably rich.
31
Hey NYT, thanks.
This coupled with the income distribution breakdown last week help paint a clearer picture.
It's a really complex thing, to nail down what can make someone feel rich.
3
The only thing about this calculator is that it's only focus is on a family.
What about us Empty Nesters?
I live alone and want to account for my income without all this family expenses stuff!
3
Financial freedom is the measurement of wealth, regardless of how much. Control of spending and living within and below your means is the key. We moved to a home 22 years ago whereby my income was 50% of the home price. During that time I was promoted 3X and 2 of those were massive increase in compensation. When I sold that home 18 years later my income was twice the selling price. We then bought a home that cost less than that. I educated all my children at the schools of their choosing, helped them get started following or to grad school. We're very simple people. I drive my daughters 10 year old honda civic. Spending control is the key regardless of income. America is an illusory image based society that wrecks financial ruin to too many.
13
I ranked in the upper 60th percentile for the income version of this, but 30th percentile for net worth, which about sums up life as a millennial. The most valuable thing I own is my car, which is depreciating by the day, almost. At this point I'm just waiting for another housing crash so I can afford a downpayment on a house that's within an hour's drive of where I work. Short of that my only hope of building net worth is getting lucky in the stock market. My solitary blessing is that I am debt-free, which makes me a rare bird for my age demographic.
5
My wife and I both have defined benefit pension plans that if we had them privately would require a two million dollar investment at a guaranteed 4% earnings rate.
But since we have that pension, the years that we each worked two jobs so we could build our Social Security up, we lose Social Security money due to the Windfall Elimination Provision of 1983. They did not want us to double dip. If I went to the ice cream shop and I worked hard to pay for my second dip, I want my second dip.
Since all the money we saved in 403b, 457 and Roth plans is substantial and we could live well without our pensions, I am happy that the pension plans do not have a windfall elimination provision. All told I never considered myself wealthy, I was too busy working.
5
@Ken I don't quite understand. Your pension plans must have been with jobs where you didn't contribute to social security. Our pension plans deliver substantially more than yours, but we don't have any SS limitations.
4
"Even though their incomes were high, many argued that after paying their mortgage, student loans and child care and other expenses, they had little left over." Choices; all their choices.
They chose expensive colleges, or else their student debt, if any, would be very manageable. They bought houses bigger than they needed (could afford?) or else the mortgages would not be bleeding them. They chose their careers and to have however many children they did, so their expenses for these have followed.
We are retired for 3, as our adult daughter has disabilities which preclude her from living on her own. Still she has part time work that she manages and that is good for her.
We live in a house that is very modest but all we need; it's been paid for for many, many years. We often buy cars used and either way drive them for many, many miles and many years. We live in a gorgeous area of the country, with many recreational opportunities that we enjoy, so didn't need to travel for that, although we did for cultural reasons and to visit family all over this country.
We are retired public school teachers. According to this tool we are at the 85th percentile for our net worth, which is mostly not in our house. We have time and enough money to live as we choose, and after a lifetime of finding inexpensive ways to enjoy life, we are fairly well set.
16
@Susan Perhaps you should air your opinion to young public school teachers and see what they have to say about your "you made your choices" argument. You'd have to catch them in between the multiple jobs they often perform and the strikes they're trying to conduct against poverty-level salaries and school supply cut-backs, but I'm sure they'd love to hear that their situation is all very manageable.
10
@Susan
Nice! Your daughter is lucky to have such wonderful, dedicated, caring, and wise parents.
10
I grew up in the bottom 5%. My parents carried debt and had no assets. I'll just say, I know how to cut the mold off government cheese.
I am now in the top 10% thanks in large part to federal grants and financial aid that got me through college (those programs work!)
I can feel my relationship to money change as I get more comfortable with my increasing wealth. My parents have risen to the 25th percentile thanks to a real estate inheritance, but they have extremely limited cash flow. They can't retire and their medical bills are increasing. We were recently having a conversation about the possibility of selling something for $1000. I said, "it's taking up space, and its only a $1000 dollars, why not just give it away on craigslist?" To me, a $1000 is easily made...to my parents its an extra paycheck. I'm trying to keep perspective but the difference in lifestyle is increasingly disparate. Better education, healthcare, less stress, healthier food, higher quality products...wealth is like a big hug I take with me all the time.
16
@Matt C
Hope that conversation with your parents taught you something other than that you can hug yourself, wrapping your arms around all your wealth!
I would have expected the message to be that you realized how insensitive you were (not just "trying to keep perspective"), but really, truly caring for your parents who raised you, put food on the table, and because they were struggling so much made you eligible for all that financial aid.
You should have, instead of saying "give it away" bought it from them for the $1,000 right then and there. Or, if that would have upended the parent-son hierarchy, offered to sell it for them, and then given them $2,000 for it, reporting what a good deal you made.
But that's all crass financial exchange. The real issue is not just trying to keep perspective, but embracing a change in attitude. Your situation could change dramatically, too, in a heartbeat (illness, stock market crash, employment ending, etc.)...
34
According to this my family is wealthy. But the truth is we are house rich and solidly middle of the road income wise. We were lucky to have saving just as the 2008 housing crash started and not lose our jobs during the crisis. As a result we were able to add to our savings over the next two years and buy a house which has since doubled in value while our mortgage payment has stayed the same. If we were to be in the market today just starting out, there is no way we could afford the house in the neighborhood where we live. In fact with my wife back in school working on her PHD, our household income less now than we did back then. And with two kids we have to more mouths and minds to feed. The hope is when she has her PHD our household income will improve. But until then it just seem like we are treading water...albeit in a decent house in a nice neighborhood. Which I fully acknowledge is indeed a luxury.
6
@Still Waiting...Good points. My husband and I have a similar story to yours, although we don't have children. We do however have parents with health issues, which is another factor to consider when one is calculating net worth.
8
I'm now in my 70s and have more assets than I ever thought I would accumulate. But in more than 40 years of marriage, my wife and I tried to control our spending on non-essentials and don't own luxury vehicles, expensive clothes, or a second home. We paid for our respective educations ourselves, and paid for our children's college educations without loans. We have taken some very nice vacations, but we felt that travel was part of the educational experiences we wanted our children to have. Are we rich? Yes, according to your standards, but it's the experiences of a successful professional career and the memories of joyful family experiences that are the most fulfilling to us now.
I'm forever grateful that my Italian grandparents, who were poor all their lives, had the foresight to come to this country over one hundred years ago.
17
Whether you are "wealthy" or not can often be traced to where you live. Living in the N.Y. or San Francisco area takes a lot more dollars to just exist than it does in Minneapolis (an expensive place by Midwest standards) or especially in some place like South Bend, IN or Des Moines, IA. Based on what I have saved over the years I am 'comfortable' with where we are financially. But If I made my money in Minnesota and then tried to retire to NY, I would no longer feel comfortable about my status. Age certainly is a part of the equation, but location is even more important.
19
What was most interesting in the article is how people will react to the Progressive giveaways. I never felt that the 1% being taxed would pay for all of these programs and believe that it is the middle class who will end up paying the taxes. Everybody should have access to healthcare and to those who cannot afford it there should b something like Medicaid. College is a choice and in many cases has become like high school. People who have worked to pay their own tuition or that of their children or those who don't have children or don't go to college should not be responsible for other people's tuition.
15
@Peggysmomi- Why stop at tuition, Peggy?
How about I don't have to pay for road maintenance because I live on a large piece of property in Montana and never drive my car off the property and raise all my food myself?
Why pay taxes to help support my county hospital, which takes in a lot of homeless people when they face medical emergencies?
I don't use the city library, so no taxes to that, either, right?
I finished school a long time ago, so why should my taxes support education?
And so on.
53
@Peggysmomi- I disagree that college is a "choice". The Educational-Business cartel has managed to pump up job requirements so that jobs that formerly could be done by a high-school graduate now require Bachelor's degrees that said colleges and universities are pleased to offer at obscene tuition rates. The business HR groups and college marketing groups have also done yeomen-like work in convincing students and parents that the future will be nasty, brutish, and short for the uneducated. Hogwash!
12
@Dave WymanThe NYS and NYC taxes I pay cover all of the above and all of them go for the welfare of the general public which also include SUNY and CUNY and not private colleges.
10
Wealth isn't a number; it's having enough to not worry about money.
For me, that means having 25x more money than I spend each year invested in the stock market. That is enough wealth, I believe, to support my spending on an inflation adjusted basis forever. Forever. That's what I call wealthy. Amazingly, that's what I have stockpiled for my family's future.
How?
I started with no money, but I NEVER spent more than 40% of my income and invested every other penny in the stock market.
I was also lucky. I had great (albeit poor) parents, merit based scholarships at the local community college, good health, a great family (that didn't overspend) and some really good jobs over the years.
Wealth isn't a number; it's a number relative to spending.
49
@Jay It's not what you earn but what you keep.
15
Does this mean the vast majority of post-grad professionals have a negative net worth? Even if they make a high salary in their field?
A 5-7 year student loan balance will negate any 401k/savings/investments a young professional may have accrued over 3-5 years, and forestall real estate purchases.
2
My entire generation is not recorded in the graph of wealth to income. I am a professional nurse born in 1969. The first stock crash since I came of age occurred when I was 18, then again in my late 20s, the housing crash in my late 30s. I still rent. My net worth is much less than my income. This is not unusual for people my age. I have no hope of retirement. Where is this discussed or demonstrated?
31
@Laura Don't give up so easily, Laura! When I was your age, I was still in grad school, and I'm not in a high income profession. But, I did have a rental property in California, and a small house in Michigan, where I went to grad school Now, 20 some years later, I'm in the 90th percentile, love my work, and will be able to retire well.
Keep your eye on the real estate market, and jump in when you can. Get a fixer, and work on it yourself--that's what I did. As a nurse, you should be able to make good money, and your job will never be outsourced or relegated to robots. You can do better than you think!
11
I only read a few comments but many readers of this and the income calculation seem to be missing the point. RICH and POOR are by their nature relative terms. So if you fall in the top 20% of either income or wealth distributions it is objectively hard to say you are not rich as measured by one or the other. After all you are richer than 80 percent of everyone else. Perhaps rather than saying one is not rich because the people even higher up have so much more- (note in a sample of 100 only 20 people have more than you) - think or note that you have or earn more than 80 out of 100 people.
4
In case it escaped others, please note that this is based on a Federal Reserve report released in 2016 - so the data is likely 3+ years out of date. It's probably worth revisiting the numbers with your 2016 net worth which is likely less than your 2019 net worth.
5
@Bill if your net worth has significantly changed in 3 years, you must be rich
1
@Laura Unless it went way down!
One element that is missing here is whether or not the individual will receive a pension upon retirement. It's future income and potential wealth, so difficult to compare to other measures of income and wealth, but it makes an enormous difference in how “rich” someone is at a practical level.
7
@Greg Shenautmost people who work in corporate America no longer receive a pension.
4
This calculator feels on par with where we're at; the income calculator did not.
The income calculator put us in the top 15% of earners for our area, the wealth calculator right on the cusp of 50%, which is reflective of our money struggles.
Too bad we're taxed on income rather than wealth. Even as our income has increased recently, it seems just as difficult as ever to accumulate wealth.
3
Rich would presumably be the ability to have Financial Independence, Retire Early (if you so desire). The definitions in this article, same as the income article, consider only numbers rather than the impact of lifestyle.
We may have +/- $1MM in assets, but 90% are in retirement accounts that can't be tapped until retirement age (there are some ways to get money out earlier, but most require one to keep working).
We have heard of the working poor, but how about a new category for the "working rich." On paper you are looking good, and if you continue on the current trajectory you will be in great shape. But let up off the treadmill for 1 minute and it will all fall apart.
Excluding defined benefit plans is especially inaccurate. Retire from the police with a $100K/yr pension at age 45 - not rich (despite actuarial value of that being several million dollars). Have a bunch of risky assets (stocks, house, etc) that could go down in value, you are rich so it is ok if we tax you more.
10
Wealth and income also have to be related to geography to talk about who is "rich" or "middle class." Take, for example, the parts of Silicon Valley where a household income of $120,000 per year makes you eligible for "low income" programs. Or think about how far $3 million will go in Manhattan, NYC compared to Manhattan, KS. Numbers are helpful, but they are only a start.
4
This is so superficial. I'm a retired senior, apparently in the 90%. But I have no pension, so every penny of income (other than Social Security) has to come from investments. The stocks and bonds sit there, unspendable, because I need the dividends and interest. Full disclosure: due to good luck, careful planning, and some inheritance I have real estate that constitutes the bulk of my "wealth," which will eventually pay for a really good nursing home. But it doesn't translate into feeling rich, or living richly.
22
@Tasha
Noted also: if the "wealthy" like you and I feel this vulnerable - I'm 67 y.o. and still working 9 to 5, because I don't feel my Social Security and retirement investments are sufficient to allow me to retire - how do the other 80-90% feel?
22
@TashaI am almost in the same situation as you
1
@Steve :O
"how do the other 80-90% feel?"
Answer: Not too good. Currently working on emigrating to another country.
7
Blessed to be a one percent household since my late thirties and convinced of the following: wealth only really makes a difference in two key areas: travel and health care. I can visit any doctor or hospital without worrying about insurance coverage and travel up front with a little extra space. Everywhere else? Not so much. From what I've seen I can safely say that money does not bring happiness.
9
@Griff
agree with you, but it also buys time, and that is a hugely valuable asset to have on your side. If you've the money, then you can jump lines, move faster than others, and in general spend less time wasting time.
5
@Griff Sorry to hear this view about the elusive nature of happiness. I am glad to be a happy person and moreover a joyful one. I have not travelled as much as I would like, as I am working class. I can not afford healthcare. But I am healthy due to good diet choices and an active lifestyle. I know many lower income people who do travel quite a bit because they do not work regular jobs. They crowd source and receive government support and get to live pretty well. I do not imagine to be able to afford retirement, but I do recognize that living impoverished does not keep me from happiness. So I could theoretically retire and be impoverished financially and retain my divinely sourced meditative bliss, dying of exposure in a state of delirium. In moments of clinging to rat race, I am not so happy.
@Griff
Wealth may not bring you happiness, but it brings you the ability to make (and apparently believe) clueless statements like "wealth only really makes a difference in....travel and health care." It's hard to imagine a statement that captures blindness of the 1% to the condition of inequality in this country better than this one.
17
In my estimation, the proper definition of 'rich' is a functional one. Speaking solely of finances, I believe you are 'rich' if you do not have to work to maintain the lifestyle you choose. If your time is yours to do what you choose with it, then you are 'rich' regardless of how many commas and digits there are in your net worth.
29
@Carl My guess is that Carl has a considerable stash of cash.
3
I love the irony: I'd be rich as this government defines it in my age group if the corporate/bank rep who handled my hard-earned lifetime savings at retirement had not watched it go down the drain, 15K a month with regularity, 2008 forward, and never recouped it as so many of my contemporaries' managers did. My ex, who didn't contribute a dime after our divorce, never lost a penny. He had the right person in charge.
Am I complaining? Only about how "rich" my "broker" got while he and the economy decimated my savings. I keep fantasizing writing the head of that bank to see what he has to say. Meanwhile, as is, I'm privileged and just plain sick about how little the 99% have - so I give it away as often as it makes any kind of political or social sense. More irony.
2
Unfortunately articles about wealth and retirement rarely consider single people. Surely a million bucks goes a lot further for one than for two or four. It's like we don't exist. But statistics show the US has the most single households in history.
16
@Doris Two isn't a lot more expensive than 1. You double some costs, but others, like housing, don't move by adding 1 more person (assuming romantic partners sharing a room).
And since income is another part of the equation, two people can really outpace singles. Two incomes, one rent, one car (more than feasible in our city), cooked dinners don't even add too much to the food costs by adding one more mouth.
It's a complex thing, so many factors.
3
@Doris But a married couple gets substantially lower taxes rates than a single. For a couple living together and sharing the costs of a house, this can be very significant.
3
Aside from the obviously concerning distribution of wealth in this country, I am horrified to read that the "head of household" is defined as as the "male" in "a mixed-sex couple" by the Federal Reserve. What age are we living in? Why is the government so far behind in terms of progressiveness and gender equality?
31
@TwentySomething Yep, there is also men's chess and women's chess. Separately
2
2 things:
1) The article somewhat reads like the wealthy are so because they put more of their money in stocks than housing. Not sure if that is intended, but I think its likelier that people of super means have so much money that they defacto have to put more of it in stocks than realestate. I don't think the trick to building wealth is putting all money in stocks and being homeless. Home ownership, generally, is a good start to building wealth.
2) If I were a politician looking to win the all important "black vote" I would emphasize boosting minority home ownership. Black home ownership is at a 50 year low, as in lower than when you could legally discriminate. Due to defacto segregation, if you are black your incentives are low to own, since poorer neighborhoods values appreciate less or not at all. It becomes a vicious circle where no one owns because property doesn't appreciate in value and therefor incentives for improving the neighborhood decrease because the residents don't own.
2
@Bob Yeah, I think the point of stocks vs. home was not to prefer stocks, but to note the working people who "become" rich, have done so because they had enough money for both a house and retirement investment, the latter of which has turned out to be very beneficial... but that may not be the case in another year!
2
I'd like to see the data between Asians and Whites. That comparison seems to be left off of many articles showing disparities. Also, need to factor in the value of pensions that some receive, because those without guaranteed pensions will need a larger net worth to equal a pensioned net worth.
8
I’m incredulous that, I’m 2019, the Federal Reserve still automatically defines the head of household in a mixed sex relationship as the male. De facto sexism is bad enough, but it’s worse to see it enshrined in the code.
18
Wealth becomes concentrated when inherited by few children. Larger families distribute it widely.
2
Interesting with the age comparison and more complete asset picture, but now it's missing the geographical comparison which was key for anyone living in expensive areas. Also how many children, etc. Seems you would need a bigger data set to make a really functional wealth calculator.
13
Ironic that in a discussion about money, there is nothing about income. Income inequality gets into how you spend what you have vs. how much you have. Both are important topics, but one you cannot become wealthy without controlling your spending. Ditto for the Federal government.
2
@Ask Better Questions: Actually, it gets into a lot of other issues:
-- Did you inherit family money?
-- Do you get financial assistance from your family?
-- Did your family have the means -- and willingness -- to pay for college for you? Or were you saddled with student loans?
-- How long have you been a high earner for? (Many people in the gig economy have highly variable annual incomes.)
-- When did you get into the housing market? (This might relate to whether you had financial assistance from family, or even whether you had family who could help guide you when the banks said no. So much of getting in as a first-time buyer requires some insight into knowing who to ask for money.)
-- Do you live in a place where housing values have escalated a lot? Or do you in live in a place where housing values are stable? (Relevant to home owners.)
-- How much is rent where you live? (High rent can negate a higher income.)
-- Does anyone in your family have any medical needs that negate your wealth?
-- Do you have a high-needs child who is not being served by the public schools and ends up, therefore, in private school?
None of these are about "controlling spending" in the way we think of it. None of these are about going out to eat too much, buying fancy clothes/cars, taking expensive trips, having too many lattes.
41
@Ask Better Questions. They did that yesterday. Guess what the complaint was? Too much emphasis on income—not enough on wealth…
3
"We are well educated, we have good jobs we love, and we own a home. Do not look at what others have. You are so very, very rich compared to most of the planet. Be wise and generous with the abundance you have, and never insult the poor be being showy."
So this middle class, Bible believing, Hillary Clinton adoring, anti-abortion household taught its children. It's been a lonely, lonely journey.
Up and down the block children were taught "look out for yourself, because nobody else will."
Comparing yourself to others and wanting more is a prison you make for yourself, goaded on by the consumption mania that "designers" and "trend setters" need -- to get rich !
I'm too old now to think the treadmill can be stopped. I still remember the co-option merchandising of the "real" 60's when youthful yearning for simple ethical living and deep compassion for equal justice had to take a back seat to creating and selling a youth culture. Oddly enough, the Clairol shampoo ad was my "aha" moment. Even a couple of bucks for keeping your hair clean had to be channeled.
36
@carol Comparing yourself to others isn't only a prison of envy. Its also the means to learn about your society, make more informed decisions, and if necessary, help others. Comparing yourself to others is how one discovers that there are grave injustices occurring that may prevent one from achieving good jobs or stable homes. Comparing yourself to others provides vital information on trends and other large-scale factors that can change one's life in a moment. Comparing yourself to others also reveals how others are treated and can be the critical factor that leads one to, say, get involved in the effort to end the imprisonment of immigrant children or to feed the family who's house burned down on the next street over.
Calling for end to comparisons as a way to curb greed sounds like an over-simplified and easily-manipulated argument that can be used to justify nearly anything. "Tend to your own house" is not only sticking ones head in the sand, its cutting oneself off from the responsibility of helping others.
19
This is hilarious. How about $-100,000?
6
Living in the San Francisco Bay Area and being retired, I do not consider myself and my spouse rich with about $2 million in wealth, including our house. My spouse and I could live another 20-35 years and need Assisted Living care (for which only I have some long-term care insurance). And a big earthquake on the Hayward Fault could bring my house down, any day now. Earthquake insurance is too expensive. If I survive "The Big One," I will move out of state!
1
@Not rich in San Francisco Bay Area
As a retiree, I respectfully suggest that you cash out that SF home and relocate to an area where real estate is more reasonable to improve your financial situation in retirement; and that would include high quality health care (i.e. Seattle, Portland, Phoenix/Scottsdale).
10
@Randy Petty I agree with you, but my spouse refuses to sell our house.
1
where you live matters - where real estate is costly, and one's wealth is tied up in one's home, then you aren't 'rich' until you sell it and move to Podunk.
25
"Why is wealth so skewed?"
Simple: the power of compound interest over time.
11
@Informer And knowing how to use it, and actually doing so.
2
@Informer. Compounded interest over time for the “haves.”. The poor never made enough to save—no benefits, no vacation, no retirement…
2
There will be no equality in America until wealth is distributed equally. Equal means equal. Stand up for radical equality.
4
@satta
Stop, think what you just wrote ''until wealth is distributed equally'''.
You want to take all the wealth in this country and hand it out equally to those who work very hard and those who don't. Those who save and to those that just spend.
Crazy ...............
17
@satta
a foolish and really dumb suggestion...equally distributed, wealth would end up in the hands of achievement oriented people after a couple of generations this eliminating your "equality".
7
@john b I supposed he could mean to just always keep an equal distribution. But in that case what on earth would motivate people to work?
The majority of the labor force would stay home and the country would plummet into poverty in no time.
3
A person's worth cannot be measured in dollars.
5
@dr. c.c. Yes it can. Net worth. Yhe value of human life is a completely different thing.
6
There is a bug in your program. I put in 3.4 million and it registered as 2.4 million.
@Just paying attention It rounds down to the next 5 percent mark nationally. I put in 300k and it rounded me down to 250k because I didn't have quite enough to be in the 60th percentile, so it put me at the minimum for the 55th.
To truly reflect the population, this scale could be expanded to take into account those people whose debt exceeds their assets. I, like many others, still carry student loan debt that dominates my net worth and will likely do so for decades to come.
4
@Alyssa Hi Alyssa I think they’re talking about net worth, money(assets) left after deducting debt.
3
Without negative numbers you've left out a good % of the nation. This is because the only wealth most people have is their health and the ability to work, to pay off a mortgage they were convinced (conned?) by the system into taking instead of renting.
As such not only are they voluntarily indebted, their future time is sold off to work to earn to pay that debt. They therefore lose any future education (as simple as time to read) or peace of mind (including sleep) that that free time might have provided. So they are in debt, obligated to work, less educated, tired, and angry. They carry on, in stress. The lower time to read leads to simplification of what they know. The lower peace of mind leads to adoption of beliefs in enemies and objects of anger. The lower sleep makes them worse parents. It's a classic rat race.
That's how you live in America, and it's why people who have lived a while and taken obligations are not able to allocate time to social complaints about superficial areas of life like skin color or language or sexual identity. Though they might like to, they don't have the free time, or freedom of mind, to be concerned about non bread & butter issues. And until that mortgage provides equity, the have negative wealth.
8
This doesn't take into account people who have defined benefit pension plans to rely on. A 55 year old with $0 net worth but has a defined benefit pension is much 'richer' than that same person without a pension. Civil servant type guaranteed pensions must be taken into account when establishing how well off a person is.
9
@Bill
When calculating net worth for those with ''defined benefit pension/income'' you use what is called a ''phantom bond fund'' . You take the yearly income and project the dollar amount of bonds one would need to own in order to product that amount of income at current interest rates.
Yes, this is not an asset you can leave to your children but it is way to show your total income producing assets.
2
@AJP. Other than certain mortgage related bonds, most bonds only pay interest until maturity. A better comparison would be the price of a plain annuity required to pay out the annual income of the pension.
2
@Bill When I was in the Army, a few years from retirement, I was making 50000 a year. I was set on retiring at 20 years, meaning I would get half pay or 25000. I planned on living on that for 40 years. Somebody offered me a joint, which would have made me fail a urinalysis and get kicked out. I calculated that joint would have cost me a million bucks. Steep.
6
I realize this article is about accumulated wealth, but I propose there is another kind of wealth perhaps more important than what you leave at the end of your brief time on earth. That wealth would be the wealth of experiences and of friendships you made, and most of all the quality of the life you led, at the end of the day thats what it’s all about.
It’s fine to pinch pennies, invest, be miserly, don’t take trips, not buy things you might want and leave your life’s financial accumulation to a relative or charity that will spend it; nothing wrong with that but perhaps some of us preferred to be generous with everyone along the way who were part of our short time on this earth, surround ourselves with beauty and interesting people and engage in a vocation that we loved and allowed us to do just that but maybe didn’t pay quite as much: I know that was my choice and I have very few regrets: yesterday my ex wife called to tell me her significant other whom she knew long before me had died; we spoke for sometime of the fifty years since we had seen one another and concluded that we all had had pretty great lives. I have been with a wonderful woman for 35 years we are able to travel, have great friends and live well in Interesting places.
She is healthy, reasonably happy(what woman doesn't want more shoes)and in great financial shape so when I leave this life I’ve done my duty: I personally may be in only in the 45th percentile but as I look back I feel like a millionaire.
25
@Ted
What a nice person you are! I hope you and your partner have many more happy and healthy years and the best to your ex-wife as well!
7
Why does anyone need more than $1 Million/yr in income and more than $2 Million in assets?
Shouldn't excess above that be used for providing lost-cost housing (for sale, not for rent) to those who have only 0.1% of that wealthy person's resources? Are we so calloused as to let our neighbors live in sub-standard housing, on the streets, or in unaffordable hovels? Why do wealthy people live in homes with more square footage than they can possibly use on a daily basis?
Shame on those who hoard their assets in order to boast of their privilege.
9
@ultimateliberal You need storage room for all your treasures. But it's funny, when I was in the Army I often lived in hole in the ground or on a cot in a shack or on a bunkbed. Now I live alone in a 2000 square foot house. I have one room just for a gym, one for a library, one for my cats. This house was run down when I got it and I personally fixed it up, removed the leaded paint and asbestos and made it liveable. Next door is a sprawling run down one story absentee landlord rental house with like three families in it, maybe 8 people, smaller than my house. Should I let one of those families move in with me? I like my room and my privacy. I've been in worse conditions than they have. They'll be fine. I built a sidewalk on the edge of my property so they can get around to the back easily.
3
@ultimateliberal
Disagree. If you bust you tail working hard to get ahead all your life, invest wisely and have some fun along the way the last place I want my money to go to is public housing. Note: I paid income taxes all my life. Government and others can fund public housing.
2
@ultimateliberal
why should you be the one who determines what is sufficient?
2
The flaw in Warren's great wealth assets tax is that the rich have the resources to game the system as they usually do and become like trump by increasing their fictional paper losses, offsetting their real assets with outlandish loans with even more outrageous terms, and loans to themselves through a blinding array of LLCs and a mesmerizing number of shell companies to offset the wealth they really have. Not sure if Elizabeth has a plan for that.
How much of the housing-assets that the middle class relies on is now being manipulated (again, since the 2008 era) by Wall Street? How much of the housing value really in the hands of the elite who own most of the stock market?
10
Please run this same survey for Manhattan only. The results will be quite different.
12
Progressive Democrats should consider explaining economic changes in our country with a simple story. Imagine Centerville, USA with 1,000 families and 1,000 identical homes with two cars each. Back in 1960, the wealthiest family get a home plus other homes as they have the money to buy them. Again, the next wealthiest family gets a house plus other houses pushing the 998 other families toward sharing the remaining homes. Now how many families had to share the last house with two cars to back in 1960? How many families would have to share the last home today? What is the future housing distribution like in ten years with the latest reduction in taxes for the wealthiest families and corporations? Is the the average family of the 1960's sharing a home today?
"It's the economy, stupid."
4
Age 68, I live on SS and thank America for Medicare.
Many ups and downs in my life. 2008 was very bad.
Why worry now, as I may be gone before I know it.
I am going to cancel NYT for being of no use to me as I am not wealthy.
Nor do I live in a big city.
I vote always.
I also have a saying, 'The rich are all killers."
sad
10
I can see excluding Social Security from assets as a federal entitlement program, but it understates assets to exclude pensions.
See https://www.financialsamurai.com/how-do-i-calculate-the-value-of-my-pension/
6
@Padonna Agreed. But we shouldn't be calling Social Security and entitlement program given that we have paid money into it. The "entitled" needs to be called "earned."
27
@Padonna If you have the option of cashing out your pension and transferring it into an IRA, it is arguably an asset, but if it disappears the moment you die and there is nothing left to pass to your heirs, then it's hard for me to view it as an asset. Yes, it produces income, but if it vanishes into thin air when you die, it's not really an asset. It will be valued at zero on your federal estate tax return if you file one.
1
@Carl
You are 100% right. There are two ways of looking at it. I like to think of it as an asset, perhaps like a family trust that I cannot touch but which keeps me afloat. But I understand that my perspective is mostly vanity.
Thanks for your astuteness. You must be very good with personal finances.
How is it possible that the Federal Reserve still refers to the male as the head of household? This seems completely outdated!
9
I am ashamed to acknowledge that I do not often consider that a large swath of Americans are not just living paycheck-to-paycheck, but also are incurring regular, additional debts as expenses come up.
I didn't create this disgusting system in inequality, but I am proud to back Elizabeth Warren as one of the only candidates with clear plans to rescue the millions who truly need help; it's time for the rich to pay their fair share of the nation's bills. For people who used our nation of opportunity to maximum effect to advance, it seems a pittance to pay so that the nation doesn't crumble...roads, education, and science spending, anyone?
97
@John Don’t forget Bernie is the guy that started it all, Warren and Sanders are the only way to beat Trump.
7
@John
I have $150 in the bank, how 'bout you?
@Ted. Not too many people are supporting Bernie. I don’t support Warren either; I want. someone who can beat Trump.
5
Thanks for the article, which I found interesting.
One issue to consider, though, is that this article either dramatically overstates the wealth of individuals whose principal retirement vehicle is a 401(k)--or, in my case, 403(b)--account, or dramatically understates the "net worth" of individuals whose employment offers a "traditional" (defined-benefit) retirement plan.
I realize that the percentage of people with "traditional" pensions has dwindled, but in my sector--education--there is a big mix across institutions. And moreover, some of my colleagues in traditional benefit plans at public school systems and higher education institutions do not participate in Social Security. This clearly muddies head-to-head comparisons of wealth.
I am in my early 50s and the vast majority of my "wealth" is tied up in retirement savings, both 403(b) and IRA accounts. I have a very modest condo (with four years left on the mortgage) and a frankly lower-than-it-should-be emergency account. In short, my "wealth" on paper is very different from liquid assets.
My anticipated income in retirement (my main purpose for accumulating wealth) is probably not that different from--and perhaps inferior to--that of someone at my salary level who is in line for a "traditional" pension but who has far less wealth/"new worth" now.
12
Wealth should be relative to the cost of living in your area. If my husband and I had over $600k for our age group we would be in the top 10%.
However, where we live an ok house (far from jobs, 2000sq ft and built in the 1960s) costs $1.2M. In another part of the country that house might cost $300k (or less). So yes, maybe for the country as a whole we could afford two whole paid off houses but for our own home where we live/work and have family we can afford half a house (and would still owe $600k to a bank).
9
@LL my parents used to joke they were the poorest household in atherton; a few years ago they sold their house for over $2M cash (land value only, <24 h on the market) and moved. no one should feel sorry for them, even though that was one of the lower sales that year. one’s neighborhood is not the correct reference. i would never move back to a place like that.
2
A key concept to see is that a significant amount of wealth is held in real estate, and property taxes therefore ARE wealth taxes (many other countries do not charge them at all). So, to the extent that anyone holds property over say stocks, they are subject to such a tax which lowers their total return over time. In addition, one of the key components of the Trump tax law changes has been the removal of the SALT deduction above $10,000, thus hurting most blue state upper middle class earners and above and the wealthy with high property taxes that exceed the cap. This is a significant explanation for the weakness in the property market in the last 18 months at the middle and high end. For this reason any "wealth tax" should exclude property as it is already taxed not on an income basis but on an assessed value basis, hence a wealth tax.
12
@michaelf, a noteworthy idea, but probably won't go anywhere. States desperately need the property taxes. The wealth tax would come from he Federal government. Dual sovereignty; it's baked into our constitutional system.
1
So now we've had "Are You Rich?" from the perspective of income and wealth. As I suspected being in the top 1% doesn't mean nearly as much as far as influential powers go. It's a good indicator of comfort for your individual lives though.
I would like to see "Are You Powerful?" instead. How much does one need to be powerful?
Also, I don't like how the 1% is being represented. I believe it distorts the picture of what the upper percentiles of the 1% look like.
1
Wealth in an IRA or 401K has yet to be taxed and shouldn't be counted at full value.
32
@Dick Locke Yes, strictly speaking (except Roth IRAs). But that portion now not taxed should yield enough eventually to offset for such a rough calculation as this. An IRA left for one's working children would be likely taxed higher than for us.
2
Want to be wealthy?
Read “The Millionaire Next Door” by Stanley/Danko.
It’s not about SPENDING on fancy stuff. It’s about SAVING and then INVESTING and doing so WISELY.
Drive a regular (i.e. not fancy) car. Don’t go on exotic vacations all around the world. Buy your clothes at Old Navy, Target, Walmart. Invest in “plain-vanilla” Vanguard index funds.
Do this over a lifetime. Your money will grow and grow.
Read a book or two on BASIC personal finance WHEN YOU ARE YOUNG so that you can reap the benefits of what you’ve learned, over your lifetime. I highly recommend “Personal Finance for Dummies” by Eric Tyson. Don’t be fooled by the title and the “Dummies” name of the series. There are GREAT lessons in there. It’s not hard to read. The author is even funny and entertaining at various parts of the book. I read a much earlier edition of this book almost 25 years ago, the lessons are sound at any point in history. Just as valuable today.
I read these two books around 1995. I’ve never tried to impress people with “stuff.” I’ve driven Hondas/Toyotas 10-12 years each for my entire life. I will never drive a BMW, Mercedes, Porche or similar, even though I easily can afford them.
Save/invest and don’t buy junk you don’t need!
297
@ABC123 I would only add from "The Millionaire Next Door" (paraphrasing), it helps to be old (only 5% have over a million at 35 to 44) and to have worked many 6 day work weeks during a person's career. It's not complicated but it isn't easy.
22
@ABC123
Tesla model 3 now has better savings returns owning long term than toyotas(incl. Fuel savings , depreciation, maintenance, insurance). Best of both worlds.
18
@ABC123
So what is the point of being rich if in order to remain rich you have to live like a poor person?
The real rich are the people who can stay rich while living large.
92
"The head of household, as defined by the Federal Reserve, refers to the male in “a mixed-sex couple”.... "
Seriously??
17
No one argues they shouldn't pay taxes; the question is how much? I would argue that no one should pay more than half their income for all taxes combined, state, federal and local. Beyond that point, you are working more for the government than yourself.
3
@Jsailor
By government do you mean: police, fire, sewer, schools K-12, roads and bridges, harbors, FAA, FDA, armed forces, FEMA . . . . . ?
1
Never ever enough money or invested income for the middle income earners for future savings because the cost of living keeps increasing too fast and wages are stagnant for most workers and retirees. Yep, that 2.5% yearly raise (if you are lucky and working) is hardly a game changer for future savings. And then the "ugly" huge every year rising medical premiums for workers and retirees, OUCH!
14
Those who have done detailed studies of the wealthy have found that a surprising number of them live very modestly. A study of households with between $5 and $10 million in financial assets found that 80% of them live in normal-looking houses and live like they are just members of the affluent upper-middle class.
That's probably why they have the money. It's certainly true in my own case, as I have lived modestly and saved a lot over the years. There are many people like that out there.
42
My wealth includes:
1. Mucho Stock in Oscar Mayer
2. 88 Walk-In-Refrigerators full of Oscar Mayer Hot Dogs.
3. 23 Weinermobiles
4. 130 meter yacht, the Hot Dog, I keep in Monaco
5. a tiny house in Milwaukee Wisconsin where I keep a stash of Wiener Whistles (will sell in 2020 on Ebay for $14 million)
All this adds up to me being in the top 1%. In other words, I am a Top Dog.
13
@Oscar Mayer- And you may already be a Wiener!
8
@Oscar Mayer Yes, relish your top dog status. Your Wurstchen must be proud of you.
1
I commented to my daughter that your previous piece, which measured richness by income, made no sense. Glad to see you corrected your mistake.
6
and the sirens call for socialism continues...
3
@Jim
I'd love some of your money.
1
So I am "wealthy". Big Deal! I have a better chance of being shot at the mall or dying of heat stroke in the next 10 years than I do of enjoying any of the hard-earned "wealth" attained through a lifetime of doing the "right" things. And I have a Game Show host as President. Life is beautiful.
15
I think if you choose a mortgage, student loans, child care and other expenses that consume all of your six-figure income, you don't get to claim you're "poor" because you don't have any money left afterwards.
14
So you're 'rich' readers don't feel rich? Imagine how the rest of us feel...
Signed,
Not Even Rich in Nebraska
18
@Sherri Well said and seconded heartily by Not Even Rich in CA.
3
It seems that many wish to focus exclusively on numbers when speaking about wealth and riches. Are you not wealthy if you can afford all your needs and wants? Are you not rich if your life is fulfilling? Do we need to assess our success versus others by numbers? To me, our society has adopted the wrong norms which has resulted in the conflicts we see today in everyday life.
8
@Bill
This is a finance article, not a philosophical one.
8
@Bill
Amen. Money as a means to end is one thing, but money accumulation for the sake of money accumulation can be poisonous. It feels like people have put more stock in wealth as a number than wealth as a feeling. Get your mind right, and as Hamlet said, "I could be bounded in a nutshell, and count myself a king of infinite space..."
37
Two thoughts. First, when thinking about liabilities, besides mortgages, auto, student, and credit card debt, one must consider unpaid taxes. Retirement accounts (401(k), IRA) are taxed as ordinary income, so they are probably only worth 2/3 (including state and local taxes) of their stated amounts. Holdings in stocks will incur capital gains when sold, so they are really not worth 100% of stated value. Of course, the calculation is completely different if assets are held until death, as there is effectively no estate tax (though retirement accounts will still be taxed to the beneficiary).
Secondly, stable marriages and family life are major factors in accumulating wealth. Divorce and multiple child support payments are really expensive and make it extremely difficult to save. While this is true for everyone (except the top 1%), it affects the lower socio-economic groups much more.
21
You're misdefining Income, and Net Worth.
Income is new money coming, Net Worth is saved money.
This quiz measures saved money, but then speaks about new money.
Problem 1: When poor people save, something comes up and the savings has to be spent. Savings can't be left untouched unless you already have enough money for food, housing, medical care, education, transportation and unforeseen crises.
Problem 2: Exponential growth: at a fixed savings rate, the doubling time of an investment is constant. With 5% interest, the doubling time is about 14 years. So in 42 years, an investment will double three times.
A person who invests a $100 inheritance at age 20 will have $800 at age 62. The person who invested a $1,000,000 inheritance will have $8,000,000.
They each had the self-discipline to leave their money untouched for 42 years. But the absolute gain for one was $700. and the net gain for the other was $7,000,000.
This is why we need inheritance taxes and wealth taxes instead of income taxes. You can allow the first $10,000,000 or whatever amount you chose to be inherited tax free - but at SOME point you need tax wealth heavily - or you end up billionaires who can't even figure out what to do with their money.
75
Heath is wealth. That is what my father repeatedly said. Guess what? He will be 100 later this month and he made sure that he had just enough to retire on and luckily for him the government pension significantly increased every 10 years of his life after age 70. He was up and about until he turned 98 and then he had a fall in his bathroom and things went downhill from then but still he is able to rest in his own bed in his own home most of the time and pay the salaries of his hired care taker team consisting of 24 hour ward boys, cooking lady, cleaning lady and visiting family doctor to look after his health care and occasional hospital stay.
My advice to those planning on living long. Don't cause any self inflicted damage to your health and make provision for sound financial health to build your health.
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@Girish Kotwal
Not all health issues are self-inflicted damage. It is nearly completely about the genes you were born with.
4
America is a filthy rich country. There is enough wealth for everybody to live happy and healthy life. The problem is the gross maldistribution of this wealth.
This can only be corrected by electing a truly democratic government; no electoral college, no senate, no gerrymandering, no filibuster and no voter suppression.
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@David J. Krupp
no electoral college? so then all our national elections would be determined by six of the most populous states? So the other 44 states have no say in the bargain? No thanks...
2
Half of Americans do not have so much as $500 in savings.
You're rich if you get three meals a day and have a roof over your head... Do you have transportation, clean clothes, a shower... Clean water, food, air? Do you have heat and air conditioning in your home? Can you get to a doctor? Is there a decent hospital within 50 miles of you? I grew up with these things to be considered luxuries.
On that note, a subscription to the NYT was considered an outrageously unnecessary expense before the Internet made it digital and affordable. I read my boss's copy for years without telling him about it. He finally busted me for it, then arranged a full university scholarship for me.
That's what I'd call rich.
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The "1%" net worth is $14.5M, but the slider tops out at $10.5M.
6
Am I the only one finding these profiling-type questions on the NYT website troubling? We had a series to determine if one is liberal or conservative, asking for income, and now wealth -- is the NYT trying to develop a "richer" trove of background information about readers? How will our answers be used?
Or maybe the behavior of other tech companies has made me overly suspicious.
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@ComeScoglio
Lie about everything. Confuse the "Borg".
8
@Juliet Lima Victor Exactly.
1
Thank you. :)
If inequality of wealth is a concern the simplest way to reduce it is for the Fed to aggressively raise interest rates.
Stock prices will fall - more so than housing owned by the lower 90%.
Cost of living will also probably improve - less inflationary pressure - helps rent - and most homeowners are on fixed rate mortgages.
Look at inequality in the few years post 2008 - how quickly it lowered.
2
Hey, I'm in the 15%! Thank god for food stamps!
5
I just spent a week fly fishing isolated mountain streams in Idaho at a total cost of less than $1,500, including airfare from Maine, and I fell like the wealthiest person alive. Net worth means nothing if you don't use your time wisely.
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Wealth depends on where you live. $1M in Lincoln NE is a lot wealthier than $1M in NYC.
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@Pajama Sam True, but money is portable. If one has $1 million that isn't going far enough in NYC, they can move to Lincoln. So they're rich, no matter where they live.
3
Kind of a misleading article. Always the comparison between white & black, white & Hispanic. What about Korean, Chinese, or others.
Then, the fact about the bottom 90% owning over half the homes, maybe because of sheer numbers.
I agree with the premise that as you accumulate wealth, you have more disposable income to play with.
In the end, extreme wealth doesn't make you happy, it only allows more choices.
4
The methodology is flawed simply by your definition of a "household". By doing so the title of your aritcle is completely misleading as it should say "Is your household rich?"
Older single people are on the rise due to many reasons (divorce, death, etc etc). Approximately 29% of the 46 million community-dwelling older adults now live alone, and nearly 50% of those 85.
5
Why isn't there a question asking how many people have to be supported by this net worth?
8
" ... excludes defined benefit plans and Social Security."
Some criticism of this premise is common among previous commenters. One -could- estimate one's wealth including these items by doing a "net present value" calculation of the annuity, and accounting this as an asset. But this would be only notional "riches:" it depends highly on the length of the payout (ow long will you live) and the assumed discount rate.
Individuals who start taking Social Security before full retirement frequently look at the calculation. In my case, the calculation showed a "crossover" age - when the higher benefit collected for a shorter time equaled the reduced benefit - of about 84. At 71, with a quad bypass and high blood pressure, how would the smart money bet?
So the Fed methodology seems reasonable: account as assets the things you can spend (or borrow against); notional assets should be accounted only by the current income stream they generate.
1
Thomas Picketty argues that income from wealth grows faster than income from work by around 1-2% per year. Doesn't sound like much but over time it compounds, the difference in incomes from wealth versus work doubling about every generation. In addition, wealth is passed from one generation to the next, allowing the snowballing of wealth to continue. He suggests that, short of a Great Depression or World War or wealth tax, we will see the creation of dynastic wealth and an oligarchy.
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@Josiah Wealth is not always passed from generation to generation. Lovely goal, but in our country, one major health catastrophe requiring long-term care can reduce a middle-class family’s “wealth” to zero.
5
What is this "household" exactly? In later years, let's say after 70, does a nest egg for a couple land them n the same percentile as a single (or widowed) person? Should a single head of household double her nest egg number? In earlier years, you might factor in children. but their costs vary so widely that I can see that would be challenging.
7
Middle class people put their money in housing, and are rewarded with a property tax bill.
Rich people put their money in stocks, and pay no property tax bill on that.
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@Sam I Am Profitable stock sales incur capital gains are taxed per the IRS: "The tax rate on most net capital gain is no higher than 15% for most taxpayers. Some or all net capital gain may be taxed at 0% if you're in the 10% or 12% ordinary income tax brackets. However, a 20% tax rate on net capital gain applies to the extent that a taxpayer's taxable income exceeds the thresholds set for the 37% ordinary tax rate ($425,800 for single; $479,000 for married filing jointly or qualifying widow(er); $452,400 for head of household, and $239,500 for married filing separately)."
- clearly linked to income
- dividend and interest income also taxed with a similar (progressive) rate.
...there's no free lunch
3
There is a million-dollar exemption from capital gains for anyone who sells their home. Selling even $1 of stock incurs capital gains (if there was a gain). There is also a deduction for homeowners for their annual property taxes, even though it is capped at a lower amount than it used to be.
Most wealthy people own a combination of physical property and stocks. And because their properties are generally worth more than yours and mine, they pay more in property taxes than we do. It's true there is no "property tax" on equities; if there were, it would be a nightmare to keep track of the values, which rise and fall on a daily basis.
It's much simpler and straightforward to charge taxes when a stock is sold.
5
@tabasco
Yes, but property tax is paid every year in addition to paying a tax once you sell your house. You only pay a capital gains tax once you sell the stocks, bonds, etc. Though, yes dividend is taxed but how many stocks pay dividends anymore?
8
I am a physician, graduated from residency 1 year ago and currently working as an attending. I was in the top 10% of income, but currently am in the bottom 5% of net worth after accounting for my medical school debt. This is unfortunately a common reality for many of us in the medical field in the United States.
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@Sarah I am an older physician. Yes, most of us were deeply in debt after residency. But, unlike many others, you and your classmates will be able to catch-up.
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@Sarah
I am a dentist. 8 years ago, I walked out of dental school with 340K in debt!!! Yikes.
If you are willing the put in the time in rural American communities that are starved for health care providers, your cost of living will plummet, the NHSC will throw money at you to practice in those rural communities. YOU are still in the top 10% of income in the US. I paid off ALL my loans in 4.5 years plus you will be providing care (which, I assume, is the reason you pursued healthcare) to those with limited access to care and will pay off your loans faster than you think.
Good luck. You can do it.
74
@Sarah. You can be reimbursed for medical school by serving in United stayed commission corps. It's a very good life experience also
5
Several others have pointed out that the middle class pays a wealth tax in the form of property taxes, but most middle class property tax bills are still small enough to be fully deducted from income taxes, even under the Republican's Raise Taxes Only on the Blue States plan. The people who are REALLY abused by property taxes are renters, who pay the tax as part of their rent but don't get to deduct it from their income taxes.
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@Green Tea
You are correct that a middle class person/couple has a property tax bill that most likely would be fully deductible when combined with state income taxes. However, what you missed is that under the new tax laws, a couple has a standard tax deduction of $24k, so that itemizing, even with a mortgage, is most likely not the best decision for them. Only 10% of taxpayers itemized in 2018, and those are mostly in the top 10% of income earners.
9
@Green Tea
Wow ... most people pay 15% or less in taxes ..so I getback
$150 per $1000 i spend on my real estate tax ...
Wow ...
@Green Tea
In Minnesota if you make below 70k the state will give you a tax deduction to help offset this
1
Looking at the graphs, one can draw some conclusions. Wealth increases significantly after an annual income of about $150,000. Wealth also increases significantly after age 50. This makes real world sense, as families with incomes less than $150K spend most of their money on "living", and families in their 50s and older are able to save more as retirement approaches and family expenses fall (mortgage is paid off, kids are out on their own). This ought to inform our government policy. First, as the article noted, federal tax laws ought to take into account regional cost of living variances. It would be interesting for economists to model the effects of this. Second, perhaps the break point for low vs high income tax rates ought to occur somewhere around $200,000, regionally adjusted. Third, perhaps a means test for social security should be developed that looks at potential investment income based on net worth invested in some "market average" investment vehicle. Fourth, there should be a limit on the amount of investment income that qualifies for a lower capital gains tax; any investment income above that limit should be taxed as ordinary income. All of these suggestions are worth some serious economic modeling.
16
I was the son of a carpenter, of parents who both came off family farms. I was "told" I was going to college and received a degree in education. I worked throughout my college tenure and had a minuscule student loan. Once I started working, I relocated and changed employers, states, countries, numerous times and retired completely debt free and well compensated. My wife. a nurse practitioner, shares a similar story. My nephew is a rising star at a regional company and I've told him that you will eventually be expected to relocate. He is pretty emphatic in stating he won't leave his home town. I have heard this way too many times from people his age. In many cases, it's not your heritage, your birthright, that limits your potential.
17
Fantastic piece on a fascinating topic, with clear explanations and helpful graphics and references to relevant scholarship. Thank you!
20
Across the span of my life and as a teacher, what I have seen again and again is the gap in "cultural capital" between rich and poor. Try as we might through taxation, social programs, even private charities, the gap in "cultural capital" between rich and poor replicates social divisions across the ages. The best predictor for being out of poverty, for example? Being married. Growing up in a married household. That's a form of cultural capital - yet our social and governmental programs focus on redistribution - giving people fish rather than teaching them how to fish in the first place.
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@Jason McDonald Actually, when you really look at the numbers, the government redistributes wealth to old people, the military industrial complex, and the medical industrial complex.
The "redistribution" argument is mostly a red herring issue designed to keep people from focusing on what's really going on.
9
Having money is a different skill than making money. The wealthy are very skilled at having multiple trusts that makes measuring their wealth murky. Trusts can be for multiple beneficiaries, across multiple generations. So whose money it really is - is not clear.
Family offices and the law firms, accountants and banks that serve them have made this very effective wealth protection system.
Trusts do pay higher tax rates that individuals. The government knows trusts are mostly a tool of the wealthy.
Raising taxes on trusts would be a tax on the rich.
13
I have negative net worth because, despite having a mortgage on a house that has appreciated, I have a lot of student loans (if you want to teach at the college level, you need graduate school, and for some funny reason I liked both paying rent and eating). Why do I have student loans, you ask? Because my family of origin isn't wealthy, because state schools have had funding cut dramatically so tuition has gone up 400%, because even a full ride for tuition doesn't cover fees and textbooks.
104
Technically, the US government doesn't consider accrued Social Security entitlements and what could be the corresponding wealth to generate them as wealth, but it is a mystery to me why wealth analysts accept this fiction. Future Social Security income is far more secure than any other form of wealth, be it stocks and bonds, private pensions, 401Ks and so on. No one every lost a penny of Social Security entitlements, unlike fee-driven retirement savings and collapsing pensions. Maybe it's not counted as wealth because Wall St. can't get its hands it (it's tried).
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@Robert Perhaps because they are aware of the Republican intent to take Social Security away from the people who need it and give it to rich donors.
25
@Robert
Income and wealth are separate categories in this analysis. Social Security is income, as are pensions.
18
@Robert Not counted as wealth because payments are linked to the life of recipient, stopping at death. Not so for assets owned.
19
The Upshot deserves accolades for broaching the subject of family wealth. Observations about performance of the stock market tending to help those at the top and increasing real estate values helping a wider range of homeowners is important for public policy. Data on age and race differences, also leads to the likelihood that black families statistically started later in a stable career path needed to accumulate wealth. The large number of 30-year-old white men living in the family’s basement over the last decade or two may perversely reduce the racial wealth gap.
Both Elizabeth Warren and Donald Trump are open to a wealth tax. Warren’s suggestion has been well publicized while the media consistently overlooks Donald Trump’s July 2000 proposal to repeal the inheritance tax and impose a one-time 14.25% wealth tax that would have paid off the national debt over three years.
With wealth taxation on the presidential campaign agenda it may be time to consider inverse taxation of wealth and income to help all families to retire as millionaires. Low wealth families would be able to elect to pay a wealth tax (up to 2%) in exchange for a proportionate reductions in income and payroll taxes (and a generous $500,000 per person retirement fund wealth tax exemption). This lets low wealth families keep more of their income and encourages the gradual accumulation of family wealth. Millions will know America is great as their tax returns calculate more family wealth than the year before.
6
@Eugene Patrick Devany
Donald Trump's wealth tax? As John McEnroe use to say: " You can't be serious!"
6
This was interesting information, especially regarding the wealth gap. The average American working person pretty much has to start from scratch, skimping and saving a lifetime to accumulate wealth. The trust fund babies only have to worry about losing the wealth they were given. Some will never acquire wealth, as their income never rises above the level required for rent and food. This disadvantage is inherited by their children and has pretty much established a growing group of people not only without wealth, but without hope.
37
Many people underestimate their relative wealth or income because they personally have difficulties in financing their lifestyle. They simply have no idea how most people live. They blame it on location. Like a nanny and private school cost so much in NY or DC or SF. It's entirely possible to live beyond one's means even when making a lot of money. It's also a lot easier to mismanage money if one makes enough such that one doesn't know "want" anyway.
19
@somsai - Many people also underestimate their relative worth because they are much more aware of all those who appear to have more than they do. They get hung up on what they don't have/can't afford instead of realizing how many people do not have as much as they do.
4
From those who are given much, much is expected.
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@Zeke27
Nobody gave ME anything but I will give YOU something - advise.
Save more of your money and don't expect anybody to give you anything.
7
There are other ways of measuring people besides income and wealth. Income inequality matters. But we've become too obsessed with money as the most salient measure of human worth. It wasn't this way 50 years ago.
37
@Richard Waugaman
You write: "... But we've become too obsessed with money as the most salient measure of human worth. It wasn't this way 50 years ago..."
Actually, I can vividly recall a university classmate, an international student, making this point to a visiting State Department official in a large assembly in 1965.
5
“Excludes defined benefit plans and social security” Wow, for people not firmly in the top 1%, taken together this can be the primary source of wealth. My dad is well into his 90s and has lived comfortably since retiring in his 60s due to a good defined benefit plan plus collecting social security. His savings aside from this were marginal. Flipped around, many reputable financial advisors suggest buying an annuity as you near retirement that would effectively replicate a defined benefit plan. To get an income of about $60,000 per year, not a massive income, you would need to put roughly $ 1 million - which means the value of the DBs and Soc Sec is very significant to a lot of people who typically are not in the top 1%
80
@ADP
Yes, thinking the same thing. The reason defined benefits and SS are not included is not stated.
But you are right: If a person with a combined annual social security benefit of say $36K (3 grand a month) and the same in a pension (another 36K) would take in $72K per year, or $720,000 over 10 years, almost $1.5 million over 20 years, and (bless ‘em if they make it) more than $2 million in 30 years, and so on.
So, the charts would be different for the ever-shrinking number of households that do have pension and social security incomes. Please note all Trumpers: Republicans want to destroy SS and have been taking away pensions for the 40 plus years.
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@RB Completely agree. Pension income is certainly "wealth" and should be considered when analyzing the "well-off" in this country. We all know government workers, police, fire, teachers, etc and other union workers who stay on the job for 20 years, retire from these jobs when they are in their 40s, early 50s, collecting high-3 based, 6-figure pensions and often continue to work in other jobs at the same time.
19
@RBThe maximum monthly Social Security benefit that an individual can receive per month in 2019 is $3,770 for someone who files at age 70. For someone at full retirement age (currently 66) the maximum amount is $2,861, and for someone aged 62 the maximum amount is $2,209.
16
Normalizing taxes on all types of income including capital gains, dividends, bond income, rent and anything else just like income will help simplify the tax structure and also much easier to monitor and enforce. With wealth taxes expect corruption to creep in as wealthy will pay to have one off assets such as a private island substantially undervalued to skimp on taxes.
20
I found a couple of the facts in this article very interesting. The 30 per cent gap between black wealth percentages and white wealth percentages is unsurprising but stunning. We are still living with the legacy of slavery and segregation.
The other fact was that the top .01 percent (that is 1 in 10,000) own between 8 and 22 percent of total wealth. That is a surprising range of values but this is a big number! In any case, anyone saying that very wealthy families should be spared a wealth tax is uninterested in equity or fairness. Homeowners, i.e. most of us, all pay a wealth tax on what is probably our biggest asset - it's called a real estate tax. Why shouldn't the very rich pay similarly?
BTW, Warren's wealth tax plan kicks in at $50 million. 99.9% of us would be unaffected.
224
@Gary A. Sure, 99.9% wouldn't have to pay the wealth tax, but it would still affect those at the bottom by funding benefits for them - which would be incredibly unpopular with many Americans.
7
@Gary A. My issue with a wealth tax is because it is very cumbersome and expensive to implement - for both sides. An annual appraisal of illiquid assets (real estate, art, furniture, antique cars, boats, etc) will be costly for the owner and costly for the IRS to review. And, inevitably lead to the IRS litigating with tax payers. After all that, how much net new tax revenue do you think will be generated?
9
@Gary A. The wealthy will figure out a way to reallocate their assets to avoid as much of it as they can. No one volunteers to pay taxes.
6
There must be some equity! How much is enough money? I have observed people spending money like water for nothing they really need while there are others working 20 hours a day to survive. Lets take the frivolous EXTRA money and share with others. Come on people with a million dollars a year in earnings, help others with this EXTRA money. I say tax the rich and that may include me.
43
@Nora - Wealth is not money. The rich hold stocks that represent ownership of buildings, factories, and vehicles. While you can sell the stock, you can't spend the underlying physical assets.
1
@Nora
Please send me some money, I could really use it.
5
@Nora
I agree ...once Steve Jobs had a billion he should not have made any more $ ...of course he likely would have stopped working ...and we wouldn't have iphones ...
but hey ...
5
I like to see the first graphic, showing the $ value of of wealth deciles, altered to include the number of American households in each decile. That would be an eye opener.
11
@Paul Downs there approximately 24 million households in the US in each of the 45-54 and 55-64 age brackets. So, there are about 240,000 households in each of the top 1% of those brackets with net worths that exceed $12mm and $14mm, respectively.
3
@Paul Downs
I designed a population/wealth graph a few years back that includes data from 1995 to 2010. The gap has grown significantly since then. See http://www.taxnetwealth.com/01_The_Wealth_Gap.aspx
2
We have enough "taxes" in this country without a wealth tax. If one works/saves their lifetime, if they receive an inheritance (and nothing is wrong with that), if they invest, etc. It is their money and no one (including the government) has a right to that money.
33
@Jan We already have a wealth tax in this country and it's called a property tax. As the article notes, the middle class store most of their wealth in houses and real estate, subject to an annual tax on its value.
A wealth tax would just be an extension of existing personal property taxes but capture liquid assets as well. Stocks, bonds, cash, etc..
179
@Jan there are so many tax benefits to having enough money when one can save. I deduct my mortgage interest and, until recently, all of my property taxes. I deduct my 401K contribution from my income. I make enough to get these tax benefits, but I do not make enough to hide money to lower my taxes. (Not a complaint -- an observation.)
Capital gains should be taxed -- and heavily. Income at the higher levels should be subject to a higher tax. People should pay social security on ALL of their income, not just the first $110K or so, and those who have enough should not get a social security benefit as they have gotten a tax subsidy under various programs and had the opportunity to save. Yes, I would lose money under my social plan, but I have enough.
Also, I am the first generation to go to college and I made my money by myself. I have never been poor, but I certainly know what it is like to live paycheck to paycheck.
74
@Jan
When a person makes use of public roads, schools, law enforcement, weather forecasts, fossil fuels (because they are heavily subsidized by our government), national parks, safe medicines (government watchdogs), safe bank accounts (FDIC), takes a safe airplane flight (NTSB, FAA), and a myriad of other services and safeguards, they are making use of other people's money (taxes) as well as their own.
With money you buy civilization. If you don't like to pay taxes, move to a failed country with no government, and see how much you can save.
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