The 1% in the household income and net worth distributions in the US in 2020

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:this forum makes me feel so freaking poor

Richness in life is derived from family, friends and health. Sure, it’s helpful to have money but it only helps to an extent.

Poor people always say this.

Unintelligent people often speak in absolutes.

[Anonymous]

Anonymous wrote:In 2020, my DH and I hit the 1 percent for HHI (in our early 50's). But we are far far far from the 1 percent in net worth.

Is that like 5M far? Three zeroes far? How far is far far far? I would think after some years at 1% income you will be a lot closer to the net worth number.

[Anonymous]

94th percentile for household income, 95th percentile for net worth by our age group. But our net worth is mostly because of a $400,000 inheritance and a $500,000 profit from selling our first house; we did nothing to earn any of it, really.

[Anonymous]

Anonymous wrote:94th percentile for household income, 95th percentile for net worth by our age group. But our net worth is mostly because of a $400,000 inheritance and a $500,000 profit from selling our first house; we did nothing to earn any of it, really.

That is more common than you think.

[Anonymous]

Especially in this period of unprecedented wealth transfer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ridiculous. We are just in the top 1 percent, by a whisker, but we are very far from rich.

After paying mortgages on our two homes, bills, private school, meals out, soirees, European vacations etc. there is very little left at the end of the month.

Well done. You almost had me.

Ditto

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:this forum makes me feel so freaking poor

Richness in life is derived from family, friends and health. Sure, it’s helpful to have money but it only helps to an extent.

Poor people always say this.

Nope; well off people who have never been poor always say this....

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ridiculous. We are just in the top 1 percent, by a whisker, but we are very far from rich.

After paying mortgages on our two homes, bills, private school, meals out, soirees, European vacations etc. there is very little left at the end of the month.

You have my sympathy!

Same. I will pray for you, PP.

[Anonymous]

Anonymous wrote:94th percentile for household income, 95th percentile for net worth by our age group. But our net worth is mostly because of a $400,000 inheritance and a $500,000 profit from selling our first house; we did nothing to earn any of it, really.

This is usually how it works.

Also, plenty of very smart and capable people choose careers that will never get them into a top income bracket but are very valuable, important, often challenging careers. Education, nursing, non-profit work, government service. Plus all the jobs that may not be as essential but bring so many of us joy -- restaurant work, making beer, making art, performers.

No one "earns" being rich, in the sense that the things it takes to become rich are generally no more valuable to society than other things. It usually just means your work is closer to sources of power and capital. That's why finance is so lucrative even though its net benefit to society is negligible (and honestly, most finance activity is actively bad for society).

[Anonymous]

We are well into the top 1% and 1% and I think that would surprise a lot of people because we don't live like that. We worked very hard for almost 40 years to achieve that level and we never really had time to live a life of luxury. Now we have the time but we don't really do it because it's just not part of our DNA. Our priority now is our children, grandchildren and those who really need help. We do live well and travel well but knowing that our grandchildren's educations will be covered is important to us. A lot of our money is in a donor advised fund which our children will eventually inherit so that our money will always be used for a good cause.

[Anonymous]

https://fred.stlouisfed.org/series/WFRBSB50215

This FRED data is interesting in that in 2Q2020, the bottom 50% in the wealth distribution owns 1.9% of total U.S. wealth. Looks like in 2Q2010 it was just 0.3%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:94th percentile for household income, 95th percentile for net worth by our age group. But our net worth is mostly because of a $400,000 inheritance and a $500,000 profit from selling our first house; we did nothing to earn any of it, really.

This is usually how it works.

Also, plenty of very smart and capable people choose careers that will never get them into a top income bracket but are very valuable, important, often challenging careers. Education, nursing, non-profit work, government service. Plus all the jobs that may not be as essential but bring so many of us joy -- restaurant work, making beer, making art, performers.

No one "earns" being rich, in the sense that the things it takes to become rich are generally no more valuable to society than other things. It usually just means your work is closer to sources of power and capital. That's why finance is so lucrative even though its net benefit to society is negligible (and honestly, most finance activity is actively bad for society).

Sure, but inheriting money or getting lucky on selling your house takes even less work than working does.

[Anonymous]

Anonymous wrote:

Anonymous wrote:94th percentile for household income, 95th percentile for net worth by our age group. But our net worth is mostly because of a $400,000 inheritance and a $500,000 profit from selling our first house; we did nothing to earn any of it, really.

That is more common than you think.

Doesn’t matter if it’s common or not, we still didn’t do anything to deserve the money.

[Anonymous]

58th percentile for HHI nationwide, 38th for DC area. We're doing fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:94th percentile for household income, 95th percentile for net worth by our age group. But our net worth is mostly because of a $400,000 inheritance and a $500,000 profit from selling our first house; we did nothing to earn any of it, really.

This is usually how it works.

Also, plenty of very smart and capable people choose careers that will never get them into a top income bracket but are very valuable, important, often challenging careers. Education, nursing, non-profit work, government service. Plus all the jobs that may not be as essential but bring so many of us joy -- restaurant work, making beer, making art, performers.

No one "earns" being rich, in the sense that the things it takes to become rich are generally no more valuable to society than other things. It usually just means your work is closer to sources of power and capital. That's why finance is so lucrative even though its net benefit to society is negligible (and honestly, most finance activity is actively bad for society).

Sure, but inheriting money or getting lucky on selling your house takes even less work than working does.

Agreed. If you’ve inherited money or you happened into a real estate windfall, you’re lucky, you aren’t doing anything particularly impressive to amass your wealth. You probably have to try to squander it at that rate.