Net Worth of the 10%, 1%, and 0.1% Households

[street]

Here is a Newsweek article about the minimum NW required to be in the top 1% by State. I don't have any idea if this is comparable to the data posted by the OP.

"The analysis used population estimates from the 2019 U.S. Census Bureau and net worth estimates from Windfall's wealth database of more than 80 million households. For each state, the minimum net worth required to qualify in the top 1 percent for that state is included, along with the median net worth of all homeowners with a primary residence in that state, and total homeowners with a net worth of $1 million or more. Net worth represents an individual's assets like homes, cars, and investments, less their liabilities like and other debt."

California -$6.8M
Georgia - $2.2M

So, what this article is saying is that, you are in the 1% of the number shown or greater, you are in the 1% wealthiest in that state, right?

If, I lived in Georgia and had a NW OF $2.5m I would be in the 1% of the wealthiest in that state.

 

[Amethyst]

Maryland has a lot of poor people. Not just Baltimore, but all those Eastern Shore counties, with failing farms, no industry and no tourist income.

You and I are from the part that has full employment, good employment, lots of business owners and defense contractors, and numerous enclaves of multi-million-dollar houses. In such environments, $2.842M is not that much.

Wow, I never figured the 1% bar would be so low for Maryland. "Only" $2.824M to break into that threshold? While I'm not there yet, if you tacked real estate equity onto my investible assets, I'd probably be around $2.6M.

I'd call myself "comfortable", but certainly don't feel "rich". And didn't think I'd ever had a snowball's chance in hell of getting that close to Maryland's 1%.

And that guy they mentioned, as Maryland's richest resident, Stephen Bisciotti? Maybe 10 minutes away, tops. About 4 miles. Probably about 1.5, as the crow flies. To think I practically drive right past his house every time I go to Aldi or the Good Will, in my 18 year old Buick with its dented quarter panel and missing hubcaps

 

[CardsFan]

We do these threads periodically, and I confess to reading them with interest. But, all these statistics are meaningless.

Do yo have enough?

Are you Happy?

Is your family well cared for?

If yes to the above:

Then you are in the top whatever percent you want to be.

 

[foxfirev5]

We do these threads periodically, and I confess to reading them with interest. But, all these statistics are meaningless.

Do yo have enough?

Are you Happy?

Is your family well cared for?

If yes to the above:

Then you are in the top whatever percent you want to be.

Yep. It's a joke - on them.

 

[OldShooter]

... Do you have enough? ... Then you are in the top whatever percent you want to be.

I have come to understand that this is the recipe. "Enough" means the end of comparing, greed, and envy.

Recounted by John Bogle: At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informs his pal, the author Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel "Catch 22" over its whole history. Heller responds, “Yes, but I have something he will never have . . . Enough.”

 

[dtbach]

Looks like I'm in the top 2% in Wisconsin. But more importantly I still have good health, great kids and have enough to give generously to charities with plenty left over for myself and family.

 

[Jerry1]

We do these threads periodically, and I confess to reading them with interest. But, all these statistics are meaningless.

Do yo have enough?

Are you Happy?

Is your family well cared for?

If yes to the above:

Then you are in the top whatever percent you want to be.

This is so true, but the one thing I get out of these threads is a feeling of knowing that, while I don’t feel rich, if the SHTF, I will be in good company. Said another way, a lot of hurt will happen before it hits my level. It’s not a “good” feeling, but it’s a feeling that I’m above the catastrophe line. Anything below that and I’m confident I’ll be alright.

 

[cyber888]

I'm in Low cost area North Carolina, so above the 10% is fine with me.

 

[Doc Holiday]

Part of me wants to quote the old “Comparison is the thief of joy.”
Another part on the other hand read all three pages here (and pulled out the centerfold too!)
And the last part wonders why there is such a discrepancy between the first set of data where 1% is over 11 M and the data from Newsweek where none of the 1% in any state is anywhere close to that. Anyone get this?

 

[Markola]

I was most surprised about Connecticut, which I imagine as chockablock with gadzillionaire hedge funders and with Nevada, which I didn’t know had so much wealth.

 

[2017ish]

The newsweek data/article and the fed's data aren't reconcilable--the former's richest state doesn't meet the latter's national number for top 1%.

As others have said, we are happy with where we are at, no matter what percentile that slots us into.

 

[bada bing]

I came here to feed my ire against the evil 1%ers, then read the Newsweek link to find out I am one

dammit

 

[NW-Bound]

Here is a Newsweek article about the minimum NW required to be in the top 1% by State. I don't have any idea if this is comparable to the data posted by the OP.

"The analysis used population estimates from the 2019 U.S. Census Bureau and net worth estimates from Windfall's wealth database of more than 80 million households. For each state, the minimum net worth required to qualify in the top 1 percent for that state is included, along with the median net worth of all homeowners with a primary residence in that state, and total homeowners with a net worth of $1 million or more. Net worth represents an individual's assets like homes, cars, and investments, less their liabilities like and other debt."

California -$6.8M
Georgia - $2.2M

Very interesting data. While many data points can be expected, quite a few states are not as wealthy as I thought.

 

[Cobra9777]

I wonder if the value of any pension or SS payment is added to these net worth rankings.

According to the links provided by MichaelB in post#22, "net worth" in this study does not include the NPV of DB pensions or SS:

Unfortunately, future income streams from OASI and DB plans cannot be translated directly into a current value because valuation depends critically on assumptions about future events and conditions—work decisions, earnings, inflation rates, discount rates, mortality, and so on—and no widely agreed-upon standards exist for making these assumptions.

It does seem to include so-called quasi-liquid, account-type pensions, which I interpret to mean DC or hybrid type pensions that have an easily-quantifiable cash redemption value, which is likely to be portable across jobs..

Financial assets also include the current cash value of whole life insurance, as well as annuities and trusts where there is an equity interest, not just the right to receive a stream of income. Financial assets also include oil and gas leases, futures contracts, royalties, proceeds from lawsuits or estates in settlement, and loans made to others. Interestingly, it specifically excludes employment-related stock options because:

...such options are typically not publicly traded or their execution is otherwise constrained, their value is uncertain until the exercise date; until then, meaningful valuation would require complex assumptions about the future behavior of stock prices.

Lastly, non-financial assets include not just the primary home but vehicles, including: cars, trucks, RVs, motorcycles, boats, airplanes, and helicopters. It also includes vacation homes, rental properties, and the net equity value of businesses.

No mention as to whether tax-deferred accounts are valued at gross pre-tax amounts or after tax. My guess would be the former, just based on the difficulty of estimating the latter.

All in all, I'd say it's a well-reasoned definition for the purpose of the study. Although I don't really think it's all that difficult to calculate a reasonable NPV of a DB pension, annuity, or SS. It would be a much more complete and meaningful study of comparative wealth if those items were included. Also, when working, I valued employee stock options using current stock value (minus tax). This was much more meaningful and useful compared to zero, until exercise date. That's just goofy.

 

[CSdot]

Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.

 

[Jerry1]

Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.

I never does seem to “feel like it”. But, when you take some time to reflect, you realize how much different it is for you compared to others and compared to yourself before you had substantial wealth.

It’s kind of like looking in the mirror at yourself all your life. Your logical brain knows you’re getting older, part of you just sees the same person.

I’m not at the 1% but I struggle with the same feelings. I think it also has to do with expectations. Maybe we expected some magical change when we became FI, but you still feel pressure financially even if self imposed, so that magical day never really comes.

 

[Perryinva]

We do have to remember that the majority of all those households are still w*rking, not retired and certainly not early retired as we are. Of more significance would be retiree household percentages, which would then reflect the amounts owned by households that are “finished”, not working to get there. If the numbers were/are still similar, then wouldn’t it just seem wrong, that we in this small group, who consistently claim to be comfortable but certainly not rich, are in the top 10%ish , meaning that 90% are not comfortable and do not have secure retirements? I KNOW most are not set, and most depend entirely on SS. It just seems like a fail that so many are so lackadaisical about their futures.

 

[Joylush]

Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.

It’s a hard feeling to adapt to. We’re in the top 1% for our state too. My husband was out today and really wanted a Whopper. When I asked him why he didn’t stop and get one he said, “I was going to but I didn’t have any coupons with me!”

He cracks me up. Old habits are hard to break.

 

[Ed_The_Gypsy]

It IS time time plan your exit strategy. Good job.

 

[Sunset]

It’s a hard feeling to adapt to. We’re in the top 1% for our state too. My husband was out today and really wanted a Whopper. When I asked him why he didn’t stop and get one he said, “I was going to but I didn’t have any coupons with me!”

He cracks me up. Old habits are hard to break.

That's how we made it to FIRE , coupon's to retirement

 

[Bigdawg]

I am assuming uphill both ways.....

In a snow storm? Oh wait, that was walking to school back in the day. LOL

 

[Amethyst]

When we did our estate planning, the attorney documented our net worth based on investable assets, savings bonds, retirement accounts (including tax-deferred annuity accounts, which can be redeemed for cash minus taxes), value of home(s) and personal property (had me estimate the sale value of my jewelry, for example). Our Federal pensions were not included, because they can't be sold, borrowed against, or inherited.

The pensions do have a "value" compared with the current cost of an inflation-indexed annuity producing the same monthly income for someone of the same age. That value is, naturally, diminishing as we age. It's tempting to include it, though, because the income is certainly there, and a person with no pension would need real assets to generate it. But the "assets," in our case, were the years we served and paid into the pension fund...and those are gone.

According to the links provided by MichaelB in post#22, "net worth" in this study does not include the NPV of DB pensions or SS:

It does seem to include so-called quasi-liquid, account-type pensions, which I interpret to mean DC or hybrid type pensions that have an easily-quantifiable cash redemption value, which is likely to be portable across jobs..

Financial assets also include the current cash value of whole life insurance, as well as annuities and trusts where there is an equity interest, not just the right to receive a stream of income. Financial assets also include oil and gas leases, futures contracts, royalties, proceeds from lawsuits or estates in settlement, and loans made to others. Interestingly, it specifically excludes employment-related stock options because:



Lastly, non-financial assets include not just the primary home but vehicles, including: cars, trucks, RVs, motorcycles, boats, airplanes, and helicopters. It also includes vacation homes, rental properties, and the net equity value of businesses.

No mention as to whether tax-deferred accounts are valued at gross pre-tax amounts or after tax. My guess would be the former, just based on the difficulty of estimating the latter.

All in all, I'd say it's a well-reasoned definition for the purpose of the study. Although I don't really think it's all that difficult to calculate a reasonable NPV of a DB pension, annuity, or SS. It would be a much more complete and meaningful study of comparative wealth if those items were included. Also, when working, I valued employee stock options using current stock value (minus tax). This was much more meaningful and useful compared to zero, until exercise date. That's just goofy.

 

[stepford]

Many of us with Megacorp pensions were offered lump sums, but chose the annuity as the NPV significantly exceeded the buyout offer. It just seems odd that this decision significantly decreased our net worth using the current definition.

It doesn't really matter as NW is just a "keeping up with Joneses" metric, but I know a few Joneses with large pensions but relatively modest savings who keep up with the 1% just fine.

 

[atmsmshr]

Based on home values and conspicuous consumption, we would seem to be the "poor people" in our neighborhood. Which is fine with us.

Yes - but the corresponding home values on the island in your neighborhood can be a bit eye-watering.

 

[atmsmshr]

We do these threads periodically, and I confess to reading them with interest. But, all these statistics are meaningless.

Do yo have enough?

Are you Happy?

Is your family well cared for?

If yes to the above:

Then you are in the top whatever percent you want to be.

Spot On!