Estimates tend to vary depending on the source of data, but according to the Russell Sage Foundation, the top 10 percent of American households have a net worth of at least $763,000; the top 5 percent hover around $1.3 million. It’s safe to say that if an American is worth more than three-quarters of a million dollars, she’s at least sort of rich."
ThanksExcerpts:
"The most basic way to do it: look at the income distribution and pick a cutoff. According to the ... World Top Incomes Database, a household income of about $113,000 lands you at the top 10%, while $394,000 makes you a bona fide member of the 1 percent. You could reasonably argue that anybody who earns above those thresholds is, in a sense, rich—or at least makes a relatively uncommon amount of money.
That’s why it’s better to think about the question of who’s rich in terms of accumulated wealth instead of annual income (which in turn is a good argument for a wealth tax). ...
Your net worth will bobble around with the stock market and home prices, but compared with income, it’s a relatively stable marker of how financially set you really are.
It also takes into account things such as inheritance ...
If you're really defining rich you've got to count pensions in that too. There are plenty of people with pensions that create more cash flow than a $1.3 million portfolio will spin-off.
+1000.TRANSLATION: 'Hey, some of us ( the people this article is trying to attract) make around $113,000, and you sure can't pick on us - we ain't stinkin' rich! So we need another measurement - yeah, accumulated wealth sounds good - we don't have much of that, 'cause we spend it all on fancy cars, fancy vacations, fancy gym clubs, private schools, and the high COLA here. Go get that other guy/gal!'
How can I put this eloquently? Let's see- - how about, hmmmm "Bull Stuffing!". I've had my net worth change more in one month than my annual income (when I was working even).
No! That will hit too close to home for comfort for some of their constituents! Pay no attention to that fully COLA'd pension behind the curtain, or any other retirement benefits! Those people are not 'rich', they want to point to those other 'rich' people!
-ERD50
Excerpts:
" according to the Russell Sage Foundation, the top 10 percent of American households have a net worth of at least $763,000; the top 5 percent hover around $1.3 million. It’s safe to say that if an American is worth more than three-quarters of a million dollars, she’s at least sort of rich."
To think that only 10% of American households have a net worth of $763,000 is scary. Heck I had that much by my mid 40's and I never made over $100,000.
Sure would be hard to retire to the good life on an SWR of 4% on that amount.
To think that only 10% of American households have a net worth of $763,000 is scary. Heck I had that much by my mid 40's and I never made over $100,000.
Sure would be hard to retire to the good life on an SWR of 4% on that amount.
Am I actually supposed to care what other people have?
If I feel that I have enough for me and my family, well isn't that enough?
To think that only 10% of American households have a net worth of $763,000 is scary. Heck I had that much by my mid 40's and I never made over $100,000.
Sure would be hard to retire to the good life on an SWR of 4% on that amount.
Spot on. Most of us don't see the lower class on a day to day basis, so we don't feel as well off as we are.I think the main reason it's hard to feel "rich" or to believe that $1 Million = rich, is that people, for the most part, tend to live in the best place they can afford. That means that if you have $1M, everyone working and living around you has that much, or more. You see all the consumption, vacations, etc. going on around you, and feel like you're barely keeping up.
Traveling around the country opened my eyes to how very little most people in the U.S. actually have. They live in vast areas filled with others who also have very little, and only really mingle with the 5% at the Motor Vehicle Administration or the box store. No doubt this contributes to the perception gap between the populace and the people they elect to represent them. Once the representative gets into the big-time, the big-time gets to feel like the norm.
Amethyst
I was thinking the same thing. I just hit the $1M mark in investable assets last month, so I'm already in the top 10%? Just doesn't seem possible. Maybe I'm just selling myself short, but I'm figuring that heck, if I can do it this easily (not that it was always easy though), I'm sure plenty of others could as well. And if it only takes $1.3M to get into the top 5%? Well, I'm in striking distance of that, and could conceivably hit it in another couple years.
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Spot on. Most of us don't see the lower class on a day to day basis, so we don't feel as well off as we are.