Net worth break downs for the US

[stahleyp]

Anyone know where I can find good information about networth breakdowns?

 

For instance, how much do it take to get into the top 1%?

 

I've looked through the Federal Reserve information, search engines, wikipedia, etc. There is a lot of information about income but not much information about net worth. As always, thanks for the help!

 

I did find this site. While fun, it's certainly not scientific.  ;) https://www.networthiq.com/

 

 

[bargainman]

This is a bit dated, but a lot of very interesting information.

 

Check out the diff between whites and non-whites, and the mean and median, and the 90-100 percentile.  There are a few very rich people...

[stahleyp]

This is a bit dated, but a lot of very interesting information.

 

Check out the diff between whites and non-whites, and the mean and median, and the 90-100 percentile.  There are a few very rich people...

 

bargain, did you have a link or something? I'm missing it.

[bargainman]

Yeah good idea, how about I include that link ;-)

 

http://www.federalreserve.gov/pubs/bulletin/2009/articles/scf/default.htm#t4

 

[bargainman]

Here's another few interesting articles:

 

This one picks out some information from the reserve

http://www.bargaineering.com/articles/average-net-worth-of-an-american-family.html

 

article about the gap between rich and poor getting wider

http://money.cnn.com/2010/12/23/pf/rich_wealth_gap/index.htm?source=cnn_bin&hpt=Sbin

 

PDF version of Fed reserve information, I think it's the same as the other link but not 100% sure:

http://www.federalreserve.gov/pubs/bulletin/2009/pdf/scf09.pdf

 

Here is some of the info highlighted in the first article:

 

Across all groups, the 2007 median net worth was $120,300 and the mean was $556,300 (guys like Bill Gates and Warren Buffett really mess things up).

 

Here are a few of the more interesting ones (2007 median data, 2007 dollars):

Current work status of head:

 

Working for someone else: $350,100

Self-employed: $1,961,300

Retired: $543,100

Other not working: $124,100

Race or ethnicity of respondent:

 

White non-Hispanic: $692,200

Nonwhite or Hispanic: $228,500

Housing status:

 

Owner: $778,200

Renter or other: $70,600

[stahleyp]

Thanks for the help, bargain.

 

That's the same information I found, too. I'm surprised it's that hard to find information as to what constitutes the top 1%!  ???

[bargainman]

Woops sorry, missed the part about you looking at fedreserve already.  Here's an interesting article on the top 1%:

 

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

Figure 1 is interesting wrt the top 1%

 

Also here are a few graphs.

http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4#the-gap-between-the-top-1-and-everyone-else-hasnt-been-this-bad-since-the-roaring-twenties-1

 

Tough to find what the actual $ cut off is though.. Lots of percentages talk...  Would like to hear if you found out anything interesting...

 

This pdf has some information on $

http://www.levyinstitute.org/pubs/wp_589.pdf

 

see page 46. table 4

 

Looks like 2007 top 1% mean is 18.5 million, top 4% is 3.6 million net worth.

 

Bargainman

[given2invest]

Mean is pretty irrelevant I think.  I'd be interested to know what the median net worth is at the cutoff of top 1%, 5%, 10%.

 

 

[stahleyp]

Woops sorry, missed the part about you looking at fedreserve already.  Here's an interesting article on the top 1%:

 

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

 

Bargainman

 

Thanks for the help again, Bargain. There is some good information there. I haven't found much yet. I did find this, though

http://www.bankrate.com/brm/news/retirement/20071101_American_wealth_a1.asp

 

That's top 10%...but not top 1.

 

I seem to recall the top 1% of net worth is $5 million, but I can not find anything that verifies that.

 

 

 

http://answers.google.com/answers/threadview?id=381313

 

This guy does some math on his own and says that for an individual to be in the top 1% in 2004, he needed about a million. That doesn't seem right to me though.

 

 

http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20060517/

 

Families in the top 1% have a net worth of at least $6 million.

[Guest longinvestor]

Woops sorry, missed the part about you looking at fedreserve already.  Here's an interesting article on the top 1%:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

Figure 1 is interesting wrt the top 1%

 

 

Great facts, thanks for sharing the info. The story is scandalous, perhaps immoral like history has seldom seen.

 

The geographical map of where disparity is at its extreme worst is interesting (Texas, NY and the deep south). If we could zoom into the map it would probably show a few city blocks aroung Wall Street. Given that the data is as of 2007, it would be greatly interesting to see how the data has skewed even further during the last 3 years.

 

How do you explan stock ownership creating so much wealth for the top 1% while destroying so much of the rest of the population? For me it is asymmetric information at the root of it all. Insider information, stock message board manipulation, mutual fund mantras to collect fees, biased & deceptive stock analyses, talking heads on TV etc. How can the disparity grow over two decades, paradoxically when information has been the most freely accessible ever in history? This maybe the problem in itself, just because you read or hear something, it does not make it real. Data verus information, information versus knowledge, half truth versus truth etc.

 

It amazes me that Washington was able to extend the Bush tax cuts, it must surely be based on the utter ignorance of the populace of the stats shown here. Ignorance is bliss indeed.

 

Wish people like Buffet would spend even more time educating the masses. He is doing it but wish he would take to the airwaves a lot more. Buffet has previously mentioned the parallels between radio in the 1920's and the internet. People who should not have been in stocks ended up there.

 

And just when equities are greatly attractive is when the population shuns them, rear view mirror thinking at its worst.

 

 

[ERICOPOLY]

Here's an interesting article on the top 1%:

 

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

Quoting from that article:

financial wealth is what counts as far as the control of income-producing assets

 

Table 1 shows that the top 1% owned 42.9% of total financial weath in 1983, but this number slipped to 42.7% by 2007.

 

The trend shows that the top 1% is taking a relatively smaller slice of the financial wealth pie.  I'm not sure that's bad, unless you are that 1% and you are worrying about losing your control?

[stahleyp]

Here's an interesting article on the top 1%:

 

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

Quoting from that article:

financial wealth is what counts as far as the control of income-producing assets

 

Table 1 shows that the top 1% owned 42.9% of total financial weath in 1983, but this number slipped to 42.7% by 2007.

 

The trend shows that the top 1% is taking a relatively smaller slice of the financial wealth pie.  I'm not sure that's bad, unless you are that 1% and you are worrying about losing your control?

Look at table 3 over the past 35 years or so.

With tabel 1, look at the bottom 80%. They are the ones getting the shaft.

 

[Guest longinvestor]

Table 1 shows that the top 1% owned 42.9% of total financial weath in 1983, but this number slipped to 42.7% by 2007.

The trend shows that the top 1% is taking a relatively smaller slice of the financial wealth pie.  I'm not sure that's bad, unless you are that 1% and you are worrying about losing your control?

 

Actually the table below shown in the other referenced article above tells more about the story. The "top 1%" just happens to be a gross approximation of what has happened with extreme polarization of wealth.

 

Table 3. The Count of Millionaires and Multimillionaires, 1983–2007       

Total Number (in thousands) with  Households Net Worth Equal to or Exceeding (in 1995$): (1,000s)

            Year Households 1  Million         5 Million       10 Million 

              1983    83,893 2,411  247.0  66.5 

              1989 93,009  3,024  296.6  64.9 

              1992 95,462  3,104 277.4  41.6 

              1995 99,101  3,015  474.1  190.4 

              1998  102,547  4,783  755.5 239.4 

              2001  106,494 5,892 1,067.8 338.4

              2004  112,107 6,466 1,120.0 344.8 

              2007  116,120 7,274 1,466.8 464.2 

  % Change    38.4      201.7              493.8            598.3   

 

 

 

[Tim Eriksen]

Since no one else has stepped up to say it, I will.  I disagree that the 80% is "getting the shaft" or that the situation is necessarily "immoral".  ( I am not talking about CEO pay - that is a rigged system).  To be clear, I have spent all, or nearly all, of my life in the bottom 80% not the top 20%.  This country provides opportunity like few others.  What people do with that opportunity is up to them.  Net worth, in general, is achieved through smart decisions.  It starts with emphasizing education and avoiding drugs and alcohol.  A good education in a well-paying field combined with living below their means allows one to accumulate savings.  To that they must add the knowledge of how to invest and odds are good that they will have a significant net worth as they age.  If that knowledge is passed on to their children, then odds are high that their children will do even better than the prior generation.

 

I would also note that the article has a clear liberal bent (UC Santa Cruz is known for being a liberal school).  But the bias is seen in the use of the term "leftover" when describing what the bottom 80% have.  As well as "ultra-conservative" to describe those against inheritance taxes.  One would be well served to counter the article with readings from Thomas Sowell.  He shows how income disparity, particularly the racial disparity, is not due to racism but due to level of education, stability (marriage), and other factors.  That is not to say that racism does not exist in our society, because it clearly does, but it is not the primary cause of the net worth disparity.

 

Equality of opportunity is the goal, not equality of outcome.         

[ERICOPOLY]

Table 1 shows that the top 1% owned 42.9% of total financial weath in 1983, but this number slipped to 42.7% by 2007.

The trend shows that the top 1% is taking a relatively smaller slice of the financial wealth pie.  I'm not sure that's bad, unless you are that 1% and you are worrying about losing your control?

 

Actually the table below shown in the other referenced article above tells more about the story. The "top 1%" just happens to be a gross approximation of what has happened with extreme polarization of wealth.

 

Table 3. The Count of Millionaires and Multimillionaires, 1983–2007        

Total Number (in thousands) with   Households Net Worth Equal to or Exceeding (in 1995$): (1,000s)

           Year Households 1  Million        5 Million      10 Million  

             1983    83,893 2,411   247.0   66.5  

             1989 93,009   3,024   296.6   64.9  

             1992 95,462   3,104 277.4   41.6  

             1995 99,101   3,015   474.1   190.4  

             1998  102,547   4,783   755.5 239.4  

             2001  106,494 5,892 1,067.8 338.4

             2004  112,107 6,466 1,120.0 344.8  

             2007  116,120 7,274 1,466.8 464.2  

 % Change     38.4       201.7               493.8            598.3    

 

 

 

 

Is this partially explained by the baby boomers?  In other words, if the age distribution is top-heavy, it stands to reason that there will be more millionaires.  Expressed differently, is this huge demographic more or less likely to have millionaires today at age 55 vs 24 years ago at age 31?

[ERICOPOLY]

Here is a good one:

http://en.wikipedia.org/wiki/File:United_States_Population_by_gender_1950-2010.gif

 

It's an animated GIF that shows the age demographics of the United states from 1950 to the present.  Every second it increments the year and the picture changes.

 

A martian would comment "this is going to lead to a higher proportion of millionaires" even if he had no other data to look at.  Older people have saved longer and had the magic of compounding in their favor.  I would say this is a no-brainer.

 

The "typical" millionaire is age 57.  As the proportion of the population increasingly shifts towards that age group (the baby boomers), should we therefore expect more millionaires.

 

Thrifty people who save and invest are not millionaires by age 25.  It takes a bit of time to get the snowball rolling.

 

This isn't really related, but do those of you in your 20s really feel jealous of 50+ yr old millionaires?  They can't take it with them.

[stahleyp]

Here is a good one:

http://en.wikipedia.org/wiki/File:United_States_Population_by_gender_1950-2010.gif

 

Thrifty people who save and invest are not millionaires by age 25.  It takes a bit of time to get the snowball rolling.

 

This isn't really related, but do those of you in your 20s really feel jealous of 50+ yr old millionaires?  They can't take it with them.

[/quote

 

I'm not jealous of their millionaire status. I'll get there soon enough. However, I am jealous of the crazy returns they generated from 1980-2000.

[dowfin1]

A new report on wealth distribution in the U.S. is out.

 

http://epi.3cdn.net/2a7ccb3e9e618f0bbc_3nm6idnax.pdf

[stahleyp]

great, great information. thanks for sharing!

[Hawk4value]

"Since no one else has stepped up to say it I will":  Forever analyzing and wringing our hands over "wealth distribution" is nonsense. The only people that really need to talk about this are politicians who need to throw a "bone" to the "80%" to get their votes, and the mis-directed liberals who are ideologically inclined.

 

The facts remain that if you are a diciplined individual who is studious, hard working, frugal, and with a modicum of ambition you can be successful. This country affords everyone access to opportunity. That is all you can expect from a free society, if you want it to remain free. Class warfare and the bashing of successful people sends a horrible message to our youth. Instead of laboring over ways to confiscate the wealth of the top 1%, we should teach our young to admire and imitate success, not expect government's re-distribution largesse in the form of unemplyment insurance, food stamps, welfare checks, etc., etc., etc., and so on, and on, and on,.......................Where it stops no one knows.

[Parsad]

The facts remain that if you are a diciplined individual who is studious, hard working, frugal, and with a modicum of ambition you can be successful. This country affords everyone access to opportunity. That is all you can expect from a free society, if you want it to remain free. Class warfare and the bashing of successful people sends a horrible message to our youth. Instead of laboring over ways to confiscate the wealth of the top 1%, we should teach our young to admire and imitate success, not expect government's re-distribution largesse in the form of unemplyment insurance, food stamps, welfare checks, etc., etc., etc., and so on, and on, and on,.......................Where it stops no one knows.

 

I agree with you for the most part Hawk, but at the same time, the inherited wealth that passes amongst the top 10% is also contrary to the workings of a free-market system.  That capital becomes stifled in inter-generational wealth, and does not go to where it could be used most efficiently. 

 

I'm definitely one that believes that inter-generational wealth makes the economy less efficient, and in a sense is welfare...but for the offspring of the rich.  I think a very high estate tax on estates of $100M, or a tax forcing the wealthy to either donate or spend the majority of capital passed to each generation would be good for the system.  The problem is how do you implement something like that!  Cheers!

[collegeinvestor]

I disagree with you Parsad. If you earn money in this world you should be able to determine how you spend  your money. Taxes leads to people uninterested in creating enduring wealth for themselves and others.

[ragnarisapirate]

I'm with college investor on this one... Besides, if the descendants of the wealth generators are the screw ups that they are often portrayed as, they will piss the money away eventually, and it will get allocated in an efficient manner.

 

Even if it just sits in a bank, that is good for people that want to take out a loan. If it sits in dividend paying stock, that is good for the shareholders, who have less of a float. If they live lavishly off of dividends, then, maids have work, airlines sell tickets, mercedes sells cars, and russia sells some expensive vodka.

 

Regardless, I am always shocked at peoples willingness to tell other people what they should do with their money, which is essentially what an estate tax is; the mindless masses telling the rich how their capital should be distributed after their demise...

[Parsad]

I disagree with you Parsad. If you earn money in this world you should be able to determine how you spend  your money. Taxes leads to people uninterested in creating enduring wealth for themselves and others.

 

So how do you explain Walmart, Microsoft and Berkshire Hathaway all being created when taxes were higher?  Were Sam Walton, Bill Gates or Warren Buffett any less incentivized to create what they built? 

 

Yes, if you have massive tax increases, at some point you will disincentivize a proportion of people, but in general, people are not going to stop working, building, consuming or acquiring if they see a 10% pop in their tax bill.  The system provides the entrepreneurial minded certain advantages that aren't available anywhere else.  Taxes are a fee to use that system. 

 

Recently in British Columbia, they removed the goods and sales tax and replaced it with the harmonized sales tax.  The initial reaction was a huge outcry and attempts to recall elected officials, as well as a drop in consumption, but by removing the GST, they reduced the cost to manufacturers.  After a period, the system will reach equilibrium and people will continue to consume.  In the meantime, the HST is reducing the cost to manufacturers, which in turn means greater employment.  After all the wailing and lobbying, the truth is the system always continues to work because people want to create a better life for themselves, regardless of whether their tax bill goes up or down.  They know they have a system that creates an advantage for them, and ultimately they are willing to pay to make it even better.

 

Regardless, I am always shocked at peoples willingness to tell other people what they should do with their money, which is essentially what an estate tax is; the mindless masses telling the rich how their capital should be distributed after their demise...

 

That's partly true College, but the fact remains that no one becomes a success without some opportunities being provided to them already...both by the mindless masses and the rich.  Your subsidized schooling, healthcare, etc, along with your work ethic, talents and some good fortune, have provided you with the opportunities that you have now.  Everyone does it with some help...including the rich who would not be where they are without some of that mindless mass.  Cheers!

[collegeinvestor]

Creating wealth, though, is not a zero sum game and as someone gets wealthy they are also benefiting others in tandem. You don't get to take what you don't give.