The One Percent vs the Average American
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The Top 1% vs. The Average American
How different are we, really? Isn’t money just a lot of paper and metal that we carry around with us? It’s not like that changes who we are fundamentally, how we live our lives, whether we marry and have kids, and what our careers are. Hmmm… actually, that’s how it would be ideally. But in reality, the divides between the 1% and the 99% are deep and firmly set.
Only 1/2 of the folks in the top 1% actually know they’re in the top 1%. The others probably don’t realize the income cutoff is lower than they thought, since you can make well under $1,000,000 per year and still be in the top 1%. How?
The average income of all Americans is $51,413 per year, but that’s $665,587 less than the $717,000 annual average of 1-percenters. Sure, that’s a lot, but it’s less than you thought, isn’t it? That’s because a lot of the difference comes down to overall wealth: net worth rather than net income.
While the top 1% are worth an average of $8.4 million, the rest of us are only worth about $121,000. That’s a MUCH bigger difference than when just looking at income. The 1% is worth 70 times more than the 99% when it comes right down to it.
If you’re in the top 1%, it’s also much more likely that you’re married, because 3 out of 4 1-percenters are. Only 1 in 2 average Americans are married–still nothing to scoff at, but a notable difference.
Men remain the main breadwinners in both income brackets, but they bring home 75% of the income for households in the top 1%, whereas the 99% only see 64% of their family income coming from men. It’s more likely women will be contributing to a significant portion of the household income when overall earnings are lower.
1-percenters are much more likely to have children under the age of 18–49% have at least one minor child, compared to 31% of average Americans. Guess they aren’t spending that extra dough on birth control!
The largest portion of average Americans have Democratic leanings (47%), while the majority of top earners (57%) are closer to Republican. It seems that morals and ideals do correlate at least somewhat to your financial lot in life.
If you’re a 1-percenter, you’re extremely likely to have a college education, because 72% of top earners do. However, fewer than 1 in 3 average Americans have journeyed into higher education—and no doubt that may be responsible for their lower earnings overall.
Let’s talk about jobs. How many of those in the top 1% do you think are working behind the counter at Walgreens?
Average Americans most commonly hold jobs in retail, cashiering or office clerical duties. However, the richest of the rich are executives, managers and supervisors—although interestingly, they don’t typically hold these positions in financial sectors!
When you think of the stock market, you probably think of men in perfectly pressed suits, polished shoes and immaculate haircuts, crunching numbers and yelling. Isn’t yelling part of buying and selling at the right time? Maybe we should yell about sale produce in the supermarket so more people could take advantage. Hmm… but we digress.
Your image of the wealthy American would be correct, as 1-percenters get about half of their wealth from investments in stock. Actually, 9 in 10 households in the top 1% have at least $10,000 in stocks as part of their overall wealth. Conversely, the 99% only get about 10% of their wealth from stocks–many probably don’t have any stock at all.
Among the average American, 1 in 5 have inherited some money from family or friends. It’s more common for 1-percenters, as 2 in 5 of them have received an inheritance, or two, or seven. And possibly sizable ones, at that.
More wealth typically means more debt, but the ratio is actually less than you might think. The average American has more than half of the average amount of debt for 1-percenters–$6,200 to their $11,300.
Why are the totals so close?
If the net worth of a top 1-percenter is 70 times more, why is their debt only 1.8 times more? It’s mostly because 1-percenters can either pay off their debts completely and quickly or pay for purchases in full from the start, without incurring debt.
The average American has a credit score of 637, while the typical person in the top 1% has a pretty good 704 score, showing again that though their average debt is higher in amount, it’s lower in proportion and less of a challenge to pay off. And the better credit scores afford them better opportunities for financing, allowing them to take on more debt and improve their credit score more when they pay it off!
In case you’re in the 99%, and you don’t quite feel poor enough yet, you should know that there are more than 57,000 people in America with a net worth of over $30 million. That’s about 7,895x what the average American has in savings ($3,800). Yeah, now you definitely feel poor.
If you can get a college degree, turn your political views to the right, bag a managerial, executive or supervisor position outside of finance, get married, have some young kids, receive an inheritance, invest in the stock market and pay all your debts immediately, you’ll be well on your way to busting into the top 1 percent. (In theory, anyway.)