For reference the top 10% net worth splits at about $1.2M, so both of your points are important.
People with stocks have undergone a massive boom in the last 20 years, that boom is not sustainable.
Bubble goes pop!
It's wrong, it doesn't account for debt. There should be a huge mass of people that are net negative. I think we're really presented with all the wrong information.
First we need to break down into a heat map of CoL which can act as an approximation of demand for the given region. Then we need to look at individual median (perhaps modal) cash flow, where your deciles land, and whether that's translating into profit when you calculate in inflationary pressures. Then you've got to look at average degrees of freedom given demographics like no-diploma, GED/equivalent, HS-diploma, and degree strata that indicate an upward move in purely economic terms. I think what you'd find is the vast majority of people are just on the treadmill, and will for the foreseeable future there remain.
I expect the median net worth (what's the method?) of a 35 year old is very much in the negative space. And I'd hope over a lifetime that the 65-74 cohort is breakeven - which is about what you've indicated - Zillow indicates the average value of a house is $264k.
To some extent this is how our system is designed to work, but the system itself is predicated on a slew of fallacious logic and wholly removed from any semblance of morality while dually being totally unaccountable for the destruction and extraction of value that it is founded on.
I should also add that power as a function of wealth had ought to be looked at. What is the effective cost of having a voice in policy? I suspect it's in the highest echelons of net worth that you can even begin thinking about leveraging the system, and locally at that. At which point, corporate personhood might had ought to be considered, how does that deform our distribution?
That's really not what red herring means.
The problem with debt is that is complicated, not that it doesn't matter.
No you have 20% ownership of an asset that is worth $100,000. The bank owns the other 80% of that asset. When you pay your mortgage every month you are essentially buying a portion of their stake in your house. At the end of the mortgage they will own 0% and you will own 100%.
Yes, it does. The usual “wealth” slices by decile are of net worth, which is assets minus liabilities; the latter includes debt.
As noted, even just selling a house in a random state like Wisconsin can easily put you in that bucket.
Top 10% by wealth is a different story harder to attain. It's frustrating that we pay for things with taxes on income and not wealth, because it hits the upper-middle-class harder than it hits the people with all of the equity.
https://www.aei.org/carpe-diem/evidence-shows-significant-in...
If, "by a large number," you mean 10%, then you're right.
Edit: Upon reflection, my comment was both flip and inaccurate. In sum, I was talking out of my ass. Phew! That stinks. My bad.
More than 10% of the population will be in the top 10% of almost any category at some point during their lifespan, even if it's briefly.
https://money.cnn.com/2016/01/07/news/economy/top-1/index.ht...
There's a specific table that breaks it down clearly: https://journals.plos.org/plosone/article/figure?id=10.1371/...
40% of Americans spend at least 2 years in the top 10%. That's not just selling grandpa's dairy farm and paying off creditors.
A full 62% spend at least 2 years in the top 20%, and over 54% spend at least 3 years there.
And it may very well be that the sale of grandpa's fairy farm spans over two fiscal years.
Secondly, these numbers are based on tax filings, and even though the process of the sale of grandpa’s dairy farm may straddle 2 years, the income from the sale isn’t realized across 2 years; it will always register as a single fiscal year, I.e. the year in which the transaction closed. The actual income is not realized until then.
Further, it’s not at all obvious that only considering consecutive years is necessary to invalidate the original GGP claim. The fact that 40% spent 2 not-necessarily-consecutive years in the top 10% (and 62% for the same in the top 20%) especially debunks the notion that one-time inheritance sales make up the variance. Nobody is selling grandpas dairy farm across 2 disjoint years. It also shows us that people do in fact move in and out of these quintiles (or deciles) as one would expect in a dynamic economy, and that those groups aren’t just a static cabal of people twirling their mustaches.
The crux of the argument stands: the majority of Americans experience affluence by spending at least 2 years in the top 10-20%. And at the very least it totally invalidates the absurd claim made (quite confidently, at that) in the GGP comment:
> Most American never get anywhere close to the top 10% - not even remotely - regardless of age. The idea that everyone is just waiting around for their career to advance enough to put them in the upper-middle class is ludicrous on its face.
It’s just outright misinformation.
It's about $800,000 in net worth: https://dqydj.com/net-worth-percentile-calculator-united-sta...
This is largely attainable for the majority of Americans when you factor in the value of one's home, retirement accounts, and general lifetime savings. Keep in mind we're not talking about how much net worth the majority of Americans have at any snapshot-in-time, we're talking about the maximum net worth attainable in one's lifetime, and what that looks like for the majority of Americans.
There's absolutely no evidence that the top 10% wealth holders has been a static group of people over the last 60 years.
OK, let's take a look, because the GP was arguing about income mobility across different years of a person's life - intra-generational mobility -- not earnings compared to your parents -- inter-generational mobility. That distinction was the key point made. And the GP is basically correct:
From two studies about intragenerational bottom[1] and top[2] income mobility:
* 53.1 percent will have experienced at least one year within the top 10th percentile
* 36.4 percent will have encountered one year within the top 5th percentile
* 11.1 percent will have experienced one year within the top 1st percentile.
* 70% of Americans spend at least 1 year in the top quintile
* 61% of Americans spend at least 1 year in the bottom quintile.
* 42% of Americans experience at least one year in the bottom decile
Summarizing:
"Taken together, these findings indicate that across the American life course there is a large amount of income volatility. Rather than a rigid class structure, the top and bottom ends of the income distribution are fairly porous. This finding provides an interesting and important caveat to the overall story of rising levels of income inequality across the past 40 years." [2]
Note that a key issue when studying mobility is that you need to do it across a few business cycles. If your study is only during an economic expansion, then it's not going to be meaningful, as life changes tend to clustered around contractions and recoveries, and several such episodes are needed. Thus the studies I selected cover 44 year periods. Some of the studies are for 5-10 year periods, and that's really too small.
---
[1] https://www.researchgate.net/publication/271598246_The_Life_...
[2] https://journals.plos.org/plosone/article?id=10.1371/journal...
That's not what class means.
Irrelevant because the subject here is wealth not income.
Year-to-year income variation doesn't imply the same degree (relative to median) wealth variation.
"$190k/yr as a successful tradesman during boom time. The former will count as "poor" and the latter will count as "top 10%[..]. In other words, no, it's not comparing Americans of different classes. It's comparing Americans at different stages of life. Or just the ebb and flow of income over and individual's life"
You may want to talk about something else, of course, but my reply was to standardUser arguing that chmod600's data was wrong, when in fact he was absolutely right.
Some people are stuck in the lower quintiles, and some people "stuck" in the higher ones. Other people float around or jump due to life events.
> The same holds true for those lower on the income ladder. While just over half of Americans reach the Top 10% at least once in their careers, only 14% stay in it for a decade or more, Hirschl found. (The minimum income threshold for the Top 10% was $141,000.)
https://money.cnn.com/2016/01/07/news/economy/top-1/index.ht...
I'm in my middle 50s. I have friends who have lived below their means all their lives and invested in wisely-- almost all of these people have sizeable savings now.
I also have friends of my age who did not live below means. They spent what they had and invested almost nothing. Predictably, they have nothing to show.
The system works. It's been foretold in investing books for decades.
Today, we have resources like Bogleheads, Mr. Money Mustache, Dave Ramsey, etc. they all preach the same message, and the message is overwhelmingly truthful.
Accumulating wealth is relatively certain, if you follow the process. There will be rare exceptions, but that's true of most everything.
US is high in social mobility. #27 and improving
If you have information to share, I have an open mind. I suspect it will be less outragous than the 10%/89% headline, though.