The top 1%'s net worth starts at $10m. But here is the $$ amount you need by age group:
Age 25-29. $685k.
Age 30-34. $922k.
Age 35-39. $2m.
Age 40-44. $3m.
Age 45-49. $10m.
Age 50-54. $15m.
Age 55-59. $15m.
Age 60-64. $16m.
Age 65-69. $12m
Age 70-74. $11m
Age 75-79. $14m
Age 80+. $12m
So some things to note. Net worth skyrockets in late 40s.Any thoughts on why that happens? Is that due to when people receive inheritances or when entrepreneurs starts ipoing. lol. Also everyone’s net worth growth tapers off around 50s for some bizarre reason. Then peaks around 60’s which is around retirement and starts falling
Net worth likely skyrockets in late forties because, for the people in this cohort, that is when the investments they made in their 30s pay off. A lot of things people start in their 30s, such as businesses or real estate development, are not marked regularly and are sold or reappraised for liquidity in late 40s. That, and late forties there are many more executives with big bonuses than earlier.
Interesting post. I imagine net worth skyrockets in the late 40s would be due to a number of factors such as people coming into inheritance and men reaching their peak salaries (late 40s - early 50s).
Why would net worth peak at 60-64, go down for the next 10 years and then increase to $14MM at 75-79?
inheritance bros. the reason all of these numbers are so high is because of inheritance and/or family wealth planning. i have a buddy who is in his 30s and is worth $100M because his daddio passed some dough on. i make 2x-3x as much as this guy but doesn’t matter due to family wealth. these numbers are not realistic to benchmark against for those who are actually doing all their own earning and saving.
so home equity is included. i selected the option to count it.
no idea really. i think it tapers off in 50s, cuz i’ve heard that’s when earning potential peaks. 60s prolly cuz of retirement and prolly trust planning, you start giving shit away. At some point you realize you’re going to have to pay the estate tax so you start spending that dough. it was only in 2018 that estate tax max for married couple was raised from $11m to $22m. I suspect that the 1% benchmark will get closer to the new 22m benchmark.
I respectfully disagree. These numbers do not say $100M by by 35-39, they say $2M. Obviously the guys I went to school with whose parents have nine figure net worth or above have a head start by this measure. I believe the jump in late 40s is probably a combo of what I said above and as you said inheritance, meaning they are achievable even if they are difficult and unlikely.
well mla the 100m is an outlier. from the data we can tell that the offspring of the 1% will inherit at a minimum of about $12m, assuming the 1% die in their 80s. so assuming inheritance is a big part of it, then the net worth should be consistently 12m which is not the case. so imo teh lower end of the 1% is self made.
also here’s a study for millionaires, not really indicative cuz a millionaire is only top10%:
Sixty-seven percent of high-net-worth Americans are self-made millionaires, according to the survey. Only 8 percent inherited their wealth. One third of the millionaires surveyed were women and half of them made their own fortunes.
but here’s a better study (but keep in mind this is self reported and many will lie underreport):
The wealthiest 10 percent of families have inherited $367,000 adjusting only for inflation and over $1.2 million adjusting for inflation and a 5 percent rate of return.
One Percent
For the wealthiest one percent, the trends are exactly the same as with the lower percentiles. Around 41.4 percent of the wealthiest one percent say they have inherited some money. The below graph shows their mean inheritance level, with the first bar adjusted only for inflation and the second adjusted for inflation and an assumed 5 percent rate of return.
On average, the wealthiest one percent has inherited just under $5 million in current dollars.
I’m 10-15 years ahead of schedule, not that it matters. Geography is obviously important also. 1br owner in Manhattan = king of Toronto.
Anyway, what has usually been most interesting to me about these numbers is not that wealth increases rapidly in your 40s (due to higher earnings, debt paid off, inheritance, etc.), but that it decreases after mid 60s. The guy in the chart worth $16 million can spend 4% a year and live off $640k, and the principal should generally not decrease. Furthermore, a majority of people who accumulate wealth like this over many years are not habitual spenders. So, maybe they are giving away money, or have some realization that they “can’t take it with them” and go crazy.
there is just no common sense with you guys is there.
not every 30 year old 1%er has to be bestowed $100M. but for every one that is bestowed $100M, there are thousands given free schooling (potentially worth hundreds of thousands), down payments for a house (potentially worth hundreds of thousands) or given a $100k Mercedes for graduating. if you remove the 1/100 that receive 90% of that net worth figure in gifts, the number would be much lower. hell, i received ~$80k in support through school and i’m sure many of you did as well. this most certainly gave me a boost relative to those who received absolutely nothing. from there, a lot of it is just the power of compounding. what i am talking about is the basis of income inequality. wealth inequality = income inequality.
compare the 35 year old doctor/lawyer that had their schooling paid versus the 35 year old doctor/lawyer that did not. one would likely have a negative net worth while the other would probably have a net worth that is at least several hundred thousand. assuming no other advantages and everything else the same, the one with schooling paid will have a net worth that is millions more than the one without schooling paid.
nerdy, there is an important distinction between inheritance and financial support. also, the vast majority of people surveyed like to think that they are sole reason for their success when in reality a large part of it is simply compounding of bestowed funds relative to peers. case in point, jerkface djt.
You’re looking at it the wrong way. This is a snapshot of the current environment. The old people are baby boomers that don’t have as much money as the up and comers behind them. So, it makes sense that the top 1% of 70 year olds has a lower limit than the 50 year olds.
wait how do you compound a 100k mercedes? doesnt that shit go down to 0.
the poor actually get free money from govt as well. in us school is free and if ur poor, very likely you get scholarships for college. middle class really gets shitted on. lol
but i get your point. so i am totally kidding. non monetary gifts > money.
ohai are you saying you have $15m? and if so, how old are you? and how do you invest it? lastly how much do you make? many thx
to further prove my point with basic math, assuming a 5% real rate of return, either due to 7% interest on a debt burden or 7% gains on net assets, a gift of $200k at age 20 would equate to a difference of $200k at age 35, $650k at age 50, $1.6M at age 65 and $3.5M at age 80.
$200k covers what? a bachelors and a masters at schools that a top 3%er would go to? add in those who were simply gifted an obscene amount (not considered inheritance because mommy/daddy aint dead). add in those who got phds or medical/law degrees. i bet you the real comparison for those not in the elite class already is 1/3 of the amounts in the op’s first post.
Nothing wrong with income inequality. I started with basically nothing and debt after graduating college and have been charging ahead. When my kids get a large inheritance vs some yolo guy’s kids who’s dad blew all his money, I don’t see a problem. Screw them, not my kid’s problem.
So it’s both inheritance and earnings, right everyone? I think “financial support” is difficult to properly account for, although I get the point that you have more to overcome if you receive zero help. May as well expand the definition of “help.” I know someone whose kid recently quit his job because he didn’t like it and his parents fully support his NYC lifestyle. They are not extremely wealthy but he is an only child and they are relatively affluent. He is certainly destroying their net worth and his future net worth. I know someone else who was a military brat and raised in a disciplined manner. He is in his mid forties, owns a company and makes $300k/month (I know this because of business dealings) and has an exceptionally high net worth. So, one person received support through money and another received support through instilled determination and drive. It’s pretty clear who will have a higher net worth.
The point? Random anecdotes are useless. We all know people who inherited a lot of money. Presumably, we also all know people who made a lot of money. It’s definitely a combination of the two. Also, lottery winners that have proper planning, don’t forget them.
you are focusing on anecdotes more than anybody. the bottom line is that poor people cannot support their kids and give them a leg up. for rich people, this is implied. this implied support results in millions over decades.
we’re talking about a breakpoint for 1% of the population. of that 1%, most of those people are there because of that support.
my whole point is that normal people cannot benchmark against the 1%. there is an unfair advantage that cannot be overcome for the vast majority.