Note: This article is courtesy of Iris.xyz
By Rick Kahler
What would it take for you to become a one percenter? How much net worth would put you in the wealthiest one percent in the United States?
In a recent discussion with a colleague, I suggested this number was $1.2 million. He said $9 million. Turns out the real answer, which is surprisingly hard to find, probably falls somewhere in between $1.2 million and $9 million. I have read several articles that put it in the range of $3 to $5 million.
Joshua Kennon, author of The Complete Idiot’s Guide to Investing, 3rd Edition, discusses this topic in more detail in an article posted to his blog in September 2011. He cites several sources and points out the differing methods used by the Federal Reserve Board (which uses the $9 million figure) and the IRS (which favors $1.2 million) to arrive at their numbers.
Regardless of the net worth needed to enter the top 1%, the media usually focuses on the amount of a household’s annual income as what really determines what makes someone rich. We know the income of the rich is growing faster than the income of the poor and middle class. What isn’t reported as often is that the percentage of Americans considered “rich” is also increasing by leaps and bounds. This is different from the rich getting richer. This means an increasing number of Americans are joining the ranks of the rich and the upper middle class.
In June 2016, Stephen J. Rose, a nationally recognized labor economist affiliated with the Income and Benefits Policy Center at the Urban Institute, published a report titled “The Growing Size and Incomes of the Upper Middle Class.” His research covered a 36-year period from 1979 through 2014. He found that the number of households earning $350,000 or more a year (adjusted for inflation) increased eighteen times, from 0.1% of the population in 1979 to 1.8% in 2014. The upper middle class, those households earning between $100,000 to $350,000, increased two and one-half times, from 12.9% to 29.4%.
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