There are 137,000 households in America that control 15% of household wealth.
The average wealth of this top 0.1% is around $200 million.
According to The Wall Street Journal, the wealth for this group has risen nearly $15 trillion this decade alone.
The rich are getting richer, as always.
The good news is that so is everyone else.
Owen Zidar and Eric Zwick show there is a large group of households that are even bigger than the Forbes 400 list in their new book The Everywhere Millionaire.
Some stats from the book:
We define the rich as households with at least $5 million in wealth, which means they are in the top 4 percent in household wealth in America as of 2022. Wealth combines both liquid holdings (bank accounts, stocks, etc.) and illiquid holdings (businesses, real estate, etc.) and subtracts debt (mortgages, student and car loans, etc.). Nearly five million households clear that threshold, including more than two million decamillionaires (at least $10 million), and around sixty-five thousand centimillionaires (at least $100 million). Most of them own a private business–as do three-quarters of decamillionaires and nearly all centimillionaires.
We define Main Street Millionaires as the rich owners of private businesses. As of this writing, they number about three million. Their average wealth is around $25 million.
Here’s a good chart from the book about these Main Street Millionaires:
This wealth is not created exclusively on Wall Street or Silicon Valley. Most of these people own a business. These are auto dealers, dentists, doctors, accountants, contractors, lawyers and beverage distributors.
These people own equity in their businesses and equity in other corporations via the stock market.
Just look at the growth in stock market ownership over time via Bloomberg:
A lot of this wealth is concentrated at the top but stock market ownership is broadening out.
Old people control most of the wealth in America but young people are investing much earlier than past generations.
BCG has some good charts that show young people are mostly doing better than you think, at least financially-speaking.
Millennials put money to work in stocks at a far higher rate than Gen X or Baby Boomers:
Young people are putting off other milestones until later in life but catching up to previous generations when it comes to income, wealth and homeownership (eventually):
There is certainly wealth inequality among younger households but the under 45 crowd is now further along than previous generations are the same age:
The fact that each generation has a higher inflation-adjusted income helps:
This looks like progress to me. The compounding from starting earlier means there will be even more rich people in the future.
According to Cato Institute the share of people making high incomes has quintupled in the past 60 years:
And it’s not just the upper middle class:
Poor and middle class households have also experienced gains. Are they the same gains as the top 1% or top 0.1%? No but this is still a positve trend.
Jeremy Horpedahl shows the average inflation-adjusted wealth for the working age population is now at all-time highs for younger and older workers:
Americans are so rich that many households can’t fit all the stuff they own at home. So people pay money for a storage facility somewhere else to house all of their excess crap.
The New Yorker says 90% of storage capacity global is in the United States. We have a lot of stuff:
There are more self-storage facilities in the U.S. than there are Starbucks, McDonald’s, Walmart, Home Depot, Domino’s, Dunkin’, and Costco locations combined.
A 2022 survey by the Craftsman tool division of Stanley Black & Decker found that more than a third of the country’s residential garages were so full of overflow possessions that their owners were unable to park cars in them.
The U.S. now has forty-eight hundred dedicated R.V.-and-boat-storage facilities and more than twenty-eight thousand hybrid facilities.
I know there are people out there who hate the economy right now. Not everyone is thriving. Things cost more. There will never be an economic environment that makes everyone happy. That’s impossible.
But America is the wealthiest society in history.
There is more money sloshing around than ever before.
The wealth effect is certainly a risk if the economy ever goes into a recession again.
All of this wealth is also one of the big reasons we haven’t had a recession in some time.
Yes the rich are getting richer but so is everyone else.
Further Reading:
Millionaires Everywhere
