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That's a myth. There's plenty of data on this. 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. Just as ludicrous as the myth that only high school kids work for minimum wage.

The top 10% are worth a ton, there’s not getting around that. But not slicing by age really does muddy things. The US median net worth for 65-74 is over a quarter million dollars. The median net worth for under 35 is $14k. That’s about a 20x difference! Anything that doesn’t split by age is nearly impossible to interpret.

For reference the top 10% net worth splits at about $1.2M, so both of your points are important.

So you've seen the wealth gap graphic, where they slice it up into deciles? Further into percentages?

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?

If someone has a mortgage on a home, their net worth is still positive (unless they're under water). If you put 20,000 down on a 100,000 home and get a 80,000 mortgage, then your net worth is still 20,000. Yes, you have 80,000 in debt, but you own an asset worth 100,000. Net worth is total assets - total liabilities.

> then your net worth is still 20,000. Yes, you have 80,000 in debt, but you own an asset worth 100,000.

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%.

That’s not true at all. If you buy the house for 100k and sell it for 200k, you walk away with 120k after paying off your mortgage. If you only owned 20%, then you would walk away with 40k. Similarly, in non-recourse states (which is most states) you are on the hook for the mortgage amount if the value of the house goes down.

You meant to say "recourse" states - non-recourse means that the bank can't pursue you for any remaining amount you owe on the house after they foreclose on the house. Non-recourse is not very common, but California is a non-recourse state, for example.


Ok I see what you are saying.

Debt is at best a red herring, an individual with a $30k mortgage on a $60k home is not in the same situation as an individual with $30k in the bank and $30k of credit card debt yet they both have $30k in debt.

> Debt is at best a red herring,

That's really not what red herring means.

The problem with debt is that is complicated, not that it doesn't matter.

Totally fair, I was thinking it is so complicated as to be a distraction.

If you have a 30k mortgage on a 60k home by selling all your assets you're 30k up, whereas the other scenario has you at zero. Net worth would arrive to the same conclusion, so I don't see net worth including wealth to be a bad metric here.

> It's wrong, it doesn't account for debt.

Yes, it does. The usual “wealth” slices by decile are of net worth, which is assets minus liabilities; the latter includes debt.

Sure, but the reason for that isn’t that they simply haven’t lived long enough to accure wealth. Younger generational cohorts have less than their parents did at the same age.

I think this can also be split by class and background to provide further clarity. For example, every single one of my classmates (we were all lower income people) and myself are head and shoulders above where our parents were at our age or at about the save level with us facing significantly less work and stress to get here. I have a feeling middle-income and upper-income people have seen something different than us.

At that point, there’s a reversion to the mean too. If your parents got lucky, you probably won’t be as lucky. If your parents got unlucky, you probably won’t be as unlucky. And luck aside, you’re still going to be (on average) closer to average than your parents.

No, you would also need to slice by top net worth percentage inside of each age group. You need to compare the percentage of people in each percentile because average/median are going to obscure the disparity. I'd bet that half the people under 35 have a negative net worth.

Can the median 30 year old grow their net worth by $500 a month plus inflation over the next 3 decades?

People with stocks have undergone a massive boom in the last 20 years, that boom is not sustainable.

> People with stocks have undergone a massive boom in the last 20 years, that boom is not sustainable.

Bubble goes pop!

yeah that largely accounts for the racial wealth gap as well (though not completely). As median age by race varies by over a decade.

A large number of Americans will be in the top 10% by income at some point during their life. Edit: I looked it up, and it's actually a majority of Americans (57%) will be in the top 10% at least one year of their life.

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.


I get irritated when this little quirk of measurement is trotted out. Someone making 400k / yr as an investment banker is in a very different position than someone who 'makes' 400k selling grandpa's dairy farm and pays off creditors. It's very disingenuous to say that a large number of people will be in the top 10% at some point. Technically true, but meaningless.

I recommend reading the research paper it's based on: https://journals.plos.org/plosone/article?id=10.1371/journal...

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.

You should be using consecutive years.

And it may very well be that the sale of grandpa's fairy farm spans over two fiscal years.

Firstly, consecutive years are in fact shown as well in the data linked: 56% of Americans spent 2 consecutive years in the top 20%, and 35% spent 2 consecutive years in the top 10%.

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 not even misinformation, when you realise the headline is about wealth and not income.

Even if we're talking about wealth and not income, the amount necessary to be in the top 10% wealth is...not that much.

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.

Why is it meaningless? A lot of investment bankers quit, change professions or get laid off and can never re-enter the market. Just look at the number of analysts vs MDs and you'll see that the funnel gets a lot narrower at every stage. And you don't see many analysts in their 30s, so where do they go? There's a lot of turnover in the top 1% and 10%.


There are lots of jobs that consistently pay multiple six figure comp. To compare them to someone who realizes a one time capital gain from an inheritance or whatever is laughable. The two are simply not the same.

>A large number of Americans will be in the top 10% by income at some point during their life.

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.

People rotate in and out of that 10%. 25 years ago I maybe had a net wealth of 500 bucks, 15 years ago I was negative 180k. Today I am in that 10%. By the time I get to 70 I probably will not be in that 10% anymore. Hell one 'RIFF' and 2-3 years of 'sorry you are not a good fit', medium sized illness, and I could be there again.

People die, people's incomes change (or cease).

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.

Absolutely not. 10% would be the bare minimum, by definition.

> That's a myth. There's plenty of data on this. Most American never get anywhere close to the top 10% - not even remotely - regardless of age.

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


"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...

> Rather than a rigid class structure, the top and bottom ends of the income distribution are fairly porous.

That's not what class means.

> From two studies about intragenerational bottom and top income mobility

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.

No, chmod600 was referring to income, as can be seen from his post:

"$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.

Chmod600 was trying to refute the headline, which talked about wealth. If he used income metrics to refute it then he is wrong. He was using the incorrect data set and applying it to the article, so the objection is correct.

Isn't this a truism though. If most Americans could get to the top 10% then it wouldn't be the top 10%.

It's not a truism given that the original comment is implying that the wealth distribution discussed in the article title is a result of people having more wealth toward the end of their life. Theoretically the 10% of oldest Americans could be the wealthiest 10% as well, although this is certainly not actually the case.

Not quite a truism. Given that wealth varies over each lifespan, you should expect somewhat more than 10% of Americans reach the top 10% at some age.

People fall in and out of the categories all the time due to job loss or raises or selling a bunch of stock to make the down payment on a house.

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.

Selling stock to buy a house will lower their stock holdings, not their net worth.

most American have a fair chance at reaching the top 10% by age at some point in the future. not sure of the numbers but I would guess at least 50% of the population is expected to reach am age where 90% of the other people are younger

Shock statistic, 50% of students have below average scores in math!

> Some 11% of Americans will join the Top 1% for at least one year during their prime working lives (age 25 to 60), according to research done by Thomas Hirschl, a sociology professor at Cornell University. But only 5.8% will be in it for two years or more.

> 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.)


I completely disagree.

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.

Data says what you are saying is false.

US is high in social mobility. #27 and improving


Then perhaps you should be writing the article, not Robert Frank. As written, the article is worthless except as a way to generate uninformed outrage.

If you have information to share, I have an open mind. I suspect it will be less outragous than the 10%/89% headline, though.

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