Where Do You Stand on America's Wealth Spectrum?
by Lee Eisenberg
Thursday, November 1, 2007

The best way to give people a sense of where they stand is to lay out some data. Every three years the Federal Reserve Board conducts a national survey that tracks the financial health of American households.

The Fed slices and dices this stuff with the vigor of an Iron Chef; the result is a rich, if dry, array of offerings on household net worth, pension and income levels, plus other demographic side dishes.

Whenever I slip these tidbits into cocktail party chatter, people are surprised to realize how little money it takes to win a gold star from the Fed. If you and yours are bringing in $40,000 a year, you're doing better than half the households in America.

Or, as a Washington think tank recently pointed out: If you're a teacher married to a policeman, your combined household income puts you in the top 25 percent of all households in the nation.

Below you'll find the average income picture sliced into income levels. Think of this chart as a parking ramp. If your household income is $170,000, you're among the nation's top 10 percent wage earners and get to park on the top floor.

Anything in six figures means you're in the top 20 percent and get to park on the floor right below.

Annual income parking ramp

Income level (percentile).........Median income (rounded)
Level VI (90 to 100)................$170,000
Level V (80 to 89.9).................$99,000
Level IV (60 to 79.9) ................$65,000
Level III (40 to 59.9)................$40,000
Level II (20 to 39.9).................$24,000
Level I (less than 20)................$10,000
Source: Before-Tax Family Income, 2001 Federal Reserve Board Survey
So does making $170,000 a year make a person rich? Last year a plurality of respondents (29 percent) in a survey by The New York Times said that "rich" was making between $100,000 and $200,000 a year. Unfortunately, the survey didn't break out how many people in that salary range considered themselves rich. If the people I talk to are any indication, very few do.

Of course, income is only one part of the equation defining where you stand. Net worth is more telling. Net worth, as every financially precocious schoolchild knows, is the sum of one's assets -- home equity, investments, savings accounts, retirement funds, cars, furnishings and such things as jewelry, furs, wine collection, old baseball cards -- minus all outstanding liabilities such as mortgage balance, revolving and credit card debt, college loans and so on. Across all households, the national median net worth is $86,000. Half of your fellow citizens have more than that, half less. As you see, there's a massive disparity between the haves and have-nots.

Net worth parking ramp

Net worth (percentile) Median net worth (rounded)
Level VI (90 to 100)................$833,600
Level V (80 to 89.9)................$263,100
Level IV (60 to 79.9)...............$141,500
Level III (40 to 59.9)................$62,500
Level II (20 to 39.9).................$37,200
Level I (less than 20).................$7,900
Source: Family Net Worth, 2001 Federal Reserve Board Survey


We live in a country that once celebrated itself as egalitarian, yet 1 percent of the population -- nearly 3 million people -- currently has as much money as the 100 million people at the bottom of the ramp.

Yet when I ask those at the top of the ramp how they feel about the future, whether their fortunate place on the ramp gives them a measure of confidence about it, they shake their heads. They give me a look that says, "What planet do you park on?"

You and your broker
If you're not parked near the top of the ramp, you're of little or no interest to financial services firms and financial advisers. There's no money to be made at these levels. Last year, a handful of Wall Street firms told their brokers they would no longer receive commissions on accounts holding less than $50,000. This effectively tells people with nano-Numbers to get lost. But for the Wall Street firms, there's gold on the floors above. The greater the household assets, the more fees and transaction costs can be extracted from an account. The result is a flood of advertising that captures a lifestyle so gloriously affluent it's enough to make everybody feel poor.

http://finance.yahoo.com/banking-budgeting/article/103815/Where-Do-You-Stand-on-America's-Wealth-Spectrum

I get to feel rich each month between the first when rent comes in and the fifteenth when the mortgage is due.

The rest of the time I feel pretty poor.

Tom W

__________________
[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

Those numbers are very interesting. They don't correlate at all with my feelings.

__________________
1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

1. The lower you are in the parking garage the faster you can get out if there is a collapse.
2. The less money you have the easier it is to keep track of.
3. In the net income that's a heck of a jump from level three to four.....

__________________
"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

I'm not grasping the presentation of the data. If a specific median net worth is noted, it should correlate with a specific percentile...........and not a range as indicated in the above tables. Does $170K on the income graph correlate with the 90% point........or the 92% point..........or the 99% point?

Maybe the question is a moot point?

Hey everybody, the govt. thinks I am rich, but I don't feel rich. Just thought ya'll would want to know my approximate net worth and household income

...........level VI JD.........we all know that already..........

C'mon dude, you had to see that was a pot shot




These numbers come out every year, and every year, folks say, "Wow, I didn't know I was in the top X% of the country!! I don't feel rich." and their ulterior motive is to tactfully () let others know where they are financially while seeming (to themselves) to be expressing humility. Its just funny to me.

........yeah.........I had to see if I could pull it off without getting destroyed.........

Off the chart sweet cheeks.

__________________
"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

I meant MY post was a potshot.......

Yeah, deliberately vague.

__________________
You don't need a weatherman to know which way the wind blows - Robert A. Zimmerman

According to those numbers, I'm not as poor as I thought I was

__________________
Whoever said there's nothing more expensive than a cheap Mercedes never had a cheap Jaguar.

83 300D Turbo with manual conversion, early W126 vented front rotors and H4 headlights 400,xxx miles
08 Suzuki GSX-R600 M4 Slip-on 22,xxx miles
88 Jaguar XJS V12 94,xxx miles. Work in progress.

Income means nothing, when net worth is absent..........duh!

.......level VI net worth...... Income? Who cares with massive net worth.....

Nah........your post was fine..........I was just teasing you...........


There's no way to know the finances of a given person or family. Some have very good incomes and spend relatively little..........some have a moderate income and spend way beyond their means..........it's never possible to measure the net worth of a person by looking at them or speaking with them.

And, in reality, why should anyone care?