The WSJ breaks down the numbers of what it takes to be wealthy in the USA:

“The top 1% of U.S. households have a net worth above $6.8 million or at least $521,000 in income, according to data from the Federal Reserve and the Tax Policy Center in Washington. The cutoffs for the top 5% are $1.9 million in net worth, or $209,000 in income.”

Those are higher numbers than I previously had seen  . . .


Baby, You’re a Rich Man
WSJ, December 28, 2012

Category: Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

32 Responses to “What is “Rich” in America?”

  1. person23 says:

    They took their net worth numbers from the federal reserve survey of consumer finances available here (including raw data):

    WSJ did not indicate mean or median, but I noticed that there top 5% net worth number match the top 10% median number for family in the summary pdf, which is either a coincidence or suggests that they messed up in that table

  2. JimRino says:

    Much of America works for less the $40,000 a year.
    I felt that I didn’t really participate in “America” until I crossed that line.
    Most people don’t know or have forgotten just how hard that can be.

  3. person23 says:

    Correction to my previous comment: I think the summary pdf gave the median for 90-100, not the 90th percentile, so WSJ probably did not mess up.

  4. donna says:

    Higher numbers than I’ve seen before, too.

  5. rd says:

    JimRino and Donna:

    These are household income numbers, so two $60k incomes puts a couple solidly in the top 20%.

    However, income and wealth inequality between the top 1% and the 99% and even the top 10% and the rest of the population has been growing at an impressive rate, so using 2012 census instead of older numbers really make the top end numbers stand out.

    Many professionals have seen their income and wealth steadily grow as they have specific skill sets tailored to the new economy. The top 1% have accelerated that dramatically by paying politicians to have the tax system gamed in their favor.

  6. person23 says:

    Income numbers are cash income not AGI. AGI, top 1% is 451,810

  7. James Cameron says:

    > Those are higher numbers than I previously had seen

    This is one of those sloppy presentations that I detest because of the difficulty of verifying the source or, for that matter, what exactly is being shown. You have to read the article and catch this, “the top 1% of U.S. households have a net worth above $6.8 million or at least $521,000 in income” to understand the graphic labeled “House Annual Income” is showing the bottom income for each group. The data source is cited as “2012 data from Tax Policy Center.” I have no idea what 2012 data would possibly be available for income estimates. However, I am aware that some of the work in the past done by TPC relies on CBO studies . . . and these studies rely on IRS and Census Bureau data/estimates. See, for example:



    If you go here:


    you see that the TOP income limits for the first four quintiles for 2011 are:

    20,262 38,520 62,434 101,582

    The last number would also be the bottom for the fifth quintile, the top 20% . . . not too far off the $107,628 shown in the WSJ graphic. But . . . this still doesn’t answer the question regarding what data was actually used for the WSJ numbers.

    As a footnote, here is a comparison of mean incomes for 2011 and 1067 for each quintile based on that Census data (2011 dollars):

    11,239 29,204 49,842 80,080 178,020 (2011)
    9,420 26,100 41,667 58,300 104,919 (1967)

    In 1967 the mean for the last quintile was approximately 11 times that of the first . . . by 2011 this had become nearly 16.

  8. donna says:

    The breakdowns at the regional level make more sense to me.

  9. constantnormal says:

    … pity they don’t break out the basis-pointers (the top 0.01%), as that is where the most rapid wealth accumulation/hoarding is taking place … you do get to see the slope of the lines steepening as one draws nearer to the realm of our Gods … those south of the 10% mark (possibly the 5% line mark) are destined to be ground into grist, with everyone south of the 1% mark struggling hard to avoid the blades of the chipper, as we slip & slide forward toward our collective destinies …

  10. donna says:

    Even for those of us in the upper percentiles, they’re taking it out of our kids with the college expenses. Kids graduating with crazy amounts of debt. But then at least we’re lucky enough to be able to afford for them to go at all. It’s harder and harder for anyone to get ahead, or even keep up. Financial industry in particular has forgotten it’s job is to expand the economy and create more wealth for everyone, not just hoard it for those at the top.

  11. louis says:

    I had no idea I was so rich, yet had nothing to show for it.

  12. James Cameron says:

    > pity they don’t break out the basis-pointers (the top 0.01%)

    A brief follow-up . . . these are charts for various income groups from 1979-2009. Taken from the TCP study:

    which in turn is based on CBO work (which itself is based on IRS and US Census data).

    Chart for all five quintiles and several higher income groups including the top 5%:

    Chart with top 1% added:

    Chart showing the percent change in average income for each income group including the top 1% from 1979 to 2009:

    Data for the top .1 or .01% would show no doubt a much greater growth in income disparity over these three decades than what we see with the top 1% (which, as the second chart shows, has been quite dramatic).

  13. bear_in_mind says:

    @ JamesCameron: Good points and additions!

    There seems something intangible missing from these charts and numbers. It sure seems to me that when comparing families in the 96-99 percentile, a family earning $166,800 in 1979 was a WHOLE LOT better off than a family making $271,800 today.

    I think the hidden factors these numbers fail to capture are the decline of the US$, coupled with the insidious action of inflation, which exploded in two key areas: health care and education (NOTE: some would add housing, too).

    From what I can see, taken together, these have greatly eroded the spending power of all but the Top 1-2 percent.
    Maybe that’s why the so-called “rich” don’t feel so rich… and why those in the middle quintiles feel so doggone poor.

  14. Joe Friday says:

    BR: “Those are higher numbers than I previously had seen

    There hasn’t been this high a concentration of both income and wealth at the top since 1928, one year prior to the Great Depression.

  15. super_trooper says:

    It’s official, I’m not rich. With these new numbers, I’m even worse off than I thought.

  16. catman says:

    I’m with you Louis.

  17. hammerandtong2001 says:

    Based on this, I know many poor millionaires.


  18. leveut says:

    “What is “Rich” in America”

    The information is interesting, but it does not answer the question.

    That is because “Rich” is a political/perceptual thing, not a data thing.

    According to Obama and the Democrats for purposes of current taxation policy, “Rich” begins no lower than an income of $250,000/year. Net assets are irrelevant.

    For purposes of class warfare, “Rich” is someone who has more than you do, whether in income, net assets, property, or appearance of “richness” regardless of debt.

    While it is true that some people in the top 1% might agree that they are “Rich”, that is not uniformly the case, as there are various surveys that show that people believe that “Rich” includes people who have more income or assets than the person asked does, regardless of the person asked’s position in the 1%.

  19. “…The top 1% have accelerated that dramatically by paying politicians to have the tax system gamed in their favor…”

    you know, in 1913, that observation may have been considered ‘trenchant’..

    though, with a ~100 Years past, it is, rather, all together, indicative of ‘Our’ lack of salient reference points..

    (and, since the ‘Options’ are rather few..I won’t bother pointing them out..)

  20. Joe says:

    The excerpted graphics are a mess, cause conceptual difficulty on inspection, and only begin make sense if you read the whole article linked below the graphic.

    I much prefer the Distribution Of Income numbers available at Political Calculations. That is the cleanest comparative measure. A high net worth does not equal practical wealth if it is in land or a home , while the same number in an active portfolio may very well equal a substantial income. It is the cash flow that makes practical wealth.

    Even using the DOI numbers, an individual having made a substantial income for a few years will not be comparable to someone in the fourth decade of having done so. And two individuals with comparable life styles in different geographical areas may look to be equal today, but each individual cutting into their lifestyle to free up 10% of their income for savings and investing will look radically different three of four decades later, even giving that their incomes from jobs and living expenses may track closely for that time periods.

    That said, there is a difference between having money and being wealthy and it is a lot clearer when you are talking about someone in the upper 2% of income and over $4 million in net worth versus someone at the 75% income mark and a net worth of $200,000.

  21. Angryman1 says:

    “I think the hidden factors these numbers fail to capture are the decline of the US$, coupled with the insidious action of inflation, which exploded in two key areas: health care and education (NOTE: some would add housing, too). ”

    What decline in USD? From your fantasy island? Somebody making 271,000 a year is killing just like somebody who made 163,000 a year in 1979. While some things have gone up, alot of thing have gone down. You miss general deflation badly, really really badly.

  22. Iamthe50percent says:

    Angryman: A lot of things have gone down? Like ipods or something similar? What has gone up is food, fuel, medical costs, and state and local taxes, which consume most of my income. True, my mortgage interest rate has gone from 8.75% to 4.25%, but property tax has tripled and dwarfs the P &I.

    Astoundingly, my net worth is at the 20% level, my Social Security annuity is nearly double the average, but I can’t afford to retire. Meanwhile the number of billionaires is exploding.

    For reference my 1979 income was $27,729 (gross) and my current income is $58,078
    My house is worth about what it cost me in 1989. In 1989 dollars!

  23. pm2416 says:

    Folks, this was figured out a long time ago: everyone needs exactly twice what they presently have in order to feel “rich.” Rich always equals 2x regardless of the value of the original x.


  24. doug1026 says:

    I think that the numbers and stats are fun. The real point, I think, is that there is more to being rich
    than money. From the comments above, I suspect most have grown up in a time when 2 incomes
    are not only common, but necessary. And in most cases, we are not talking about 40 hour work weeks.
    As a result, I believe we have more stuff, but less of quality of life. With both working, who raises and cares for our family? So go on keeping score….I in the count above, but would not trade a day I spent with my son growing up for more crap or more money. Those times were times that money can never buy!

  25. McMike says:

    Rich Karlgaard’s essay in Forbes (October 10, 2011) titled: “What is Wealth in America?”, described a “millionaire” as someone a century or so ago who was worth a million dollars, and that adjusted for inflation, one would have to have a million dollars per year income (net worth of $20 million earning 5%/year).

    Karlgaard differentiates wealth vs income only as a discount rate of 5%. I can’t get a risk-free 5% return currently, but who needs a return if one can get income? Who needs to save a million bucks if one can get a risk-free, inflation/deflation-protected $50K /year income from a pension? Karlgaard thinks $2 million net worth is the lower end for middle-class life in America currently! He bases that on a starting pension incomes of $100,000 /year for police and firefighters in the larger states.

    Five year CD’s dated december 2007 earning close to 5% are rolling over to rates around 1.5%. Good luck finding income in your retirement.

  26. JimRino says:

    Income is one thing.
    But, wealth, would tell a much worse story.
    As we income earners get taxed at 25%-33%, Capital Gains for the wealthy of 15% over 10 years, have Compounded their wealth advantage over working America.

    If Capital Gains stays in place, there is no possibility of the “99%” ever catching up.

    And they have the GAUL, where they soon will own it, to complain about taxes.

  27. glengarry says:

    Some reconciliation between these numbers and what I saw before is the difference between “income” and “market income”. For example, from the CBO site:
    in the supplemental tables (at the bottom or the right column), tab 4 lists Income Group Minimums by household size:
    Top 1% (2009 dollars):
    2007: $364,700
    2009: $282,900
    2007: $515,700
    2009: $400,100
    2007: $631,600
    2009: $490,000
    2007: $729,300
    2009: $565,800

    But Tab 7, and the CBO report at:
    at Summary Table 1, Distribution of Federal Taxes and Household Income lists “Market Income”:
    Top 1%:
    2007: $1,917,200
    2009: $1,219,700

    In 2007 the Top 1% earned “Market Income” from these sources:
    All Labor = 28.9%
    Capital Income = 20.4%
    Capital Gains = 31.7%
    Biz Income = 16.8%

  28. It is truly hilarious to watch American wannabees (and their celebrity President) constantly trying to redefine themselves as “middle class”. Throughout the British empire the upper class has always been defined as the wealthiest 1% of society. The middle class are a nation’s top 10% earners. The rest are frankly the lower and working class peons…

  29. It would be great to be worth some of the fiqures mentioned here. But it seems they more money we earn, the less it will buy. $8 chicken breasts, $12 for a t-bone steak, a bag of apples is now around $5. I do not see how these prices can continue to rise. How in the heck does someone earning $10 an hour get by these days? I earn close to six figures each year and still feel the pinch.

  30. AmericanObserver says:

    Here is where we have a problem:

    Contrast the top 10% and top 20% of INCOME with the following table (which is based on 1.6 times poverty line for free insurance) of income eligibility for free or highly subsidized health insurance for children in NY:
    source (

    Child Health Plus
    2012 Family Contributions by Income and Household Size
    Premium Categories Monthly Income by Family Size* Each Additional
    Person, Add:
    1 2 3 4 5 6 7 8
    Free Insurance $1,489 $2,017 $2,545 $3,073 $3,601 $4,129 $4,657 $5,185 $528
    (Max $27/Family) $2,067 $2,800 $3,532 $4,265 $4,997 $5,730 $6,463 $7,195 $733
    (Max $45/Family) $2,328 $3,153 $3,978 $4,803 $5,628 $6,453 $7,278 $8,103 $825
    (Max $90/Family) $2,793 $3,783 $4,773 $5,763 $6,753 $7,743 $8,733 $9,723 $990
    (Max $135/Family) $3,258 $4,413 $5,568 $6,723 $7,878 $9,033 $10,188 $11,343 $1,155
    (Max $180/Family) $3,724 $5,044 $6,364 $7,684 $9,004 $10,324 $11,644 $12,964 $1,320

    Since the table doesn’t copy over so well, I’ll point out some figures:

    If you’re in the top 20% and have 3 children in NY, you can get subsidized health insurance for your children that would cost you only $180/month. You can get the same if you’re in the top 10% and have six children!

    Now, I’m not saying that the subsidized insurance is offered to wealthy people, I am saying that unfortunately you can be in the top 10% of income earners, and still struggle financially if you live in NY and have a large family.

    The numbers would be more meaningful if they would be broken down per capita with geographical adjustments for cost of living.

  31. ERISANation says:

    Give me the $6.8 million, keep the $521k per year.

  32. ERISANation says:

    Give me the $6.8 million, keep the $521k per year.