Making More Than $50 Million Per Year

Every year, the Social Security Administration lays out exactly how many people earned specific amounts of money in the preceding year. 2009's numbers were just released. Feast away:

2009 Earnings Number of Tax Filers Percentage of Total Tax Filers Aggregate Earnings (billions) Percentage of Total Earnings
$0.01-$24,999 72,826,204 48.26% $748 12.7%
$25,000-$39,999 27,781,618 18.41% $892 15.1%
$40,000-$64,999 26,733,740 17.71% $1,360 23%
$65,000-$99,999 14,125,691 9.36% $1,120 19%
$100,000-$124,999 3,884,621 2.57% $431 7.3%
$125,000-$149,999 1,948,105 1.29% $265 4.5%
$150,000-$199,999 1,707,880 1.13% $291 4.9%
$200,000-$299,999 1,079,914 0.72% $258 4.4%
$300,000-$499,999 530,778 0.35% $199 3.4%
$500,000-$999,999 221,035 0.15% $147 2.5%
$1,000,000-$1,499,999 39,938 0.03% $48 0.8%
$1,500,000-$1,999,999 14,569 0.01% $25 0.4%
$2,000,000-$3,999,999 15,889 0.01% $43 0.7%
$4,000,000-$4,499,999 1,415 0.00094% $6 0.1%
$4,500,000-$4,999,999 1,029 0.00068% $5 0.1%
$5,000,000-$9,999,999 3,689 0.00244% $25 0.4%
$10,000,000-$19,999,999 1,193 0.00079% $16 0.3%
$20,000,000-$49,999,999 353 0.00023% $10 0.2%
$50,000,000+ 72 0.00005% $6 0.1%

Sources: Social Security Administration, author's calculations.

A few observations here:

  • The amount earning more than $50 million last year was actually the lowest since 2003. In 2008, 131 people cracked the $50 million mark -- twice as many as in 2009.
  • Few people, except for maybe hedge fund managers, actually earn more than $50 million per year. In most cases, incomes more than $50 million are the result of selling assets that were accumulated in the past, with the proceeds counted as taxable income for that year. For example, Bill Gates sells a tremendous amount of Microsoft (Nasdaq: MSFT  ) shares every year. Same for Larry Ellison of Oracle (NYSE: ORCL  ) , and Larry Page of Google (Nasdaq: GOOG  ) . Most of us wouldn't consider these sales "income," but that's how they're accounted for.
  • Income inequality is incredibly strong. The top 1% of earners made about as much as the bottom 48%.

On that last point, inequality, Slate's Timothy Noah recently penned a great 10-part series on income inequality in the United States that puts a lot of these numbers into context. In his words:

It's generally understood that we live in a time of growing income inequality, but "the ordinary person is not really aware of how big it is," [Economist Paul] Krugman told me. During the late 1980s and the late 1990s, the United States experienced two unprecedentedly long periods of sustained economic growth -- the "seven fat years" and the "long boom." Yet from 1980 to 2005, more than 80 percent of total increase in Americans' income went to the top 1 percent. Economic growth was more sluggish in the aughts, but the decade saw productivity increase by about 20 percent. Yet virtually none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads.

And here's what I think is really important:

Why don't Americans pay more attention to growing income disparity? One reason may be our enduring belief in social mobility. Economic inequality is less troubling if you live in a country where any child, no matter how humble his or her origins, can grow up to be president. In a survey of 27 nations conducted from 1998 to 2001, the country where the highest proportion agreed with the statement "people are rewarded for intelligence and skill" was, of course, the United States. (69 percent). But when it comes to real as opposed to imagined social mobility, surveys find less in the United States than in much of (what we consider) the class-bound Old World. France, Germany, Sweden, Denmark, Spain -- not to mention some newer nations like Canada and Australia -- are all places where your chances of rising from the bottom are better than they are in the land of Horatio Alger's Ragged Dick.

I touched on this last week in an article about who owns the stock market. Income inequality is something to strive for if there's also strong social mobility -- the ability to work hard and move up the income ladder from poor to rich. But social mobility in the U.S. is among the lowest of all developed nations. Rather than just a function of hard work, wealth in the U.S. is largely attributable to family status and upbringing. In the U.S., nearly 50% of someone's earnings can be explained by his or her parents' earnings, compared with less than 20% in Canada, Finland, Norway, Australia, and Denmark, according to OECD. That in itself is a reason to look at our income inequality with a sense of disappointment.

What do you think?

Fool contributor Morgan Housel owns shares of Microsoft. Google and Microsoft are Motley Fool Inside Value choices. Google is a Motley Fool Rule Breakers selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google, Microsoft, and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On November 26, 2010, at 11:33 AM, PhulishMortal wrote:

    I can't speak for others, but I personally don't pay much attention to income disparity because it doesn't affect my day-to-day life all that much. I pay attention to trying to improve the lot of my wife, myself, and particularly my daughter. If I can improve my income by $1,000/year, good for me. I'm not sure why I should be concerned that someone else boosted his by $50,000/year -- good on him, as my Aussie friends might say.

    I'm more inclined to burn brain cells on how to improve the lot of the lower earners on the pay scale, though; having been through plenty of lean times, I feel plenty of empathy for those people. If something we do helps them out, I have no problem if it also helps out someone rich.

    All that said, the major mobility used to be from lower class to middle class, not so much from middle class to the higher echelons. It seems these days that the lower- to middle-class mobility is going the way of the dodo, and that is a trend that needs to be reversed.

  • Report this Comment On November 26, 2010, at 11:38 AM, Oldfool103 wrote:

    I want to thank you for this. Having gone through my child rearing years in the lower income levels, i know how absolutely difficult that can be when you can find no avenue for real improvement when most of your time is taken working 1 1/2 lousy paying--obviously non-unionized--jobs trying to keep the kids taken care of, day care paid, old car running, blah blah blah. The statistical evidence that the avenues of mobility have virtually closed down, especially with so many now plummeting from the middle class into the welfare class, should send up warning flags re social unrest; but the loudest voices seem to come from those who have the most.

    When you set the livable low income rates at the $40000 level--both parents working 40 hour weeks @ $10/hour with no time for more parenting than after dinner, or single mom @ $20 an hour--that roughly excludes about 2/3 of those reporting income. That struggle is bad enough; but when you read comments on media such as this you realize just how much hate there is in the country for those whose circumstances are less fortunate. It doesn't take too much imagination to look ahead one or two generations to see how this will work out with the overwhelming percentage of the populace unable to gain higher education due to financial constraints both from their families and their governments.

  • Report this Comment On November 26, 2010, at 1:16 PM, Bert31 wrote:

    I think it would be helpful for your audience to explore and report the impact on immigration and the different policies the countries you mentioned in your article may have on income inequality. Each generation there is a new wave of immigrants coming to the United States willing to work for a lower wage than many Americans because it is still higher than what it would be in their home country. I think any discussion regarding income inequality should absolutely include this aspect of the economy otherwise it is not really inclusive or complete.

  • Report this Comment On November 26, 2010, at 2:09 PM, lennysims wrote:

    good article Morgan, I hope more people read it. But most people just don't care and will continue to do what they can to help themselves.

  • Report this Comment On November 26, 2010, at 3:22 PM, ynotc wrote:

    Morgan, are you advocating that we change our system to europeon style socialism? The problem is not our economic system or the disparity in income the problem is our willingness to sacrifice our principals. We relocate factories overseas, we pay government employees wages and benefits that are well above national average, we expect the government to do things for us. Many people expect, as a birthright, that they will do better than the previous generation but without any real sacrifce or effort.

    You guys at TMF talk alot about scalability, the current system is not scalable but no one wants to make the sacrifices necessary to get the system back to a level of sanity that will provide a fundamental base on which to build.

    Personally, I don't expect to ever recieve any social security and I am planning my life accordingly. Those who expect the government or others, including business to take care of them, are perpetuating the problems and thier own income diparity

  • Report this Comment On November 26, 2010, at 4:32 PM, cmfhousel wrote:

    "Morgan, are you advocating that we change our system to europeon style socialism?"

    No. Just pointing out that those European socialist countries are, in some respects, more capitalistic than the U.S.

  • Report this Comment On November 26, 2010, at 7:29 PM, modeltim wrote:

    Great article and spot on. The average American has been programmed by the culture and our culture that we are number one and that is because of things like our rugged individualism, American exceptionalism (we are #1, etc) and the growing myth of upward mobility. The increased concentration of wealth has been going on for over 40 years and was greatly accelerated by the "Reagan Revolution". David Stockman, Reagan's former budget director, wrote an Op-Ed in the NYT this summer which is essentially a mea culpa and an expose on the failures of beltway fiscal policy since the time of Reagan. He is also writing a book on about our present financial crisis.

  • Report this Comment On November 26, 2010, at 10:39 PM, HINTE wrote:

    Which are you advocating, Communisiam or Socialism ?

  • Report this Comment On November 27, 2010, at 12:06 AM, DonkeyJunk wrote:

    Only 4 comments into an article on jaw-dropping wealth disparity before the first mention of socialism. According to Godwin's Law, a Hitler reference shouldn't be too far behind (this meta-reference doesn't count).

    Eventually the socialism bugbear will not be enough to terrify people away from the realization that the country is leaning not toward socialism, but feudalism.

  • Report this Comment On November 27, 2010, at 12:09 AM, wolfman225 wrote:

    @Oldfool103: "That struggle is bad enough; but when you read comments on media such as this you realize just how much hate there is in the country for those whose circumstances are less fortunate"

    Really? I don't see any "hate towards the less fortunate" (to use your misleading phrase). If anything, I see it much the other way. Articles like the above seems to me are promoting and even stoking envy and hatred of those that occupy higher rungs on the socio-economic ladder. I believe that America is still the greatest chance for the "regular Joe" to make more of himself than the status to which he is born. The continuing waves of immigration coming to this country (legal and otherwise) just for the chance bears this out.

    After all, you don't see nearly as much of a rush to illegally invade European countries as you do here. As for comparing upward mobility in society here to other countries......could it not also be said that the gap between the haves/have nots in other countries is narrower because the standards of living enjoyed here are so much higher than in nearly any other country. Perhaps the income level to be considered upper-middle class in western Europe is lower, which results in a smaller gap?

    I really don't like to see, especially in a website purportedly devoted to teaching investors how to accumulate and grow their wealth with-in a capitalistic model, such a persistent drumbeat against those who have managed to do just that. As far as I am concerned, increasing someone else's taxes hasn't (and won't) put another penny in my bank account. If I ever get to the point that someone else gettin the shaft makes me feel better about myself, I will have fallen to a new low, indeed.

  • Report this Comment On November 27, 2010, at 1:30 AM, cmfhousel wrote:

    I don't know how it's possible to read this article and come away thinking it's a drumbeat against those who earn their wealth through hard work (it's the exact opposite), or that it was a call for a communism (get a grip).

    To summarize succinctly: Income inequality is great when there's strong social mobility -- it's a sign that one can work hard and move up the income ladder. Yet social mobility in the U.S. is among the lowest of all developed nations, according to the OECD. That's it.

  • Report this Comment On November 27, 2010, at 10:22 AM, afamiii wrote:

    All wealth is created first in the mind. Those with inadequate wealth or income are in their position because they lack the vision, knowledge, skill and/or attitude to become the people they need to be in order to have the income they want.

    This is a failure of public education firstly. Since it cannont be expected that parents with mental skills that are not able to create wealth to pass on these skills to their children. And a failure of rich people secondly, for not working harder to share their knowledge and mental strategies with those outside of their family.

    To change things, one must first overhaul the teachers, who themselves don't have a wealth creation mindset, and then overhaul the educational system, who's objective today is to create good workers (rather than wealth creators) and promote social cohesion.

    In a future where good workers are available in higher quantities, at lower cost and comparable quality, it is only by moving the educational system out of the role of training workers to the role of identifying and developing the unique genius in each student and creating a mindset where each person knows how to use their genius to solve problems, and create wealth and value.

    Many say that I am idealistic, that the cost is too great and that the economy can not absorb so many talented people, that there will be no one to do the mundane jobs, etc.

    My reply is i) to let the Chinese do the mundane jobs, this is why their government continues to buy US treasuries in the billions, why fight it. And ii) the current strategy of trying to train workers to do jobs that Chinese can do can never increase the income or wealth of the majority of workers. It can only assist in bringing them down to the income level of Chinese workers (with a small adjustment for quality and productivity.)

  • Report this Comment On November 27, 2010, at 12:49 PM, wolfman225 wrote:

    "To summarize succinctly: Income inequality is great when there's strong social mobility -- it's a sign that one can work hard and move up the income ladder. Yet social mobility in the U.S. is among the lowest of all developed nations, according to the OECD. That's it."

    Social mobility would be much stronger in this country if people would focus less on getting freebies from other people (ie, gov't), and more on developing their own individual gifts and committing themselves to doing the necessary hard work.

    Also, lest we forget, much of the upward social mobility in the world has come as a result of the example set by the American model of individual enterprise. Or do you really think that the peasants in China and those in the lower castes of India would have bettered their standard of living w/out our example.

    I stand by my belief that the "wealth disparity" in this country seems so egregious, in part, to the extreme levels of success that our system makes possible. Capitalism is messy, no argument there. It's still a better platform for individual (and family) success than any other.

  • Report this Comment On November 27, 2010, at 12:51 PM, bbell46356 wrote:

    I read this article the other day and was somewhat skeptical of the data and unsure what the point was that Housel is trying to make. It seems to be that the degree of income equality is bad because equal opportunity to achieve wealth is less prevelant in the US than most people think.

    This somewhat contradicts the statements in his previously cited article that says the wealthiest people got that way through investment in the stock market ("Who owns the Stock Market")

    Yet in this article Housel implies that sales of stock shouldn't be counted as income.

    I couldn't find the data on the Social Security website but the US Census also publishes income data and reports that the median family income for 2009 is about $49,000, about double what Social Security data seems to imply.

    If we really think income and wealth inequality is so bad, the government should just take stock from the top 1% and give it to the bottom 99% until everyone has an equal share of the wealth.

    Many readers will say this is ridiculous but it is a lot simpler than the myriad of government welfare programs and tax incentives that try to do the same thing.

    The real problem is that what is proposed is equality of outcome instead of equality of opportunity.

    There are plenty of examples of ordinary people becoming millionaires over time through a steady program of small investments over a long period of time. This is the essence of what the Fool advocates.

    Most people however, spend all and save none. I know plenty of people who drive fancy cars, take vacations and dine in restaurants, yet expect the government to pay for their health insurance and education and albeit to a lesser degree, subsidize their housing and other basic needs.

    There may be inequality but just about everyone is better off today than a generation ago. Think computers, cell phones, air conditioning and heart treatment as examples. These certainly aren't limited to the top 1%, 50% or even 90% of Americans.

    If we aren't getting richer as a nation, it is because too many people think they should get something for nothing. Free health care, free education, mortgage subsidies, food stamps for everyone and reduction of the number of people who pay any tax at all will only make everyone poorer in the long run.

  • Report this Comment On November 27, 2010, at 1:55 PM, cmfhousel wrote:


    Thanks for your thoughtful comments.

    Here's the Social Security data used in this article:

    To your point about contradicting another article, I'll agree that it does appear that way. My response would be: The quote from the first article makes claims about the way wealth was accumulated (stock market, as opposed salaries or cash savings.) The second part, from this article, quotes other sources questioning whether the degree of income inequality is efficient given labor mobility. The two points are not mutually exclusive.

    A few other comments:

    "There are plenty of examples of ordinary people becoming millionaires over time through a steady program of small investments over a long period of time. This is the essence of what the Fool advocates."

    100% in agreement. I'd never claim that social mobility is absent in the U.S. Just lower than competitors.

    "There may be inequality but just about everyone is better off today than a generation ago."

    Hear hear. I think this is a point the pessimists largely miss. Matt Ridley's book "The Rational Optimist" does a great job explaining this.

    Thanks again. Happy holidays.


  • Report this Comment On November 27, 2010, at 2:03 PM, cmfhousel wrote:

    One more bbell,

    "Yet in this article Housel implies that sales of stock shouldn't be counted as income."

    Nope. The section you reference implies that incomes are not only made up of salaries and dividends, but asset sales, and those sales tend to make up the majority of the ultra-high brackets. I never mentioned whether that was desirable for reporting, and if one asked, I'd say it is. Anything else would be incomplete.

  • Report this Comment On November 27, 2010, at 2:08 PM, cmfhousel wrote:

    Actually, I'll conceded that that portion of the article -- particuarly the last sentence -- could have been worded better to make my point.

  • Report this Comment On November 27, 2010, at 11:04 PM, shoemaker17 wrote:

    this is a fantastic article. I am just curious if you could break it down to dollars per hour. that will really show the discrepancy. I view myself as a fairly fiscal conservative, but I believe the rich should pay more in taxes. the great thing about the rich is, they pay taxes in all of the tax brackets right? My father is a orthopedic surgeon, and he makes between $500,000 and $1,000,000. He even agrees with me, after a lengthy discussion. Salaries have kind of gotten out of hand. I believe that any increase in salary should be incremental, not exponential. If I got a raise, i expect it to be 5-10%, not double. Do i think someone should earn $50,000,000 in a year? Sure, but I don't believe anyone has invented the Jet Pack, cured cancer, or AIDS.

  • Report this Comment On November 29, 2010, at 1:49 AM, thedatadude wrote:

    "If I got a raise, I expect it to be 5-10%, not double".

    And there is nothing wrong with that really, if you are content with that. Many people are and that is a good thing.

    I, however, am not, and I never will be.

    I have worked for myself for 25 years, enjoying fully the opportunities that freedom and capitalism have made available to me. I HAVE doubled my income's incredibly satisfying, and if someone were to take away my ability to do that?...I would produce less and not work so hard...WHY BOTHER. When you tie my reward to my willingness and ability to successfully take risks and meaningfully produce goods or services, you stoke the fires of capitalism, and that my friend is how the system works. But when you tie my hands, you take that desire away, because I will not work for free, I will figure out how to maximize my income for the minimum amount of is 8th grade economics, supply and demand, yet some people still don't get this.

    And guess what...when I doubled my income...I QUADRUPLED my taxes...everybody's a winner, including Uncle Sam. It's the simplest formula ever, and you can only make it worse by screwing around with it.

    Income "inequality"? It is the fuel that drives the entire system forward!! We have the biggest income inequality in the world because we REWARD success more than anyone else, and it is higher than it was a generation ago because the people with the MONEY make the laws so that success CONTINUES to get rewarded. I would hope and expect that this inequality will grow larger over the next generation, because smart people keep figuring out how to get rich, here in this land of unbounded opportunity. If you ever see this trend reversing, then the game is over and WE ALL LOSE.

    People want to come to this country because here you CAN win the game, you CAN reap the full rewards of your hard work, and once in awhile out of nowhere a couple of folks invent something and go on to become the RICHEST people in the world.

    And my friends, you cannot do that ANYWHERE else, as easily or as quickly, or as FREELY, as you can here. Inequality in-deed. I love this place!

  • Report this Comment On November 29, 2010, at 12:26 PM, LegalizeMe wrote:

    Envy and jealous are wasted emotions. I could care less how much money someone else makes as long as they did it honestly (which is another discussion all together).

    I found that all it took was hard work and determination to go from 5 figures to 6 figures.

  • Report this Comment On November 29, 2010, at 6:15 PM, stieny wrote:

    I think the discrepancy between the SS data and the census data in the SS data is for individuals and the census is for households. So spouses, children and young adult dependents (students with summer/part time jobs) are counted separately in the SS data and as part of the same household in the census.

    I don’t count an IVY league college student whose summer job brings in $10,000 but whose father earns $500,000/year and pays for the students expenses as part of the lower class. But this SS data does.

    Yes income disparity is high, and yes the US is less capitalistic that we like to think. But this data is misleading.

  • Report this Comment On November 30, 2010, at 1:38 AM, MartinSamuelson wrote:

    It seems to me that the key for social mobility is quality education. Unfortunately, higher education is becoming too expensive and the public schools are performing poorly compared to other nations.

  • Report this Comment On November 30, 2010, at 12:21 PM, DavidTheJust wrote:

    I spent 10 years working with disadvantaged teenagers in Philadelphia and I respectfully disagree with the common equation of education with social mobility (at least in terms of explaining why 48% of the population makes less than 25k per year).

    The key issue is not academic education but values. If someone is willing to (1) get and keep any job; (2) show up on time and do what the boss says; (3) avoid drugs and sex outside of marriage; then there is almost no liklihood of that individual making less than $25k per year by the time he or she is in his or her thirties (unless that person chooses, as I did when working with disadvantaged teenagers, to pursue work with horrible financial compensation for social reasons).

    There are all sorts of jobs that pay more than the $25k per year such as being a truck driver, or the assistant manager at a WaWa or a Taco Bell that a person can attain simply by willing to work hard and do what he or she is told. I should add, that there is the long term prospect of becoming a store manager or a district manager with a company like Yum or McDonald's.

    Does this mean that we have the social mobility to all become millionaires? No. What it does mean is that families can advance economically intergenerationally. There is no doubt that growing up in a rent controlled apartment in New York hampered my economic opportunities. I was, however, able to serve in the military and receive a college education in exchange for my 9 years of service. My daughter has economic and social opportunities that are greater than I do. That is how American society has been built for over 200 years. This is not something to complain about. It is something to celebrate.

    If half of Americans are living on less than $25k per year as this article states and, all they need to do to move into the top half of wage earnes is to be willing to work hard, not do drugs, and not have children outside of marriage - then it is hard to argue that this country doesn't have genuine social mobility.

    If you want to help your family, your neighbors, and the poor - don't skip over values. They are not a magic path to wealth, but they are a key ingredient in getting ahead.

  • Report this Comment On November 30, 2010, at 2:35 PM, Libertarian71 wrote:


    Interesting stuff. Can you verify that the top 10% of income earners pay over 70% of the revenues from the income tax?

  • Report this Comment On November 30, 2010, at 8:02 PM, salsasal wrote:

    I don't think the data is truly representative of the US to begin with. What are wages, tips, and "the like?" Unfortunately the SSA didn't clarify it, but I'll bet that data includes income from social security benefits, because I'm not buying that 50% of this country is making less than 25k a year.

    Either way, you are overstating your claim of "income inequality". Like all those people who love to talk about the "real" unemployment rate being double than advertised, I am going to make a similar claim. I bet everybody looked at those numbers and saw full-timers, but the reality is otherwise. Therefore their "real wages," had they been working full-time, would have been higher. Included in these lower rungs are people who choose to work part time: college students, retirees, lazy people and those who couldn't find full time. So while presenting these static numbers fuels the liberal fury about the "rich," it is so ignorant to take one slice of data and present it as "income inequality." I'd like to add more:

    First off, these numbers aren't looking at the age distribution. Comparing a 16 year old's part time income to a 50 year old seasoned executive's incomes makes no sense whatsoever. Should we be shocked that the executive is making $200k a year while the 16 year old is making $5k? Is this really the income inequality that people are referring to? Of course not.

    Secondly, one's salary affects no one else, so "income inequality" is irrelevant.

    A lot of people also point out facts like yours, "The top 1% of earners made about as much as the bottom 48%," and their audience is somehow surprised. It's simple math really and doesn't really say anything. Warren Buffett's net worth is probably worth more than 70% of the people's in Omaha. So what?

    In fact, "income inequality" is important to subdivide scarce resources because otherwise everyone's standard of living would decline. If everyone is fighting for the same goods, how is it then allocated? Does everybody get a ration like in the USSR? Writing about statistics of "income inequality" only strokes the envy and jealousy of lower income earners who discover that someone else is earning more than them.

    Thirdly, being able to start with nothing and end up rich is the conclusion of a capitalist system. Without allowing people to pursue their passions to become rich, innovation would cease. Do you think factories are free? And just because it is not easy to become rich, it doesn't mean that the system has failed (see above). Somehow people expect a free lunch.

    Since 47% of income earners pay no federal taxes, of which I would imagine would be mostly in the lowest income brackets, their effective pay is actually higher than someone who receives the same amount, but after taxes. I was quite annoyed to discover that after my salary increased 50%, my taxes increased not 50% but 100%. A lot of deductions have been phased out, such as the one for student loan debt, because I am apparently considered rich now. Never mind the fact that my net worth is actually negative because my student loan debt is 75k. But I digress...

    I am offended by statements like, "wealth in the U.S. is largely attributable to family status and upbringing." This is just a cop out for people who did not have the foresight to do the right things in life and do not and will probably never earn a large income.

    These are people who can only attribute success to being born with family wealth or connections and the end result is a self fulfilling prophecy. These are the people who max out their credit cards, make car payments on Hummers, and buy expensive clothing to pretend to be rich. Funny thing is that could actually be rich one day if they were to take all of the above money and stash it in an index fund yearly for 30 years.

    I'm not saying family connections won't help a lot, but get a grip and take control of your own destiny. And for those who think that most wealth is inherited, think again:

    Read about the Millionaire Next Door: "Fewer than 20 percent inherited 10 percent or more of their wealth." Robert Frank reports that things haven't changed much in eleven years.

    Please share comments on my blog:

  • Report this Comment On December 03, 2010, at 4:18 PM, GrumpyGopher wrote:

    I think the 'system' of being able to move up 'in class' is still possible from lower to middle. But middle to upper is quite difficult, seems many connections are needed.

    I think one fault is not necessarily the education system, but that people overlook the value of getting it free. Our forefathers worked the fields, if they didnt have school. Other countries kids excel because they underestand education is a means to a better future. Ours just expect good things to happen and that its someones fault if they don't.

  • Report this Comment On December 05, 2010, at 3:15 PM, trishtiger wrote:

    RE: none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads.

    Some overlooked items that Economists need to look at, as they impact income are: Income from machinery, equipment, computers, and over seas labors. This would not translate on any increases in wage earner income, rather, it would increase the earnings of the holder of such technology. It would not spread to other wage earners.

    The fact the IRS has decided that the sales of assets are income, distorts wages and business earning for comparison purposes. I'm frustrated that the Government enjoys using Family or Household income; since, it does not tell the real story of the individual citizen. These are examples of ways to present information that in themselves can lead to misrepresentation of facts.

    I do not understand the media and economy experts that continue to expect things to return to what they were in the past. How can we say we would rather hire 20 men to dig a ditch when one machine can do it, why would we add a whole layer of middle managers when the top now does both the paperwork and manages, why would we grown and harvest our own food when we can buy it from Mexico, why would we go to all the trouble to build something and sell it when we can buy it from another country and just be a middle man? We fundamentally have changed the very world we live in.

    America needs to find out how our workers can make good money, enjoy life, and have a savings account for retirement including health care and long term assistance, without any Governmental handout. It is a new world, face it, most jobs for employers are going to pay poorly. If you want to be successful you will need to invest.

  • Report this Comment On December 11, 2010, at 12:02 AM, fredgei wrote:

    "Can you verify that the top 10% of income earners pay over 70% of the revenues from the income tax?"

    Only since 2005. To someone who has been watching income inequality grow over the years, it seems most likely to be an artifact of that growth; for example, back in 186s, the top 10% paid not quite 55% of total income tax revenues:

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