The richest 1% know the secrets to building wealth, and nothing makes that more evident than the statistics about how they stack up to the 99% that most of us belong to. Though we may never join them, many of us can't help but be curious about how these wealthy folks live. Here are five surprising statistics about the richest 1% along with some tips on how to increase your own net worth.
1. It takes an annual income of $421,926 to join the 1% in the U.S.
When we think of the 1%, we often think of people raking in seven figures a year, but it only takes the comparatively modest figure of $421,926 to join the 1% in the U.S., according to data from the Economic Policy Institute (EPI). That's an average of about $35,161 per month or about $1,156 per day.
Being in the 1% of your state may cost more or less than this, though. Connecticut residents will need to earn a whopping $700,800 per year to join this elite group while Mississippi residents can join the 1% with a mere $254,362 in annual income.
2. The richest 1% earn 26.3 times more than the bottom 99%.
The average one-percenter can expect to earn almost $1,317,000 per year, according to the EPI study. By contrast, the average 99-percenter brings home just $50,107 per year. That puts the average 1% income about 26.3 times higher than the average income for the rest of the country.
This ratio also varies by state. New York has the largest income inequality gap with the top 1% taking home 44.4 times what the bottom 99% earn in that state. Alaska has the lowest income inequality gap. Its 1% only earns 12.3 times what its bottom 99% earn.
3. The top 1% holds 42.5% of the national wealth.
The wealthiest 1% of U.S. residents -- about 3.29 million people -- hold 42.5% of our national wealth, while the remaining 325.7 million people share the remaining 57.5%, according to Inequality.org.
No other country in the world has so much wealth concentrated in the hands of the few. In the Netherlands, which had the next-largest income inequality gap according to the Inequality.org survey, the 1% only holds 28% of the country's wealth.
4. The 1% earn 20% of the nation's income each year, but pay 37% of the taxes.
While the 1% may hold over 40% of the nation's wealth, they only earn about 19.7% of all income in the U.S. each year. But they pay 37.2% of all the nation's taxes, according to 2016 data from the Internal Revenue Service. Many argue they should pay even more taxes, but few realize how much they're already paying.
5. You might be among the richest 1% in the world.
Few of us will ever join the richest 1% in the nation, but we may already be among the richest 1% in the world without even knowing it. It only takes an annual income of $32,400 to join the world's richest 1%, according to Global Rich List. It would take workers in poor nations like Zimbabwe 31 years to earn this amount. Something to think about next time you're envious of those who have more money than you.
You may never join the 1%, but you can still grow your wealth
You don't need to join the 1% to feel wealthy or to improve your living situation. Even an extra $100 or $200 per month can make a difference in your life, and it could bump up your annual salary by a few thousand dollars too.
There are more opportunities than ever to grow your wealth. You could go the traditional route and work overtime or pursue promotions at your existing job, or you could try something new by starting a side business. This might be driving for a ridesharing service, walking dogs, or selling handmade items online.
Investing is one of the best ways to grow your wealth, and it doesn't have to require a lot of work or research. With the rise of robo-advisors, you don't have to know much about investing to get started. You could also consult with a financial advisor who can offer individualized recommendations based on your goals and timeline. Just make sure you choose a fee-only advisor, not a fee-based advisor. Fee-based advisors can earn commissions for recommending certain investments that may or may not suit you.
Money is always going to be a part of our lives and we'll probably always be somewhat envious of the 1% who don't have to worry about it. But with diligence and planning, we too can grow our wealth and begin to live a more luxurious life.