How Does Your Income Stack Up to the Richest Americans'?

We all know that rich people make a lot of money. That's what makes them rich, after all. But as for how much money most make in a year, a lot of people are in the dark. But a new Federal Reserve survey has cast some light on this subject and the results are really interesting.

If you've ever wondered how your annual income stacks up to the richest Americans', you're about to get the answer. And if you happen to find that answer a little depressing, we'll also look at ways you can beef up your salary.

How much do rich people earn in a year?

The latest Survey of Consumer Finances lays out the median household income for American families broken down by percentile of income. Here are the most recent results based on 2022 data:

To be clear, the above figures are household numbers. So if you're trying to figure out how you stack up and you live with someone who also brings money into the household, you need to add your annual incomes together for an accurate comparison.

Don't be discouraged if you're nowhere near the top earners. Even those in the 80th- to 89th-percentile range make less than half of the top 10%'s annual income. And the wildest part is that some in the top 10% make a lot more than that.

If you look at mean household income rather than median, the result for the top 10% climbs to a jaw-dropping $720,530 per year. This is exactly why most sources don't use mean household income when talking about American finances. When you add in very high earners, they skew the mean upward so it appears as though the average person is much better off than they actually are. Median chooses the middle income value of a group, so it's a better representation of actual household income for typical Americans.

How can you increase your income?

No matter which of the above income brackets you fall into, your personal finances could probably use a little extra cash. Cutting back spending can sometimes work to increase savings if you have a lot of wiggle room in your budget. But this isn't the case for a lot of people. So rather than trying to cut costs, it's better to look for ways to increase your salary.

Start by looking at your current job. You might be able to make a little extra by working overtime or pursuing promotions with your current employer. But if not, it might be worth exploring other employment opportunities in your area. If your job is something that could be done remotely, you could also look at companies headquartered farther away.

Side hustles are also a popular way to earn extra cash if you have a little spare time. There are dozens of options out there. If you have a vehicle, you might want to be a rideshare driver or act as a personal shopper for others. Or if you're artsy, you could create handcrafted items to sell. Think about what best suits your skills and resources and weigh the potential income against the time involved.

A longer-term approach is to pursue higher education or advanced certifications in your field. This will take time and cost money, but it could lead to much higher-paying salaries down the road. If you're thinking about going this route, look for an employer that helps pay for their employees' higher education costs. But make sure you understand the terms of these programs before you apply. You may have to commit to working for that employer for a set period if you get help paying for classes.

Even doing all of the above, the only way most of us will hop up to the top 10% is if we happen to win the lottery. But that's no reason to get discouraged. Even having a few thousand dollars extra in your bank account per year could make your life a lot more comfortable. But don't try to do too much too fast and burn yourself out. Focus on making slow and steady progress instead, and celebrate your wins along the way.