Income That Puts You In The Top 1%, 5% & 10%
HTML-код
- Опубликовано: 19 июн 2024
- Data from this video can be found here: www.epi.org/publication/inequ...
00:00 Intro
00:49 Resources
01:05 Top 10%
02:36 Top 5%
04:21 Top 1%
05:51 First 90%
06:35 All Percentiles
Some of my favorite books: amzn.to/3KF3tlr
Camera & equipment I use: amzn.to/3Z20lof
Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
Join the family & subscribe to my channel here: / erintalksmoney
Thanks for watching, I appreciate you!
Income is not a predictor of wealth. Many pro athletes that made millions went BK. It’s now how much you make. It is about how much you keep.
Making a lot sure helps toward keeping a lot. Being frugal only gets you so far with a below average income. Being frugal and providing work of real value and wisely investing the money you don't spend is simply next level.
Once we hit the top 10% we got out of debt and paid off our mortgage.
We started stacking up our retirement savings.
Then we retired early.
We live a very modest lifestyle.
I've had some really good earning years (sales guy - my income fluctuates from year to year) and I can say that anyone who thinks being in the top 10% (by Erin's numbers) will be life changing would be surprised to find out it really isn't. Also - you would be surprised to find out how fast you adjust to that income level at which point it feels "normal" to you. Bottom line - live within your means, whatever that is, and be happy with what you have!!
I couldn't agree more! Well said
So true! You need to keep that lifestyle creep in check! I know people who make 5x my wage but literally never have money, just a bunch of depreciating assets😂😂😂
As I make more, I just save more. I've even cut expenses. I went from a $3600 mortgage with a 45 mile roundtrip commute to a $1500 rent payment and using practically free public transit to get to work in half the time. My utilities are way cheaper too, with my two-bedroom apartment being less than 1/3 the size of my former two-story house.
I had been a big spender on my home, but then I realized the stress it brought just made it so much less fun. Maybe if I had a maid, a landscaper, a chef, a handyman and a decorator on staff it would've been different, but alas I was not rich enough even for one part timer.
@@braceyourselvesfortruth2492 So true, don't understand why folks engage in lifestyle lunacy when they get the big payday. It just becomes a huge headache and makes getting to FI harder. Keep lifestyle creep in check, earn like crazy, and then tell your boss you're out, feel like laying on the beach for a while now....
@@dstevens518 seems like people buy a life that's easy to sell, not one that's truly valuable.
I don’t need to be in the top ten percent, but more income is always nice😂!
Very good info, but another topic you might want to cover is how well off are you in that 90 - 95% group in various locations in the county. If you are making $130k small town Michigan, your dollar goes a LOT farther than in SF, NY, or even Ann Arbor, here in Michigan. I had a coworker about 10 years ago, who left our company for a big raise out in California. Talking to him a couple years later, he felt that he went backwards financially, because along with the raise, came a huge increase in Cost of Living. Another question, for those in that 90 - 95% range, where do they live. As with my coworker, the reason he got rhat large raise to move, is because companies in California generally must pay more to get the same talent as a company in Michigan.
I've lived in both states. Yeah, it's pricier here in California, but I don't need heavy winter clothing, AC or heat. I just use an electric blanket a couple month of the year. Maybe use a heavier jacket or sweater. I fly back to see family, but mostly they come out here to thaw!
That's the very same reason why Scottsdale, AZ has been flooded w CA transplants, especially retirees.
I think using average instead of median is not really helpful, it’s always going to skew upward doing this.
It also doesn't give you a number at which you become top 10%, 1%, etc. It's just the average of those in those groups. The median would still be significantly higher than the entry point as well, but your point is valid about mean being even more than median.
Agree on further cuts to the groups as the numbers get skewed so much. Regardless it’s eye opening for folks to see. Social media has really distorted what the average person is earning and this helps shed light on the realities
Thank you Erin!
I agree that lumping the 90% together is unsatisfactory. According to the Census bereau, the 2021 household income limits by percentile:
Bottom 10th: $15,660
20th: $28,007
30th: $40,542
40th: $55,000
Median: $70,784
60th: $89,744
70th: $113,210
80th: $149,131
90th: $211,956
95th: $286, 304
Source: "Income in the United States: 2021" Table A4-a "Selected Measures of Household Income Dispersion: 1967 to 2021"
It’s amazing to me to see that this is all the income you need to have to be in the top 10%. I have been in this group since 2019 and am surprised even being in this income range that I am only in the 22% tax bracket (I’m married and have some non taxable income). However even being in the the top 10% there are 4 more tax brackets above me.
So true. We are on the same level.
Another great video. I feel very lucky and blessed because I made it to an income near the average of the top 5% incomes in the final 4 years of my career. Due to good savings/investment habits, I will retire with an income close to the average in the top 10%. We are truly blessed and wish the same success for everyone else.
Income is important - wealth is what matters!
I retired 12 years ago with a final income of about &140-150K/yr. I was a mid-level engineering manager with 30 years experience.. I imagine that today an engineer in the later stage of their career could get in into the top 10% with that $167k income. The part about half of people in this income range living paycheck-to-paycheck is completely about lifestyle choices. Particularly if they are in a marriage with a working spouse. Choices people! Choose a better career field. Live below your means.
Sounds great. I am the top 5% income earner live in the Bay Area with a family of 4, but I don't feel rich, instead I feel like the top 10% earner like everyone’s struggling to get by.
Well those numbers were bigger than I thought they would be.
We’ve done well by saving 15 to 30+% a year.
Again I was surprised by how high the numbers were.
You must save and invest well and not give it away. I’m not a fan a FP that take a %
Fee ONLY advisor is what I believe.
I've earned very little over my life. I grew up poor. In my 20s I was either enlisted military or in college. In my 30s, in a mediocre paying career, so I went back to college at 40 to get an MBA. Landed a good job in oil and gas but shortly thereafter there were industry wide layoffs. Spent 3 years unemployed. Now, for the first time in my life I have a good salary. Having lived poor most of my life I'm REALLY good at not spending. I save over half of my $100,000 salary.
Great video, but Averages are misleading, Median numbers describe a better picture.
And for today's entry on the "What can I watch to feel more like a failure" list, we have....
:-)
You should do a video on the turnover of the income earners. Someone starting their own business might be in the bottom percentages until it takes off, then have some good years in the top 10%, then the business fail and be back in the lower percentages. Someone might never earn a 6 figure income, but sell the home they have lived in for 30 years and they are a 1% income person for that year.
My husband made roughly $300K/year in his last 5 yrs as a senior airline pilot. Other than his 401K that was left intact, we lost all our monies and properties fr his gambling addiction before those last 5 yrs. After having graduated fr the rehab facility, I know that we wouldn't have been able to retire w a net worth of $2M (along w some other source of funds) if we weren't used to living well below our means. Now we are happy and content, but we will always stay wise w our finances.
A little late to the show on this video. I normally don't watch videos on wage comparisons. Why? Because they never eem to take into considerations where a person lives. If I took my salary that I have made over the years while living in the Bay Area of California to just about anywhere in the mid-west or the south-east I would have been living in virtual luxury. 15 years ago I was making $169k -$185K per year. That is a really good income in Kansas or Mississippi. But here in California it was definitely mid-middle class.
Without geography these numbers make no sense at all.
The income change makes sense, honestly. The lower 90% are doing jobs that most people, including kids in HS, can do. It may be an unpopular statement, but factually it's true.
Knowing the above, it's all on the person to put themselves in a better position to grow their income. They can earn a college education, certificates in Cyber, learn a profitable trade, I.e., machinist. The ball is in their court and only they can control their future.
As someone who went from bottoms of the bottom 90% to the upper top 10% - the biggest takeaway is what Erin said, it’s about how much you keep, not how much you make.
How does saving increase your income?
@@pw709 it doesn’t. But many people fall trap to lifestyle creep. So whether you make 50k or 100k, you should focus on your savings rate. Of course try to increase your income, you’ll have more to work with. But there’s a reason 50% of folks who make 100k are living paycheck to paycheck, and it ain’t because of their income
@@pw709I was wondering that too. We understand saving and investing as much of your income as possible, but was curious about making that much income.
I agree with you. I have gone from being a few hours away from homeless to a seven figure net worth. Financial education is the real problem !! We have forgotten the difference between what we WANT and what we NEED.
@@pw709 In addition to what @mckinleyp13 said, savings is invested and earns about 10% in the stock market, so the more you save, the more you earn in that sense.
Are these Household income or individual income average?
I've never had a target income that I was shooting for. I've always just made as much money as I could. The most money I ever made, though, was in 2008 and 2009.
Also, you don't just jump into a career into the top 10%. Have a plan and some patience. You may expect to get to that level 20 years later.
Sometimes you don't expect it to happen, and then it does. I could have relaxed.
I am just at the bottom of the top 10%. And I drive a 2008 pickup. I guess I’m not typical.
Using the mean for these numbers would give a better picture of where you stand on income percentages
You mean median, I think, and I agree.
Once I found my true love in work I started doubling my income every year for a couple of years. But I basically increased my expenses only by a little living WAAAAY below my income level. That simply allowed me to stockpile money into retirement accounts (save on income taxes!) and savings accounts. Controlling the expenses allowed me to retire at 52. That was 6+ years ago and I am so glad I did that throughout my career.
I made it at 58 (almost 59) - so very happy that I pulled the ripcord.
It would be interesting to see how much the numbers differ when compared to household income. Is there a correlation between % of 2-income households and the wages earned of the higher income earner? I.e. when the primary breadwinner earns X-amount, a tipping point is reached where the spouse leaves the workforce to manage the household.
Having kids is not a good idea. They are a money, time, and patience drain.
I'd be really interested in the % of income that people are saving/investing.. making a lot of money is great, but doesn't mean anything if you spend more than you make
I would like to see this broken down geographically. According to this I should be in top 10 percent. Maybe top 8. But where I live at I'm definitely higher. I bet if I lived in California I'd be lucky to be in the top 25
Cool...
Are these Household Incomes or per capita/Individual.
What about top 20% breakdown?
Are those figures pre-tax?
If You know about leverage and value , taxes you skip income . My personal belief is if u making 100k a yr you have no business buying a new that 48k you can invest .
Have income primarily in real estate: what are you counting as annual income... only net profit, or also annual principal reduction and annual real estate appreciation?
You also referred to wage increase of the wealthy... probably better to refer to annual income growth since most wealthy do not rely solely on wages as passive income is often the larger amount of the increase.
I make about 99k and I save about $600+/week in HSA/401k/Roth. And so what’s deposited into my bank account makes me feel like I’m living paycheck to paycheck.
So when you hear someone with incomes of 80-90k and higher saying they feel like they are living paycheck to paycheck. A percentage of them are likely still about to invest 15-30% into savings. So it may smudge the data with their feelings.
My experience is, since I have a hard time saving is to buy rentals. Granted I’m handy so worked well for me. It’s a forced savings account. It’s not easy but for some might be the way towards fire. Financial independents retired early. I’m 54 8 rentals and half my property’s paid off. I was a airline pilot and quit 20 years ago to build a rental portfolio. Glad I did. My friends in the aviation industry are close to wha I earn but will still need to work. I’m retired a living off the dividends my rentals produce.. just food for thought hope someone can benefit. Listen to rich dad poor dad and bigger pockets. Have a great day everyone.
Ha! I got the first “like”😂 and comment. Time to watch.
😂 fun fact, my husband won’t even hit the like button until he sees the entire video, because in his words “he has to see if he likes it” haha - there is an exception, if our dog peanut 🥜 makes an appearance in the video, he will immediately hit like. That’s just shows who he loves more!
@@ErinTalksMoney nice😂. I felt fairly confident I was going to enjoy the video. I have been a long time subscriber and found there is insight to gain from all of your content.
Take care, Erin!
Jeff
@@jefferymccauley9548 You probably brought her an Apple to. Sheesh.
@@wrongwayeric you mean an apple “too”. And yes I would- if I knew she liked them. 😉
0:16 Berkshire Hathaway's Warren Buffett and Charlie Munger each receive $100,000 per year, with no additional stock options or bonuses. In the past, Buffett has returned half of his salary to Berkshire. You don't have to be greedy to be rich.
Warren has sat on over 20 Corporate Boards, in which he was paid. His salary from Berkshire is a small part of what he makes each year.
Read The Richest Man In Babylon, The Wealthy Barber, The Millionaire Next Door, The Millionaire Mind, or Rich Dad Poor Dad. The avg. CEO reads over 50 books a year while the avg. worker reads zero and people wonder why CEOs get where they are.
Small business owners and real estate investors exist outside of this data due to the immense tax benefits of business and investment income and the relatively low individual W-2 income business owners pay themselves.
Build marketable skills, increase your income and preferably find a way to become self-employed or own a business so you benefit from the tax code instead of get punished by it. ✅
Shrimping and frugality can lead to financial freedom via a massively constrained lifestyle, but it won’t lead to financial abundance. Increasing income and reducing tax drag are 🔑!
Is 335k for married couple or single person? Thats a big differnce.
at 1:01 - stated that it is based on individual
I'm retired so my income would put me in the lower middle class; however, if I used my net worth, I am in the upper 8%.
Problem is that percentage is different depending on geographic region. 1% in rural US is far lower than 1% in major cities.
The average in a bracket isn’t the minimum amount to put you in that percentile. This is household incomes, and then for the typical lower 90% she shifts to individual income that makes it even more skewed. About 95% of households that made it to the 1% don’t make it the next year. Why? because the big thing putting people in the 1% isn’t their career but the sell of their home. Take 2022, median sell price was roughly 450k. 3% of household sold so easily top 3ish % is mostly from selling home. Through work alone probably best metric of “making it” is the cutoff for the 95th or 96th percentile. BTW there is roughly one medical doctor per 400 people in the US and I highly doubt the number of people in Csuite positions constitute roughly 5% of the population. My point, Through a job alone you can do extremely well for yourself and family but if it won’t make you a top 1%. Also, it’s only like one in 2000 households that make it to the top 1 % cutoff year after year. So whatever those people are doing, it’s what really makes you a 1% in the sense that the general public thinks of the 1%.
Highly recommend dentistry for anyone considering 😁
Highest rate of suicide
Why take average, how about the boundaries? Average is very skewed.
I think this data is helpful to provide context. I now know where i sit and where others sit. I understand the distribution better.
What i'd really like help understanding is how to increase my income. How do i go from where i am to where i want to be? Maybe thats intuitive for some, but it isnt intuitive for me. Its easy to say, "Learn new skills that increase your value." With so many skills in a world or an industry of skills to learn, how do i prioritize which skills to put energy toward that will increase my chances of earning a higher salary? I'm not even sure of who to turn to or what resources might be out there to understand this.
I also know there are many factors that come into play. Salaries differ across industries. N skills come into play. Geographic location can come into play.
It seems like there are lots of people teaching how to manage the money you have. I dont see a lot of good content on how to increase your earning potential. Maybe i'm over complicating it? I dont know.
Recommend looking at a tech school and consider plumbing, electrician, HVAC or nursing skills. These are jobs that pay better if you are not interested in coding or IT.
@@markjohnston3948 I'm in IT. Making just under $150k. How do I get higher?
@@CalicoCooperFan Talk with your boss. Ask what skills (people and or technical) you need to do his or her job when they move on. What will it take for them to recommend you in the event that happens?
@@markjohnston3948 Many have oppotunities for overtime also.
American wages are modeled on the iceberg. 1/8th above the water line, 7/8th below. It's bound to collapse sooner or later.
Income means little. There are two kinds of people - those who save no matter how little they earn AND those who don’t save no matter how much they earn.
On behalf of my fellow Top 10% earners, I wish you all well on the journey!
So corny
LoL. what a tool bag
Bottom 30 percent here 😢
The comments are so much more interesting that the long wind up intro.
😒
Just because an individual has a high income does not mean that he or she can manage money well (re: Congress). I'd be interested in seeing the correlation between one's income and one's net worth. Many people with smaller incomes may be much more effective at managing money.
Great reply !
Well that’s a great video idea - I’ll work on putting it together!
Net worth is the key indicator of prosperity - not Income
7:05 ssa.gov shows a much finer breakdown, with percentiles in 5k brackets for wages. (Used for computing the average wage index)
Earn, earn, earn. Bigger shovel, bigger nest egg faster, earlier FI. Better life.
Most of the top earners own a small business
My target income $200-300k
Hopefully that is at with $200-300K in 2023 dollars and indexed upward over time to keep up with inflation.
I want $300k per year.
This data doesn't represent investors that grow in wealth but don't pay themselves a high salary. For example Warren Buffett has a salary of $402,000.00 a year. He doesn't qualify for the top 1%. But he's worth 118 Billion dollars.
But that’s not the point of this video
I am in top 5% but don't feel anything special. I live like any other middle-class family would. Buy store brand and look for value.
So as someone in the 5% class I can honestly say, I still never feel rich. I know that I am fortunate, but I still buy my cars used on Craigslist and run them into the ground. I haven't bought a car since 2012. What I was able to do, was pay cash for it. And I think that's the thing. I still get disgusted when I see how expensive the world has become, but I never worry about getting a bill in the mail, or having to fix a car. I can afford to do those things. And I suppose not worrying is the luxury that income provides.
The richer you are, the more likely you have assets. Assets tend to rise in value with inflation, so the rich aren't as negatively affected by inflation.
I'm a 27 year old recent college graduate, and I honestly am not super motivated by money. I don't want to be poor obviously, but I also don't feel a need to be rich. If I could make it into the top 20%, that would be more than enough to make me happy. That being said, This video truly shows how unequal this country is.
If you're not motivated by money, then you should also not be jealous of people that are. Inequality doesn't matter if money isn't important.
I'm guessing a large YT following gets you into the top 5% also.
If your annual income is 40k$ in India. It is enough to afford a BMW , a 4bhk house and keep a house maid, sent kids to international school, and give option to my wife in case she doesn't want to work and focus on other things like writing a book or learn music etc. Yes it is possible.
Not in Mumbai. You may live like a king in a village.
@@lordabhikingfisher8087 why take the worst example and then say it's only possible in a village. I am from Kerala and most places here are very good for living a king life.
India is huge - this is not possible in metro cities..Delhi, Bombay, Bangalore, and Hyderabad. International schools in Hyderabad charge 6L INR for nursery!
If you figure that the majority of lottery winners are broke within a few years, a lot of money isn't the issue for many. Most of the 'poor' people I know are not poor, they make poor decisions.
"According to the National Endowment for Financial Education, 70% of lottery winners go bankrupt within a few years." - 4JAX News
@@user-dz4vn5cs2y let NOT.
It's not how much you earn, it's how much you get to keep. If you are an employee, you can shave off 25% because of taxes, example 200,000/1.25=$160,000 take home pay annually.
Too many variables not included. Location for example. Generally speaking, the more educated you become the the higher your wage. Once again: GENERALLY SPEAKING!!!
"Promo sm" 💐
What are your targeted audiences? Just people from the U.S. or the whole world? Being the top 10% of the whole world doesn't mean much in the U.S.. Also, being top 10% living in Mississippi won't be the same if living in another state like New York or California. Of course I can just google these statistics, but that defeat the purpose of watching videos.
Not talked about too much; people with kids spend more and save less. Not having kids is a financial must have.
I'm in the top 10%, and live paycheck to paycheck.
Why are you soooo obsessed with the class system?? Either you live within your means or you don't. How about some different video topics, please. I don't need to be judged by someone in a video. There is plenty of judgement out in the world.