“If you could suddenly make the 1% realize they are rich, what impact do you think that would have? Would that mean they would give more to charity?”
Maybe. Data suggest they would be happier.
I remember feeling like I had “made it” when I never had to doubt whether my charge would go through at the grocery stores. Embarrassingly, it took much longer than it should have for me to watch my money.
A more provocative and nuanced piece also from the Atlantic https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/ and a piece critical of that article https://slate.com/business/2018/05/forget-the-atlantics-9-9-percent-the-1-percent-are-still-the-problem.html
The article in the OP switches back and forth between income and wealth, which muddles whatever point it is trying to explore. Being in the top .01% of income doesn’t at all guarantee that you’ll get into the top .01% of wealth. People who have long had plenty of wealth probably feel richer than people who have recently received plenty of income because they are. No real mystery there.
I honestly had no idea that it took so much in salary to be in the top 1%. Somehow I thought it was less. Now I feel even less rich LOL.
I live in New England and serve on a non-profit board with a few 1 percenters who have been in that category since birth–two of them (who are also quite philanthropic) are some of the most frugal people I know. One takes left-over coffee (it’s in a large insulated carafe) from board meetings and then heats it up for her morning coffee for the next few days.
As a few people here have noted, income and wealth are different things. People with very high incomes and no savings aren’t wealthy. In my view, nobody qualifies as wealthy until they have a net worth of at least a few million.
Warren Buffett is a great example of a frugal 1 percenter.
Warren Buffett is probably a 0.001 percenter.
Not probably. Definitely considering he is the 3rd richest person in the WORLD.
This is a constant problem in articles about affluence, I agree, but in this case, it doesn’t matter: members of both groups are undeniably rich.
@sherpa Agreed, we are not in the top 1%, definitely in the top 5% and we are not wealthy. We are paying for college as we go. Once my last graduates college(she is in her 3rd year) we will start aggressively stacking our savings. We have some wealth but given our income it’s not much at all. One bad illness and we would be toast.
Actually, @MomofJandL, I was thinking about it in reverse. When the benefits of frugality and starting to save early pays off with having “wealth”, but the salaries are not in that top income range, or even more so , one retires or semi-retires, it feels less secure with the liquid income stream changing. Now yes, there is unearned income from investment dividends, etc, but the drop in earned income adds to not “feeling” anything other than middle class. Its hard to learn to feel comfortable spending relatively freely, and not worrying about outliving one’s money, even if its a low probability worry.
H grew up contributing his entire paycheck to help pay bills of his parents—there was never quite enough. He’s often been concerned that we will “run out” of money, even though for our entire multi-decade marriage we have lived below our means and now live below the monthly amount of his pension.
Feeling rich is subjective. I would think that the point where you “feel” rich is when you have enough. Everyone has to decide for themselves what that is. Who is richer the person who has what they want and are content or the person who regardless of what they have is concerned about how to get what they don’t? By most standards being in the 1% means objectively you are rich. For some subjectively they cant’t feel rich.
I tend to define top 1% by net worth. You can have a high income, spend most of it and have low net worth. You are essentially several paychecks away from dropping out from the top 1%. That is not rich. Net worth is a better gauge, if you lose your job, you can at least have a good cushion and not having to panic. In one article, the net worth of top 1% is at least $10M in assets. I agree with it.
The primary driver of college EFC is income, isn’t it? If I earn $300k/year and spend $280k, I’m still in a vastly different situation than the family who earns $80k and spends $60k because next year I’ll earn another $300k. Should I get as much need based aid as the family who earns $80k just because I spent down my wealth?
EFC is based on both savings and income. A high net worth with very low income will still result in full pay.
I can’t imagine anyone in the top 1% of net worth (~$10 million) feeling anything but wealthy. If they can’t feel comfortable with that, they probably never will. I’m not saying they won’t want more, but those people don’t “need“ to clip coupons.
On the other hand, not everyone earning top 1% of household incomes (~$430k) is going to feel similarly. Those who are in that position but haven’t yet accumulated significant net worth, are relatively close to a normal retirement age, and/or perceive their income level to be insecure for whatever reasons, are justified in feeling less than wealthy. Sure they could objectively compare themselves to many others with significantly less. But that doesn’t make the uncertainty of outliving one’s resources any less real or valid.
Yes, many of the “donut hole” complaints on these forums similar to the one quoted in post #0 come from posters who are probably in the top 10% excluding the top 0.1%.