If the top 10% of Americans own 80% of the wealth, does that mean 1 in 10 people I see on the street have significantly more money than me?
In: 4977
First, a clarifying point. Wealth is a complicated concept. It’s typically not just money sitting in a bank account, especially for very wealthy people. It’s houses, stocks, businesses, and other properties. It can also be reduced by debt. All this means that someone can have significantly more *wealth* than you while not having significantly more *money*. For an ordinary American, this could be because they own their home but are living on a fixed income.
From a pure stats perspective, what you want to know is your *percentile* in the distribution of wealth. If you are at the 73rd percentile of wealth, 73% of people have less wealth than you, and 27% have more, though some of them will only have a bit more money, rather than “significantly more”.
Because wealth is difficult to calculate, we know a lot less about its distribution than income. It’s also standard to think of wealth at the household level, which can mean splitting it across many different people. The Census put out a report with a rough distribution of household wealth last year:
10th Percentile: $0
25th Percentile: $16,650
50th Percentile: $166,900
75th Percentile: $604,900
90th Percentile: $1,623,00
So about 1 in 10 people has no wealth to speak of (renting, no savings, cheap car, maybe significant debts), the next 2 people have some savings but no significant housing wealth. The next 6 start to get into 6-figures, probably much of which is in their house. The last 1 is a millionaire.
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