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?

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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?

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Anonymous 0 Comments

No, because of a few things:

1) It depends where you are on the spectrum. If you’re wealthier than average, this won’t hold true for you.

2) It depends on what you mean by “wealth” and “money”. “Wealth” tends to be defined as net worth, meaning assets minus liabilities (or, “stuff you have” minus “stuff you owe”). If you make $100K a year, but your living expenses are also $100K a year, you’ll have little to no net worth or “wealth”, whereas someone making $50K a year who saves or invests half their income would be “wealthier”. The biggest example of this is homeownership, which contributes a lot to people’s wealth. A person who owns a house is going to show as a lot wealthier than someone who lives a more luxurious lifestyle, but doesn’t own anything permanent.

3) Wealth is concentrated very differently based on location. In particular, people are wealthier in or near cities and along the coasts. It’s not like 10% of people living in trailer parks are secret millionaires. So if you’re walking down Hollywood Boulevard, most people are probably going to be wealthier than you. But if you’re walking around a low income village in Kentucky, you may be one of the wealthiest people there.

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