From Statista’s Oct 2024 article about Wealth distribution in the United States in the second quarter of 2024.
The following is extracted from Statista’s website:
U.S. wealth distribution Q2 2024
Published by Statista Research Department, Oct 29, 2024
In the first quarter of 2024, almost two-thirds percent of the total wealth in the United States was owned by the top 10 percent of earners. In comparison, the lowest 50 percent of earners only owned 2.5 percent of the total wealth.
Income inequality in the U.S.
Despite the idea that the United States is a country where hard work and pulling yourself up by your bootstraps will inevitably lead to success, this is often not the case. In 2023, 7.4 percent of U.S. households had an annual income under 15,000 U.S. dollars. With such a small percentage of people in the United States owning such a vast majority of the country’s wealth, the gap between the rich and poor in America remains stark.
The top one per cent
The United States follows closely behind China as the country with the most billionaires in the world. Elon Musk alone held around 219 billion U.S. dollars in 2022. Over the past 50 years, the CEO-to-worker compensation ratio has exploded, causing the gap between rich and poor to grow, with some economists theorizing that this gap is the largest it has been since right before the Great Depression.
Observations from the USA Facts article:
In 2023, 97.5% of all net worth — totaling $139.4 trillion — was owned by the 50% of Americans with above-average net worth. The remaining 167 million Americans owned about 2.6% — or $3.6 trillion.
How Many Americans Own Stock? About 162 Million -- but the Wealthiest 1% Own More Than Half
(Source: Motley Fool article dated 27 Dec 2024)
About 162 million Americans, or 62% of U.S. adults, own stock.
The top 1% holds 50% of stocks, worth $23 trillion.
The bottom 50% of U.S. adults hold only 1% of stocks, worth $480 billion.
My muse
There is income inequality when the top 1% most wealthy hold 30% of the wealth whereas the bottom 50% have less than 2.6% of the nation’s wealth.
Here is a recent CNBC article in Nov 2024 that highlighted Americans living paycheck from paycheck:
Nearly half of Americans at least somewhat agree with the statement, “I am living paycheck to paycheck,” as of the third quarter of 2024. The share shrank slightly between the second and third quarters of this year, but in 2022, less than 40% of Americans felt this way, Bank of America reports.
A significant portion of America struggles with affordability. It seems that half of the nation (167 million) is struggling. Will the layoffs lead to more financial peril?
This is something that we need to look out for. S&P500 does not represent the American economy when 40% of the revenue came from outside America. The stock market can hit higher highs as more Americans struggle with affordability. Both can happen concurrently. Let us consider some hedging going forward.
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