A large number of Americans will be in the top 10% by income at some point during their life. Edit: I looked it up, and it's actually a majority of Americans (57%) will be in the top 10% at least one year of their life.
As noted, even just selling a house in a random state like Wisconsin can easily put you in that bucket.
Top 10% by wealth is a different story harder to attain. It's frustrating that we pay for things with taxes on income and not wealth, because it hits the upper-middle-class harder than it hits the people with all of the equity.
I get irritated when this little quirk of measurement is trotted out. Someone making 400k / yr as an investment banker is in a very different position than someone who 'makes' 400k selling grandpa's dairy farm and pays off creditors. It's very disingenuous to say that a large number of people will be in the top 10% at some point. Technically true, but meaningless.
Firstly, consecutive years are in fact shown as well in the data linked: 56% of Americans spent 2 consecutive years in the top 20%, and 35% spent 2 consecutive years in the top 10%.
Secondly, these numbers are based on tax filings, and even though the process of the sale of grandpa’s dairy farm may straddle 2 years, the income from the sale isn’t realized across 2 years; it will always register as a single fiscal year, I.e. the year in which the transaction closed. The actual income is not realized until then.
Further, it’s not at all obvious that only considering consecutive years is necessary to invalidate the original GGP claim. The fact that 40% spent 2 not-necessarily-consecutive years in the top 10% (and 62% for the same in the top 20%) especially debunks the notion that one-time inheritance sales make up the variance. Nobody is selling grandpas dairy farm across 2 disjoint years. It also shows us that people do in fact move in and out of these quintiles (or deciles) as one would expect in a dynamic economy, and that those groups aren’t just a static cabal of people twirling their mustaches.
The crux of the argument stands: the majority of Americans experience affluence by spending at least 2 years in the top 10-20%. And at the very least it totally invalidates the absurd claim made (quite confidently, at that) in the GGP comment:
> Most American never get anywhere close to the top 10% - not even remotely - regardless of age. The idea that everyone is just waiting around for their career to advance enough to put them in the upper-middle class is ludicrous on its face.
This is largely attainable for the majority of Americans when you factor in the value of one's home, retirement accounts, and general lifetime savings. Keep in mind we're not talking about how much net worth the majority of Americans have at any snapshot-in-time, we're talking about the maximum net worth attainable in one's lifetime, and what that looks like for the majority of Americans.
There's absolutely no evidence that the top 10% wealth holders has been a static group of people over the last 60 years.
Why is it meaningless? A lot of investment bankers quit, change professions or get laid off and can never re-enter the market. Just look at the number of analysts vs MDs and you'll see that the funnel gets a lot narrower at every stage. And you don't see many analysts in their 30s, so where do they go? There's a lot of turnover in the top 1% and 10%.
There are lots of jobs that consistently pay multiple six figure comp. To compare them to someone who realizes a one time capital gain from an inheritance or whatever is laughable. The two are simply not the same.
People rotate in and out of that 10%. 25 years ago I maybe had a net wealth of 500 bucks, 15 years ago I was negative 180k. Today I am in that 10%. By the time I get to 70 I probably will not be in that 10% anymore. Hell one 'RIFF' and 2-3 years of 'sorry you are not a good fit', medium sized illness, and I could be there again.
As noted, even just selling a house in a random state like Wisconsin can easily put you in that bucket.
Top 10% by wealth is a different story harder to attain. It's frustrating that we pay for things with taxes on income and not wealth, because it hits the upper-middle-class harder than it hits the people with all of the equity.
https://www.aei.org/carpe-diem/evidence-shows-significant-in...