There is not a lot of love for the top 1% to put it simply. It is very politically charged topic whenever you bring the top 1% up. Many people think it is unfair that anyone should make that much, or that they inherited it all or most of it, or that they should be taxed at an even higher rate than they currently are. We have a few different takes regarding this subject that hopefully are not too divisive and offer a different perspective.
If you make over $30,000, you are in the top 1%- Let that sink in for a minute. We hear all the negative things about the top 1%, but on a larger scale are you doing the things you want the top 1% to do? This may be the hardest concept to grasp and understand, but if you take not just US numbers, but the whole world, if you make above $30,000 you are considered in the top 1%. Now in the US $30,000 for anyone more than one person, maybe two people, would be very hard to live on, but it is not impossible. Really consider this though, if you are going to say the top 1% in the US make too much, than if you make over $30,000 you need to also be able to say you make too much or more than almost the rest of the entire world. If there is one key take away it is this- you need to have gratitude and be willing to give no matter what your financial situation is because the numbers do not really matter. If you break it down into ratios it makes it easier to follow.
If you make $100 working in a day and you give away 5% that would be $5. That does not seem like a lot. How much is $5 really going to make a difference? It will no matter what you think, but second you are building the habit of gratitude and giving if that is something that does not come naturally for you. If you made $1,000 and still gave away 5% you are now giving $50. $50 sounds like a pretty substantial amount and a lot more than $5, but this is okay. The ratio is the same. Your $5 is the best that you can do at this time making the $100. When you make more money (Over the course of a lifetime, most peoples incomes will go up and not just because of inflation. Hopefully this is not a controversial statement.) you continue to give at the ratio. You may even choose to increase the percentage and you probably should, but your not looking at the dollar amount. You care about what the percentage of your income is.
The top 1% inherited most or all of their money- Another misconception is that the top 1% (top 1% in USA, although most likely true across the world) inherited most of their money so they never learned to work hard or develop any necessary skills or knowledge. This is not true either. Here is a quote from a Forbes article that will hopefully help you see a different side.
“One measure of the percentage of the wealthy who are self-made is Forbes’ own Forbes 400 list. In 1984, less than half the people on The Forbes 400 list of richest Americans were self-made. By 2018, in stark contrast, this same figure had risen to 67%.”
So if more of the top 1% in the US are self made, how can they not have some skills or some knowledge? It is extremely hard to run a business let alone a successful one. Sure some people were there at the right time with the right product/service, but that can not be the situation for everyone and there still is something to be said about being in the right place at the right time. Here is another quote from Chris Hogan who wrote a book on Millionaires. Not the top 1%, but still a pretty good class to be in.
“We recently released the findings of the largest study of millionaires ever conducted, with 10,000 people participating. We also surveyed the general population, and we found out that 74% of Millennials believe millionaires inherited their money. So do 52% of Baby Boomers. Our study of millionaires blows that theory out of the water. Only 21% of millionaires received any inheritance at all. Just 16% inherited more than $100,000. And get this: only 3% received an inheritance at or above $1 million.”
Don’t Pay Enough Taxes- If you ever look at your paycheck before taxes, it can be pretty sobering to see how much money is taken out after taxes. Even still it is nowhere near how much the top 1% is taxed at. Put yourself in these shoes, you create a smash hit product/service/business that is revolutionary and changes your industry. Your income shoots up. We talked about ratios before and this is key to remember, you are making all of this money, yet you are losing more than ever due to higher taxes because you are successful? That does not really seem like good incentive to want to be successful from the government or society. Now the flip side to the ratio argument presented before is that there will come a time that your true living and emergency expenses balance out and you will have plenty more to give to others. At this point the ratio argument does lose steam, but still needs to be considered for perspective. You still need that money to grow, maintain, and preserve to keep the business running too. If we were in those shoes though, we think we would do a better job managing and allocating that money than a government would.
Summary- We want to leave you with this, because we think this summarizes why people feel the way they do about the top 1%. Who you hang out with and what you watch/read affects your mindset. Whatever anyone tells you differently about this is sadly mistaken. This has a HUGE influence on your energy, your knowledge, your perception, everything. If you believe that no one should ever have that much individual wealth or that making $30,000 should not be considered in the top 1%, maybe the information you are getting it from is pulling you away from your goals and what you can accomplish. Now we aren’t saying to follow blindly or not question the truth or status quo. There are instances that people get their wealth unfairly and do not give away as much as they should/could, but that does not mean that you can not achieve financial freedom for yourself. If all incomes were fixed or more balanced, the incentive to want to work harder and strive for more would be much harder to come by. Find your information from more than just one source. If an article says the top 1% are terrible and make too much, find another article/source that says the opposite. Maybe this is that article and you go read another that says differently. That is perfectly fine and yes this is extra work, but at least then you can form a more balanced opinion and take action from there.
Here are some recommending readings and sources for this article.
7 Secrets You May Not Know About the Top 1% (Blog Article)
Why Inheritance is Mostly Overrated as a Reason for Wealth (Forbes Article)
How Many Millionaires Actually Inherited Their Wealth (Chris Hogan Article)
Nearly 68% of World’s Top Richest People are Self Made (CNBC Article)