There is Always Another Level (This Is Your Humbling Blog)

There is Always Another Level (This Is Your Humbling Blog)

I’m a competitive person in general and thus like to know how I stack up compared to others. Where does my weight compare? How about my IQ? What about my strength as a 45-year-old? Although they say comparison is the thief of joy, there is something about knowing your standing that gives you a sense of understanding. An area I get asked about a lot, and now think about a lot, is how we stand compared to others when it comes to net worth and income.

Clients constantly ask, “How do I look compared to other people roughly my age?” I figured why not give you an updated look at where you stand, then leave you with a message about what it should mean to you. For relevancy’s sake, and assuming most of you reading this reside in the good ole United States of America, I’ll just use U.S. stats.

Median

So, what makes you a typical American household? If your household earns $84k, you make as much as the median American household does. From a net worth standpoint, that would put you at roughly $216k of total assets minus liabilities (aka net worth). There is nothing wrong with average, and for many of us knowing we are average is a great feeling.

Top 10%

If you are still reading, it probably means (A) I haven’t offended you yet, or (B) you are waiting to see how much further I go until I get to your level. Now we turn our attention to you top 10% peeps. What does it take to be considered a top 10% earner in America? Well, that would have you making $251k per year. To be top 10% by net worth, you’d need about $2.5m. This is getting to some serious money, folks, and for what it is worth, there are only about 13.5 million households in our country that fall into this category.

Top 5%

Maybe you were the person who graduated in the top 5% of your class and always was an overachiever. I was not one of those kids, but I do find this next category very interesting. To be considered top 5%, you’d be earning $336k per year or have a net worth of approximately $4.9m. This also cuts the pool roughly in half, meaning only about 6.8 million households currently fall into the top five percenters in the States.

Top 1%

Now we are getting down to the nitty gritty. What does it take to be at the top of that class list? A top 1% earner in our country brings in roughly $660k to $730k a year as a floor. Top 1% by net worth takes a whopping $16.3m. Only about 1.35 million households fall into this category. These are serious assets and earnings, folks, and if you spread them evenly across the country, which is not how it works, you’d have only about 27,000 households per state that can call themselves top 1%.

Top .1%

Last one, I promise, but people want to know what it would take to be truly a top .1 percenter. This is only about 135,000 households in total, or roughly 2,700 per state. Think of it this way: for every 1,000 households you meet, maybe one of them is at the top of this mountain. So, what does it take? About $2.8m of annual income or a net worth of roughly $60,000,000 or more! These people are extremely rare, and for most of us there likely isn’t even a pathway to that level outside of a lucky lottery ticket.

Message

This was the longest setup to a blog ever. That said, the message is this: there is always going to be somebody richer and poorer than you. It’s tempting to think, yeah man, I made it, I make more than my friends, or family, or colleagues, or graduating class, or whatever your litmus test is. However, if you are chasing that next level, you should be humbled to know that even if you make a million dollars a year, there are hundreds of thousands of people in our country alone who out-earn you.

Thus, if you are gauging yourself off other people’s wealth for any sense of being or accomplishment, you are using the completely wrong mirror. Heck, if you compare any part of you to someone else expecting to feel satisfied, you are always going to set yourself up for disappointment. Turn your focus inward and derive your self-worth and happiness from what you have accomplished, not what you have accomplished compared to someone else. That is what matters in life and wealth. Only you can determine what is enough and what helps you live a life that is aligned with your goals.

As always stay wealthy, healthy, and happy.