Net Worth and Income of the Top 20%, 10%, 5% & 1% In America (U.S.)

Net Worth and Income of the Top 20%, 10%, 5% & 1% In America (U.S.)

The United States is one of the richest countries in the history of the world.

The median income in the U.S. is $65,700 and the median net worth is $121,700. This is the middle, there is a huge variance both below and above this level. The bottom 20% of earners nationwide make $26,685 a year.[1]

Let’s take a look at the highest net worth and highest income Americans and see how each level of wealth ranks by percentage of the population.

The top 20% of Americans earn over $130,545 in annual income.

Another important fact is that the top 20% are also making over 50% of all the income earned in the country.

The top 20% also earn half of all the payroll dollars. Six figure earners are making close to 20% of all income while the other 80% of employees are splitting the other 50%. That’s a huge a variance showing how quickly earnings power drops if someone isn’t in the six figure club as pay drops dramatically in the lower income brackets.[2]

It’s crucial to get into the six figure income bracket as quickly as possible whether you are an employee, business owner, self employed, investor, or trader. The only way to make this level of income is through value creation for your employer, business, or in the marketplace for customers.

It’s also important to get your first $100,000 in net worth to start the compounding growth process as early as possible. Your income is your fuel for wealth creation that comes from converting earned income into investments, businesses, and cash flowing assets.

What is the net worth for the top 20% of Americans?

The top 20% net worth in the U.S. is $558,189 in 2022. You must be over halfway to millionaire to be in the top 20% of wealthiest Americans. This is doable over the longer term even for lower income earners if they can invest wisely when they are young and allow the returns to compound. Also home ownership can help get you to this level quicker if you buy in an area that’s growing and increasing in value over the years.

What is the net worth for the top 10% of Americans?

The top 10% bracket for net worth in the U.S. is $1,219,126. The top 10% for income earners are paid $173,136 a year.

There are approximately 15 million millionaire households in the U.S. making up 11% of the population.

This is the millionaire club and the upper class of income earners. Here you will find professionals like lawyers and doctors. Also successful bankers, business executives, and entrepreneurs are in this club. The blue collar workers that get to this level of income and net worth generally own their own business in their industry.

According to the IRS, the majority of millionaires create and maintain seven income streams at this financial level of net worth.[3]

1. Dividend income from stock investments.
2. Earned income from a job or self-employment.
3. Real estate rental properties.
4. Royalties from intellectual property.
5. Capital gains from investments.
6. Profits from operating their business.
7. Interest from bonds and savings.

Multiple streams of income make achieving and maintaining your millionaire status much easier and less risky.

Creating your own successful business is the quickest path by far to the top 10% in income and net worth. Professionals like doctors and lawyers take longer to build their net worth as they must spend a decade in most cases on their education and then pay off their student loan debt.

The top 5% bracket for net worth in the U.S. is $2,584,130. The top 5% income earners make $342,987 a year.

This is double what the 10% have in net worth and income. This level is literally twice as successful as the 10% level.

This is the multimillionaire club and the wealthy class of income earners. Here you will find CEOs, successful entrepreneurs who scaled their business, the top corporate lawyers, and doctors that specialize and are experts in one thing. Professional athletes and top entertainers in acting and music can achieve this level of income. The key to this level of achievement on the net worth or income side is the use of leverage. You need to monetize a large customer base and/or high earnings per customer and your time to get to this level.

This is not just about working hard at this level but about using the leverage of disconnecting your time from pay and multiplying your ability to earn. This can only be achieved by being rewarded for running a company, selling a company you built, selling to a large fan base, being paid to monetize your skills in sports or entertainment, or being paid a huge sum for what you know and can achieve in medicine or law.

The top 1% bracket for net worth in the U.S. is $11,099,166, The top 1% income earners make $823,763 a year. [4]

These are the decamillionaires worth over $10 million. These are the winners in their industries and geography and the best in their niche. These are the people that created businesses or intellectual property worth tens of millions of dollars and kept their monetary share. These are professional athletes that had good careers. These are the best selling authors. These are the actors and actresses that got plenty of roles and high paying jobs. Top musical artists that breakout to fame can achieve this. This level is where the top lawyers and doctors that built successful firms and practices can get to. Lottery winners can sneak into the top 1% in net worth but they usually don’t stay there for long.

To get to the top 1% in net worth or income takes a very successful career in your industry. To stay there requires good management of your taxes, investments, and spending. A top 1% earner must be able to convert their income into sustainable wealth. It’s possible to spend more than you make at every income level and taxes will eat away at your wealth if you don’t know how to optimize your earnings and investments to minimize them or hire the right person who can.