Data from the Federal Reserve indicates that the top 10% of Americans have double the wealth of the remaining 90%.
The top 10% hold $101.62 trillion of the nation’s wealth and assets, while the remaining 90% collectively hold $50.06.
To break it down further, the bottom 50% of Americans hold $3.78 trillion in assets, while the top 0.1% holds $20.66 trillion. In other words, the top 0.1% has nearly 5.5 times the wealth of the bottom 50% of Americans.
Related: Nearly 7% of Americans Are Millionaires
Wealth Stores of the Top 10%
Assets can include cash, homes, vehicles, and investments in various assets such as commodities, real estate, stocks, bonds, and bitcoin.
The wealthiest Americans’ net worth often depends on the value of assets other than cash. Professional investors such as Warren Buffett often have most of their fortunes tied up in the stock market. Generally, they will have diversified enough that they won’t be financially harmed if one investment fails.
There’s a risk vs. reward tradeoff. For example, Venture capitalists often trade higher risk in lower liquidity for a greater chance of a large payoff if startups in their portfolio succeed. However, venture capital is high risk. More than two-thirds of all startups never turn a profit for investors.
Venture capital firm Andressen Horowitz had its share of successful investments, including AirBnB, Lyft, and Coinbase. Many of its successes were acquired by other companies or had an IPO.
Naturally, Anderssen Horowitz had its share of failures that simply ran out of money, despite an occasional attempt to reboot, like OpenBazaar. However, its spectacular successes more than made up for the failures.
Most of Elon Musk’s net worth is tied to his shares in companies like SpaceX, Tesla, and X (formerly Twitter). This explains why he seemingly competes with Amazon founder and former CEO Jeff Bezos for the title of the world’s wealthiest person as the value of their respective shares fluctuates.
In 2021, Musk sold enough Tesla shares (NASDAQ:TSLA) to cover an $11 billion tax bill. The 15.7 million total shares he sold in 2021 reportedly put some downward pressure on a stock that had previously become part of the S&P 500.
A February 2024 regulatory filing indicates Musk still holds a 20.5% stake in the company earlier this year.
Related: Elon Musk Interviews Donald Trump on X Spaces
Wealth of The Average American
Meanwhile, the average amount that Americans 65 and up have in their retirement accounts is $232,710.
Most of their retirement funds are invested in stocks and bonds, potentially making retirees vulnerable if markets decline and they are forced to withdraw funds to cover monthly living expenses. Other major assets also include their homes, if they own them, as well as their vehicles.
Many Americans not only live paycheck-to-paycheck during their careers, but also rely on their retirement portfolios and Social Security when they reach retirement age. Unfortunately, they may not have enough saved up to cover their expenses.
Professional investors and businessmen often have their fortunes tied up in various investments, where they can avoid paying taxes on gains until they are forced to sell, such as when they need liquidity.
Those sales can impact the assets’ value, impacting ordinary Americans’ smaller investment portfolios and retirement savings.
Related: The Second Gilded Age: Wealth Inequality Deepens in the U.S.
