Nice to see you back here, and nice to have a very intriguing question
to sink my teeth into.
Let me say at the outset that we are diving into very murky waters.
There are sources of reliable statistics on wealth in America, but
they originate primarily in everyones favorite government agency
the Internal Revenue Service. IRS data tends to be very tedious to
wade through, and vey tough to make sense out of.
I've done my best to extract the relevant information and present it
here as clearly as I know how. But let me say at the outset, if
anything at all needs additional discussion or elaboration, just let
me know by posting a Request for Clarification, and I'll be happy to
assist you further.
At this link:
you will find the IRS' most recent report on "Personal Wealth".
Unfortunately, even though the report is recent (April 2003), the data
are from 1998. But for many of the types of questions your are
asking, this is most recent year of data available.
The report starts off this way:
"There were more than 6.5 million individuals in
the United States with gross assets of
$625,000 or more in 1998. These "top wealth
holders" represented about 3.4 percent of the total
U.S. adult population. As a group, top wealth holders
owned more than $11.1 trillion in assets, or almost
32.6 percent of total U.S personal asset holdings.
Almost 4.0 million, or 61.2 percent, of these wealthy
individuals were male, and 2.5 million were female."
So right away, we know that the subject of your question is at least
in the top 3-4% of Americans, in terms of personal wealth, and
probably a good deal higher. We also know the odds are almost two to
one that the person in question is male.
From additional information provided in Figure A of the report, we can
also see that 70% of the men of wealth are married, making it more
likely than not that your subject is a married man.
The report also gives a detailed description of where the data comes
from. This is of interest if for no other reason, that to clarify the
difficulty that even the IRS faces in trying to paint a statistical
portrait of the nations wealthy:
The distribution and composition of personal wealth in
the United States are topics of great interest among
researchers and policy planners. Unfortunately,
these issues are difficult to research, since there are
few sources of data on the wealth holdings of the
general population, especially the very rich. Federal
estate tax returns (Form 706) provide a unique
source from which to study the nations wealthiest
individuals. The estate tax return contains a complete
listing of a decedents assets and debts, as well
as a demographic profile of the decedent and information
on the costs of administering the estate.
Lets turn now to the table labeled: "Table 1.--Personal Wealth: Type
of Property by Size of Net Worth".
This table which is unfortunately rather difficult to follow
details the distribution of wealth in the United States according to
different categories of net worth. From it, we can glean the
Of the 6.5 million wealthy people included in the report, 3.7 million
of them had a net worth of under a million dollars.
--2.1 people million had a net worth of from $1.0-2.5 million.
--440,000 people had a net worth of $2.5-5 million, and
--another 166,000 people had a net worth of $5-10 million.
Adding up the numbers from the table of all those with incomes of five
million dollars or more, we can see that:
--only 246,000 -- about 1/4 of a million -- people in the US had a net
worth of $5 million or more. Put another way, about one-tenth of one
percent of the population was worth $5 million or more.
The individual you inquired about in your question belongs in this
very rarified group.
The report goes on to describe differences among the assets held by
different categories of wealthy individuals:
Portfolio composition varied substantially by sex
and wealth class among Americas top wealth holders... Compared to
those in higher net worth
groups, individuals with less than $1 million in net
worth devoted a larger percentage of their portfolio
to personal residences, investment real estate, and
retirement assets. In contrast, top wealth holders
with more than $10 million in net worth, dedicated
more of their portfolio to closely held stock than less
wealthy investors... Womens portfolios contained
a greater proportion of stock in public corporations
than those of men, while stock in closely held corporations
made up a larger share in the portfolios of
male top wealth holders.
From Figure C of the report, we can put together an even more detailed
portrait of the portfolio of America's richest people. For an
individual man with a net worth in the range of $1-10 million, 22.6%
of his portfolio would be in stocks.
Other percentages are:
Closely held stock..12.4%
along with some other, smaller categories, including personal
residences valued at 8.0% of total net worth.
Interestingly, individuals in this wealth-range who are female (Figure
F) keep a larger portion of their wealth in common stock (30.7%) and a
much smaller proportion (6.7%) in closely-held stocks....I suppose
they still have a hard time getting into the club!
The report goes on to discuss the influence of age, another factor you
In general, personal investment goals tend to change
as one ages. Younger investors are usually interested
in asset growth opportunities and are often
willing to accept higher levels of risk than older
investors, who may be more focused on reliable
income sources and who tend to prefer investments
that are eligible for preferential income tax treatment.
In 1998, the value of investment real estate and
investments in closely held corporations made up
smaller percentages in the portfolios of older top
wealth holders than in portfolios held by younger
individuals in the same wealth classes, while the
portfolios of younger investors included smaller
percentages of Government-issued bonds than those
of older investors. Publicly traded stock was the
dominant asset in the portfolios of wealth holders in
every age group and for both genders...
Figure H in the report provides more details for the comparison of
assets by age. Your 39-year old millionaire would fall into the
"Under 50" category used by the IRS, and would tend to have more of
his or her assets in high-growth opportunities -- real estate and
closed corporation stock -- rather than some of the investments
preferred by their older colleagues, such as government bonds.
Another IRS report that covers the 2000 tax year also sheds a bit of
statistical light on the world of the wealthy. The report is:
Individual Income Tax Returns, 2000
and you can find it at:
The nice thing about this report is that it discusses income as well
as net worth, so it gets to the other aspect of your question.
However, the breakout of income categories only goes as high as a
million dollars or more. In other words, everyone reporting more
than a million dollars of income is lumped together into one, big,
wealthy category, so there's no way to breakout the data to provide a
statistical comparison for, e.g., individuals earning $1 million vs $3
million vs $5 million.
Out of 129 million individual returns filed for tax year 2000, a mere
240,000 reported incomes of a million dollars or more. That is,
two-tenths of 1% of all taxpayers reported incomes of over a million
dollars for the year 2000.
Once again, the subject of your question belongs to this small club.
Your question was incredibly prescient on this account, since you
mentioned two-tenths of a percent as a possible figure...or had you,
perhaps, already seen the IRS data?
Before leaving the IRS. I want to mention two other sources of
information that can be found at:
Both of them sound promising, but for the reasons I'll describe,
really don't add to the statistical picture that you're looking for.
The first report is:
High-Income Tax Returns for 2000
This report provides a tremendous amount of detail for all tax filings
with an adjusted gross income of $200,000 or more. Unfortunately,
everything's pretty much lumped together in the "above $200,000" and
"below $200,000" category, so there's no real way to tickle out any
detail to distinguish the ordinary wealthy, from the pretty wealthy,
from the stinkin' rich.
And speaking of stinkin' rich, the other report is:
The 400 Individual Income Tax Returns Reporting the Highest Adjusted
Gross Incomes Each Year, 1992-2000
which deals, obviously, with the returns from some very wealthy people
-- people who's wealth is generally in the hundreds of millions or
more, and who, therefore, cannot shed much statistical light on the
individual you inquired about and his/her measly few million.
I hope the information Ive presented here meets your needs. I know
it does not touch on every base you mentioned -- education level for
instance -- but I trust it still provides a comprehensive look at the
But as I said earlier, if anything here is unclear or if you simply
need additional information just let me know and Ill be happy to
assist you further.
Clarification of Answer by
09 Sep 2003 13:14 PDT
Ahh...so *that's* what you wanted. I'll have to refine my "reading
between the lines" skills.
No problem, though. I can provide you some information about wealth
and education levels. I think it will provide the type of perspective
you're looking for. A warning, however: most of this stuff is highly
academic (read "obtuse") in nature. I'll give you some plain-
English interpretations here, but if you want to check out the
original documents yourself, be prepared for some heavy slogging.
Might as well start off with probably the densest paper of the two,
because it's also probably the most informative.
The Federal Reserve Board conducted a study called:
DISENTANGLING THE WEALTH EFFECT: A COHORT ANALYSIS OF HOUSEHOLD
SAVING IN THE 1990S
This looked at who made money in the booming 1990's, and what factors
(education included) were associated with household wealth.
If you drop down right to Appendix B at the end of the paper, there's
a table titled "Share of Aggregate Net Worth" broken out by education
categories for the year 2000. In a nutshell, the table looks at the
total net worth of all households in the U.S., and divides it up by
education level (of the head of household).
The numbers look like this for the year 2000:
Some college .........22.3%
High school degree....14.3%
No H.S. degree.........3.4%
In other words, those who have college degrees hold well more than
half the total wealth in the country as measured by aggregate net
worth. Those with some college education (but no degree) hold almost
another one-quarter of the wealth. Those with a high school degree,
Those who haven't graduated high school don't fare very well in this
respect, as they cumulatively only hold a paltry 3.4% of national
Note that the table also includes the same data for 1992. The numbers
are not greatly different from 2000. Not surprisingly, the rich got
richer, and the poor got poorer, but not by a tremendous degree of
change. Overall, the pattern holds over time -- a college degree
opens doors to increased wealth accumulation, while lack of a high
school degree ordinarily is a significant barrier to accumulating
Thus, the subject of your question should -- as far as statistics are
concerned -- have access to only a very small portion of society's
overall accumulated wealth. Clearly, he or she is something of a
Another statistical portrait of wealth and education stems from a
dataset known as PSID -- the Panel Study of Income Dynamics -- which
can be found at the University of Michigan website:
where you will find a report entitled: Trends in household wealth
dynamics, 1999 - 2001
Table 5 of the report is: "Household Financial Wealth" and includes a
breakout of wealth by educational categories as well as by age of the
head of household (a twofer!).
For 2001, the numbers for average (mean) household financial wealth
look like this:
Some college ..........$83,100
High school degree.....$72,100
No H.S. degree.........$27,600
About a 9 to 1 difference in household income between the college
graduates and the high school dropouts.
The age data are:
Age of Head
20 to 29.................$14,500
30 to 39.................$52,000
40 to 49................$101,600
50 to 59................$128,600
60 to 64................$263,400
65 or more..............$196,300
So again, the subject of your question stands out as anomaly, having
reached significant personal wealth well before the peak years of
wealth accumulation, at the ages 60-64.
I hope these additional statistics provide the type of perspective you
are looking for. If anything here is not clear, or if you need
additional information, please let me know through a Request for
Clarification. I'll be glad to continue working on this until we can
find you just the information you need.