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Q: How did the wealthest 1% of US citizens get their money? ( Answered 5 out of 5 stars,   1 Comment )
Subject: How did the wealthest 1% of US citizens get their money?
Category: Business and Money > Economics
Asked by: sybarite-ga
List Price: $15.00
Posted: 01 Mar 2005 22:07 PST
Expires: 31 Mar 2005 22:07 PST
Question ID: 483304
MarkJ-ga: Please answer with the data you found in response to "How do
US citizens become millionaires?"
Subject: Re: How did the wealthest 1% of US citizens get their money?
Answered By: markj-ga on 02 Mar 2005 05:55 PST
Rated:5 out of 5 stars
sybarite -- 

Thanks for your invitation to post my information as an answer.

The study I have found is titled "The Rich and the Poor: Demographics
of the U.S. Wealth Distribution."  It was published by the Federal
Reserve Bank of St. Louis in 1997 and was written by John C. Weicher,
a senior fellow of the Hudson Institute:

Federal Reserve Bank of St. Louis: Review (7/97) ("Study")

It may be particularly useful to you because it is based on nationwide
data samples and it pays special attention to the mobility of
households between wealth categories and the factors behind it.  It
does this by generating and analyzing net worth data over time -- for
1983, 1989 and 1992.

Since the Study is brief (13 pages) and very clearly presented, I
suggest that you will want to read it in its entirety.  The data that
may be of the most immediate interest to you is in Table 4 on page 5
of the study, which is titled "Asset Holdings of the Richest 1 Percent
of Households."   This table breaks down the asset categories held by
percentage and for each of three years studied.  Thus, this table not
only gives you the static data on assets held by the wealthy in a
given year, but also vividly demonstrates the changes in asset
categories held over a ten-year period (1983-1992).  This should give
you some insight on your special interest of how the rich acquire that
status as well as how they behave once they have acquired it.

 For your convenient and immediate reference, here are some
particularly relevant excerpts from the Study:

"The data source for this article is the
Federal Reserve Board?s Survey of Consumer
Finances (SCF). The SCF is one of
the few surveys reporting assets and liabilities
of individual households for a sample
of the entire population on a consistent
basis over time." (Study, at page 2)

"The ownership of wealth is much
more concentrated than other measures of
economic well-being. This section reports
the attributes of the richest 1 percent of
households, who hold approximately onethird
of all household wealth. The
threshold for inclusion is about $1.9
million in net worth in 1983, $2.2 million
in 1989, and $2.4 million in 1992 (all
measured in 1992 dollars). This definition
of ?rich? has been used in a number of
studies." (Study, at page 4)

"Table 4 describes the components of
net worth for the richest 1 percent. As the
top panel shows, unincorporated business
consistently constituted the largest share
of their wealth and grew in importance
from about one-third in 1983 to over 40
percent by 1992. Commercial and rental
property accounted for about one-sixth in
1983, rising to one-fifth in 1992.4 The
most surprising finding is the sharp
decline in the importance of stock ownership
from 1983 to 1989, despite the stock
market boom of the 1980s". (Study, at page 5)

"Most of the rich are entrepreneurs,
and most have earned their wealth. Inheritance
accounts for about 8 percent of the
net worth of these households in the
aggregate. More than half have never
inherited anything, and inherited wealth
is less than 10 percent of total wealth for
more than two-thirds of those who have." (Study, at page 6)

Search Strategy:

Not surprisingly, there is lots and lots of online information on "the
wealthy."  The problem is sifting and winnowing the information to
find the data that is most interesting and reliable for your purposes.
The following Google searches, among the many I tried, were the most
useful in that process:

millionaires "asset categories"

"percent of millionaires" inherited

"percent of millionaires" "asset categories"

I am hopeful that this information is as useful and responsive to your
interests as I think it will be.  If anything is unclear, please ask
for clarification before rating the answer.

sybarite-ga rated this answer:5 out of 5 stars and gave an additional tip of: $2.00
Interesting article.  If you get a more recent version, I'll buy that too.

Subject: Re: How did the wealthest 1% of US citizens get their money?
From: markj-ga on 03 Mar 2005 10:45 PST
sybarite --

I too thought that the study was particularly interesting.  I rather
doubt that there is a more recent, comparably well-designed, study of
wealth asset allocation over time, but if I find one I will let you
know in the form of a comment on this answer.  Thanks for the five
stars and the tip.


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