93% of U.S. households' stock market wealth is held by the top 10%
axios.com
axios.com
But the dirty secret behind this myth is that, while access to equities is widespread, ownership is becoming more concentrated. Two decades ago, the wealthiest 10 per cent of Americans held 77 per cent of corporate equities and mutual funds, according to calculations by Lyn Alden, a strategist. The poorest 50 per cent held just 1 per cent, leaving the middle-to-upper cohort with 12 per cent.
Today, however, the wealthiest 10 per cent own 92.5 per cent of the market — a “record high concentration”, Alden notes. And while the richest 1 per cent owned just 40 per cent two decades ago, their share stood at 54 per cent in the most recent data from 2022.No, overpriced housing. You want jobs? You need more income equality to fund spending.
But yes, government should use our tax money better, and even if they are used as a debtor of last resort, they should use the money they borrow more wisely as well (less relevant now that interest rates are high).
Top 1%: 40% to 54% -> +14%
Top 10%: 77% to 93% -> +16%
Top 10% minus the top 1%: 37% to 39% -> +2%
Essentially this was all the top 1% and the rest of the 10%ers barely budged in ownership percent. I'd be curious to see the results for top 0.1% and 0.01% as well.
[edit] Found the source numbers:
50-90% https://fred.stlouisfed.org/series/WFRBSN40172
90-99% https://fred.stlouisfed.org/series/WFRBSN09145
99-99.9% https://fred.stlouisfed.org/series/WFRBS99T999258
top 0.1% https://fred.stlouisfed.org/series/WFRBSTP1285
Bottom 50% barely registers, hovering below 1% https://fred.stlouisfed.org/series/WFRBSB50199
It looks like the top 0.1% barely nudged in the past two decades as well. I would guess that the top 0.1% is probably hard to account for given all the ways the wealthiest can distribute their wealth to make it opaque and hard to granularly track. Those numbers could reflect changes in choices of financial vehicles for the wealthiest households.
> [edit] Found the source numbers:
> 50-90% https://fred.stlouisfed.org/series/WFRBSN40172
> 90-99% https://fred.stlouisfed.org/series/WFRBSN09145
> 99-99.9% https://fred.stlouisfed.org/series/WFRBS99T999258
This is the series I think you want.
Share of Corporate Equities and Mutual Fund Shares
If 93% of stock market wealth help by the wealthiest 10% represents $10k, that means something really different than if it represents $1m. Comparing percentages can be really confusing, particularly when talking about wealth.
Assuming Us has round 300k population.
My understanding: lets say whole market is worth 1Gz, i.e. sum(share*sharePirce) over (all shares in all companies) is 1 gadzilion, so 10% of population (30k) combined own 0.93 gadzilion. While the rest (270k), share 0.07 Gz of market.
on avg per person 0.93/30=0.031Gz 0.07/270=0.00025Gz
(On average, poorer 9 deciles are poorer by a factor of two)
Today, practically everyone including fastfood workers has access to 401ks which are extremely cheap. No commission fees upfront. Almost every broker has commission free trading. Not only can you buy 1 share at a time, you can buy fractions of 1 share. You can do it all from your phone, after or before market hours.
Access has been expanded and costs lowered dramatically. So why have the bottom 90% stopped buying shares?
accessibility is useless without purchasing power
https://www.census.gov/library/publications/2023/demo/p60-27...
One's first though might be that in a truly equitable society, we'd have X = Z for all Z. E.g., the top 10% have 10% of Y, the top 20% have 20% of Y, and so on.
But upon a few moments more thought one will realize that is only mathematically possible if everyone has the same amount. If Y is stock owned by households, for example, such equitability in ownership can only happen if every household has the same amount of stock.
The moment even a single household ends up with either more or less stock than a single other household, then the % held by the top Z% will be >Z%.
This is true for anything, not just financial things. E.g., the top 10% of the winners of the Best Album of the Year Grammy Award have won more than 10% of the Best Album Grammy Awards. The top 10% of pimps manage more than 10% of the whores who work for pimps. The top 10% of pizza sellers by sales sell more than 10% of all pizza sold. The top 10% of muggers are responsible for more than 10% of muggings.
I never thought about how small their audience actually is.
That said, I never felt a sense of alienation reading these articles/watching these shows, it really just feels like listening to someone out of touch with reality. I am mostly curious why anyone would bother watching/subscribing to this media, since the amount of information you gain from them is enough to influence you emotionally, but not enough information to gain you a market advantage.
I mean wouldn't you be better off just paying someone to manage your wealth for you or owning shares of a mutual fund? It's like these programs are for people with enough wealth to care about the market, but not enough knowledge to invest it effectively. People who are going to be picking stocks successfully are reading 10-Ks and crunching numbers in excel, not listening to Squawk Box.
That's the point. They want their audience to be confused. They want them to act on instinct, to spend funds as they choose. It's not about value, it's not about growth - it's about power, first and foremost.
[1] https://www.businessinsider.com/personal-finance/average-401...
The information is more available than ever as well, however, there are a lot of people pushing out bad information to line their own pockets, or because they just don’t know better themselves. Sorting through the BS to get to something good can be hard, and can take more work than most people are willing to do. This is rather unfortunate, as a few really basic things can put someone far ahead of the average.
I don’t think we should cripple the best option for average people, just because not everyone is using it to its full advantage. We should be looking for ways to get more people to take advantage of compounding. It’s available today and it works. Putting retirement in the hopes of a complete overhaul of society doesn’t seem like a great bet.
You can't "financial education" your way out of poverty.
People at different percentiles of net worth do not have the same asset distribution.
(This is possible with stocks for some X outside those bounds too!)
I think it’s probably a more equitable mix as I know a lot of Americans who’s generational wealth is tied up in land and not the stock market.
Farmland-wise, he owns a drop in the bucket- there's an estimated 900 million total farm acres.
https://www.landgate.com/news/largest-landowners-in-the-unit...
But what "calculations" is she doing exactly? The source that she's quoting says 53.7% not 93.0% [1].
50-90% https://fred.stlouisfed.org/series/WFRBSN40178
Also consider that A) things are more expensive here and B) our economy is debt based and many people with homes and cars in the US have negative income after expenses, just because aesthetically our poverty looks different, it doesn't mean that it's good. It's not comparable.
I’ve had people who make less than me tell me I live like a poor person. That’s ok. I know I’m doing fine and they have since told me about some of their money struggles, and have a lot of debt to deal with each month.
Maybe if people stopped using debt to pretend they had more than they do, we’d see more reasonable housing and car prices, as well as goods that are made with some quality and repairablity instead of things like fast fashion that simplely gets thrown away.
Companies doing business in the US go to where the demand is. People need to stop using debt to demand junk that makes things worse.
Step one could be ratching down the average home size. It has more than doubled since the 1950s, while the number of people in the house has gone down. A bigger home is naturally going to be more expensive to buy/build, but then it also takes more land, has higher property taxes, costs more to heat/cool, costs more to repair and maintain, has more rooms to furnish, and has more place to put stuff before a person needs to stop and question if this need all of it. Simply living in a more modest home or apartment can have a massive effect on a person’s finances.
Also consider: where do the billionaires in the US get the resources to fuel their empires? Do they get their cobalt from slave labor mines in the Congo? Do you think maybe there is some kind of connection between corporate greed in America and people on the other side of the world making $1/day or less?
This is absolutely besides the point. I also wish as many people as possible could make enough money to live comfortable lives but it has nothing to do with the problem of people passively earning millions of dollars without contributing anything positive to society.
Fighting corporate greed in the US is in effect fighting for the rights of laborers internationally that are negatively affected by American business interests. No one who fights for this kind of change does so for selfish reasons, it's for all of us.
"Better" is entirely relative and using a western-centric framework to assert a "hierarchy of goodness". However, it is not an objective frame, and there are plenty of detractors both endogenous and exogenous.
What is really of interest here is one, the consolidation of wealth into a pinhead of the population, and two the egregious and worsening condition of wealth distribution in the US. Which I would argue exacerbates the global condition through manifold conductors, in essence it's imperialism-via-market but in equal measure an unabashed use of threats in other capacities to keep other countries in line.
Most people, given the time (which they necessarily trade away) would, I expect, prefer a definitively ethical, sustainable, robust product - however this comes at a cost (which is what they purchase with their increasingly devalued time) and so what we end up with is a consumer-driven market where people don't have enough time to peer down the rabbit hole of ethics and sustainability, instead opting to take the wheel for what best appears to suit their demands. This is then papered over simply by hand waving that introducing the Western market regime is improving conditions globally, which I'll again point out that this is relative. And I think this then suffers further amplification because, it seems for a great many decades, that the US itself has been suffering a slow decline. This itself has many impacts, for instance it has been increasingly salient that something like home ownership is becoming less prominent and so the social fabric must be altered. These dynamics may take a lifetime to shift to meet equilibrium, so you'll have to forgive the many hundreds of millions of people for their disinterest in global affairs when the social contract their forebears penned them is burning to ash.
It sounds like you believe that if the ownership share of the top 10% went up, then the average wealth of the bottom 90% went down. The latter does not follow from the former. Both can have seen increases in wealth.
It's a simple question: Has the wealth of the lowest 90% gone up or down?
(And 90% is too coarse. Would be good to see it for every decile.)
> but that is nearly meaningless when the cost of living has increased much greater than any of those wealth increases.
Can we show that for each decile?
Here's the equivalent of your statement: If I throw a penny into a fountain at the mall, has the wealth of the fountain gone up or down?
Here's more realistic and relevant discussions on the relative gross of the lower classes:
* https://www.cbpp.org/research/a-guide-to-statistics-on-histo...
* https://www.pewresearch.org/short-reads/2022/04/20/how-the-a...
* https://www.census.gov/library/stories/2022/09/income-inequa...
This trend will continue until resources are no longer exploitable, or people trying to enrich themselves created artificial scarcity or restrict their trade.
This is false. The concentration of wealth directly correlates with increases of death, starvation, suffering, etc. Inequality is by far the most important measure. "Growth" of income is effectively meaningless on its own without relative comparisons to the other classes in your own country and the significantly higher increases in the cost of living. If you look for the narrative you'd like, you can certainly find a number in isolation supporting it. But that narrative falls down when you look at the whole picture.
Meanwhile, if you want the Bezoses, Zuckerbergs, and Musks of this world to stop being so rich, there is actually a simple, straightforward way to achieve this: STOP GIVING THEM MONEY. Don't order crap of Amazon. Don't look at ads on social media. Don't buy that luxury electric car. It's not them taking all the money, it's us giving it to them.
Perhaps it would be worth calling attention to, and organizing some sort of procedure to elicit an opinion in a democratic manner.
If Google has its way, you won’t have a choice. How do you convince companies not to advertise on X or YouTube?
OK red scare calm down. I think you overestimate how much control capitalism gives you. Criticizing the economy does not make you a commie. If you wanna lay down and accept oligarchy because you are afraid of communism be my guest, but I would highly suggest you fight for slightly better circumstances for yourself and your neighbors.
> STOP GIVING THEM MONEY If oligarchy was limited to Bezos, Zuck, and Musk that would be easy! But billionaires kind of own everything? Our food supply is controlled by a handful of megacorps, our communication network is administered by a few others, real estate is a game for giant investment groups, health care is a fucking joke... It's impossible to elect to not participate in the economy, or at least its impractical for everyone to live off the grid.
Listen I know you think that communism means the goberment controls everything (it doesnt), but at least I can vote for my gov reps. I don't get a fucking vote when Blue Cross Blue Shield is deciding where I can go to the hospital.
One doesn't have to be communist to think that there needs to be some control levers on wealth inequality. Even if communism were required, communism does not necessarily lead to reeducation camps and starvation. Layered and purposefully obscured ownership structures make it nearly impossible to 'stop giving money' to the ultra wealthy. Even if everyone stopped giving money to the ultra wealthy, they're not going to stop being ultra wealthy unless they're especially stupid with their current holdings. Further, how does one stop giving money to those who partially or fully own monopolies on necessities?
If you're freely giving your money to Jeff, then it's not Jeff's fault you're upset about it.
For example, just look at the contribution limits for IRAs and Roth IRAs. They are disgustingly low, limiting people with salaries just barely big enough to afford a mortgage with an hour commute. Now, why is that? It's because it keeps the middle class in place while the upper class has several loopholes they exploit to put generational levels of money into these accounts. The story goes on and on.
What would be an example here?
However, the super wealthy are able to amass tens, hundreds, and even thousands of millions of dollars in Roth IRAs, and furthermore, they use these accounts as investment vehicles into investments not available to non-super wealthy people. The only way that's possible, in accounts with strict and low limits, is through various loopholes in the system available to them because of their wealth.
https://www.investopedia.com/ultrawealthy-exploit-roth-ira-5...
https://www.propublica.org/article/lord-of-the-roths-how-tec...
Those are limits on tax advantaged accounts. You can put any amount of money you want into whatever market and have the growth taxed at capital gains rates. If you're talking about backdoor Roths you can (and should) take advantage of it, it's not a rich-person only thing.
1. Put in $6000/yr into your Roth. 2. Invest in low-cost, high-risk high-reward stocks. 3. Get lucky. 4. Boom your Roth is worth millions.
For more seed money look at the list of the accounts you're still allowed to roll-over into Roth IRAs, pump money into there, and roll them over.
The only "rich person" thing is some people have access to non-publicly traded stocks but I have those and I'm certainly not rich.
We can read articles like this, but there are also interesting facts like how a huge percentage of poor Americans have a problem with obesity, something only kings and aristocracy could suffer from just a handful of generations ago. Or die from overdoses (they have free resources to spend on recreational drugs).
Our poor people have transcended the traditional problems of poor people, they are no longer dying from starvation but now obesity. They don’t die of overwork but from recreational abuse of dangerous substances. I don’t disagree with anything in the article but it is worth looking at from a historical perspective.
I think my point is that yes things are unequal, but it’s also worth remembering how much the floor has been raised as well. I would prefer to try continuing to raise the floor rather than lowering the ceiling.
If that doesn't compute... look at the chart in the article. Is it just a strange occurrence that the chart almost perfectly follows the stock market itself? That magical dip in 2008... ?
This is basic math. The article is bs.
This is actually kind of an important distinction. If you add back in things like pension funds that distributes things a lot more generously.
Also, I am not sure if 1 in 10 people I know even own stock directly. 1/10th of the population is still a lot of people and it almost surely skews more by age than any other metric.
People see these power law distributions and are surprised? But like, do you actually want enforced uniform wealth (communism)?
> People see these power law distributions and are surprised? But like, do you actually want enforced uniform wealth (communism)?
This is a really all-or-nothing take. A handful of people are arguing for enforced uniform wealth, most people are just pointing out that our current economic system is marginalizing a growing number of people each year, while enriching a handful of giga-wealthy individuals.
Even with defined benefit plans there's an indirect connection -- with higher expected returns, employers will offer larger pensions.
As you say, the carrot is held by the employer.