The $115 trillion in financial assets and $64 trillion in liquid assets held by U.S. households is an incredible amount of assets that is difficult to properly account for from an allocation perspective.
Wealth Distribution in the U.S. Stock Market
The U.S. stock market and investment fund units are 45% held by the top 1% of the wealthiest and another 43% held by the top 19%, meaning the top 20% hold about 88% of all assets in the market, while the bottom 40% hold less than 3% of the market.
In the bond market, the concentration is even more pronounced, as the top 20% hold 99% of the bond market.
Median Net Wealth by Percentile
According to Fed calculations, median net wealth (total financial and non-financial assets minus liabilities) by percentile is as follows, based on the amount of money income:
- 0 - 20 - $17,000;
- 20 - 39.9 - $55,000;
- 40 - 59.9 - $171,000;
- 60 - 79.9 - $299,000;
- 80 - 89.9 - $793,000;
- 90 - 100 (top 10% of the richest) - $2,650k with an average of $6.5 million.
For all families, the median is $193 thousand, with an average of $1.1 million per family. It is considered that the average American family has a net wealth of almost $200 thousand dollars.
The national median net wealth for all Americans over age 75 is $335k (average of $1.6 million), and for those between 65 and 74, it is $410k (average of $1.8 million).
According to the Fed data, it follows that a highly qualified American over the age of 60 has a median net wealth of over $1 million, with an average wealth of over $6 million.
For a highly qualified American - someone with a master's or bachelor's degree and more than 35 years of work experience in leading specialties (research and development, finance, economics, law, IT, medicine, engineering, top management, etc.) - the probability of becoming a dollar millionaire is about 80%.
Conclusion
In summary, the data underscores the significant wealth concentration in the U.S., with a small percentage of households holding a vast majority of assets. While median net wealth figures may appear relatively healthy, the disparities are glaring, particularly among highly qualified individuals. Addressing these wealth gaps remains a critical societal challenge.