The American Wealth Gap

The wealth gap, measured by net worth, between average Americans and the wealthy is the widest and most extreme in recorded history.

The average American has personal wealth, measured by net worth, consisting of about $393,000 in assets minus liabilities, according to the World Inequality Database. Yet, someone with that kind of net worth is not “wealthy,” relative to the country’s wealthiest elites.

Below is the chart created using data from the World Inequality Database and Bloomberg’s Billionaires Index. The bubbles represent the relative wealth of the average American — just one pixel wide in the chart below — compared to the average wealth of the top 1% of people in the US. Also, there are bubbles to represent multibillionaires Marc Benioff and Charles Koch, as well as Elon Musk, the richest person in the world.

The chart shows just how far ahead billionaires are from everyone else. The dot representing the average American’s wealth is so small that chart designers had to draw a circle around it. It depicts that Elon Musk’s bubble stands 488,000 times as large as the average American’s comparable infinitesimal bubble.

Even the average wealth in America of the top 1%, approximately $13.7 million, is dwarfed by the billionaires. The top one percent of household net worth threshold starts at $11.1 million in 2019, according to finance and investing website ‘Don’t Quit Your Day Job’.

HENRYs — “high earner, not rich yet”

In the world of finance, HENRY is an acronym that stands for “high earner, not rich yet”. HENRYs make six figure incomes but still live basically paycheck to paycheck. These individuals earn a sizeable disposable income and tend to spend that income to facilitate a standard of living at or beyond their financial means. It’s also important to note that HENRYs typically live above their means, they constantly utilize credit and work to pay off their accumulated debts.

Because of their considerable disposable income and being on the path to establishing future wealth, luxury brands target HENRYs with their marketing. The 3 Key Characteristics of a HENRY, according to Corporate Financial Institute, are:

Feeling of/belief that they have little to no wealth
A substantially greater-than-average yearly income
Limited or non-existent savings

Though HENRY’s are in a much better position financially than many Americans to pay their monthly mortgage, buy a car, or take a vacation, compared to billionaires like Musk or Benioff, they don’t make the cut for the wealthiest.

The US has 650 billionaires according to an analysis by Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality,

References:

From Gratitude to Greatness: Brownlee Global's Path to a Purposeful Life

Guide and Educate Individuals How to Build Long-Term Wealth, Better Manage Their Money, and Achieve Financial Freedom

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