• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Media
  • Disclaimer
  • Contact

My Money Wizard

Demystifying the Magic of Financial Freedom

  • Home
  • About
  • Net Worth
  • Blog Archives
    • Best of MyMoneyWizard
  • Recommended
    • Personal Capital vs. Mint
    • Credit Sesame vs. Credit Karma
    • Get Paid to Shop Online
    • Vanguard vs. Charles Schwab
    • Vanguard vs. Fidelity
    • Vanguard vs. Betterment
  • Contact

Who is The One Percent? (Prepare to be Surprised)

May 24, 2016 By The Money Wizard 32 Comments

  • 384shares
  • Facebook363
  • Twitter9
  • Pinterest3
  • LinkedIn7

MSNBC recently polled the wealthiest 10% of Americans, and 84% identified themselves as some variation of middle class.

What about you? Certainly you’re middle class right?

Another poll surveyed a wider group, with demographics more representative of the entire US population. Not surprisingly, these results indicated 88 percent of the American population considers themselves middle class in one way or another.

So it turns out we all feel, well, extremely average. (Except when it comes to our vehicle skills, where two thirds of drivers consider themselves not just above average, but “excellent” or “very good”)

Something about this math doesn’t add up.

Here’s the shocking truth: an annual salary of $26,400 places you smack dab in the middle of all wage earners in the United States. (Curious where you stand?)

middle-class 2

Here’s the even more shocking truth: if you earn any more than $32,400 per year, you are among the richest one percent of all humans on the planet. (Still curious?)

Surprised?

Quite the far cry from our mind’s images of the 1 percenters, driving around all day in million dollar yachts, designer clothing flapping in the crisp ocean breeze.

More accurately, an underpaid teacher in the United States, commuting to work in an old Toyota Corolla, is one of the richest humans on earth.

Not a 1 percenter.
Not the only 1 percenter…

The true middle class wage earner in America ($26,400 per year) makes more in one year than the average Ghanaian laborer makes over not one, but two lifetimes. Specifically over 165 years, which means that is in U.S. lifetimes, because the life expectancy in Ghana is nearly 25% shorter than our country.

America…  We are a country living in poverty, and complaining about it on the new iPhone 6s with Unlimited Data.

Guys and gals, we are all well off. Extremely well off. The sooner we recognize this, the easier freeing ourselves from the desire of more becomes.

The Money Wizard Pact

We can all, myself included, stop taking things for granted. Let’s stop pretending it’s not ridiculous that the push of a button can send a text message halfway across the world. Do we really need to get frustrated when it takes longer than a few seconds to send?

We can speed over the landscape in a climate controlled bubble, faster than hundreds of horses. Do we really need to stress over whether the interior has leather seating?

We can even go to a restaurant and pay a servant to bring us food until our stomachs are stuffed with food so delicious it would make the Kings of yesteryear jealous.

We live in a society where the difference between want and need has become a hazy blur, and in some places wiped out all together.

Somewhere along the way, the base line standard of living moved from a basic shelter to a huge, multi-room monstrosity. And it absolutely must have enough extra space to store as many expensive decorations, collections, and stuff as the owner can buy.

Instead of a basic phone, it became a mobile cell phone, and then an expensive smart phone with a screen resolution higher than the most high definition TVs of just a few short years ago, to ensure a person stays entertained at all times.

And not just any form of transportation will do, but every person needs a car to ensure they get wherever they want ASAP, while doing as much damage to the environment as possible in the process.

A lifestyle that would inspire jealousy in 99% of the world’s population is viewed with apathy in our society. A salary that’s less is labeled poverty.

As I type this I am sitting on a plane which is ready to transport me 1,000 miles across the country in a matter of hours. This is a trip that less than 200 years ago would have taken months, and very likely have been fatal.

The man next to me is listening to music on an expensive set of high tech, Bose noise canceling earphones, while apparently making the important decision of whether or not to download “Amy’s Burger Shop 2” onto his smart phone.

The man next to him is surfing the mind blowing technological marvel that is the internet, on a laptop so small it would have been inconceivable 40 years ago. On his wrist is a gold, brand name watch that costs more money than the average Indonesian makes in a year.

And yet I know before this flight is over, someone will complain about the amount of legroom. Or how their baggage servants took a few too many minutes in putting their luggage on a conveyor belt, which conveniently transported their suitcase halfway across the airport and right at their feet.

More Is Not The Answer

I recently overhead a very senior and very successful coworker, who has had a long and extremely successful career, remark that she too considers herself middle class, while lamenting about the greed of America’s 1 percent. She makes $180,000 a year.

We know money is entirely relative. In the same way a Wall Street CEO can feel poor while earning $5 million a year, my coworker can feel middle class while salaried at $180,000. And an American making $32,000 considers themselves poor, while not realizing that to 99 percent of the human world, even after adjusting for cost of living, they are that Wall Street CEO.

We live in a time of unprecedented decadence, in one of the richest countries in the world. Shedding the feeling of being average, middle class, or in any way unspectacular is one of the first steps to feeling rich, without breaking bank.

Be happy for what you have, and recognize your fortune.

Feeling Lucky?

Warrren Buffett likes to describe the hypothetical ovarian lottery, or your chance at selecting one ball out of 6.8 billion before your birth. This ball determines your birthplace, race, gender, physical attributes, and health.

If you could put your ball back, and they took out, at random, a hundred other balls, and you had to pick one of those, would you put your ball back in? Now, of those hundred balls… roughly five of them will be American… Half of them are going to be below-average intelligence, half will be above. Do you want to put your ball back? Most of you, I think, will not… What you’re saying is, ‘I’m in the luckiest 1% of the world right now.'” -Warren Buffett

lucky 700

You are awesome!

We live in an amazing time. Be happy for what you have, recognize your fortune, and capitalize on it.

Even if you’re struggling with a job you’re unhappy with, you can still earn more in an hour than most of the world can make in a day. Maybe you live in an apartment you wish was bigger. There’s nothing stopping you from making it the coolest tiny apartment around! Maybe you feel like you just can’t get ahead. You already are ahead.

Vanguard CEO, and rare finance-world good guy John Bogle, tells the true story of two legendary authors, Kurt Vonnegut and Joseph Heller (you may recognize these two as the minds behind such classics as Slaughterhouse Five and Catch-22). The authors were attending the extravagant cocktail party of a New York City hedge fund manager. Vonnegut turned to Heller and said, “You know, this hedge fund manager makes more in one day than you made with all the royalties from Catch-22 combined.” Heller replied, “Yes, but I have something he doesn’t… enough.”

Becoming aware of our success is the first step in reaching enough. And once we reach enough, we can avoid lifestyle inflation and free ourselves to comfortably save the leftover in pursuit of complete financial freedom.

This Week’s Challenge

This week I’m throwing you a challenge. The next time you feel those dangerous jealous thoughts creep into your mind, take a moment and stop. The next time you feel the buying impulse begin burning, think again.

I want you to pass on just one thing this week that you would have normally bought. Whether it’s a $2 bag of chips or a $1,000 laptop; think about how much you already have and pass on one purchase.

The first step to becoming rich, is realizing you already are.

If you successfully completed the challenge, let us know in the comments!

  • 384shares
  • Facebook363
  • Twitter9
  • Pinterest3
  • LinkedIn7

Filed Under: Saving Money

Reader Interactions

Comments

  1. Yetisaurus says

    May 26, 2016 at 6:38 pm

    Great post! The ovarian lottery bit is HUGE, and I’ve thought about that a lot. It’s important to keep perspective. Not that it should prevent anyone from trying harder, hustling, making smart financial decisions, and improving their own lives. But it’s so easy to get caught up in jealousy and competition, and to beat yourself up for not achieving as much as some other people around you. It’s good to take a step back and appreciate where you are and how far you’ve come. And, of course, to give back to others who can’t do the same for themselves.

    Reply
    • The Money Wizard says

      May 26, 2016 at 9:51 pm

      Exactly Yetisaurus. The key is to recognize how ridiculously awesome our standard of living already is, and not get caught up in a game of comparison and splitting hairs.

      I currently live a great life on a small amount of money. If I doubled, even tripled my spending, would my life be any better? It might look better to strangers, but my true happiness really wouldn’t change much.

      Instead, saving that money and becoming more financially free? That’s priceless.

      Reply
      • JW says

        March 24, 2021 at 12:35 am

        Wow… Mr. MW… I have a MBA and I’m obsessed with studying religion, history and science! And in all my life time of study, research and etc… I have never been so impressed (as I am now, after reading this one article from you). All I want to do is share this article with everyone I have ever known or will ever know in my life time!
        I spend so much time completely shocked and discussed with my wife, this nation and even myself (at times) because of what I consistently say is our strange & sick obsession with “STUFF” and the impact that it has had on all of us!?
        But never have I ever been able to recognize and or explain it like you have in this article!! It’s not only Amazing! But it’s also very humbling! Thank you!!

        Reply
  2. Ty @ Get Rich Quickish says

    May 29, 2016 at 2:11 am

    “You already are ahead.” That’s so true, but when you’re playing the game it can be hard to realize it.

    Thanks for taking the time to write and share this post, which is a great reminder of just how fortunate many of us really are.

    Reply
    • The Money Wizard says

      May 30, 2016 at 2:53 pm

      My pleasure Ty! It’s so important that we all take a step back from the rat race now and again. Glad you liked it.

      Reply
  3. Jenna L at Hello Suckers says

    June 9, 2016 at 3:31 am

    “America… We are a country living in poverty, and complaining about it on the new iPhone 6s with Unlimited Data.” Wow, that’s a powerful statement!

    I do think there’s plenty of people who don’t recognize just how much wealth they have as a result of opportunity. I don’t necessarily begrudge that but it’s important that those people are aware of their privilege.

    I live in the UK and I’d be interested to see the same statistics for us. I’ve just finished a degree and therefore I’m probably considered ‘lower middle class’… I am unemployed though!

    Reply
    • The Money Wizard says

      June 13, 2016 at 4:43 pm

      Jenna, it would be interesting to see how the wages stats compare for different countries. Perhaps some research for a future article?

      Reply
    • Terry Pratt says

      July 17, 2017 at 2:35 am

      Actually, I’m complaining on it with my $50 laptop and 10 GB of data per month.

      Reply
  4. FI Champion says

    June 11, 2016 at 2:36 pm

    Enjoyed the article. As someone who has travelled around the world to a handful of places, I can attest to the truthfulness in it. We are very fortunate in the USA. Our “problems” are a far cry from those in other places.

    Quick question on the income chart and stats….I’m curious where the numbers come from: something the census had collected, data from IRS records, or someplace else?

    Reply
    • The Money Wizard says

      June 13, 2016 at 4:50 pm

      The percentile calculator for American wages is based on data collected by the Census Bureau. The worldwide percentile calculator is based on statistics collected by World Bank. To adjust for cost of living in different countries, they used purchasing power parity dollars.

      Additional info can be found in the footnotes of the webpages linked in the article.

      Reply
  5. Ten Factorial Rocks (TFR) says

    August 31, 2016 at 12:12 am

    Good post. Having lived and worked in many countries, I have see the truth the numbers imply here. When half the world is worried about the next meal or scrounging for an old bucket to catch the water dripping from their leaky roof, many Americans complain about their few minutes delay in service or waiting too long to buy their favorite toy. Warren Buffett said it right. You must win an amazing lottery to be endowed with various success factors even to ‘earn’ your way to be the true 1% of wealth owners in the world.

    Reply
    • The Money Wizard says

      August 31, 2016 at 7:51 am

      Exactly Mr. TFR, seeing that firsthand definitely puts our complaints in perspective. Thanks for stopping by.

      Reply
  6. jim says

    September 20, 2016 at 4:21 pm

    great article I feel better about myself already and I make 132k/year and felt I should have more

    Reply
    • The Money Wizard says

      September 20, 2016 at 10:59 pm

      Thanks Jim! I know I sometimes get caught in the trap of comparing my salary to friends and coworkers. Every once in a while it’s helpful to take a step back and recognize just how lucky we already are.

      Reply
  7. John says

    September 21, 2016 at 6:10 pm

    i especially liked the quote from warren. isn’t he the man? i agree with this article mostly, one thing though is that yes wages are lower around the world, but so is their cost of living. in america, 100$ will not get you very far. in other parts of the world, 100$ would be enough to survive off for a while. but the trade off, is the infrastructure though… they may not have paved roads, or a police force, electricity, etc…

    Reply
    • The Money Wizard says

      September 28, 2016 at 2:11 pm

      Definitely – I’m going to have to look into a “Warren Buffett is My Homeboy” shirt soon enough.

      Fair point about cost of living, but for the vast majority of countries in the world, even the poorest salary in America affords a quality of life that most couldn’t even dream of.

      Reply
  8. Karl says

    September 29, 2016 at 4:50 pm

    Do you have a way of parsing out the numbers to say what a 1%-er earns when the population is the USA instead of the whole world? I’m curious on how much it shifts when you focus it to just a single country. I know there are vast cost of living differences across America, but I still think it’s a more homogeneous group than the whole planet.

    Reply
    • The Money Wizard says

      September 29, 2016 at 5:17 pm

      You can use the link at the top of the page to find out the one percent in America. It’s about $300K.

      Reply
      • The Wease says

        June 24, 2017 at 10:50 pm

        Hey Money Wizard,

        Another very thoughtful post on the important topic of realizing when you are rich.

        I made it into the 1% of US incomes on and off over the past few years, (although more like 5% in Net Worth.) It is funny how easy it is to always “compare up” to colleagues and friends that you know are making more, and feel poor.

        I just finished reading Jeff Olson’s “The Slight Edge,” and found it to be quite useful in helping define an attitude towards wealth that is more appropriate.

        I gather from your several posts expressing calculating the value of a potential purchase in the total amount of time that you have to exchange for it, that you are a fan of “Your Money or Your Life.” I read that one when it first came out; it shaped how I think about spending a great deal.

        I think you are on the right track.

        Cheers,

        The Wease

        Reply
        • The Money Wizard says

          June 25, 2017 at 9:30 am

          Thanks Wease, I’ll check out the book recommendation.

          I actually haven’t read Your Money or Your Life yet, although it’s sitting on my bookshelf as we speak. I know it’s credited for a lot of the financial independence movement, so it will be fun to take a look at one of the books that started it all. I may feature it in one of my upcoming book reviews.

          Thanks for the supportive comments.

          Reply
  9. Alice says

    October 31, 2016 at 5:42 am

    This article made me think again of what I had planned for myself at the beginning of the year in terms of savings an passing purchases. It worked some months better than others and I realised I could have definitely stop and think more.
    I am now struggling to convince my husband to not buy the 40K EUR car just because ‘he never had a brand new car’ and ‘he deserves it’. He has 1/2 of money to pay it cash, I would have to make a loan for the other 1/2 and I don’t want to. Arguments, arguments, and more arguments (plus the guilt).

    Reply
    • The Money Wizard says

      November 5, 2016 at 8:12 am

      Getting the spouse on board can be tough. Framing spending as a trade off between material stuff and years of freedom makes some people reconsider their big purchases. Good luck, finances in a relationship are always tough, but like anything, comes down to communication and having similar priorities.

      Reply
  10. love frugal mim says

    July 10, 2017 at 10:32 am

    Thanks again for a well constructed post, full of gems to pull and use. Blessings and keep ’em coming

    Reply
  11. Terry Pratt says

    July 14, 2017 at 5:50 am

    No, I’m not surprised. “Wage earners” is a vast, broad category which includes a lot of NON-breadwinners. Think of all those teens, college students, moms and seniors working part-time. One=fourth of jobs in this country pay no more than $10 per hour. Wages are only one component of income. Salaries typically pay more than wages, and there are many sources of income than just wages and salaries.

    Reply
  12. Grant @ Life Prep Couple says

    September 5, 2017 at 10:59 am

    Fantastic post. If you can control your desires you are instantly rich if you can’t you will never be.

    This post gives great perspective on how good we have it. Thanks for the reminder.

    Reply
    • Bill C says

      May 17, 2018 at 8:10 am

      Great quote. I am stealing it.

      Reply
  13. Greenbacks Magnet says

    January 2, 2018 at 1:50 pm

    Hello,

    I tell people all the time to spend less. Forget the fancy cars, clothes, and homes. Invest your money. Let it work for you! 76% of Americans are living check to check in the richest country in the world. It’s outrageous. We need to save more and then be free to do other things. So skip that one purchase every week and save the difference.

    Thanks,
    Greenbacks Magnet
    greenbacksmagnet.com

    Reply
  14. Bill C says

    May 17, 2018 at 8:08 am

    Great post!
    I often hear people lamenting that they need to win the lottery. I usually tell them, “You already have, you were born in the US.” Most of them agree, but once in a while, I get folks who will argue with me and start telling me all of the problems we have with this country, especially the government – regardless of who is in office.
    We would all be so much better off if we would count our blessings instead of looking for faults in others.

    Reply
  15. Investor Trip says

    July 27, 2018 at 5:45 pm

    This is a great open letter on the many luxuries of living in America. But saving money must be a goal and you need to automate it or else the money will leave your hand.

    It’s also shows just how fortunate one can be on a so called low salary of $26k. There are plenty of investments that can turn that average salary into millions over time.

    I’ve been traveling in Asia and Africa and your claims about their lifestyle is 100% true. They work the same 8 hours and earn A LOT less money.

    Reply
  16. soundtosilence says

    November 29, 2018 at 11:13 am

    Growing up in a asian country i understand what you mean here. We are taking too many things for granted

    Reply
  17. Jan says

    January 7, 2020 at 3:23 pm

    I have been reading almost all of your posts now and i have a rising double feeling and don’t know how to act on it. I am 22y and a student master finance with poor parents yet succesfull grandparents and reading your posts have me feeling like i wrote them myself. I also live alone with my gf and we pay everything for ourselves unlike anyone in our region from the same age. At first i felt so happy i was not alone who felt like this and i had finally the confirmation of someone like me that IS happy with a frugal lifestyle. But the more i read your posts the more i feel disconnected towards everyone around me who are way to deep in the consumption pattern (except for my grandparents ofc). How do you deel being so different then the 99%. Can you and your friends still understand each other despite the complete different lifestyle?

    Reply
  18. Henry Knox says

    June 16, 2020 at 2:28 pm

    A Berkshire Hathaway executive once said that it is not greed that drives the world but envy. I wonder who that salaried coworker making $180,000 envies. Thank you for putting things into perspective!

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Welcome

I'm the Money Wizard, a 20-something who started this blog after I saved $100,000 by age 25. Now, I'm sharing everything on my journey towards early retirement in my 30s.
Become a Money Wizard...

Latest Net Worth

I track my net worth and spending every month, and I share all the details (even when they're not pretty) here:

Current Net Worth: $588,800

Free Net Worth Tracker

Check out the legit tool I use to track my net worth and spending for free:

otherother

Popular Posts

Money Muggle to Money Wizard in One Page (The Best of MyMoneyWizard.com)
The 3 Step System to Stop Wasting Money
18 Income Producing Assets to Generate Serious Passive Income
What I Learned Living in a Million Dollar Home
How to Earn $101,200 per year and pay ZERO taxes.
The Easy 401k Strategy to Kill Your Tax Bill and Retire a Multi-Millionaire

Money Wizard Reviews

Personal Capital vs. Mint
Credit Sesame vs. Credit Karma
Ebates and Mr. Rebates
Vanguard vs. Fidelity
Vanguard vs. Schwab
Vanguard vs. Betterment

FREE UPDATES

Categories

  • Book Reviews
  • Cars
  • Celebrity Net Worth
  • Debt
  • Early Retirement
  • Featured
  • Financial Freedom
  • Go Figure
  • Investing
  • Link-O-Rama
  • Millennials
  • Money
  • Money Hacks
  • Net Worth
  • Random Thoughts
  • Reader Mailbag
  • Real Estate
  • Reviews
  • Saving Money
  • Side Hustles
  • Student Loans
  • The Money Wizard
  • The Wizard Cauldron
  • Travel
  • Uncategorized
  • Working

Footer

My Money Wizard is an opinion based website. I am not a financial advisor, and the opinions on this site should not be considered financial advice.

I also recommend products that I think are awesome, and some of those products may sponsor links on this site. If you use those links, I may be compensated at no cost to you. I am a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and links to Amazon.com.

Privacy Policy

© 2018 My Money Wizard, LLC