Many people are aware that the United States has significant wealth inequality. Even knowing that, the actual numbers can be shocking.
The Motley Fool recently published research on how many Americans own stock. In that report, it also looked at how stock ownership compares between those at the highest levels of wealth and the rest of the population. The 1% has a very large and growing slice of the pie.
Stock ownership among the wealthiest Americans
As a whole, there are about 150 million Americans who own stock, and those stocks are worth $31.62 trillion. The wealthiest 1% own 53% of that, with a value of $16.76 trillion. Just 1% control over half the wealth in the country. Here's a full breakdown of stock ownership at each level of wealth, as of the third quarter of 2022:
- The top 10% own 88.6% of stocks ($28 trillion).
- Americans in the 50th to 90th percentile of wealth own 10.8% of stocks ($3.4 trillion).
- Americans in the bottom 50% own 0.6% of stocks ($19 billion).
To put it another way, the 1% hold about 882 times as much stock as the bottom 50%. You'd expect the wealthiest Americans to have more, but it's a much larger difference than many realize.
Unfortunately, it's also a difference that has been on the rise. Over the last two decades, stock ownership has tilted more and more toward wealthy Americans. Here's how it has changed over the years:
| Date | Top 1% | Top 10% | 50th to 90th percentile | Bottom 50% |
|---|
| 2001:Q1 | 41.9% | 78.8% | 19.7% | 1.5% |
| 2008: Q1 | 48.5% | 85.1% | 13.9% | 1.0% |
| 2015:Q1 | 51.4% | 86.6% | 12.6% | 0.7% |
| 2022:Q1 | 54.1% | 89.2% | 10.2% | 0.6% |
Data source: Federal Reserve.
It has been a gradual change, so it's not as noticeable when just comparing one year to the next. But over a longer time period, there's a clear pattern. The rich get richer, and the other 90% of the country gets poorer.
Don't let a widespread issue stop you from improving your own finances
There's no way of sugarcoating it. Economic inequality is a serious issue in the United States. The distribution of wealth will never be even, but it can certainly be better than it is right now. A small percentage of Americans earn far more money than the rest and hold a massive portion of the total wealth in the country.
As frustrating as it can be, don't let it discourage you from saving money, investing, and building wealth. Focus on what you can do to improve your own financial situation.
If there's one lesson to take from this, it's that stocks are a smart way to invest your money. The richest Americans buy them for a reason. The stock market has historically grown about 10% per year. If you invest at least 10% to 20% of your income in stocks, it can make a huge difference in how much money you have later in life. There are several types of investment accounts available:
People often start with a 401(k), if they work for an employer that offers one. An IRA or a Roth IRA is also a good option. These are all retirement accounts that can help you save on taxes, but generally don't allow penalty-free withdrawals until you're 59 1/2. An individual brokerage account doesn't offer tax savings, but you can withdraw money at any time without penalty.
Realistically, most of us aren't going to be joining the 1%. But we can all at least invest, build our own portfolios, and reach a comfortable position financially.
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FAQs
Two decades ago—in the wake of the dot-com bust—the wealthiest 1% held 40% of the wealth in public markets; today, their share is 54%.
How much does the 1% own? ›
For example, the top 1 percent of households hold 30.6 percent of the total wealth, according to the Federal Reserve. But just the top 0.1 percent own 14 percent of the total wealth, giving them a stunning average of more than $1.52 billion per household.
What is the top 0.1 percent wealth in the US? ›
US households have added $37 trillion in wealth in the past four years, but the distribution has become more concentrated among the very rich — the top 0.1%. Those roughly 133,000 split about $20 trillion in wealth between them as of the end of 2023, equating to some $150 million per household.
Who owns 80% of stock? ›
The share of equities held by people who are at or near retirement age (55+) has climbed to about 80%, up from 60% two decades ago, according to an analysis of Federal Reserve data by Rosenberg Research.
Who owns 90 of the wealth? ›
The pyramid shows that: half of the world's net wealth belongs to the top 1%, top 10% of adults hold 85%, while the bottom 90% hold the remaining 15% of the world's total wealth, top 30% of adults hold 97% of the total wealth.
Who is in the top 1%? ›
According to a Congressional Budget Office report, you need at least $652,657 in income per year to make the top 1%, but this varies by where you live. While making six figures is not within the reach for many people, a financial advisor can help you build a financial plan for the future.
Where do billionaires keep their money? ›
Common types of securities include bonds, stocks and funds (mutual and exchange-traded). Funds and stocks are the bread-and-butter of investment portfolios. Billionaires use these investments to ensure their money grows steadily.
Are there any Trillionaires? ›
No individual has claimed the status of trillionaire just yet. But a net worth equal to at least one trillion in U.S. dollars or a similarly valued currency isn't unattainable, but it will be a couple of years yet. Only 18 countries have a GDP that exceeds that amount. The World Bank.
Who is the youngest billionaire? ›
Who is the richest girl in the world? ›
1. Françoise Bettencourt Meyers. With an eye-watering net worth of $99 billion, Francoise Bettencourt Meyers, a French businesswoman and philanthropist, is the richest woman in the world.
What percentile is a $3 million net worth? ›
The 95th percentile, with a net worth of $3.2 million, is considered wealthy, facilitating estate planning and possibly owning multiple homes. The top 1%, or the 99th percentile, has a net worth of $16.7 million and represents the very wealthy, who enjoy considerable financial freedom and luxury.
How many billionaires are in the US? ›
This is a list of U.S. states and federal district by the number of billionaires as of 2023; there are 756 billionaires living in the United States. They live in 43 of the 50 states. The only states with no billionaire residents are Alaska, Delaware, New Hampshire, New Mexico, North Dakota, Vermont, and West Virginia.
Who owns the majority of the stock market? ›
The richest Americans own the vast majority of the US stock market, according to Fed data. The top 10% of Americans held 93% of all stocks, the highest level ever recorded. Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023.
What percentage of the stock market is owned by pension funds? ›
All told, institutional investors—that is, primarily pension funds—control close to 40% of the common stock of the country's large (and many midsize) businesses. The largest and fastest growing funds, those of public employees, are no longer content to be passive investors.
Who owns the majority of wealth in the US? ›
White households continue to own a disproportionately greater share of total family wealth. Though they represented 66.3% of households, white households owned 84.5% of total family wealth in the third quarter of 2023; this is 27% more wealth than their representation in the U.S. might predict.
Who owns the stock market? ›
National Stock Exchange of India
| Founded | 1992 |
| Owner | Various group of domestic and global financial institutions, public and privately owned entities and individuals |
| Key people | Girish Chandr Chaturvedi (Chairperson) Ashishkumar Chauhan (MD & CEO) |
| Currency | Indian rupee (₹) |
| No. of listings | 2,190 (December 2023) |
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