6 ms·

What It Takes to Be in the 1% Around the World

47 points by siberianbear 8y ago

westiseast 8y ago
I often chat with my wife (Chinese, runs her own business) about relative wealth in her home country. She’s easily 1%, but living in big east coast Chinese cities, it often feels like we’re pretty average, even sub-average. The hundreds of millions of rural and urban poor are almost hidden from view.
- ForHackernews 8y ago
  There's no upper limit and the right edge of the income distribution looks almost exponential. Mere multimillionaires feel like paupers next to the billionaires.
  - sametmax 8y ago
    Which makes sense, as it's a x1000 factor. Millionaire is actually just a x100 factor from a middle class saving account. Each time, the real difference is not the physical goods anyway. From middle class to millionaire, it's the logistic that changes the most. You can live free of many constraints. From millionaires to billionaires, it's more a matter of impact in the world. Having 100 luxury cars must be fun, but I can't imagine it changing your life that much.
    - vidarh 8y ago
      > Having 100 luxury cars must be fun, but I can't imagine it changing your life that much. But it's the gap from flying first class to owning private jets. Or renting a large yacht or owning a small one to owning a super-yacht with two helicopter pads and a sub (like e.g. Paul Allen's "Octopus" [1]). [1] https://en.wikipedia.org/wiki/Octopus_(yacht) https://en.wikipedia.org/wiki/Octopus_(yacht)
      - ForHackernews 8y ago
        It's all obscene. IMHO we're headed for guillotine territory if things continue the way they have the past ~40 years or so in the West. And climate change is only going to make it more likely to go up like a tinderbox.
        sametmax 8y ago
        I've been thinking that for 20 years, but it's still holding. Our system have an incredible resilience... or inertia.
        vidarh 8y ago
        Marx predicted that it would take capitalism no longer having more markets to expand into causing further competition to hit labor costs to start throwing capitalism into crises. Whether or not he was right about that part, he also severely under-estimated how long it would take for capitalism to fully expand into every corner of the globe. Continued expansion has allowed for offsetting a lot of cost-cutting. It's not so much that the system has incredible resilience, as it is that the after-shocks of feudalism and colonialism are still incomplete: we still have dozens of countries shacking off the post-colonial conflicts and building basic infrastructure that allows for rapid initial growth in commerce. We'll find out once the last groups of developing countries start seeing growth drop back to the levels of developed countries. That is likely to be decades still, as many parts of Africa in particular just entered the steep growth over the last decade or so.
        sametmax 8y ago
        It reminds me of this lecture from Albert Bartlett: https://www.youtube.com/watch?v=F-QA2rkpBSY&feature=list_other&playnext=1&list=SP6A1FD147A45EF50D https://www.youtube.com/watch?v=F-QA2rkpBSY&feature=list_oth... Eventually, any kind of growth is limited in a closed system, so it makes sense that it will be the dawn of capitalism, provided we don't escape in space before. But I'm surprised, almost disapointed, that we need to reach this extreem. I was expecting injustice, greed, health issues and the ponzi scheme aspect of our economic system to be the kicker. It never happened.
    - cascom 8y ago
      I’ve worked with a few billionaires and a bunch of multi-millionaires and having had this conversation, can tell that the inflection point is where your lifestyle untethers from your finances. For example, if you just had twins and live in a big city paying for those kids education/uprbringing is going to cost maybe ~$2-4m (NPV) even if you have $10m, that is really meaningful number to you, and less so at $30m, $300m, $1b etc. Once you hit that inflection point (which is different for everyone) the conversation changes from how do I aforrd to [pay for my kid’s education] to what do I want to do with my life, what do I enjoy doing, what is my legacy going to be....
- collyw 8y ago
  Worldwide I am in the 1%. Doesn't feel like it but apparently I am.
- antwerpen 8y ago
  This feels true in Manhattan, too, where most people here are affluent compared to the rest of the nation. However, in NYC, being average amongst the people doesn’t feel like a bad thing. That’s what I like about NYC anyways.
MarkMc 8y ago
Interesting that in Mumbai someone who just reaches the top 1% of earners must pay 44% of their income to send one child to a private school, while in Australia it is only 8%.
- sametmax 8y ago
  Given the population size and density, competition is not nearly the same, and hence, top education is probably more expensive compared to the local wealth in India.
- jeswin 8y ago
  I am not sure if that number is accurate (or which super-exclusive school they've taken as reference). Private School fees depend on the institution and the grade you're in, and varies from $5-25K.
electricityUser 8y ago
I am going to become a Nanny in Monaco then ...
- sametmax 8y ago
  Working in Monaco without being from Monaco does not grant you the same benefits. Besides, it's a really, really boring city.
  - Kurtz79 8y ago
    Even if it were true, it is 30 minutes from Nice, from the Italian border and within an hour of some of the best beaches in the Mediterranean...
sametmax 8y ago
What's the number for the 1% world wide ?
- AJRF 8y ago
  $32,400 According to Global Rich List - https://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp https://www.investopedia.com/articles/personal-finance/05061... I'm sure that shifts a bit from year to year
  - sametmax 8y ago
    It's funny to think a lot of the « We are the 99% » are probably actually part of a class of people that are the 1%.
Blackbeard_ 8y ago
Having a country-wide 1% must pull it down in some cases. For instance in the UK if you bought the $4.1m London home on a 25 year, 3% mortgage, with a 25% deposit you'd pay about $170k per year. But after tax your $290k "top-1%" income would be about $185k -- only just enough to even cover your mortgage, forget about school fees. I wonder what the London, NY, LA etc 1% numbers are? Surely that's a fairer comparison to e.g. Singapore anyway, since it's a city-state.
- breakbread 8y ago
  This piqued my interest. At least according to this site [0] (which references a 2013 report [1]) for instance, to be in the 1% in New York state you have to be making at least $517,557. However, the average annual income of those in the 1% is $2,006,632. In Mississippi, though, you only have to be making $264,952 to be in the 1% and the average annual income of the 1% in MS is $565,813. Of course, you have to consider cost of living and what not, but 1% is definitely not the same everywhere. [0] https://www.cnbc.com/2017/06/12/how-much-you-have-to-earn-to-be-in-the-top-1-percent-in-every-us-state.html https://www.cnbc.com/2017/06/12/how-much-you-have-to-earn-to... [1] https://www.epi.org/publication/income-inequality-in-the-us/#epi-toc-3 https://www.epi.org/publication/income-inequality-in-the-us/...
klohto 8y ago
Bloomberg could at least once publish more than a few regions when using "Around the World".
Blackstone4 8y ago
This reflects top 1% of income yet I'm not sure this is the best metric. It's much easier to measure income than wealth....many of those in the top 1% of income are probably not in the top 1% in terms of wealth.
david-gpu 8y ago
The tax information is way off, at least for Canada. I'm guessing they are quoting federal taxes only, ignoring provincial taxes. In Ontario/Toronto, the highest combined marginal taxes are around 54% [0] [0] https://www.taxtips.ca/taxrates/on.htm https://www.taxtips.ca/taxrates/on.htm
ddoran 8y ago
This article seems to focus on top 1% by income. Very few of the top 1% earners in any developed country are also in the top 1% of wealthy people. The truly wealthy tend to be so because of their capital/assets. Salary is an utterly tax inefficient way to convert your life's work into personal wealth, versus other forms of income/compensation.
forkLding 8y ago
I've been in Bahrain and UAE for many years, income and wealth inequality is a real problem. A lot of the high earners are either sheikhs, landed nobility and business people who have large businesses in oil, energy, etc. who had opportunities open to them and could grab it while Bahrain or UAE was still undeveloped. It is also why their high earners is so high up in rankings. This coupled with the fact that these places are tax havens or pay much less tax because the govt can rely on oil revenue means you can keep a lot more of your income. However, it seems there has been an economic downturn recently and taxes have been increasing so the economic landscape of Middle Eastern countries could change.
plg 8y ago
top marginal tax rate in Canada is way higher than 33%
- siberianbear 8y ago
  Yes, I had that same impression reading that chart. The top marginal tax rate in California is 13.3% and the top federal rate is 37%, so the top total tax on earned income is 50.3%.

47 points by siberianbear 8y ago

I often chat with my wife (Chinese, runs her own business) about relative wealth in her home country. She’s easily 1%, but living in big east coast Chinese cities, it often feels like we’re pretty average, even sub-average. The hundreds of millions of rural and urban poor are almost hidden from view.

ForHackernews 8y ago
There's no upper limit and the right edge of the income distribution looks almost exponential. Mere multimillionaires feel like paupers next to the billionaires.
- sametmax 8y ago
  Which makes sense, as it's a x1000 factor. Millionaire is actually just a x100 factor from a middle class saving account. Each time, the real difference is not the physical goods anyway. From middle class to millionaire, it's the logistic that changes the most. You can live free of many constraints. From millionaires to billionaires, it's more a matter of impact in the world. Having 100 luxury cars must be fun, but I can't imagine it changing your life that much.
  - vidarh 8y ago
    > Having 100 luxury cars must be fun, but I can't imagine it changing your life that much. But it's the gap from flying first class to owning private jets. Or renting a large yacht or owning a small one to owning a super-yacht with two helicopter pads and a sub (like e.g. Paul Allen's "Octopus" [1]). [1] https://en.wikipedia.org/wiki/Octopus_(yacht) https://en.wikipedia.org/wiki/Octopus_(yacht)
    - ForHackernews 8y ago
      It's all obscene. IMHO we're headed for guillotine territory if things continue the way they have the past ~40 years or so in the West. And climate change is only going to make it more likely to go up like a tinderbox.
      - sametmax 8y ago
        I've been thinking that for 20 years, but it's still holding. Our system have an incredible resilience... or inertia.
        vidarh 8y ago
        Marx predicted that it would take capitalism no longer having more markets to expand into causing further competition to hit labor costs to start throwing capitalism into crises. Whether or not he was right about that part, he also severely under-estimated how long it would take for capitalism to fully expand into every corner of the globe. Continued expansion has allowed for offsetting a lot of cost-cutting. It's not so much that the system has incredible resilience, as it is that the after-shocks of feudalism and colonialism are still incomplete: we still have dozens of countries shacking off the post-colonial conflicts and building basic infrastructure that allows for rapid initial growth in commerce. We'll find out once the last groups of developing countries start seeing growth drop back to the levels of developed countries. That is likely to be decades still, as many parts of Africa in particular just entered the steep growth over the last decade or so.
        sametmax 8y ago
        It reminds me of this lecture from Albert Bartlett: https://www.youtube.com/watch?v=F-QA2rkpBSY&feature=list_other&playnext=1&list=SP6A1FD147A45EF50D https://www.youtube.com/watch?v=F-QA2rkpBSY&feature=list_oth... Eventually, any kind of growth is limited in a closed system, so it makes sense that it will be the dawn of capitalism, provided we don't escape in space before. But I'm surprised, almost disapointed, that we need to reach this extreem. I was expecting injustice, greed, health issues and the ponzi scheme aspect of our economic system to be the kicker. It never happened.
  - cascom 8y ago
    I’ve worked with a few billionaires and a bunch of multi-millionaires and having had this conversation, can tell that the inflection point is where your lifestyle untethers from your finances. For example, if you just had twins and live in a big city paying for those kids education/uprbringing is going to cost maybe ~$2-4m (NPV) even if you have $10m, that is really meaningful number to you, and less so at $30m, $300m, $1b etc. Once you hit that inflection point (which is different for everyone) the conversation changes from how do I aforrd to [pay for my kid’s education] to what do I want to do with my life, what do I enjoy doing, what is my legacy going to be....
collyw 8y ago
Worldwide I am in the 1%. Doesn't feel like it but apparently I am.
antwerpen 8y ago
This feels true in Manhattan, too, where most people here are affluent compared to the rest of the nation. However, in NYC, being average amongst the people doesn’t feel like a bad thing. That’s what I like about NYC anyways.

MarkMc 8y ago

Interesting that in Mumbai someone who just reaches the top 1% of earners must pay 44% of their income to send one child to a private school, while in Australia it is only 8%.

sametmax 8y ago
Given the population size and density, competition is not nearly the same, and hence, top education is probably more expensive compared to the local wealth in India.
jeswin 8y ago
I am not sure if that number is accurate (or which super-exclusive school they've taken as reference). Private School fees depend on the institution and the grade you're in, and varies from $5-25K.

electricityUser 8y ago

I am going to become a Nanny in Monaco then ...

sametmax 8y ago
Working in Monaco without being from Monaco does not grant you the same benefits. Besides, it's a really, really boring city.
- Kurtz79 8y ago
  Even if it were true, it is 30 minutes from Nice, from the Italian border and within an hour of some of the best beaches in the Mediterranean...

sametmax 8y ago

What's the number for the 1% world wide ?

AJRF 8y ago
$32,400 According to Global Rich List - https://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp https://www.investopedia.com/articles/personal-finance/05061... I'm sure that shifts a bit from year to year
- sametmax 8y ago
  It's funny to think a lot of the « We are the 99% » are probably actually part of a class of people that are the 1%.

Blackbeard_ 8y ago

Having a country-wide 1% must pull it down in some cases. For instance in the UK if you bought the $4.1m London home on a 25 year, 3% mortgage, with a 25% deposit you'd pay about $170k per year. But after tax your $290k "top-1%" income would be about $185k -- only just enough to even cover your mortgage, forget about school fees. I wonder what the London, NY, LA etc 1% numbers are? Surely that's a fairer comparison to e.g. Singapore anyway, since it's a city-state.

breakbread 8y ago
This piqued my interest. At least according to this site [0] (which references a 2013 report [1]) for instance, to be in the 1% in New York state you have to be making at least $517,557. However, the average annual income of those in the 1% is $2,006,632. In Mississippi, though, you only have to be making $264,952 to be in the 1% and the average annual income of the 1% in MS is $565,813. Of course, you have to consider cost of living and what not, but 1% is definitely not the same everywhere. [0] https://www.cnbc.com/2017/06/12/how-much-you-have-to-earn-to-be-in-the-top-1-percent-in-every-us-state.html https://www.cnbc.com/2017/06/12/how-much-you-have-to-earn-to... [1] https://www.epi.org/publication/income-inequality-in-the-us/#epi-toc-3 https://www.epi.org/publication/income-inequality-in-the-us/...

klohto 8y ago

Bloomberg could at least once publish more than a few regions when using "Around the World".

Blackstone4 8y ago

This reflects top 1% of income yet I'm not sure this is the best metric. It's much easier to measure income than wealth....many of those in the top 1% of income are probably not in the top 1% in terms of wealth.

david-gpu 8y ago

The tax information is way off, at least for Canada. I'm guessing they are quoting federal taxes only, ignoring provincial taxes. In Ontario/Toronto, the highest combined marginal taxes are around 54% [0] [0] https://www.taxtips.ca/taxrates/on.htm https://www.taxtips.ca/taxrates/on.htm

ddoran 8y ago

This article seems to focus on top 1% by income. Very few of the top 1% earners in any developed country are also in the top 1% of wealthy people. The truly wealthy tend to be so because of their capital/assets. Salary is an utterly tax inefficient way to convert your life's work into personal wealth, versus other forms of income/compensation.

forkLding 8y ago

I've been in Bahrain and UAE for many years, income and wealth inequality is a real problem. A lot of the high earners are either sheikhs, landed nobility and business people who have large businesses in oil, energy, etc. who had opportunities open to them and could grab it while Bahrain or UAE was still undeveloped. It is also why their high earners is so high up in rankings. This coupled with the fact that these places are tax havens or pay much less tax because the govt can rely on oil revenue means you can keep a lot more of your income. However, it seems there has been an economic downturn recently and taxes have been increasing so the economic landscape of Middle Eastern countries could change.

plg 8y ago

top marginal tax rate in Canada is way higher than 33%

siberianbear 8y ago
Yes, I had that same impression reading that chart. The top marginal tax rate in California is 13.3% and the top federal rate is 37%, so the top total tax on earned income is 50.3%.