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Look at it from the other direction: How many people are in the top 1% of NW but fail to be in the top 1% of income? Surely some but I bet not a ton. EDIT: I f

by harryh 7y ago

Look at it from the other direction: How many people are in the top 1% of NW but fail to be in the top 1% of income? Surely some but I bet not a ton. EDIT: I found this - https://economix.blogs.nytimes.com/2012/01/17/measuring-the-top-1-by-wealth-not-income/ https://economix.blogs.nytimes.com/2012/01/17/measuring-the-... "Some readers wondered if the 1 percent by wealth weren’t an entirely different group of people from the 1 percent by income. But there is substantial overlap: the Fed data suggests that about half of the top 1 percent of earners are also among the top 1 percent in the net worth category. Almost all the rest of the top earners are still in the top 5 percent when it comes to net worth."

saltcured 7y ago
Going by the thresholds above (I don't know that they are correct), sitting on $10M in assets would require a 7.5% annual income return to reach the $750k threshold. That sounds very unlikely, if the person is living on passive investment income. Even with a well-performing stock or real estate portfolio, to have that level of returns you are mostly talking about unrealized gains. Those would not count as income if someone is living in equilibrium, growing their assets over time. You would only realize those investment gains as income if you were liquidating your assets to fund a lavish but limited duration lifestyle. Edit: noting your addendum, I guess we're looking at the difference between a technical implication (you must have this income if you have these assets) versus a behavioral trait (most people don't live frugally or complacently with big piles of assets)...?