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The article talks about top 10% – $175k+/year https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/ https://www.investopedia.com/pe

by Swizec 4y ago

The article talks about top 10% – $175k+/year https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/ https://www.investopedia.com/personal-finance/how-much-incom... That’s a fun grey area where you’re making a lot but not a lot. And the path to making more is paved with leverage, not with hours. You absolutely cannot get to the top 1% by just grinding away. I can’t find the study right now, but I remember reading that “work for money” tops out at about $400k. The highest average income in USA goes to car wash owners.

badcppdev 4y ago
Agree 100% ... "You absolutely cannot get to the top 1% by just grinding away" And if you are grinding away then you might not have the energy and time to create the real opportunity to help yourself.
Phelinofist 4y ago
> The highest average income in USA goes to car wash owners. Is that an euphemism for money laundering (Breaking Bad) or make car wash owners really that much money?
- Swizec 4y ago
  Not a euphemism. Yes you have higher variance in other fields (like tech) where you can become a billionaire. Car washes, by comparison, have low variance but reliably make mid 7-figures per year. The market is super fragmented and localized so it doesn’t really matter how many other successful car washes exist. People won’t drive too far out of their way just for a car wash. This puts a ceiling on competition. Starting a car wash is a big but not huge investment. This also puts a ceiling on competition, but remains accessible to fairly regular people. Starting a car wash also doesn’t require any specialized knowledge. And because the business is profitable, but not that profitable, it has (afaik) escaped the clutches of private equity consolidation. This keeps money in the hands of local owners thus improving average/median outcomes and keeping variance low.
  - lupire 4y ago
    Can you provide a citation? All I find are generic SEO ad sites. $1M+/year? $4M+/yr? In profit? On average? And no big company has bought them all out?
    - Swizec 4y ago
      It’s from an early People I Mostly Admire episode but I can’t remember which one and their archive is difficult to search. I can’t remember the incantation to find the underlying paper they were talking about either. And as you noted, Google has become bad at this sort of thing because most people don’t want those sorts of results.
patrick451 4y ago
I'm not sure this true. For example, [1] claims that for an individual earner, 400k puts you in the top 1%. That number is definitely achievable just on a salary. the article you cite is listing average numbers for top 1%, so isn't really useful here. According to [2] a household needs to earn 570k. This is in line with [3] which claims a household needs to earn 590k. It's definitely feasible for a couple to earn that on salary alone. [1] https://dqydj.com/income-percentile-calculator/ https://dqydj.com/income-percentile-calculator/ [2] https://dqydj.com/household-income-percentile-calculator/ https://dqydj.com/household-income-percentile-calculator/ [3] https://smartasset.com/data-studies/what-it-takes-to-be-in-the-1-by-state-2022 https://smartasset.com/data-studies/what-it-takes-to-be-in-t...
CloudRecondite 4y ago
Clearly some people make more than 400k and work a normal W-2 job. I’m well into 7 figures and slave away. I struggle daily on whether it’s worth it.
- lotsofpulp 4y ago
  Make a list of goals (including things like protecting one’s self from health risks, legal risks, etc), pencil out how much it your annual expenses are, and project your cash flow until age 100. If your investments can afford your goals, then quit or scale back. Head over to Bogleheads forums where this situation is frequently addressed.

by Swizec 4y ago

badcppdev 4y ago

Agree 100% ... "You absolutely cannot get to the top 1% by just grinding away" And if you are grinding away then you might not have the energy and time to create the real opportunity to help yourself.

Phelinofist 4y ago

> The highest average income in USA goes to car wash owners. Is that an euphemism for money laundering (Breaking Bad) or make car wash owners really that much money?

Swizec 4y ago
Not a euphemism. Yes you have higher variance in other fields (like tech) where you can become a billionaire. Car washes, by comparison, have low variance but reliably make mid 7-figures per year. The market is super fragmented and localized so it doesn’t really matter how many other successful car washes exist. People won’t drive too far out of their way just for a car wash. This puts a ceiling on competition. Starting a car wash is a big but not huge investment. This also puts a ceiling on competition, but remains accessible to fairly regular people. Starting a car wash also doesn’t require any specialized knowledge. And because the business is profitable, but not that profitable, it has (afaik) escaped the clutches of private equity consolidation. This keeps money in the hands of local owners thus improving average/median outcomes and keeping variance low.
- lupire 4y ago
  Can you provide a citation? All I find are generic SEO ad sites. $1M+/year? $4M+/yr? In profit? On average? And no big company has bought them all out?
  - Swizec 4y ago
    It’s from an early People I Mostly Admire episode but I can’t remember which one and their archive is difficult to search. I can’t remember the incantation to find the underlying paper they were talking about either. And as you noted, Google has become bad at this sort of thing because most people don’t want those sorts of results.

patrick451 4y ago

I'm not sure this true. For example, [1] claims that for an individual earner, 400k puts you in the top 1%. That number is definitely achievable just on a salary. the article you cite is listing average numbers for top 1%, so isn't really useful here. According to [2] a household needs to earn 570k. This is in line with [3] which claims a household needs to earn 590k. It's definitely feasible for a couple to earn that on salary alone. [1] https://dqydj.com/income-percentile-calculator/ https://dqydj.com/income-percentile-calculator/ [2] https://dqydj.com/household-income-percentile-calculator/ https://dqydj.com/household-income-percentile-calculator/ [3] https://smartasset.com/data-studies/what-it-takes-to-be-in-the-1-by-state-2022 https://smartasset.com/data-studies/what-it-takes-to-be-in-t...

CloudRecondite 4y ago

Clearly some people make more than 400k and work a normal W-2 job. I’m well into 7 figures and slave away. I struggle daily on whether it’s worth it.

lotsofpulp 4y ago
Make a list of goals (including things like protecting one’s self from health risks, legal risks, etc), pencil out how much it your annual expenses are, and project your cash flow until age 100. If your investments can afford your goals, then quit or scale back. Head over to Bogleheads forums where this situation is frequently addressed.