8 ms·

The source from the FT has some interesting other numbers: https://archive.is/emsQK https://archive.is/emsQK But the dirty secret behind this myth is that,

The source from the FT has some interesting other numbers: https://archive.is/emsQK https://archive.is/emsQK But the dirty secret behind this myth is that, while access to equities is widespread, ownership is becoming more concentrated. Two decades ago, the wealthiest 10 per cent of Americans held 77 per cent of corporate equities and mutual funds, according to calculations by Lyn Alden, a strategist. The poorest 50 per cent held just 1 per cent, leaving the middle-to-upper cohort with 12 per cent. Today, however, the wealthiest 10 per cent own 92.5 per cent of the market — a “record high concentration”, Alden notes. And while the richest 1 per cent owned just 40 per cent two decades ago, their share stood at 54 per cent in the most recent data from 2022.

foobarian 3y ago
So the million dollar question... when to sell off to beat the boomer exit? :-D
- pydry 3y ago
  When inheritance taxes become punitive. So, on the 2nd of never, two thousand and not gonna happen.
  - superhumanuser 3y ago
    Who cares of they do or don't have to pay taxes. Taxes shouldn't be punishment. We should strive to all pay less. The government wastes our money frivolously. We should be advocating for better appropriation and spending, not advocating to give them more just because you think the rich are an enemy.
    - loeg 3y ago
      Some people want wealth redistribution. Taxes are the only real mechanism for doing that. I understand that you disagree with that objective. But the proposed mechanism isn't the problem.
    - carlob 3y ago
      Having people be this rich is a problem, though: periods of time where the wealth is superconcentrated have never been good for anyone, the economy slows down, because the superrich never consume in proportion with what they have, there is social unrest and eventually wars and revolutions. The times where wealth was less unequally distributed were the '50s and '60s, whereas we haven't seen this kind of inequality since 1914, and we all know what happened in the following 3 decades...
      - caballeto 3y ago
        If the rich are not consuming in proportion to what they have, then what do they do with their money? Right, they invest it. And what does that investment create? Jobs, factories, lower costs, and new opportunities for all. The fact that someone was able to accumulate wealth shows that they know how to use it to generate a return. For the economy in general, it is much more beneficial to have people with skin in the game to invest their own money, instead of the government wasting it in bureaucracy.
        pydry 3y ago
        >Right, they invest it. And what does that investment create? Jobs No, overpriced housing. You want jobs? You need more income equality to fund spending.
    - ok_dad 3y ago
      Sure let’s cut spending, but in the mean time those who are wealthy and benefitting most should be paying the most.
    - ochoseis 3y ago
      If society ossifies into classes with landed gentry at the top, it’s not going to end pretty.
    - seanmcdirmid 3y ago
      Wealth redistribution via progressive taxation has been a primary way of avoiding peasant revolts for awhile (working in favor of the rich who tend to be targeted during those things). Sort of like how property taxes discourage buying and holding property without using it productively. But yes, government should use our tax money better, and even if they are used as a debtor of last resort, they should use the money they borrow more wisely as well (less relevant now that interest rates are high).
- ren_engineer 3y ago
  the ultra wealthy put all their assets into trusts or charities that dodge taxes and don't require selling anything. They can then take out loans using those assets as collateral when they need cash
  - SkyBelow 3y ago
    Are they allowed to take out loans without paying them back? If they have to pay them back, eventually they have to use that collateral which will be a taxable event. They might be able to delay, but they'll eventually have to pay.
    - mfitton 3y ago
      Could they not make sure that enough of their assets are in cash-flowing assets (think, rent-yielding assets, or treasuries, or dividend-yielding stock, etc.) that need not be sold and whose cash-flow can be utilized?
      - twoodfin 3y ago
        All those cash flows are taxed.
    - deleted 3y ago
      [deleted]
    - loeg 3y ago
      "Buy, Borrow, Die" is the talking point. Cost basis of the assets gets stepped up at death so the inheritor can pay off the loans at that point in time without paying taxes on capital gains.
      - SkyBelow 3y ago
        Then this seems to be the loophole that needs to be resolved. Before the estate pays out, the debts should be settled within the estate using the cost basis belong to the deceased. Assets paid out after loans are satisfied should then have their cost basis reset (if that happens at all, I don't want to take a stance either way if that should happen, except it should only apply once loans are repaid if it ever does apply).
- bcrosby95 3y ago
  Boomers have been exiting for the past 10+ years.
dwallin 3y ago
The choice of 10% is extremely peculiar. Top 1%: 40% to 54% -> +14% Top 10%: 77% to 93% -> +16% Top 10% minus the top 1%: 37% to 39% -> +2% Essentially this was all the top 1% and the rest of the 10%ers barely budged in ownership percent. I'd be curious to see the results for top 0.1% and 0.01% as well. [edit] Found the source numbers: 50-90% https://fred.stlouisfed.org/series/WFRBSN40172 https://fred.stlouisfed.org/series/WFRBSN40172 90-99% https://fred.stlouisfed.org/series/WFRBSN09145 https://fred.stlouisfed.org/series/WFRBSN09145 99-99.9% https://fred.stlouisfed.org/series/WFRBS99T999258 https://fred.stlouisfed.org/series/WFRBS99T999258 top 0.1% https://fred.stlouisfed.org/series/WFRBSTP1285 https://fred.stlouisfed.org/series/WFRBSTP1285 Bottom 50% barely registers, hovering below 1% https://fred.stlouisfed.org/series/WFRBSB50199 https://fred.stlouisfed.org/series/WFRBSB50199 It looks like the top 0.1% barely nudged in the past two decades as well. I would guess that the top 0.1% is probably hard to account for given all the ways the wealthiest can distribute their wealth to make it opaque and hard to granularly track. Those numbers could reflect changes in choices of financial vehicles for the wealthiest households.
- chollida1 3y ago
  Good points made but you linked to corporate bonds held > [edit] Found the source numbers: > 50-90% https://fred.stlouisfed.org/series/WFRBSN40172 https://fred.stlouisfed.org/series/WFRBSN40172 > 90-99% https://fred.stlouisfed.org/series/WFRBSN09145 https://fred.stlouisfed.org/series/WFRBSN09145 > 99-99.9% https://fred.stlouisfed.org/series/WFRBS99T999258 https://fred.stlouisfed.org/series/WFRBS99T999258 This is the series I think you want. Share of Corporate Equities and Mutual Fund Shares
- georgeecollins 3y ago
  Can some smart person here help me understand what this means in terms of average holding value per household? Like how much stock market wealth does the average household own? What's the average amount of stock market wealth held by the first, second, third and fourth quadrille? If 93% of stock market wealth help by the wealthiest 10% represents $10k, that means something really different than if it represents $1m. Comparing percentages can be really confusing, particularly when talking about wealth.
Vaslo 3y ago
I wanted to link to this since it's the primary source but the amount of paywall forced me to pull this Axios summary instead. Thanks for posting the archive.
missedthecue 3y ago
I can't find any problems with the data, but this is extremely unintuitive! My father who was buying shares decades ago for his personal account had $50 commission fees (not inflation adjusted!!) And like most brokers in that time demanded, he could only buy in 'lots' meaning 100 shares minimum or multiples of that. You had to place a call to your broker, usually when the market was open, which meant the middle of the work day. Today, practically everyone including fastfood workers has access to 401ks which are extremely cheap. No commission fees upfront. Almost every broker has commission free trading. Not only can you buy 1 share at a time, you can buy fractions of 1 share. You can do it all from your phone, after or before market hours. Access has been expanded and costs lowered dramatically. So why have the bottom 90% stopped buying shares?
- pyvpx 3y ago
  with what money? what money are the bottom 90% supposed to buy shares with after rent utilities food car note and high APR debt? accessibility is useless without purchasing power
  - missedthecue 3y ago
    According to the US census, the bottom quartile of earners made more money in 2022, adjusted for an inflation, than any previous year in American history. https://www.census.gov/library/publications/2023/demo/p60-279.html https://www.census.gov/library/publications/2023/demo/p60-27...

foobarian 3y ago

So the million dollar question... when to sell off to beat the boomer exit? :-D

pydry 3y ago
When inheritance taxes become punitive. So, on the 2nd of never, two thousand and not gonna happen.
- superhumanuser 3y ago
  Who cares of they do or don't have to pay taxes. Taxes shouldn't be punishment. We should strive to all pay less. The government wastes our money frivolously. We should be advocating for better appropriation and spending, not advocating to give them more just because you think the rich are an enemy.
  - loeg 3y ago
    Some people want wealth redistribution. Taxes are the only real mechanism for doing that. I understand that you disagree with that objective. But the proposed mechanism isn't the problem.
  - carlob 3y ago
    Having people be this rich is a problem, though: periods of time where the wealth is superconcentrated have never been good for anyone, the economy slows down, because the superrich never consume in proportion with what they have, there is social unrest and eventually wars and revolutions. The times where wealth was less unequally distributed were the '50s and '60s, whereas we haven't seen this kind of inequality since 1914, and we all know what happened in the following 3 decades...
    - caballeto 3y ago
      If the rich are not consuming in proportion to what they have, then what do they do with their money? Right, they invest it. And what does that investment create? Jobs, factories, lower costs, and new opportunities for all. The fact that someone was able to accumulate wealth shows that they know how to use it to generate a return. For the economy in general, it is much more beneficial to have people with skin in the game to invest their own money, instead of the government wasting it in bureaucracy.
      - pydry 3y ago
        >Right, they invest it. And what does that investment create? Jobs No, overpriced housing. You want jobs? You need more income equality to fund spending.
  - ok_dad 3y ago
    Sure let’s cut spending, but in the mean time those who are wealthy and benefitting most should be paying the most.
  - ochoseis 3y ago
    If society ossifies into classes with landed gentry at the top, it’s not going to end pretty.
  - seanmcdirmid 3y ago
    Wealth redistribution via progressive taxation has been a primary way of avoiding peasant revolts for awhile (working in favor of the rich who tend to be targeted during those things). Sort of like how property taxes discourage buying and holding property without using it productively. But yes, government should use our tax money better, and even if they are used as a debtor of last resort, they should use the money they borrow more wisely as well (less relevant now that interest rates are high).
ren_engineer 3y ago
the ultra wealthy put all their assets into trusts or charities that dodge taxes and don't require selling anything. They can then take out loans using those assets as collateral when they need cash
- SkyBelow 3y ago
  Are they allowed to take out loans without paying them back? If they have to pay them back, eventually they have to use that collateral which will be a taxable event. They might be able to delay, but they'll eventually have to pay.
  - mfitton 3y ago
    Could they not make sure that enough of their assets are in cash-flowing assets (think, rent-yielding assets, or treasuries, or dividend-yielding stock, etc.) that need not be sold and whose cash-flow can be utilized?
    - twoodfin 3y ago
      All those cash flows are taxed.
  - deleted 3y ago
    [deleted]
  - loeg 3y ago
    "Buy, Borrow, Die" is the talking point. Cost basis of the assets gets stepped up at death so the inheritor can pay off the loans at that point in time without paying taxes on capital gains.
    - SkyBelow 3y ago
      Then this seems to be the loophole that needs to be resolved. Before the estate pays out, the debts should be settled within the estate using the cost basis belong to the deceased. Assets paid out after loans are satisfied should then have their cost basis reset (if that happens at all, I don't want to take a stance either way if that should happen, except it should only apply once loans are repaid if it ever does apply).
bcrosby95 3y ago
Boomers have been exiting for the past 10+ years.

dwallin 3y ago

The choice of 10% is extremely peculiar. Top 1%: 40% to 54% -> +14% Top 10%: 77% to 93% -> +16% Top 10% minus the top 1%: 37% to 39% -> +2% Essentially this was all the top 1% and the rest of the 10%ers barely budged in ownership percent. I'd be curious to see the results for top 0.1% and 0.01% as well. [edit] Found the source numbers: 50-90% https://fred.stlouisfed.org/series/WFRBSN40172 https://fred.stlouisfed.org/series/WFRBSN40172 90-99% https://fred.stlouisfed.org/series/WFRBSN09145 https://fred.stlouisfed.org/series/WFRBSN09145 99-99.9% https://fred.stlouisfed.org/series/WFRBS99T999258 https://fred.stlouisfed.org/series/WFRBS99T999258 top 0.1% https://fred.stlouisfed.org/series/WFRBSTP1285 https://fred.stlouisfed.org/series/WFRBSTP1285 Bottom 50% barely registers, hovering below 1% https://fred.stlouisfed.org/series/WFRBSB50199 https://fred.stlouisfed.org/series/WFRBSB50199 It looks like the top 0.1% barely nudged in the past two decades as well. I would guess that the top 0.1% is probably hard to account for given all the ways the wealthiest can distribute their wealth to make it opaque and hard to granularly track. Those numbers could reflect changes in choices of financial vehicles for the wealthiest households.

chollida1 3y ago
Good points made but you linked to corporate bonds held > [edit] Found the source numbers: > 50-90% https://fred.stlouisfed.org/series/WFRBSN40172 https://fred.stlouisfed.org/series/WFRBSN40172 > 90-99% https://fred.stlouisfed.org/series/WFRBSN09145 https://fred.stlouisfed.org/series/WFRBSN09145 > 99-99.9% https://fred.stlouisfed.org/series/WFRBS99T999258 https://fred.stlouisfed.org/series/WFRBS99T999258 This is the series I think you want. Share of Corporate Equities and Mutual Fund Shares
georgeecollins 3y ago
Can some smart person here help me understand what this means in terms of average holding value per household? Like how much stock market wealth does the average household own? What's the average amount of stock market wealth held by the first, second, third and fourth quadrille? If 93% of stock market wealth help by the wealthiest 10% represents $10k, that means something really different than if it represents $1m. Comparing percentages can be really confusing, particularly when talking about wealth.

Vaslo 3y ago

I wanted to link to this since it's the primary source but the amount of paywall forced me to pull this Axios summary instead. Thanks for posting the archive.

missedthecue 3y ago

I can't find any problems with the data, but this is extremely unintuitive! My father who was buying shares decades ago for his personal account had $50 commission fees (not inflation adjusted!!) And like most brokers in that time demanded, he could only buy in 'lots' meaning 100 shares minimum or multiples of that. You had to place a call to your broker, usually when the market was open, which meant the middle of the work day. Today, practically everyone including fastfood workers has access to 401ks which are extremely cheap. No commission fees upfront. Almost every broker has commission free trading. Not only can you buy 1 share at a time, you can buy fractions of 1 share. You can do it all from your phone, after or before market hours. Access has been expanded and costs lowered dramatically. So why have the bottom 90% stopped buying shares?

pyvpx 3y ago
with what money? what money are the bottom 90% supposed to buy shares with after rent utilities food car note and high APR debt? accessibility is useless without purchasing power
- missedthecue 3y ago
  According to the US census, the bottom quartile of earners made more money in 2022, adjusted for an inflation, than any previous year in American history. https://www.census.gov/library/publications/2023/demo/p60-279.html https://www.census.gov/library/publications/2023/demo/p60-27...