Who Are The Top 1% Income Earners?
It’s trendy to rage against the top 1% nowadays. We’ve discussed how the world will go through further employment pain thanks to the decline in the stock markets, EuroZone debt crisis, US state-level budget problems, and political impotence. Things are not pretty to say the least.
From my rental property article, you discover that the top 1% are a couple who met in law school at 25 and are now 28 year old 2nd year associates making $380,000 combined. The top 1% is also the 28 year old Google software engineer from Caltech who brings in $450,000 a year and has $400,000 in savings. The top 1% is the 35 year old cardiologist who is finally making over $300,000 a year after 11 years of post high school education and 3 years of residency work at $60,000 a year. By the time he’s 45, he will probably make over $1 million dollars.
Where else can we find the top 1%? Oh yeah, MBA grads who join Wall Street firms such as JP Morgan and Goldman Sachs at the standard $150,000 base salary and $30,000 sign-on bonus at age 29-30. But, you knew this already since that’s who so many people are demonstrating against. If they can last through the treacherous ups and downs of the markets, the multiple rounds of layoffs every year, the intense pressure of 60-80 hour work weeks, not to mention all the internal political landmines, they too will make over $380,000 a year by the time they are 35 year old second year Vice Presidents.
THE TOP 1%: COME OUT, COME OUT, WHEREVER YOU ARE
Public Schools: Public colleges regularly pay their employees hundreds of thousands of dollars a year. The best paid University of California employee is Jeff Tedford, with a salary of $3 million a year coaching football. Not bad for a job many would say they’d love to do for much less. Practically every single Top 25 head coach in football and basketball makes multiple-six figures. The UC’s last President earned $900,000 and UCSF’s Chancellor, Susan Desmond-Hellman made $450,000.
Politicians: In September 1999, President Clinton signed legislation that increased the presidential salary to $400,000, effective January 2001. This presidential pay raise was the first since 1969, when the president’s salary was raised from $100,000 to $200,000. Adjusted for inflation, $200,000 in 1969 would be worth $930,232 today. On top of the salary and expense accounts, both the U.S. president and vice president are given free housing with plenty of amenities. The White House has 132 rooms, 32 bathrooms, a movie theater, bowling alley, billiards room, tennis court, jogging track and putting greens. Pretty good perks!
Online Infopreneurs: Bloggers making over $380,000 a year are a dime a dozen. Here are some that make the list: Heather Armstrong (Dooce), Darren Rowe (Pro Blogger), Michael Arrington (Tech Crunch), Pete Cashmore (Mashable), John Chow (John Chow), J. Shoemoney (Shoemoney), Perez Hilton (Perez Hilton), Ben Huh (Cheezeburger Network), Peter Rojas (Gizmodo), Leo Babauta (Zen Habits), and many top personal finance bloggers. There are hundreds more that we’ve never heard of.
TV Journalism: Anchorwomen and men make well over $380,000 at all the major stations in all the major cities. Katie Couric sealed an eye-popping $75 million, 5 year contract for CBS. Political comedian, Jon Stewart from the Daily Show makes around $15 million a year and has a net worth north of US$50 million. Jon makes his money making fun of politicians and rich people. Documentary-maker, Michael Moore, has made millions from railing against the car, food, and finance industries. Oprah is the queen of them all with mega-billions.
Executives: We then come to all the CEOs of the Fortune 500 companies who on average make a somewhat outrageous $10 million a year. If you include the CFOs, COOs, and all other C-level execs, we’re talking about thousands who make in the multi-millions. These aren’t the top 1%. These are the top 0.1%! Many Directors and VP of Fortune 500 companies all make well over $380,000. You don’t have to be a C-level executive to get there.
Internet Start-Ups: And then there are the founders of all the great internet/tech companies you see today: Apple, Zynga, Twitter, Google, Youtube, eBay and so forth. They are the creators of the tools you use everyday to communicate and entertain yourself with. There are thousands more you’ve never heard of, who get acquired by the gorillas and make millions too.
Professional Sports: Every starting NFL player makes well over $380,000. So do all the members of every NBA team and European soccer league. Men and women who hit fuzzy green balls and whack dimply white balls earn over $380,000. It’s hard for a Nascar and Indy driver not to make over $380,000. Finally, baseball players have incredible multi-year guaranteed contracts that make all other sports envious! They are in the top 1%.
Entertainment Media: When you come home from a long days work and switch on the tube, the stars of your favorite TV sitcoms are well into the top 1%. When you take your significant other to the movies on a Saturday night to watch the highly anticipated Big Momma’s House III, the actors are all in the top 1%. They entertain you and make you laugh, and you go out and support them as a result.
THE TOP 1% ARE EVERYWHERE
The top 1% of income earners are everywhere. They walk among us peacefully, and often times invisible to you and me. Why are we trying to hunt them down? They have worked hard to get to where they are and many of them employ thousands of the rest of us 99%. Many of them entertain us with their movies, or their witty morning banter. Some of us even fix our broken bones. Even more donate a significant amount to charity. Shouldn’t we say “thank you” to the top 1% instead of eviscerating them?
Do you want to be in the top 1%? It will take a lot of hard work and creativity that’s for sure. The top 1% are no different from you and me. The top 1% is that kid raising her hand in the front of the class and the scrawny 8th grader who plays JV baseball, but never varsity. The top 1% join you in causes and vote along side of you. The top 1% still have to wait in line at the security check-in and sit in middle seats. The top 1% die from cancer and eat more than they should. The top 1% have loved ones.
Some may have caught a lucky break, while others just inherited it all. Those who didn’t earn their way to the top 1% are a minority. We can’t all get to the top 1%, but we can all certainly try.
Recommendations To Increase Your Wealth
1) Manage Your Finances In One Place: The best way to increase your wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing, how my net worth is progressing, and where my spending is going. The best feature is the 401K Fee Analyzer which has saved me over $1,000 in annual portfolio fees I had no idea I was paying! There is no better tool online that has helped me reach early retirement. It only takes a minute to sign up.
2) Refinance Your Mortgage: If you are a homeowner and you have not refinanced in the past year, I strongly suggest you check online to see what the latest rates are. There is seriously some serious mortgage interest savings to be had! I always check with Quicken Loans because they are fast, quick, and provide a no obligation real quote based on the input you provide. I recently refinanced to a 5/1 ARM for 2.625% in the Summer of 2012 after just refinancing in the fall of 2011 for 3.125% from 3.625%! I am now saving $4,000 a year in mortgage interest!
3) Check Your Credit Score: Everybody needs to check their credit score once every six months given the risk of identity theft and the fact that 30% of credit scores have errors. For over a year, I thought I had a 790ish credit score and was fine, until my mortgage refinance bank on day 80 of my refinance told me they could not go through due to a $8 late payment by my tenants from two years ago! My credit score was hit by 110 points to 680 and I could not get the lowest rate! I had to spend an extra 10 days fixing my score by contacting the utility company to write a “Clear Credit Letter” to get the bank to follow through. Check your TransUnion credit score for free at GoFreeCredit.com and protect yourself.