It’s normal to rage against the top 1% nowadays. Even though the economy has recovered handsomely since the 2009 lows, bringing many people greater fortune, the distribution of that fortune has not been equal.
With over 40 million people unemployed due to the coronavirus and lockdowns, there is a lot of uncertainty and unrest. The economy is in temporary ruin, yet the NASDAQ is at a new all-time high and the S&P 500 is not far behind.
As a landlord since 2005, I’ve been able to screen many tenants over the years. During this process, I’ve discovered many people make top 1%-level incomes ($400,000+).
For example, in my latest screening, I discovered the top 1% are a couple who met in law school at 25 and are now 28 year old 2nd year associates making over $400,000 combined.
The top 1% is also the 28-year-old Google software engineer from Caltech who brings in $400,000 a year and has $300,000 in savings.
The top 1% is the 35 year old cardiologist who is finally making over $400,000 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.
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 land mines, they too will make over $400,000 a year by the time they are 35 year old second year Vice Presidents.
Let’s explore a little further who else makes top 1% money besides the usual suspects.
THE TOP 1%: COME OUT, COME OUT, WHEREVER YOU ARE
The following is a list of occupations where the top 1% reside.
Public School Administrators: Public colleges regularly pay their employees hundreds of thousands of dollars a year. The best paid University of California employee is the football coach, with a salary of $3 million a year. 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!
Publishers/Bloggers: Bloggers making over $400,000 a year are everywhere, you probably just don’t realize it. Here are some that make the list: 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. Who knows, maybe even yours truly makes over $400,000 a year from my various online media properties. Learn how to start your own profitable site online today. What used to cost thousands and require employees costs next to nothing and can be set up in under 20 minutes!
TV Journalism: Anchorwomen and men make well over $400,000 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 made 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: 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 $400,000. 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, Uber, Lyft, AirBnB, Pinterest, Twitter, Google, Youtube, Instagram, Snapchat, Zoom and so forth. They are the creators of the tools you use everyday to communicate and entertain yourself with. Some accept only a $1 salary, but when you calculate their stock option packages, they are making in the mega millions every year. The Twitter CFO, Anthony Noto, got stock compensation worth roughly $70 million in 2017! Now that’s crazy given the stock has performed so badly.
Professional Sports: Every starting NFL player makes well over $400,000. 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 or mend our melancholy hearts.
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.
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Updated for 2020 and beyond. The bull market should be making a lot of people wealthier if they’ve been continuously investing all this time! Further, tax cuts and the raising of the estate tax threshold to $11.58M per person and $23.16M per couple will also boost wealth as people get more motivated.