It’s normal to rage against the top 1% nowadays. With the coronavirus pandemic raging on, there is going to be a widening wealth chasm between the top 1% income earners and everyone else. If you happen to be doing well, I highly suggest you keep things under wraps.
With tens of millions of people unemployed due to forced economic 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.
Who Are The Top 1% Income Earners?
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 between 2005 – 2010 and $470,000 for 2021+).
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 $450,000 combined.
The top 1% is also the 30-year-old Google software engineer from Caltech who brings in $500,000 a year, including RSUs, with over $300,000 in savings.
The top 1% is the 35-year-old cardiologist who is finally making over $480,000 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 $800,000 dollars.
Where else can we find the top 1% income earners? Oh yeah, MBA grads who join Wall Street firms such as JP Morgan and Goldman Sachs at the standard $150,000 base salary and $35,000 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.
Top 1% Income Earners From All Occupations
The below highlights top 1% income earners from various occupations. Some are more obvious, such as medicine and banking. However, you’ll be surprised by how many other industries pay top 1% income. The key to being a top 1% income earner is really about performance and longevity. The top producers tend to get paid the most.
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.
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!
Up and coming politicians such as AOC earn $174,000 in Congress. Although not a top 1% income, Alexandria Ocasio-Cortez will earn millions if she decides to write a book or move on from politics. It is an inevitability that by the time AOC turns 40, she will have a net worth over $1 million.
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!
Anchorwomen and men make well over $470,000 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.
Public Company 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-Up Founders:
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 he’s gone ahead and become the CEO of SoFi with likely a similar impressive compensation package.
Every starting NFL player makes well over $407,000. 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 $480,000. It’s hard for a Nascar and Indy driver not to make over $480,000.
Baseball players have incredible multi-year guaranteed contracts that make all other sports envious! Well, then there’s Patrick Mahomes from the Kansas City Chiefs, who signed a 10-year contract worth $477 million starting in 2020!
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.
Top 1% Income Earners Are Everywhere
Making over $470,000 a year to be a top 1% income earner is no easy feat. However, even during a global pandemic, there are plenty of top 1% income earners who are cleaning up.
They have worked hard to get to where they are. 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 top 1% income earners donate a significant amount to charity. We should probably say “thank you” to the top 1% instead of eviscerating.
Do you want to be in the top 1%? It will take a lot of hard work and creativity that’s for sure. One good step is to try and make a top 1% income by age. This way, you’ll have good income goals to shoot for along the way to $470,000+.
Top 1% Income To Top 1% Net Worth
The top 1% are no different from you and me. They are the kid raising her hand in the front of the class. The top 1% is the scrawny 8th grader who plays JV baseball, but never varsity.
The top 1% join you in causes and vote along side of you. They 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.
Once you achieve a top 1% income, it’s time to get to a top 1% net worth of $10,000,000 or more. Once you have both, then you’re really balling out!
Recommendations To Build Wealth
1) Track your finances like a hawk.
Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. You can use Personal Capital to help monitor illegal use of your credit cards and other accounts with their tracking software. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.
2) Invest in real estate.
Every top 1% income earner and person in the top one percent net worth I know has a very healthy real estate portfolio. Real estate is a great way to build recurring passive income and build great wealth as asset values inflate over time. Real estate alone has made me millions since I started investing in 2003.
Check out Fundrise and their eREITs. eREITs give investors a way to diversify their real estate exposure with lower volatility compared to stocks. Income is completely passive and there is much less concentration risk. For most people, diversifying in an eREIT is a great way to go.
If you are bullish on the demographic shift towards lower-cost and less densely populated areas of the country, check out CrowdStreet. CrowdStreet focuses on individual commercial real estate opportunities in 18-hour cities. 18-hour cities have lower valuations, higher cap rates, and generally faster growth rates. If you have more capital behind, you can build your own select real estate portfolio with CrowdStreet.
Both platforms are free to sign up and explore. I’ve personally invested $810,000 in real estate crowdfunding across 18 deals to diversify my expensive San Francisco real estate holdings. Below is my latest real estate crowdfunding dashboard that shows $810,000 invested and $386,444 distributed so far.