Top 1% of Americans own 56% of US stock - Bottom 90% own just 12% of stock (1 Viewer)

[superchuck500]

It's quite a figure and the share held by the top 1% is growing. When you consider the free rein that corporations have to act politically and that those decisions are controlled almost exclusively by the extraordinarily wealthy in a board room where the corporation is legally bound to act in the interest of its shareholders (i.e. the 1%), what does that mean for the bottom 90%? Not in the top 1%? Sucks to be you.

The wealthiest US households are strengthening their grip over corporate America. The richest 1 per cent of Americans now account for more than half the value of equities owned by US households, according to Goldman Sachs. Since 1990, the wealthiest have bought a net $1.2tn in company stakes, while the rest of the population has sold more than $1tn.

Three decades ago, ownership was also lopsided, but the top percentage point of Americans by wealth only controlled 46 per cent of all US equities held by households. By the end of September 2019, that proportion had hit a record 56 per cent, amounting to $21.4tn, according to the investment bank’s calculations. That includes both public stock and ownership stakes in private companies.

“The wealthiest households have been by far the biggest driver of positive household equity demand,” Goldman Sachs analysts, led by Arjun Menon, said in the report.

“Accelerating US economic growth and rising stock prices should continue to support equity purchases by the top 1 per cent.” Recommended LexEquities World economy/stocks: Piketty is right Premium As of September 2019, the bottom 90 per cent owned $4.6tn of equities, or 12 per cent of the total, the analysts noted.

How America’s 1% came to dominate equity ownership

Wealthiest households have bought $1.2tn of company stakes since 1990

www.ft.com

 

[samiam5211]

What should happen to the rest of the money?

It is taxed.

I support a 100% tax on all wealth above 10 million upon death.

I don’t think any of the first 10 million should be taxed.

Dead people don’t have rights, and hereditary wealth is the main driver of inequality on the planet.

 

[JimEverett]

So, again, how much generational wealth are we going to create by allowing minimum wage earners to invest for themselves in qualified plans?
Who is going to want to manage a plan that gets $20 per week invested? Or, for that matter, $5 per week? How much will they charge?

Is it going to be enough to guarantee a safe minimum level of subsistence when you're 90 like what we have now?

Now, don't get me wrong. I don't think SS is a great deal for anyone except those who really need it, but I also know there's no better alternative I've ever heard.

Wouldn't a low wage earner generate much more wealth investing in equities than what ss invests in (which is, what - treasuries or nothing?)
Just think aggregately - thw ss fund would be worth substantially more regardless of the year you start.
Really, that is a better deal than what we have now - investing the entire fund itself. But I understand thete would be substantial problems with that approach.

 

[samiam5211]

Wouldn't a low wage earner generate much more wealth investing in equities than what ss invests in (which is, what - treasuries or nothing?)
Just think aggregately - thw ss fund would be worth substantially more regardless of the year you start.
Really, that is a better deal than what we have now - investing the entire fund itself. But I understand thete would be substantial problems with that approach.

It would just make it impossible to not bail out corporations who make poor choices and collapse an industry. It would only allow them to push the line of what they can get away with even more, knowing that the entire country depended on their success.

 

[not2rich]

It would just make it impossible to not bail out corporations who make poor choices and collapse an industry. It would only allow them to push the line of what they can get away with even more, knowing that the entire country depended on their success.

Very good point. The 2008 crisis was caused by the hubris and stupidity of the banking industry - but they didn't pay the price for it, because they were "too big to fail." If we put the financial security of the country in their hands, and they F it up, they won't pay the price when that happens either. But we will.

I'd be interested to see if there's any studies on what percentage of seniors would be living below the poverty line if SS were eradicated overnight.

 

[MT15]

If social security would be eliminated, my guess is around 80% of seniors would be either without income or living on bare subsistence levels.

What I can find suggests that 21% of couples and 45% of single seniors rely on SS for 90% or higher of their income right now.

The pharmacy tech who sold me my prescription yesterday looked to be 70 years old. I have been noticing how many fast food workers, clerks in stores, gas station attendants, etc look to be at least 70 years old. I just wonder if they are working because they want to or because they have to. I’m inclined to believe they have to.

 

[JimEverett]

It would just make it impossible to not bail out corporations who make poor choices and collapse an industry. It would only allow them to push the line of what they can get away with even more, knowing that the entire country depended on their success.

Perhaps if funds were highly dependent on one company. But isn;t that the case now?

I mean the only reason I responded the way I did was to the point that rich people were becoming more rich by investing in equities. You, and many others, seem to think its too risky - to some degree and for some reason - to try and have people in the bottom half of wealth or income get in on this wealth-creating-action.
That seems counter-productive to me if you think the OP is expressing some sort of problem.

 

[dtc]

How can people on left be so blind to who the 1% really are. You have to get all the way down to 13th richest and you still have to have a debate as to whether they are republican.

• Jeff Bezos, Amazon – $114 billion.
• Bill Gates, Microsoft – $106 billion.
• Warren Buffett, Berkshire Hathaway – $80.8 billion.
• Mark Zuckerberg, Facebook – $69.6 billion.
• Larry Ellison, software – $65 billion.
• Larry Page, Google – $55.5 billion.
• Sergey Brin, Google – $53.5 billion.

What are these top democrats offering to end income inequality? If you say a higher minimum wage then you are kidding yourselves even more. The democrats have been the party of the rich for about the last 15 years if not longer but if all you do is follow what the MSM tells you then you would never know that.

It would be better if your facts were actually factual.

 

[BobE]

If social security would be eliminated, my guess is around 80% of seniors would be either without income or living on bare subsistence levels.

What I can find suggests that 21% of couples and 45% of single seniors rely on SS for 90% or higher of their income right now.

The pharmacy tech who sold me my prescription yesterday looked to be 70 years old. I have been noticing how many fast food workers, clerks in stores, gas station attendants, etc look to be at least 70 years old. I just wonder if they are working because they want to or because they have to. I’m inclined to believe they have to.

I'd like yo know too. Mainly just because. Though I'd say most do it because they have to you'd be surprised how many do it due to boredom.

 

[dtc]

Wouldn't a low wage earner generate much more wealth investing in equities than what ss invests in (which is, what - treasuries or nothing?)
Just think aggregately - thw ss fund would be worth substantially more regardless of the year you start.
Really, that is a better deal than what we have now - investing the entire fund itself. But I understand thete would be substantial problems with that approach.

Since you understand there would be substantial problems I won't bother to call it out.

Does " a low wage earner" have the means, capacity or facilities to manage their paltry investments in a way that would supplant their needs as elderly?


See how this works yet?

 

[JimEverett]

Since you understand there would be substantial problems I won't bother to call it out.

Does " a low wage earner" have the means, capacity or facilities to manage their paltry investments in a way that would supplant their needs as elderly?


See how this works yet?

I don't buy the argument that low wage earners are too stupid to pick qualified funds to invest in. Most people who have 401ks are not sophisticated investors. Do you see how that works?

 

[dtc]

Perhaps if funds were highly dependent on one company. But isn;t that the case now?

I mean the only reason I responded the way I did was to the point that rich people were becoming more rich by investing in equities. You, and many others, seem to think its too risky - to some degree and for some reason - to try and have people in the bottom half of wealth or income get in on this wealth-creating-action.
That seems counter-productive to me if you think the OP is expressing some sort of problem.

I sit here old and lazy yet wondering what planet one would have to be from to envision a scenario where a person making $3.35 per hour has the capacity and time to dedicate themselves to doing the work necessary to turn that $5 per week into generational wealth.

I mean that guy mowing the grass is going to head home and hop on his 1980s investment app and figre a way to invest his $240 and put himself into a situation where his children are secure as they head off to PRinceton.

 

[dtc]

But I understand thete would be substantial problems with that approach.

Yeah, I'll quote this for posterity.

 

[JimEverett]

I sit here old and lazy yet wondering what planet one would have to be from to envision a scenario where a person making $3.35 per hour has the capacity and time to dedicate themselves to doing the work necessary to turn that $5 per week into generational wealth.

I mean that guy mowing the grass is going to head home and hop on his 1980s investment app and figre a way to invest his $240 and put himself into a situation where his children are secure as they head off to PRinceton.

Do you know how social security works or what it is ? It is retirement account, it is not welfare. Whether a person earns $5 an hour or $500 an hour - they will build more wealth by investing in equities than not investing or investing in Treasuries.

 

[Intensesaint]

I don't buy the argument that low wage earners are too stupid to pick qualified funds to invest in. Most people who have 401ks are not sophisticated investors. Do you see how that works?

Agreed, It Sounds like a pretty elitist thing to say. Also very nanny state. Here let us take care of that money for you, since we know you don't really know what to do with it.

 

[not2rich]

Do you know how social security works or what it is ? It is retirement account, it is not welfare. Whether a person earns $5 an hour or $500 an hour - they will build more wealth by investing in equities than not investing or investing in Treasuries.

It's not a retirement account. Not exactly "welfare" either, but much closer to the latter than the former. My FICA taxes aren't going into a personal account for me that earns interest until I retire. My FICA taxes are funding benefits for current retirees.

Certainly, if I were able to invest what I paid in SS taxes into my own IRA, it would be significantly bigger than it is now. But I'm a relatively high earner. I think dtc's point is that people who go through their life earning minimum wage, or even people who make more than that but aren't making say, more than $40K a year, are not in a position to save as much for retirement as those of us who earn relatively healthy incomes.

Now if those people actually put what they would have paid into SS into an IRA, that would clearly help them build retirement wealth they may not otherwise be able to. But it's a big assumption that people would simply transfer those tax savings to an IRA when immediate needs seem much more pressing. It's just human nature.

 

[not2rich]

Agreed, It Sounds like a pretty elitist thing to say. Also very nanny state. Here let us take care of that money for you, since we know you don't really know what to do with it.

When I pay SS taxes, it's not me handing over money to the state to "take care of for me." I'm funding payments to current retirees. SS isn't a retirement account - it's welfare designed to keep old people out of poverty.

That said, I'm ALL for means testing for benefits and implementing policies to prevent older folks from losing everything they own due to medical or nursing home expenses.

 

[JimEverett]

Now if those people actually put what they would have paid into SS into an IRA, that would clearly help them build retirement wealth they may not otherwise be able to. But it's a big assumption that people would simply transfer those tax savings to an IRA when immediate needs seem much more pressing. It's just human nature.

You would require them to. At least how I envision it - you would require them to invest in something like a 401k or they could invest in low-risk Treasuries. Or bond funds, or some combination. And it doesn't have to be 100%.

The point is to try and build wealth in the way rich people build wealth - instead of just complaining about rich people getting richer by investing in equities, lets take a successful program and make it more successful by taking advantage of things rich people take advantage of.

 

[not2rich]

You would require them to. At least how I envision it - you would require them to invest in something like a 401k or they could invest in low-risk Treasuries. Or bond funds, or some combination. And it doesn't have to be 100%.

The point is to try and build wealth in the way rich people build wealth - instead of just complaining about rich people getting richer by investing in equities, lets take a successful program and make it more successful by taking advantage of things rich people take advantage of.

Okay, I'm following you. But I'm not persuaded a person earning minimum wage investing in low-risk Treasuries would earn a better return in retirement than they would getting SS benefits. On the other hand, if they invest in higher return investments, those are higher risks, and an event like the 2008 recession could wipe them out if they're close to retirement age.

I think your point about building wealth is well taken, but rich people can take advantage of the stock market because they're rich. They can ride out market downturns because they aren't depending on those returns for day to day living. I simply think it's flawed to extrapolate how the stock market works for the rich to those who essentially survive paycheck to paycheck, because the capacity to be risk tolerant and absorb losses - even if "temporary" (meaning, up to several years or more) is not remotely similar.

Additionally, the advantage of being rich is that you have the luxury of having your money work for you, rather than you working your arse off to save money. $500K in the stock market is going to grow much faster than $50K in the stock market. And people who make $150K a year are going to get there much faster than people who make $50K a year. So sure, everyone who has or makes "some" money can invest in the stock market, but there is no doubt that those who have or make more money can build their wealth much more quickly than those who do not.