Since no one can escape politics these days anyway we felt we may as well throw our hat in the ring by discussing a concept that get’s almost media attention as President Trump’s twitter account: the 1%.
Journalists and politicians alike reference people in this mysterious society constantly. They are both hero and villain. Paying over 1/3 of total taxes in the U.S. while simultaneously not deserving the incomes they earn.
No matter how you feel about the 1% and taxation, there is something that all of us need to sit back and think about; the 1% is not the same group of people from year to year.
In a study conducted by Washington University Professor Mark Rank, he found that 12% of the American population will be in the 1% for at least a year. Additionally, 39% will be in the 5% tier and 56% will be in the 10% tier.
What his study brings attention to is the fact that these groups are not some form of socioeconomic status system and they change constantly. Over half of Americans experience affluence in their lives and about that same percentage experience poverty. People fall into these tiers at different times in their lives and few stay there for long. Only 0.6% of the population stays in the 1% for more than a decade, so 40% of that category is a revolving door. †
To us this was a great eye opener to remind us not to get caught up thinking that all of these classifications that get made up for people are real organizations of human beings. They are not, they are statistics. We think that’s very important to keep this in mind when formulating opinions.
These study findings also lend a very useful perspective to the importance of proper financial planning as they highlight how much income and affluence can change in a person’s life.
All the best,
Wesley R. Nicholson, Mike Allen and Aaron Everdyke