Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
While I never have looked at the statistics of who is in the top 1% of income, I'll bet it is heavily skewed towards business owners.
Here are the statistics for the top 1% and the top 0.1%, if anyone is interested. You can skip to Table 2 on p.36 to see the details on the jobs of the top 1%:
Looking at this, probably about 24% of the top 1% are business owners.
This is assuming half of the following groups are business owners,
Executives, managers, and supervisors at closely held businesses 10.6% of the top 1%
Medical 15.7%
Lawyers 8.6%
Blue Collar 3.8%
Real Estate 3.2%
...and all of the following groups are business owners:
Entrepreneurs not elsewhere classified 2.3%
Farmers and Ranchers 0.5%
Here are the statistics for the top 1% and the top 0.1%, if anyone is interested. You can skip to Table 2 on p.36 to see the details on the jobs of the top 1%:
Looking at this, probably about 24% of the top 1% are business owners.
This is assuming half of the following groups are business owners,
Executives, managers, and supervisors at closely held businesses 10.6% of the top 1%
Medical 15.7%
Lawyers 8.6%
Blue Collar 3.8%
Real Estate 3.2%
...and all of the following groups are business owners:
Entrepreneurs not elsewhere classified 2.3%
Farmers and Ranchers 0.5%
Executives, managers, and supervisors at closely held businesses are almost all business owners. A closely held business is a business that is owned by a few people/entities. The vast majority of people running the show at closely held businesses are owners.
I would guess that 100% of Blue Collar earners in the top 1% are owners. What blue collar job pays highly enough to put an employee in the top 1% of earners?
Doctors and Lawyers might not be 100% owners. There are some fields where employees can earn enough while being an employee. I would still guess that the proportion of Doctors and Lawyers in the top 1% of earners is higher than 50%.
It's pretty difficult to earn $300K as an employee in a law firm. A typical split of revenues in a law firm would be 40% of revenues to the employee, 30% to the partners, 30% to run the office. In order to bill $300K a lawyer would have to bill $750K. If a lawyer billed at $300 per hour that would mean billing around 50 hours per week for 50 weeks. Since a lawyer cannot bill for every second at work the lawyer would be working more than 50 hours a week to bill that much. If the lawyer's rate was $250 the billable hours go up to 60 hours per week to earn $300K.
If you are an owner it is more typical that 30% goes to run the partnership and the rest to the partner These are not formulas. They are targets. At $300 per hour an owner only has to bill around $430K to earn $300 (assuming targets are met). That boils down to 1430 billable hours per week or around 28 hours per week. Plus the amount the partners earn from employees. As you can see it is much easier to make 1% money as an owner if targets are met.
A long term employee might take more than 40% of revenues but a younger one will not. Additionally, the partners often have to cut hours to meet client budgets and you can bet that employee hours are cut more often than partner hours.
At any rate my post is a long way of stating that I think that much more than 24% of the top 1% are owners.
Exactly right... Breaking into the 1% typically entails: wning your own business, owning/creating income producing assets (e.g. real estate, company shares, intellectual property/patents etc.), or having a rare, highly paid skill (e.g. throwing a football).
College major matters most if you want to break into the upper middle class.
I completely agree with this. I am nowhere near the 1% right now as far as yearly salary (early career science professor) but I am doing everything I can to build additional income including rental properties, scientific and educational consulting, and aggressive investing in small businesses personally familiar to me. in 2013, roughly 2/3 of my income will be my salary and 1/3 will be 'other'. I am hoping that twenty or thirty years from now my academic salary is a small fraction of my overall income, but even if it is half I will be very comfortable.
Some people have suggested that I could make more money if I gave up teaching altogether and consulted full time. They may be right, but I love teaching as well as the stability of academia. 90% of my job is a joy to do and if I was wealthy I would pay for the privilege of doing it. I can definitely see, however, that if my goal was to become as rich as possible I would never get there collecting a paycheck.
All of my friends that are my age (mid 30s) and millionaires made their money through starting a business. Even the investment bankers, lawyers, and surgeons are going to need a few more years to finish paying off loans and accumulating assets before they are what I consider 1%ers. On the other hand, business ownership can be very risky. My friend who owns a algorithmic trading business is under a ton of stress because he is so leveraged that he could potentially lose millions if his computers executed flawed code by accident. I went rafting in the Poconos with him this summer and I could just feel his blood pressure spike every time his phone rang, even when we were out on the river. I would not want to trade him careers, even though he probably clears over a million a year.
I agree with all of your post. Stereotypes many times are counter productive, black sounding names might get called back less, (on average) Asians might make less than whites, etc. So we agree. That said, you can demonstrate partial reasons for the origin of some stereotypes that we will both agree on. But that doesn't change the fact that there ARE other stereotypes that have traction and "stick" for a cultural reason. You need to come to grips with that and not always search for reasons that are politically correct.
Read Men Are from Mars, Women Are from Venus. Men and women are RAISED differently. Why? That's our culture. Actuaries look at how we behave as we get older and stereotype too. A 70 year old can have an earring and drive recklessly while a teen can drive under the speed limit. So while it may be counter productive or not, there are legitimate correlations for AGE stereotyping too.
So through my lenses at least, I have observed correlations that fit those stereotypes.
We're going to have to agree to disagree and I'll explain why. When I first started reading about what it means to be a doctorate when I began my graduate studies, one of the issues raised by the author was the types of knowledge people possess.One of them had to due with the beliefs and misconceptions people hold onto due to their experiences compared to formal knowledge gained through discourse and inquiry. It's not being politically correct to point out information that is incorrect that people believe due to social and racial conditioning. Stereotypes are controlled by automatic cognitive processes and people believe them to be true due to confirmation bias caused by years of conditioning. When talking about race, they're used as an excuse to justify prejudice beliefs rather than challenge them. For example, you believe African-Americans don't care about education, which is not true, but justify this belief based on stereotyping. There is a contradiction between stated beliefs and actual beliefs and implicit biases. I'm not accusing you of anything so please don't take it the wrong way. I'm agreeing to disagree because I don't think there isn't anything to discuss anymore as reflection is more important at this point.
I agree. Too many people are starting to focus on income when breaking into the top percentile is about net worth and being frugal as assets appreciate much faster than income. It's entirely realistic for a professor earning 75k to be more wealthier than a lawyer earning 130k if the latter buys into the hidden rules of his class and concerns himself more with outward displays of wealth than the latter who starts out with a lower salary, is forced to be frugal, and invests some of his income in the stock market.
This is a clear case of correlation vs causation. The men who are in the one percent get there due to numerous reasons; the degree that they obtained in college may or may not have contributed to that. It's the person who makes it to the one percent, not the degree.
It's like when people champion figures like Steve Jobs and Bill Gates in making a criticism against a college education. "They showed that they can be successful without college!" No, they didn't. Gates and Jobs were men who had extraordinary talent and intelligence, far more than your average Joe has. They also happened to make right investments at the right time. Using Gates and Jobs as a reason for dropping out of college is a bad idea because they probably have nowhere near the talent that they do.
This is a clear case of correlation vs causation. The men who are in the one percent get there due to numerous reasons; the degree that they obtained in college may or may not have contributed to that. It's the person who makes it to the one percent, not the degree.
It's like when people champion figures like Steve Jobs and Bill Gates in making a criticism against a college education. "They showed that they can be successful without college!" No, they didn't. Gates and Jobs were men who had extraordinary talent and intelligence, far more than your average Joe has. They also happened to make right investments at the right time. Using Gates and Jobs as a reason for dropping out of college is a bad idea because they probably have nowhere near the talent that they do.
Because that doctor isn't working 100 hours a week and seeing their family more? Any doctor could be making much more than 125k if they chose to also. Your posts are a tad confusing with working like crazy but them talking about your son making you cut back.
I can see why that post a while back was confusing. A couple of points. My $125K wording for doctors pay was in response to jobaba's $125K doctors pay point of reference. I realize there are many doctors who make far more $$'s. But it depends on their discipline.
To the highlighted words above. We disagree. In reality, the only way you can make much larger $$'s is if you are in a specialty that is very fast moving (where insurance companies cannot get their hands wrapped around newer and more expensive procedures). So flight surgeons, general doctors, OBGYN's, and Pediatrics make far less $$'s than a say a dermatologist. Guess what specialties are the most competitive to get into? Answer: those which pay the most and also have the most stable hours. Let's a young Doc dreams of being a Dermatologist. Good luck because it is one of the most competitive avenues. You don't get to automatically pick a field of study / speciality unless you are at the top of the heap. I have a lot of customers who are doctors. No one is working 40 hours a week. Also, many specialties are on call. So while you may not work 100 hours per week, you can never really relax if you are on call and you may have call backs early into the evening hours.
Who said anything about discouraging anybody to work hard?
I'm in my 30s. I know how hard you have to work just to put friggin food on the table and make sure that I might have a steady, non-dispensable job when I'm in my 50s, let alone pipe dreams of being in the 1%...
Pipe dreams?
One of the richest people I know personally turned a scrap metal business into a multimillion dollar empire.
No college...blue collar and elbow grease all the way. He is in his 40s.
Same with my friend's dad...turned old tires into a factory into a truck transport company...
Then there are all the business peeps I know...my neighbor across the street immigrated here with nothing, got a cab, parlayed his over time into a cab and limo company. The man is in his 40s now, lives in a million dollar house, has all the great toys for himself and his 2 boys, and spends time at he lake with his boats and jet skis and GIANT RV all the time...tells me to "join the lifestyle" every time he sees me schlepping my sorry stupid arse to work.
We're going to have to agree to disagree and I'll explain why. When I first started reading about what it means to be a doctorate when I began my graduate studies, one of the issues raised by the author was the types of knowledge people possess.One of them had to due with the beliefs and misconceptions people hold onto due to their experiences compared to formal knowledge gained through discourse and inquiry. It's not being politically correct to point out information that is incorrect that people believe due to social and racial conditioning. Stereotypes are controlled by automatic cognitive processes and people believe them to be true due to confirmation bias caused by years of conditioning. When talking about race, they're used as an excuse to justify prejudice beliefs rather than challenge them. For example, you believe African-Americans don't care about education, which is not true, but justify this belief based on stereotyping. There is a contradiction between stated beliefs and actual beliefs and implicit biases. I'm not accusing you of anything so please don't take it the wrong way. I'm agreeing to disagree because I don't think there isn't anything to discuss anymore as reflection is more important at this point.
As before, I agree with much of what you say. So to say "we need to agree to disagree" isn't applicable again. I concur that stereotypes can be obtained by inaccurate means. That doesn't change that there are cultural differences amongst ethnicities, genders, different regions of the country, nationalities, young versus old, 1st born versus last born etc. You seem unable to admit this obvious fact that at least some stereotypes exist for a correlated (but not absolute) reason. Perhaps some people refuse to believe there are negative and positive stereotypes that were formed because they fear being politically incorrect. I call them how I see it.
Therefore I will not be surprised when I see Stanford and Harvard campus filled with motivated Asians nor I will be surprised when I see an actor or director who is Jewish. That doesn't mean that Lee Daniels or Spike Lee isn't brilliant. To use this last example, I also understand that it is harder for other ethnicities to crack into directing films because (now) it is hard to get a film funded. But the source of the stereotype comes from the fact that the Jewish culture embraces the arts and culturally speaking they have high expectations on their children's overall performance. In my book, it is foolish to deny this stereotype is real. I could go on for hours with other stereotypes regarding ethnicities, genders, different regions of the country, nationalities, young versus old, 1st born versus last born etc. They are adopted for other reasons than what they teach you in college. That said, the books that you read and pointed out earlier also speak the truth. They chose to ignore some valid negative stereotypes and found a way to write it all off with their "research".
Last edited by MN-Born-n-Raised; 09-04-2013 at 08:10 AM..
I can see why that post a while back was confusing. A couple of points. My $125K wording for doctors pay was in response to jobaba's $125K doctors pay point of reference. I realize there are many doctors who make far more $$'s. But it depends on their discipline.
To the highlighted words above. We disagree. In reality, the only way you can make much larger $$'s is if you are in a specialty that is very fast moving (where insurance companies cannot get their hands wrapped around newer and more expensive procedures). So flight surgeons, general doctors, OBGYN's, and Pediatrics make far less $$'s than a say a dermatologist. Guess what specialties are the most competitive to get into? Answer: those which pay the most and also have the most stable hours. Let's a young Doc dreams of being a Dermatologist. Good luck because it is one of the most competitive avenues. You don't get to automatically pick a field of study / speciality unless you are at the top of the heap. I have a lot of customers who are doctors. No one is working 40 hours a week. Also, many specialties are on call. So while you may not work 100 hours per week, you can never really relax if you are on call and you may have call backs early into the evening hours.
There are some work environments that are 40 hours. I think the average is around 60 a week.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You need to come to grips with that and not always search for reasons that are politically correct.
A couple of points. My $125K wording for doctors pay was in response to jobaba's $125K doctors pay point of reference. I realize there are many doctors who make far more $$'s. 
But it depends on their discipline. 
