According to the latest IRS data, the top 1% in America make $422,000+ a year.
This group is broken up into two components:
1) Self-employed business owners
2) Highly-paid professionals
Let's unpack both of those in specific detail:
1)
According to the Chicago Booth Review, "the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies." These businesses range from a local restaurant chain to a dentists' office to a B2G enterprise software solution. However, according to Booth's research, "The businesses earning the most profits in the bulk of the top 1 percent were physicians’ and dentists’ offices, professional and technical services, specialty trade contractors, and legal services." The typical company in the top 1% category has over $7M in sales. With a 10% profit margin split between two owners, this would create two top 1% incomes. This by far is the most common path to joining the top 1%: small business ownership.
2)
According to research from NPR's Planet Money, the top 1% disproportionately hold jobs as physicians, an array of managers/executives, lawyers, salespeople, and financial specialists/accountants. The common thread? Extremely valuable specialized skill and revenue generation. A doctor and a lawyer have specialized, in-demand skills that people are willing to pay for. Managers, salespeople, and financial specialists all work towards revenue generation.
So how does someone join the top 1% of income-earners? It basically involves becoming a very specialized/revenue generating employee or founding a successful small business.
Hopefully this was interesting! Definitely consider your goals and don't obsess over a specific number or sacrifice things you care about to join an elusive group - it certainly won't make you happy. But earning a lot of money can give you the opportunity to make an impact, not worry about not having enough money, give things to others, and spend money for yourself. Good luck and please let me know what you thought!
Submitted January 22, 2019 at 03:44PM by zapproximator http://bit.ly/2HpxTco
