This article was last updated on May 19
A lot of people say “richer” Americans are an eccentric lot. But the fact is that, your co-worker or neighbor down the road is probably more likely to better fit the “well-to-do” or upper class profile than someone like Donald Trump. Based on information from the Census and IRS data, the tax policy center put together a profile of well to do Americans, classified as those that earn more than $250,000.
- 83 percent are married-couple families.
- 56 percent are between the ages of 45 and 65.
- 73 percent of these families have two or more earners
- 78 percent have a bachelor’s degree or higher
- 61 percent of high-income households have children
- 91 percent own their own home.
- They earn 55 percent of all private business income
Meanwhile, low-income taxpayers tend to be the polar opposite of each of these characteristics. They are: single; younger (although in some income bands there are unequal number of people over 65); they have high school degrees or less; and, they have part-time jobs.
So which profile do you meet? High income or lower income? And more importantly the above list suggests some traits/actions you can take to move into a higher income class. This includes (in no particular order), but is not limited to:
1. Get (and stay) married. Just like two heads are better one, two people earning and sharing financial risks is a better formula for longer term wealth. Further the stability and support of a family unit, can provide the basis for success (or the right amount of pressure) at work and other activities.
2. Younger rich people are the exception, rather than the norm. So work hard, save and invest smartly and chances are by the time you are in your mid 40’s, you will be well on the road to riches. If you are already in the 45 to 65 age range and not in the so called well-off demographic then it may be time to become much smarter about managing your money.
3. Get educated. Despite the rising cost of education, more is better than less. The unemployment rate for graduate degree holders is nearly half the national rate and if you are good at what you do, there are jobs a plenty.
4. Home ownership is still the dream. Despite a sluggish housing market, well-to-do Americans like to own their home. They tend to buy in good areas and because they have a longer term view where they can ride out short term volatility, their house is an asset rather than a liability.
5. Small business owner. Not surprisingly small business owners tend to be better off than their working peers. Apart from being your own boss, you get out what you put in. America is a nation built on capitalism and entrepreneurship, and that’s what made it rich. So it’s not surprising that our rich, successful small business owners, are the epitome of capitalism and entrepreneurship