Who Are the One Percent?

As we have discussed below even among the 1% of wealthy Americans there are vast differences between those at the top of that 1% and those at the bottom of the 1%.

According to the Harrison Group and American Express Publishing who put out a Survey of Affluence and Wealth in America, The bottom of the 1% have alot more in common with the rest of the 99% than you would think.

According to the survey

• 67% grew up in a middle class or poorer household.
• 85% made their wealth in their lifetime.
• 76% describe themselves as “Middle Class” at heart.
• 3% is the sum total of their assets that they inherited.

The Barron's article goes on to discuss how troubling it is that these people have become so risk adverse.

• In 2007, the One Percent had a savings rate of 12%; in 2011, that savings rate had jumped to 34%. So no surprise their savings doubled between 2007 and 2011, from $250 billion a year to $550 billion a year. The percentage of those savings going into “personal savings and money markets,” earning low returns but relatively safe, has jumped from 24% to 54%. Conversely, and more disturbing, is the fact the rate invested in “financial products and markets” has plummeted from 76% to 46%.

These people are, by definition, risk takers, and yet they’ve stopped taking financial risks. They are, in the words of the report, “irrationally defensive.” Taylor warns that “this is tremendously risky for the country. They’re putting their money under the mattress. They’re terribly nervous.”

Why should the public care? Very simply. Investment doesn’t follow job creation; new jobs are the result of risk-takers making investments.

Full article here