Monday, January 19, 2015

Am I in the Top 1%? Apparently so...

The BBC recently produced a video to mark the upcoming landmark when the global top 1% will own more wealth than the other 99% combined, an event which will occur sometime next year (2016) according to a report by the anti-poverty group Oxfam. The same report also suggests that the richest 80 individuals already own more than the poorest 50% of the world (i.e. about 3.6 billion people).
The BBC's short video tries to point out that the 1% are not actually such a rarefied class, and not necessarily what we usually consider as the super-rich. In fact, it says that there about 70 million individuals in the 1% club, "that's anyone who owns property worth about $800,000" or "about the price of the average London home". This seemed implausibly low to me (and put our family squarely within the 1%!), and it was not clear to me just where they got that figure from. So, I did a bit of checking around.
Oxfam's original report mentions that "Members of this global elite had an average wealth of $2.7m per adult in 2014", which seemed a much more plausible figure to be considering. Except - hold on! - the $2.7 million figure is the average wealth of the top 1%, not the threshold above which a person qualifies for the 1% club.
The Global Rich List tool puts anyone with over about $750,000 (US) into the top 1%, roughly confirming the BBC's figure. Furthermore, a report on the matter by The Economist - whose economic figures I am happy to trust - puts the threshold at a rather exact $798,000 (although it seems to have about 35 million people in that bracket, about half as many as the BBC claims). The Economist also adds that as little as $3,650 in assets would put one in the top 50% worldwide, surely a scary thought. I assume that all these figures are in US$.
So, there you have it: although the top 1% has an average wealth of $2.7 million, the threshold for membership of the club does in fact seem to be around $800,000. Which puts us, as a family, very comfortably in that rather uncomfortable position.

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