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Are You in the Top 1%, 5%, or 10% of Income Earners? Thumbnail

Are You in the Top 1%, 5%, or 10% of Income Earners?

Social media is an invaluable tool for getting information, keeping in touch with our loved ones, and breaking up our days with a quick hit of entertainment.

But the flipside to clicking through all those Facebook posts and vacation photos is, inevitably, we start comparing what we have and how we’re living to the people we follow.

This tendency isn’t new – people were interested in “keeping up with the Joneses” well before Facebook. But social media and 24/7 celebrity news make a lot of folks feel more pressure than ever before to “keep up.”

That’s why I think some of the chatter surrounding income brackets these days can be a bit overblown. “The top 1%” might make for good sound bites, and for some folks, aspiring to reach a certain level of wealth is motivation that helps sustain prudent spending, investing, and saving habits. But at Keen Wealth, we believe that there are more important questions that people should be asking themselves when it comes to their finances.

Yeah sure, but what are the numbers?

Can’t resist peeking over the fence at that greener grass?

According to an Economic Policy Institute study of 2017 data from the Social Security Administration, the top 10% of earners make an average of around $118,000 per year in wages.

The top 5% earns an average annual income of just under $300,000.

And those who crack the hallowed 1% earn an average of a little over $718,000.

Now again, these numbers are just based on wages. It’s not unreasonable to figure that folks in these high-income brackets are probably bringing home even more money due to things like earnings on investments and profit sharing in companies they might own.

How much happiness does that kind of money buy?

To a certain degree, people have benefited from the economic gains we’ve enjoyed in recent decades. In the last 40 years our GDP has tripled and the S&P 500 has risen 9,000% when you include reinvested dividends. Based on this information, you are likely to think that these dramatic gains in wealth also have created the happiest generation of Americans in history.

Nope!

According to the World Happiness Report, in 2017 US happiness hit a ten-year low. In fact, we don’t even crack the top 10 happiest countries!

Think about that for a second. Since 2007, our economy hit rock bottom during the Great Recession of 2008-09 and then experienced the longest bull market in history through August of 2018. However, instead of getting happier as the economy improved, we got less happy.

Of course, there’s more to our society’s feelings of happiness than just how the economy is doing. I’d bet that the doom and gloom media, our never-ending political squabbles, and the general negativity on social media aren’t exactly lifting our collective spirits.

But this is a big picture example of something that many other studies have found over the years: earning more money does not necessarily translate into more happiness. Once our income reaches a threshold that allows us to live comfortably, earning more does not make us any happier.

Then what is all my money for?

Now that’s a great question!

After all, if your only goal in life is to reach a higher percentage of affluence or hit some magical savings number, you’re never going to have enough money.

At Keen Wealth, we focus on working closely with our clients to help them grow a comfortable nest egg that will support them in retirement. But there are other numbers that are just as important to our process.

For example, how would you rate:

  • Your well-being. Are you devoting time to your hobbies, relationships, and health?
  • Your progress. Do you feel like you’re advancing towards personal and professional goals?
  • Your freedom. Do you feel trapped by the need to make money, or are you free to do the things you love?

Let’s make an appointment to discuss how we can help your numbers “keep up” with what matters most: your vision of a happy and fulfilling retirement.


About Bill

Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.

KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.

The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

The Amazon Best Seller ranking listed on marketing materials is specifically referring to Best Seller rankings for the Kindle Top 100 Paid Lists under the subcategories of: Budgeting and Financial Risk Management, based on data as of September 5, 2019. Amazon rankings although relevant on how a product is selling overall doesn’t necessarily indicate how well an item is selling among other similar items or similar item categories. Amazon may choose the most popular categories or subcategories within which an item has a high ranking to determine its best seller rankings. These rankings are updated hourly and as a result, should be expected to fluctuate as such. Keen Wealth Advisors and Amazon are not affiliated entities. For further details on Amazon rankings please visit https://www.keenwealthadvisors.com/important-disclosures.


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