Six figure income

Affluence refers to an individual's or household's economical and financial advantage in comparison to others. It may be assessed through either income or wealth.

In absolute terms affluence is a relatively widespread phenomenon in the United States, with over 30% of households having an income exceeding $100,000 per year and over 30% of households having a net worth exceeding $250,000, as of 2019. However, when looked at in relative terms, wealth is highly concentrated: the bottom 50% of Americans only share 2% of total household wealth while the top 1% hold 35% of that wealth.

In the United States, as of 2019, the median household income is $60,030 per year and the median household net worth is $97,300, while the mean household income is $89,930 per year and the mean household net worth is $692,100.

Income vs. wealth

While income is often seen as a type of wealth in colloquial language use, wealth and income are two substantially different measures of economic prosperity. Wealth is the total value of net possessions of an individual or household, while income is the total inflow of wealth over a given time period. Hence the change in wealth over that time period is equal to the income minus the expenditures in that period. Income is a so-called " flow" variable, while wealth is a so-called "stock" variable.

Income as a metric

Affluence in the United States has been attributed in many cases to inherited wealth amounting to "a substantial head start": in September 2012, the Institute for Policy Studies found that over 60 percent of the Forbes richest 400 Americans had grown up with substantial privilege.

Income is commonly used to measure affluence, although this is a relative indicator: a middle class person with a personal income of $77,500 annually and a billionaire may both be referred to as affluent, depending on reference groups. An average American with a median income of $32,000 ($39,000 for those employed full-time between the ages of 25 and 64) when used as a reference group would justify the personal income in the tenth percentile of $77,500 being described as affluent, but if this earner were compared to an executive of a Fortune 500 company, then the description would not apply. Accordingly, marketing firms and investment houses classify those with household incomes exceeding $250,000 as mass affluent, while the threshold upper class is most commonly defined as the top 1% with household incomes commonly exceeding $525,000 annually.

According to the U.S. Census Bureau, 42% of U.S. households have two income earners, thus making households' income levels higher than personal income levels; the percent of married-couple families with children where both parents work is 59.1%.

In 2005, the economic survey revealed the following income distribution for households and individuals:
* The top 5% of individuals had six figure incomes (exceeding $100,000); the top 10% of individuals had incomes exceeding $75,000;
* The top 5% of households, three quarters of whom had two income earners, had incomes of $166,200 (about 10 times the 2009 US minimum wage, for one income earner, and about 5 times the 2009 US minimum wage for two income earners) or higher, with the top 10% having incomes well in excess of $100,000.
* The top 0.12% of households had incomes exceeding $1,600,000 annually.
Households may also be differentiated among each other, depending on whether or not they have one or multiple income earners (the high female participation in the economy means that many households have two working members). For example, in 2005 the median household income for a two income earner households was $67,000 while the median income for an individual employed full-time with a graduate degree was in excess of $60,000, demonstrating that nearly half of individuals with a graduate degree have earnings comparable with most dual income households.

By another measure – the number of square feet per person in the home – the average home in the United States has more than 700 square feet per person, 50% – 100% more than in other high-income countries (though this indicator may be regarded as an accident of geography, climate and social preference, both within the US and beyond it) but this metric indicates even those in the lowest income percentiles enjoy more living space than the middle classes in most European nations. Similarly ownership levels of 'gadgets' and access to amenities are exceptionally high compared to many other countries.

Overall, the term affluent may be applied to a variety of individuals, households, or other entities, depending on context. Data from the U.S. Census Bureau serves as the main guideline for defining affluence. U.S. government data not only reveal the nation's income distribution but also the demographic characteristics of those to whom the term "affluent", may be applied.

Wealth

Wealth in the United States is commonly measured in terms of net worth, which is the sum of all assets, including the market value of real estate, like a home, minus all liabilities. The United States is the wealthiest country in the world.

For example, a household in possession of an $800,000 house, $5,000 in mutual funds, $30,000 in cars, $20,000 worth of stock in their own company, and a $45,000 IRA would have assets totaling $900,000. Assuming that this household would have a $250,000 mortgage, $40,000 in car loans, and $10,000 in credit card debt, its debts would total $300,000. Subtracting the debts from the worth of this household's assets (900,000 − $300,000 = $600,000), this household would have a net worth of $600,000. Net worth can vary with fluctuations in value of the underlying assets.

As one would expect, households with greater income often have the highest net worths, though high income cannot be taken as an always accurate indicator of net worth. Overall the number of wealthier households is on the rise, with baby boomers hitting the highs of their careers. In addition, wealth is unevenly distributed, with the wealthiest 25% of US households owning 87% of the wealth in the United States, which was $54.2 trillion in 2009."Growing Wealth, Inequality, and Housing in the United States."
Zhu Xiao Di. Feb. 2007. Joint Center for Housing Studies."Wealth Inequality: Data and Models." Marco Cagetti and Mariacristina De Nardi. Aug. 2005. Federal Reserve Bank of Chicago.

U.S. household and non-profit organization net worth rose from $44.2 trillion in Q1 2000 to a pre-recession peak of $67.7 trillion in Q3 2007. It then fell $13.1 trillion to $54.6 trillion in Q1 2009 due to the subprime mortgage crisis. It then recovered, rising consistently to $86.8 trillion by Q4 2015. This is nearly double the 2000 level.

Mechanisms to gain wealth

Assets are known as the raw materials of wealth, and they consist primarily of stocks and other financial and non-financial property, particularly homeownership.Haskins, Ron: "Wealth and Economic Mobility". Economic Mobility Project, 2007. While tangible assets are unequally distributed, financial assets are much more unequal. In 2004, the top 1% controlled 50.3% of the financial assets while the bottom 90% held only 14.4% of the total US financial assets.

These discrepancies exist because the many wealth building tools established by the Federal Government work better for high earners. These include 401k plans, 403b plans, and