What Does It Take to Be in the Top 1%?
You’ve likely heard about the “one percenters” — those people whose net worth is among the top 1% in the nation. Just how wealthy are these individuals? To be part of the top 1% in the U.S., your net worth needs to be at least $11.6 million. If you’re looking strictly at income percentile, the threshold for joining the top 1% of earners in the U.S. stands at $787,712.
If you are curious about what it takes to be among the 1% or have your sights firmly set on joining their ranks, read on. Here’s a closer look at how the wealthiest people in America got there, plus some of their most effective strategies for financial success.
Key Points
• A significant majority (79%) of the top 1% are self-made, leveraging both skill and luck.
• Key traits for wealth accumulation include living below one’s means, prioritizing financial independence, and seizing economic opportunities.
• Early savings and consistent income growth are essential for boosting wealth over time.
• Frugality, exemplified by figures like Warren Buffett, significantly aids in wealth accumulation.
• The top 1% save 38% of their income, compared to the national average of 4%.
What Does it Mean to be in the Top 1%?
Many people might think “top 1%” and immediately imagine a CEO whose salary is in the tens of millions. But the term “top 1%” is often used to refer to net worth, rather than income, which means one percenters aren’t necessarily the people who earn the most.
Net worth refers to the value of the assets a person owns (which includes balances in bank accounts, the value of securities such as stocks or bonds, real property value, the market value of automobiles, etc), minus their liabilities (or debt, like mortgages, loans, credit card balances, they owe).
A deeper view of the top 1% indicates that this wealth accumulation is spurred by more than one source and includes income, investments, tax breaks that can help the wealthiest keep more of their money, property, and more. All of these help make up the resources a household or individual has socked away as net worth.
Recommended: What Is Discretionary Income?
The Income and Savings of the 1%
Having a high net worth isn’t just a matter of earning more. It can also mean saving more. While the average savings rate in the U.S. was just 4% of income in 2024, the average saving rate for the top 1% was a whopping 38%.
Of course, those who are earning more can afford to save more, since less of their income is taken up by housing, transportation, food, and other necessities. However, the savings rate of the top 1% shows that savings habits — and not just income — have a big impact on wealth. A high savings rate is one reason why the rich are so rich.
To build wealth over time, financial advisors generally recommend saving at least 20% of your income. This includes putting 15% of pretax income into retirement savings (including any employer match) and 5% into a shorter-term savings vehicle like a high-yield savings account.
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Is There a Formula for Becoming Part of the 1%?
There’s no one formula for joining the 1%, but several factors appear to play a role in the rise of many one-percenters. These include:
• Saving. As mentioned above, savings rates are a key difference between the one percenters and everyone else. If you aren’t contributing the max amount to your 401(k), consider gradually increasing your contributions. You also want to be sure you take full advantage of any employer matching contributions — this is essentially “free money” and can help you build your net worth faster.
• Starting early. “The sooner you can start investing, the quicker you can take advantage of compound returns,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Compounding helps you to earn returns on your returns, which can help your earnings grow exponentially over time.”
• Income consistency and growth. The more you earn and the more that grows over time, the more likely your household will be to enter the top 1% of wage earnings. There are some in-demand careers that pay huge salaries. But regardless of your particular job, staying consistently employed and saving is a path to building wealth, versus leaving the work force or deciding to forego savings for a few years to, say, travel more.
• Frugality. You may have heard that Warren Buffett wears outdated suits and lives in a house he paid $31,500 for in 1958. He’s worth approximately $158.4 billion. He also buys reduced-price cars, doesn’t spend big on expensive hobbies and he even clips coupons. Not all 1% are spending lavishly on yachts and third and fourth homes. If you want to be a part of the 1% and you didn’t invent the best thing since sliced bread, it may be helpful to stay motivated to save money vs. overspending.
• Family history/luck. Having a head start can certainly help. However, research indicates that 79% of 1%-ers are self-made. Finding the right solution for a big problem at the right moment can lead to a big windfall in a new company. In other words, starting the next Facebook or Amazon takes a combination of skill and luck.
Recommended: How to Stop Overspending
Moving Towards the 1%
Thomas Stanley, author of The Millionaire Next Door, identified the seven characteristics of people who become big accumulators of wealth — and thus have a chance to build the wealth it takes to be in the top 1%. These common traits include:
1. They live below their means.
2. They allocate their money, energy, and time in ways that contribute to building wealth.
3. They believe that financial independence itself is more important than appearing to have a high social status.
4. Their parents did not provide money for their basics in adulthood.
5. Their adult children are self-sufficient economically.
6. They understand how to target economic opportunities.
7. They choose the right occupation.
Not all of these are factors one can fully control — and not everyone has a knack for targeting economic opportunities. In addition, many people choose an occupation around a passion, not around wealth-building. But that doesn’t mean you can’t get there — or get close.
The Takeaway
Being part of the 1% appears to take a combination of luck, talent, hard work, and determination. Being diligent about saving is also a key way to grow your net worth over time. The more you can sock away, the better off you will likely be in the future.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
What is top 5% net worth?
Based on the most recent government statistics, the top 5% of households have a net worth of around $3.8 million or more. Being in this percentile means you have a significantly higher net worth than most people, often including substantial assets like real estate, investments, and savings.
What qualifies you as a 1 percenter?
To qualify as a 1 percenter, you typically need to be in the top 1% of wealth or income in your country. In the U.S., being in the top 1% requires a net worth of $11.6 million to $13.7 million or an annual income of $787,712 or more. This elite status signifies significant financial resources, including assets like real estate, investments, and savings. Being a 1 percenter also often comes with unique financial opportunities and challenges.
What salary is top 5%?
The income threshold to join the top 5% earners in the U.S. is $290,185. This income is about one-third of the income needed to be a one-percenter but represents a high level of income compared to the general population. Top 5% earners often include professionals in fields like finance, technology, and medicine, as well as successful business owners and executives.
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