Unique asset and debt behaviors characterize those at the top of the income and net worth distributions
Wealth ownership is essential to well-being but is highly concentrated in the United States. Wealth is the things people own and is usually measured as total assets minus total debts. For most households, assets include a home, cash accounts, and perhaps some savings in retirement accounts. Higher-wealth households might also own vacation homes, commercial real estate, stocks, bonds, business equity, and more rare assets such as hedge funds and other alternative investments. Americans are also very likely to have debts. Mortgages, credit card debt, students loans, car loans, and other liabilities are common at all levels of wealth.
Wealth provides both tangible and intangible advantages: it can replace income in the case of job loss, can be saved for retirement, invested to create more wealth, or used to buy necessities or to enjoy luxuries. Wealth can also improve social and political advantages, be used to improve educational and job opportunities, and can be passed to other generations as inter vivos transfers or inheritance.
Despite its advantages, wealth ownership is highly concentrated in the U.S. The top one percent of households have held 29%-39% of net worth and 33%-37% of financial assets since 1989. The median household had less than $89,000 in net worth and less than $20,000 in financial assets in 2016, but the threshold for membership in the top one percent of these distributions was more than $8 million in net worth and $4 million in financial assets.
WealthInequality.org provides details about how wealth is owned and the factors that contribute to wealth inequality.