"The 1%" is a popular term used to refer to the wealthiest people in the country. It clearly requires a large amount of money to join that group, but for most people, the exact amount is a mystery.
If you're curious about how much it takes, or if you want to set some very high goals for yourself, a recent report has the answer. Below, we'll go over how much money you need to be in the 1% and the most important steps for building wealth.
Joining the 1% club
You need $5.8 million to join the 1% in the United States, according to The Wealth Report by Knight Frank. That's based on data from the fourth quarter of 2023.
The United States has one of the highest wealth thresholds to join its 1%. It comes in fourth, behind only:
- Monaco: $12.9 million
- Luxembourg: $10.8 million
- Switzerland: $8.5 million
For most people, it's not realistic to amass this much wealth. It is the top 1%, after all. And this threshold generally goes up over time. A year ago, it took "just" $5.1 million to be in the 1% in the United States. The current figure of $5.8 million is an increase of nearly 14%.
The vast majority of people will be somewhere in the other 99%, and there's no shame in that. But it's still important to do what you can to build wealth for your own financial security, and so you'll have enough to retire when you're ready.
What you can do to build wealth and financial security
Even though everyone's financial situation is different, there are some simple steps that anyone can follow to improve financially. Here's what you can do to save more money and build a retirement fund.
- Invest at least 10% of your income. When you invest, you put your money in places where it can grow. One of the most popular and effective investments is index funds. These invest your money in a large number of stocks. You can even invest in index funds that follow the performance of the entire U.S. stock market.
- Seek out raises throughout your career. Because of inflation, if your salary stays the same year after year, it gradually becomes less valuable. Try to get a raise every year. You could do that by talking to your current employer, switching jobs when new opportunities are available, or adding a side hustle for another income stream.
- Stay out of high-interest debt. As a general rule, if you have any debt with an interest rate of 10% or more, pay it off as quickly as possible. One of the biggest problems for many American families is credit card debt. The average credit card interest rate is over 20%, so this type of debt makes it much harder to reach your financial goals.
- Save an emergency fund. You never know when you'll run into an unexpected issue, such as a job loss or a surprise bill. Experts recommend having at least three to six months of living expenses in emergency savings. That's a lot of money to save, but if you set aside money toward your emergency fund every month, you'll eventually get there.
Following these rules may not get you to the 1%. To join that group, you typically need to earn a very high salary or start a successful business. Or have rich parents -- that never hurts.
But you can certainly get into a more comfortable financial position this way. And ultimately, what's important isn't making it into the 1% -- it's being able to use your money to live the life that you want.
