As I discuss in the essay in Chapter 10 of my text, the wealth in the United States is concentrated in the population aged 65 and older. We see this every year when Forbes publishes its list of the 400 richest Americans. Now, to be honest, they put out this year's list several weeks ago, but it took me a while to organize the data into a spreadsheet so that I could analyze it (and, yes, you can pay Forbes for a spreadsheet, but I declined that offer) for an update to what's in the Chapter 10 essay in the 12th edition. The bottom line: in 2016 people 65 and older account for 57% of the richest 400, and they hold 59% of the wealth in that group.
At the same time, we have to recognize that 3 of the 5 richest Americans are under age 65: Bill Gates is 61, Jeff Bezos is 52, and Mark Zuckerberg is 32. If you are rich at a young age, you are likely to be uber-rich. Keeping in mind that it took a net worth of 1.7 billion to get in this club, people less than 45 years old had an average wealth of 9.8 billion, compared to 6.1 for those aged 45-54, 4.8 for those aged 55-64, and 6.2 for those aged 65 and older.
Although the list shows that there are a lot of ways to get rich (James LePrino has made billions out of Mozzarella cheese, for example), the one that stands out in terms of how many people are on this list is finance--in some way or another. That is, of course, the source of wealth for Warren Buffet--the third richest American, but there are a lot of hedge fund, private equity, and other investment-related people on the list. If you are watching "Medici" on Netflix, as my wife and I are, you will appreciate the historical nature of finance as a way of "financing" wealth. And if you want some insight to how private equity firms enrich their partners, check out this article in today's NYTimes.
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