Can Millennials Still Become Millionaires?
During the last few months, the president and Congress had a heated debate about the definition of affluence and who should have to pay more taxes. Ultimately, the opposing sides decided that anyone earning more than $400,000 would be subjected to higher tax rates, the implication being that this group has the financial wherewithal to pay more. However, the decision about who is really rich is much more subjective.
Recently, the Census Bureau stratified the income levels in the U.S. About 46 million people, or 15% of the population live below the poverty level, or the income needed to barely survive. The poverty level is dependent upon a number of factors and was set at $23,050 for a family of four.
Lower middle class workers have incomes that fall between $32,500 and $60,000. Upper middle class workers often have income above $100,000, which comprises the top third of American incomes.
The next level of income is the 5% of Americans earning more than $150,000 annually. At the top of the economic ladder is the 1% who can earn more than $250,000.
A 1996 article published in the New York Times titled “The Millionaire Next Door: The Surprising Secrets of America’s Wealth” is a slightly outdated but interesting review of the profile of millionaires. Some of the observations in the article follow.
- Most are men aged 57 years, married with three children.
- One in five is retired. Two-thirds are self-employed. Self-employed people make up less than 20% of all workers, but account for two-thirds of the millionaires. Most are professionals, such as doctors and accountants.
- Many are involved in mundane and very unexciting businesses.
- Half of the wives of millionaires do not work. The No. 1 occupation for wives is teacher.
- The median income is $131,000, and average income is $247,000 (the higher earning millionaires skew this number). Eight percent have incomes between $500-999,999, and 5% have income over $1 million.
- Average household net worth is $3.7 million. Six percent have more than $10 million. The median is $1.6 million (this number is skewed by high earners as well).
- On average, total annual income is less than 7% of total wealth.
- 97% are homeowners.
- 80% are first generation affluent
My question is whether millennials have a fair chance at becoming millionaires during their lifetimes. Are higher tax rates, redistribution of wealth, increased class warfare, and lower levels of business confidence throughout the country going to decrease the odds that young people will achieve the wealth levels of former generations?
Related questions are: Will millennials be able to buy a home? Will educational costs suppress the accumulation of wealth? Do millennials really want to accumulate wealth or are they focused on more esoteric career paths? How many millennials will become millionaires by default inheriting significant sums from their parents?
Time will tell. In the meantime, I have accumulated three lists, which should help young people make decisions, if salary is an important criterion in their selection of a career. The first is a Bureau of Labor Statistics list of all jobs that pay more than $100,000. Actually, the reference lists all jobs; I extracted those over the aforementioned level. The second is a list of top paying jobs with medium and top pay levels. The third is the highest paying jobs along with training time for each career. The information comes from three diverse sources, so that there are some inconsistencies relating to job specifications, etc.
Good luck in your job hunt. I hope you all make a lot of money in careers that fulfill your ambitions and dreams.
Bureau of Labor Statistics (in thousands)
Annual Mean Wage
Physician, all other
Doctor, Family Gen Prac
Dentist, all other
Arch and Eng Mgr
Comp Inf Mgr
Natural Science Mgr
Ind Org Psych
Gen Ops Mgr
Air Traf Contr
Public Relations Mgr
Mgrs all other areas
Computer Hardware Eng
Top Paying Jobs
Positions - Median Income ($100,000) - Top Pay
Neurosurgeon 368 643
Petroleum Eng 162 265
Nurse Anesth 159 205
Petroleum Geo 149 247
Dentist 147 253
Actuary 136 208
Software Arch 119 162
Pharmacist 114 133
Mgt Consult 110 198
SAP Basis Adm 107 160
Optometrist 105 149
IT Security Cons 102 156
Highest Paying Jobs
Positions Highest Salary ($100,000) Training Time (yrs)
Surgeon 181 10-15
CEO 140 varies
Eng Mgr 140 6-7
Airline Pilot 134 5-10
Dentist 132 8
Lawyer 110 7
Air Traf Contr 100 9
Comp Info Mgr 100 4-8
Mkt Mgr 100 4-6
Natural Sci Mgr 97 6
Note: The desirability of these positions is greatly impacted by any number of other considerations. Off hand, I can think of the following: side benefits, location, deferred compensation such as stock options, etc.