Gap Between Ultra Rich and Regular Rich Continues to Grow

by Justin Weinger on April 18, 2007

We spend a lot of time talking about the growing gap between the haves and the have nots, but it turns out the gap between various levels of the wealthy may be growing at just as rapid a pace.

According to an article published in The Wall Street Journal Online, a recent survey conducted by the Spectrum Group showed that the number of households with a net worth greater than $5 million grew by a rate of 23% during 2006, while the total number of households with a total net worth greater than $500,000 grew by only 9%.

Translation: the richest of the rich are growing their wealth faster than their less wealthy counterparts.

Results of the Spectrum Group’s survey showed the number of households with net wealth of $5 million (excluding the value of their primary residence) grew to 1.14 million households during 2006, while the number of households with a net worth of greater than $500,000 grew to over 15 million.

Considering the fact that we’ve experienced a bull market in stocks for the better part of the last three or four years, it would seem to me that this is where most of the wealth growth is coming from. 

However, with the fact that during the past two years the average American consumer has spent more money than they have earned, it completely blows my mind that there are 15 million households out there that have $500,000 in cash, stocks, bonds and other investments.

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David Gaw April 19, 2007 at 6:52 am

I don’t think the information presented actually says what you think it does. It says that the *number of households* in the top category is growing. It doesn’t say anything about how fast the *wealth* of the households in any category is growing. That doesn’t suggest any widening gap: the growth of the top bracket simply means people are moving out of the lower brackets into the top one–the less rich are becoming the more rich. Which if you’re less rich is probably a good thing.

Even then, though, its not a remarkable statement, because the numbers are percentages, and one would expect the top tier to be small, meaning a relatively small number of people would produce relatively large percentage growth.

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