US top 0.1% more than doubled their wealth since 2019 on stock boom, Fed data shows

Bottom half of US households hold just 2.3% of national wealth

The roughly 137,000 American households in the top 0.1% have more than doubled their combined wealth since the end of 2019, according to Federal Reserve data analyzed by The Wall Street Journal. The group added $14.5 trillion in wealth over the period, with about $10 trillion of that coming from gains in stocks and mutual funds.

Wealth is measured as a household’s assets, like stocks and home equity, minus their liabilities, like mortgages and credit-card debt.

The top 0.1% now control about $28 trillion, or roughly 15% of the nation’s total household wealth, which amounts to nearly $186 trillion. The average wealth for a household in this group is more than $200 million. As of 2022, the minimum wealth needed to fall into the top 0.1% was $45.8 million, according to the most detailed data available from the Fed. With wealth among the group up by roughly 50% since then, that threshold is much higher now.

The widening gap between the ultrawealthy and other Americans is not just a matter of the rich pulling away from average earners. The extremely rich are now pulling away from other rich Americans as well. The year the pandemic started was when the ultrawealthy began to pull away from other wealthy groups, according to the Journal’s analysis of Fed data.

The biggest factor in this phenomenon is that wealthy people simply own a lot of stocks. In the year ended June 30, when the S&P 500 gained 21%, the top 0.1% received nearly $4 trillion of new wealth from the market. The roughly 137,000 households who make up the nation’s top 0.1% had already become richer relative to everyone else in recent decades, thanks to higher incomes and lower tax rates. The current stock-market boom, driven by strong corporate earnings and highflying tech stocks, is powering their wealth even further.

“The stock market’s ripping, and so if you’re in the stock market more, it has been really great,” said Eric Zwick, an economics professor who analyzed the Fed data with Owen Zidar for their recent book “The Everywhere Millionaire.”

The ultrawealthy’s recent gains from the stock market dwarf the total wealth of the bottom 50% of all Americans, which is about $4 trillion. That bottom group has actually seen its wealth rise more than any other group on a percentage basis, thanks to a combination of rising home values and pandemic-era government relief that swelled bank accounts and helped pay down debt. Nevertheless, the bottom half’s share of total wealth, at an average of about $63,000 a household, comes to just 2.3% of the national total. The average household in the top 0.1% holds over 3,000 times as much wealth as a bottom-half household does.

The people who fall into the top 0.1% aren’t usually traditional salaried workers. Rather, they are much more likely to be the owner of a string of car dealerships or an heir living off investment income. In the top 0.1% by wealth, 37% earn most of their income from businesses, and 26% derive it from capital gains, according to the analysis by Zidar and Zwick. Only 10% derived most of their income from wages and salaries.

By comparison, the rest of the top 10% of richest Americans gained $38.2 trillion in wealth over the same period, but it was split among nearly a hundred times as many households.

Americans more broadly have become richer over time, as rising wages for college-educated workers, entrepreneurship and the stock market have lifted wealth for millions of Americans. The housing market has also increased the wealth of Americans who own homes. Yet many others have been locked out of prosperity, and entrenched inflation is pressuring even those with six-figure salaries.

Some wealthy people borrow against their booming stock portfolios to fund their lifestyles. But even investors who keep their money in the market often spend more when stocks go up, because they feel good about their personal finances — a phenomenon economists call “the wealth effect.”

The Journal’s analysis describes growing wealth at the very top as a political flashpoint and credits it with helping fuel the rise of politicians it identifies as Democratic socialists, including New York City Mayor Zohran Mamdani.