It’s not just Wall Street bankers, hedge fund traders and corporate raiders who will join the one percent. Nope. By now you may have heard that the new look of affluence in America is kind of… girly. The 7th Fidelity Millionaire Outlook found that today’s emerging high rollers are 66 percent female and 25 percent non-white.
The Fidelity Outlook identified 6 wealth-building traits that multi-millionaires have in common: Their starting point—a mere $250,000 in assets.
1 Time Horizon: On average, emerging affluent investors are just 40 years of age with 27 years left before they reach the normal retirement age of 67. Only one percent of the emerging affluent is retired.
2. Career: Many of the emerging affluent have pursued similar professions to today’s millionaires, including information technology, finance and accounting. While they might be at lower-level positions than millionaires, they have a number of years in front of them to move up the ladder.
3. Income: At $125,000, the median annual household income for the emerging affluent is 2.5X the median U.S. household income8 and is nearing the income of today’s millionaires ($200,000 for those still employed).
4. Self-Made Status: Approximately eight in 10 emerging affluent investors have earned or increased their assets on their own, a trait they share with millionaires and deca-millionaires.
5. Long-Term Focus: The emerging affluent share millionaires’ long-term focus, with three in four of both groups focused on the long-term growth of their assets, and three in 10 focused on supporting the lifestyle they want in retirement.
6. Investing Style: Similar to deca-millionaires, the emerging affluent display a willingness to invest aggressively to help maximize returns, as well as a willingness to set aside a significant portion of their portfolio for riskier investments that promise a bigger payoff. The emerging affluent and deca-millionaires were also most likely to describe themselves as “self-directed” investors, seeking hands-on involvement with their investments.
Top Reads from The Fiscal Times:
- The 10 Worst States For Paying Taxes
- 6 Popular Social Security Myths Busted
- The Worst States For Retirement in 2015
“Tax revenue as a percentage of gross domestic product is expected to be 16.5 percent next year. The long-term average in a full-employment economy is 18.5 percent of GDP; if revenue were at that level for the coming decade, debt would be $3.2 trillion lower and the 10-year fiscal gap would be halved. Returning to past revenue levels, however, will be inadequate over time, because an aging population will increase Medicare and Social Security costs. This need not pose a problem: Revenue was roughly 19 percent of GDP in the late 1990s, and economic conditions were excellent.”
– Former U.S. Treasury Secretary Richard E. Rubin, writing in The Washington Post
“You … often hear the claim that a lot of tax cuts will ‘pay for themselves,’ that they’ll cause so much additional economic activity that the revenue feedback from that activity will fully offset the direct revenue loss caused by the tax cut so that you end up making money for the federal government, or at least not losing any money. Now, of course that is theoretically possible and it would happen at extreme rates. I mean if a country had a 99 percent flat rate income tax and lowered it to 98 percent, I believe that they almost certainly would collect more revenue at the 98 percent rate than they did at the 99 percent rate. But the idea that this type of effect would occur at today’s tax levels just requires responses that are much bigger than statistical evidence would support and I think much bigger than common sense would indicate if you just ask people how they themselves would react to the tax cut.”
It’s summertime and the driving is anything but easy if you want to get to your favorite beach or mountain cabin for a well-deserved break. As lawmakers consider a plan to raise federal fuel taxes by 15 cents a gallon, here’s a look at the current state-level taxes on gasoline, courtesy of the Tax Foundation:
The New York Times’ Jim Tankersley tweets: “In order to raise enough revenue to start paying down the debt, Trump would need tariffs to be ~4% of GDP. They're currently 0.2%.”
Read Tankersley’s full breakdown of why tariffs won’t come close to eliminating the deficit or paying down the national debt here.