With politicians on both sides claiming that the game is rigged, it may be surprising to hear that social mobility still exists. According to a study conducted by Washington University in St. Louis and Cornell University, the average American has a 1 in 9 chance (11%) of joining America’s wealthiest 1% for at least one year in his or her life. Over half of Americans will spend at least a year in the top 10%, and nearly 70% will spend at least a year in the top 20%.
What’s the Catch?
Although the ranks of the country’s highest income earners may be more fluid than most Americans realize, few working people who break into the top 1% remain there. Less than 1% of these success stories will stay at the top for more than a decade.
The study’s authors ventured that the main reasons for crashing back to Earth might include losing a job, getting a salary reduction, getting a divorce, and having children. If this is true, it means that a good income is not enough to weather significant setbacks or lifestyle changes. The key to remaining rich is wealth accumulation.
Building Wealth Through Real Estate
How does one create and maintain wealth? According to commercial real estate firm McKinney Capital & Advisory, real estate is one of the most effective vehicles for wealth accumulation, and it has played a role in creating 90% of the world’s millionaires. Investing in real estate is also a great way to diversify an investment portfolio. For these reasons, it makes sense for any high-income earner to consider branching into this field.
How to Stay There
The research shows that, while it is not easy, it is also not so tough to make it into the top 1%. However, while a good career or shrewd entrepreneurship can catapult a worker to high places, sticking with the elite requires more than just a good income. To remain at the top, one needs income-generating investments that build long-term wealth through appreciation. These could be stocks, equity in a business, or, as McKinney Capital & Advisory suggests, real estate.