'Hunger Games economy'
The top 10% of earners, households that generate around $250,000 in annual income or more, now account for 49.7% of all consumer spending, the highest level since 1989, according to Moody’s Analytics data cited by The Wall Street Journal. Thirty years ago, this cohort accounted for just 36% of total consumer spending.
In addition, the top 10% controls 87% of stocks, 84% of private businesses, 44% of real estate and roughly two-thirds of all wealth across the country, according to Ben Carlson at Ritholtz Wealth Management. This is based on data from the Federal Reserve.
Galloway says the U.S. has turned into a “winner-take-most” environment and is critical about whether or not this economic system allows for upward mobility.
“Is America about identifying the remarkable or identifying the children of rich people and turning them into billionaires? Is that what America is supposed to do?” he asked. “My view is America is about identifying or giving everyone in the bottom 90% a shot to be in the top 10%. That's how it was when I grew up.”
While you may not be able to change the system alone, there are some ways to improve your financial prospects individually.
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Find the best rate for youMove up the ladder
Despite any challenges, ordinary young people can improve their chances of ascending the economic ladder with a few key steps.
One step is to acquire skills and talent in sectors of the economy that have low barriers to entry and higher demand. Taking courses and acquiring certifications for unique or niche jobs may yield positive results. Increasing your knowledge base adds more value.
Another step is to use extra income to accumulate assets. Setting aside a portion of your earnings to invest in stocks, index funds or rental properties can help you create durable wealth over the long term.
You can start small and gain an edge after a few years of saving, investing and compounding.
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