'average' people might see it in a year with an inheritance. That was me two years ago. It was a finanically interesting time before the money got placed in more safe places than the checking account.

By the same token, it's not hard for a person to be worth $1M+...steady long-term investment in a 401k over the course of your career can get you there.

But it's _unavailable_ to the average person. They'll get taxed brutally if they touch it, and when managed correctly, will be divvyd out over the course of their retirement...so having 1M doesn't mean it's liquid.

Reality check: 'average' people do not get inheritances of such significance.

Yeah, the median household receives ~$12k in inheritance (average is $46k). And that's lifetime inheritance, so it's spread over several years.

I haven't researched the actual numbers...but isn't that kind of sad?

We may get two more, not near as sizable as the last one...and if we manage things right, my kids will get some, too.

It doesn't take hardly any money at all if you start early enough. $100 a month becomes $320k at retirement. (yes, handwavey tax implications, but still, 100 a month at 7% for 44 years is $320k)

> 'average' people might see it in a year with an inheritance.

inherited money is not taxable income to the recipient (in the US).

Actually the current rule is not taxable up to $12M but that changes with the whims of politicians and has changed quite frequently.

No, it is not income (nor taxable) to the recipient regardless of amount.

There is a tax on the estate of the decedent if the estate is larger than the exclusion amount.

I think we are saying the same thing.

Not taxable until it is over $12M. The only difference is that I didn't state that it wasn't taxed as income (which it shouldn't be) - it should be taxed as inheritance if it should be taxed at all.

Its unusual to start an agreement response with “actually” but glad we cleared up my misunderstanding of that phrase.

In the context of “an inheritance put me in the top 1% of income”, that’s obviously wrong, which was my point.

It is only rare in a particular year. If a given person is assumed to only earn that for 1-2 years of a 30+ year career, then 10-20% of all people will be a top 1% earner, by rough math. Still rare, but not nearly as uncommon when looked at that way, if you take the hypothesis that it is commonly a one-time event.

If your math adds up, (and it might but I'm not following it at all) -- 10% is still kind of rare. But yeah, not extremely so. For example, I consider myself pretty good at what I do, but I'd likely have to work very hard (for me) to get in that position. My circumstances don't put me anywhere near it.

FYI: Median personal income in the US in 2022 was about $40,000. https://fred.stlouisfed.org/series/MEPAINUSA646N

You do realize that the vast vast majority of the population never have an IPO-style windfall in a 30+ year career, don’t you? Are we witnessing some sort of fake out-of-touchness as humble brag here?

Yeah, I've been a software engineer for almost 20 years and I've never had an 'IPO-style windfall' (and don't see how that's going to happen in the next ten years either, unless I join a unicorn startup). Closest I've ever gotten to that is a $10k bonus one year. That definitely doesn't count.

I've been an early employee at two startups also, they just didn't pan out.

If I don't get that in one of the more well-paid professions, then I don't see how a teacher, or a janitor, or a waitress, etc, would ever get one.

> If I don't get that in one of the more well-paid professions, then I don't see how a teacher, or a janitor, or a waitress, etc, would ever get one.

Yeah I was entirely limiting the population discussed to SWE as well. Anybody who doesn't work in a core tech role has no chance whatsoever of such windfall, and that includes many people who do work in tech roles.

Of course they do - lots of roles in a business will get pre-IPO share option packages.

> unless I join a unicorn startup

Not a unicorn. Just be an early member of a company that gets to IPO. You do have to risk more to attempt that, and maybe do it more than once, but it's a question of appetite for risk and a slightly lower work-life balance. It's definitely not unattainable.

Well I tried it twice so far. I'm in my 40s now, with a wife who's also trying to get a side business going in her spare time. It's not impossible but I haven't found anything worth making that risk for yet, and I'd still need to make almost what I'm making now for salary to even bother.

I did go ahead and interview at another early startup that reached out last job search and it was such a boring idea (a slight tweak on Blue Apron) and the CTO had such a massive ego (spent literally half the interview talking about all the things he expects from an engineer at the company and how many engineers he's passed on and how people think he's an asshole) I wasn't bothered when he passed on me too. Felt like I was in good company.

Maybe I'll give another one a chance next time I'm looking for a job.

> appetite for risk and a slightly lower work-life balance

So it's difficult and rare and less/not available to those without safety nets and unhealthy (and, therefore, less/not available to people with disabilities).

Surprisingly startups often don't even pay less cash salary these days. It used to be the trade-off: a much lower cash salary but a pile of shares. Not anymore. You trade off in FAANG vs something else, yes - if they want you. But not startup vs established.

This has been my experience too as a software engineer with about 8 years of experience under my belt. A massive windfall like that simply isn't in the cards for me and even being fairly well compensated saving a majority of my money I don't see homeownership in my future.

That's been increasingly the experience of friends and coworkers too. I think a fair number of people are either far better off than they think, or just don't see the huge middle class and below squeeze going on.

Well, I do own a home. But the only people I know my age that seem to own homes (that don't have high paying jobs) took advantage of something in order to get the money together for the downpayment, like lived with their parents for years rent-free while saving, or their parents just outright provided the downpayment.

Or they bought a single-bedroom apartment as a condo for like the same price that most people used to pay for full-size homes back in the day.

And that was all pre-pandemic, when prices were like 70% of what they are now and mortgage rates were super low (that's when I bought mine also). I don't know of anyone who's bought a home my age since then (and I'm an older Millennial, it should be mostly us buying homes right now).

> and I'm an older Millennial, it should be mostly us buying homes right now

There's a huge Boomer generation also trying to downsize.

Back in 2021 the average homebuyer was 45 years old. This probably hasn't changed that much: https://www.businessinsider.com/typical-us-homebuyer-age-sal...

https://www.nar.realtor/sites/default/files/documents/2021-h...

- GenZ at 2%

- Older Millennials at 23 percent and Younger Millennials at 14 percent of the share of home buyers. Millennials have been the largest share of buyers since the 2014 report

- Buyers 41 to 55 (Gen Xers) consisted of 24 percent of recent home buyers.

- Buyers 56 to 65 consisted of 18 percent of recent buyers and buyers 66 to 74 consisted of 14 percent of recent buyers.

- Buyers 75 to 95 (The Silent Generation) represented the smallest share of buyers at five percent.

I would guess that in any given year a large chunk of the top 1% income earners were also top 1% income earners in other years. The median top 1% income earner, when calculated by the total number of living people who have ever had a top 1% income, may be a person who is only such an earner for 1-2 years. But it's fairly straightforward to see that this median can be reached while the majority of top 1% income earners in any given year are those who have been, or will be, top 1% earners in other years.

Basically, for a 30 year period, if a grand total of 5% of the populace will earn a top 1% income in their life, you could have 0.5% earning a top 1% income for the majority of their lives (so using up half of the top 1% slots). Another 0.9% earning a top 1% income for an average of 10 years of their lives (using up an additional 30% of the top 1% slots). And in the 30 year period this would leave only 1/5th of the top 1% slots open to the remaining 3.6%, who would have an average of 1.6 years each of being a top 1% income earner. Any spare slots would go to lottery winners.

Just to throw a concrete number on this, extrapolating from Wikipedia, about $350k family income will put you above the 1% mark. I assume IPO-windfall would be considerably higher than that and maybe be at least top 0.1% that year ($2M+), which would be a different discussion.

So, mathematically, the number must lie between 1% and 30% that will be in the top 1% over a 30 year career. The question that remains is where in that range, which gives a measure of economic mobility for a country.

For those calculating based on average house sales prices, I think the current threshold for a 1% income is just under $550k per year now in the USA.

https://taxfoundation.org/data/all/federal/summary-latest-fe...

> Income Split Point $548,336