You Are Probably Part of the 1%

All of the recent discussions about income inequality have actually skewed the perception of what it means to be wealthy.

In his recent book The Haves and Have-Nots, World Bank economist Branko Milanovic provides an interesting take on who the 1% are and how much they earn a year.

Milanovic approaches measuring wealth in global terms, adjusting for varying costs of living around the world.

Using data from 2005, the last year global statistics of this kind were available, Milanovic concludes that the true global definition of middle class falls far short of owning a home, having a car in a driveway, saving for retirement, and sending their kids to college.

In fact, people at the world's true middle- as defined by median income- live on just $1,225 a year.

To be part of the top 1% of everyone on planet earth today takes an annual income of $34,000.

According to Milanovic, America is home to about 29 million of the world's richest; the rest are scattered among several countries. About 4 million live in Germany, 3 million each in France, Italy and England, and 2 million in both Japan and Brazil, as well as a handful of other countries.

"There is nobody from Africa, China, India or from East Europe or Russia" in statistically significant numbers, Milanovic writes

I definitely recommend the book.

It is a quick and easy read as well as an incredibly enlightening one.