Top 1% of income is a red herring too - Top 1% of wealth is what everyone is focused on. Top 1% of household wealth is more like $10M in net worth. Almost nobody earning $500k will ever amass $10M in net worth due to income taxes (vs. capital gains for those with substantial wealth) and living expenses. It really is a separate stratosphere.
This is clearly not true - if you are making that much and are a constant (but not even especially frugal) saver you will have 10M by the time you retire. The top 1% includes people of all ages - including people collecting paychecks their whole life - not just people who are in their 30s.
Of course, in 20 years 10M will not mean as much, but nonetheless it is important to remember 20% of the population is at or near retirement age.
You can't fast-forward your net worth and leave everyone else's frozen in place. If 10M is the bottom of the top 1% now, In 20 years 10M won't be enough to be in the top 1%.
Isn't wealth the red herring, and income the proper measure? After all, the median (50%tile) wealth is nearly zero. Amongst those with zero wealth, the top income earners clearly have better lives than the low income earners, since the top income earners can consume more.
The ultimate measure of resources is how much a person can consume a year. Income is equivalent to what you can steady-state consume. Wealth is just what you happened to save up to that point in time.
Since the wealth gap is larger than the income gap (since wealth is saved past income), the wealth gap tends to be pointed out by people who want to overemphasize inequality.
A person with $10M in wealth should be earning $500k a year taxed at capital gains rates. This person does not and will not ever live like a mere mortal (unless for show or sport). Assuming he's not an idiot, the $10M guy would have to try reasonably hard to become broke.
A person earning $500k/yr is reasonably likely to be a normal guy--maybe semi talented business person or tech exec paying regular income taxes (at least partly) that could quickly become broke or at least become a mere mortal again if he stopped working. I don't really have anything against this guy. He's not a pervasive driver of inequality. He's not at the tier of wealth where you're buying influence. He's likely stuck in an expensive COL place. Unlike Mr. $10M, he probably hasn't carefully shielded his funds from divorce, family, etc.
>Wealth is just what you happened to save up to that point in time.
Nobody just "happens to save up" $10m. You either inherited it, lucked into it or grinded for years or (more likely) decades with the express aim of a payday (and you got lucky enough to get one).
That sounds way more alarming than whatever the median income is.
> the top income earners clearly have better lives than the low income earners, since the top income earners can consume more.
The top wealth owners clearly have better lives than low wealth owners because the former don't have to work, yet make more money and pay less in taxes than everyone else.
You haven't made a convincing case for why wealth shouldn't get more attention than income (or at least why it shouldn't get more attention, since the dialogue among politicians and in the media seems to exclusively focus on income despite income taxes being significantly higher than capital gains taxes).
It also seems that the title is misrepresenting the facts. Needing more to reach the top one percent of an arbitrarily separated population should suggest that the rest of the population is also benefiting.
E.g. if you needed less to join the top 1%, then it could be suggested that the gap is increasing. If you need more... well, it could just as easily follow that the bottom 99% percent have merely moved closer to the top 1%, effectively raising the bar (which, as an arbitrary point, shifts all the time anyways).
That said, it could be argued the other way - but the evidence for either direction is lacking. Because the issue is being raised by people who tend to overemphasize inequality, I tend to lean the opposite direction - perhaps we should re-evaluate the way we define upper and lower class.
No, because 10M generates a steady return in a growing economy. So the steady-state consumption of someone with a net worth of $10M is much greater than someone with $0, all other things (e.g., income) being equal.
A single person in San Fransisco with an income of $500,000 and the standard deduction has a takes home $288,646.
A single person in San Fransisco has a cost of living of $1125.83 without rent, according to numbeo (whatever that is). Median rent in San Fransisco is $3700 for a one bedroom.
That leaves a measly $230,736 of post-tax, post-living expenses money. Assuming this person does nothing more than hide a monotonically increasing pile of cash under a mattress, it takes just over 43 years to amass $10,000,000.
Presumably this financial cretan started working right after college, at the age of 22. This means they've acquired the full sum at the age of 65, which is not an uncommon retirement age. Cuts close, but checks out.
More realistically, if you get a 5% return on your investments (or ~2% after inflation), in 43 years you'd have $14,663,123.
I'm lucky enough to be making ~$400k at 30. At 21, I was lucky enough to be making $65k. Virtually no one starts off making $500k. Even if you start at the top 1% of income earners and stay there your entire life, live relatively frugally, never have kids, never take a break from work, and invest well -- even then, you're still unlikely to accrue $10M in wealth.
I don't think many people should expect to get into the top 1% of assets by just sticking money under a mattress. Presumably most would invest it and expect an average rate of return of 7% or so from decades of investing. Eventually the investment grows more from compounding than new income.
For example, if you have a $10M net-worth, according to Gabriel Zucman & Thomas Piketty, you get higher returns on average than the little guy. Not sure the exact number, but let's say an ~8% return on average (believe it's higher).
You would make ~$800K a year in "capital gains" and pay $133K in federal taxes. If you earned $500k in income, you'd pay ~$164K in federal taxes. You'd pay another ~$35k+ in states most people live in for about a 39.8% tax rate. Not to mention, your employer is paying another 5% in payroll taxes to employ you. So, really, it's a 44.8% tax.
But if your income comes from "capital gains" instead of working, you'd pay less than half that percentage in tax -- at 16.25%.
Why is there a distinction between "capital gains" and dividends and fixed income? Because only the very wealthy get most of their income from capital gains.
Even people with $1-5M in wealth... they're mostly the people that worked really hard and still got a little lucky with their investments. They're almost all old. They've paid off their house. So... 1) most of their wealth is tied up in their house, and 2) most of what's left over is tied up in fixed income like bonds -- which are taxed as "income" and not "capital gains".
Your calculations are based on an erroneous model. Corporate profits are taxed twice. The effective tax rate of dividends can be as high as 39.8%. I'm not sure what typical numbers are, because I couldn't find 2018 data, and 2017 data predates significant tax cuts.
I'm a bit confused as to what 'tax unit' mean here. Is that the amount of tax (in monetary unit like USD) one is supposed to pay if s/he hits certain percentage of wealth class? Thanks in advance for the reply!
I'll just copy/paste from the source of the chart, but a tax unit is everyone on a single tax return where a household is everyone that lives in a house. So if an elderly parent who pays their own taxes moves into their adult children's household, that property would consist of 1 household but 2 tax units. The net worth of the household would increase, even though the net worth of those two tax units stayed the same.
> "For most people, their tax unit and household are the same. But there are cases where a household would include multiple tax units. When an elderly parent moves in with an adult child with kids filing taxes separately to form a three-generation household there would be multiple tax units exist in one household. The same is true when a child moves back in after college or an unmarried couple moves in together. These are groups that we probably want to think about together because they rely on each other economically. On the other hand, a group of unrelated adults living together as roommates would also count as a household."
> We might prefer tax units to households for income trend analysis because household structure is not independent of economic circumstances. For instance, adult children move back in with their parents (Gallup reported that 14 percent of 24 to 34 year olds lived with their parents in 2013 and a Pew Research Center study showed this to be increasing). Similarly, homeowners sometimes take in boarders for economic reasons. In each of those cases, the tax-unit data captures the deteriorating economic situation associated with these types of living arrangements.
> In contrast, household data captures more earners under one roof, which increases household income. Imagine a group of three graduate students living together where each makes $25,000. They would show up as three different tax units but one household making $75,000. Now image that they all got $5,000 raises and decided to get places on their own. This would show up as a 20 percent increase in their incomes by tax units, but their household incomes would have dropped by 60 percent.
I think it's household, so maybe multiply by the number of average people in a household (say 2.6 is US average household size, so we can say 1 out of 26K owns $111m)?
Not to quibble, but this is household income, not necessarily a single individual's income.
In coastal cities, a two income household making 250k each is not absurd, and can certainly happen with two doctors, lawyers, or even software developers.
I'd much rather see metrics normalized by the local household income, which would be much more representative of relative inequality.
>In coastal cities, a two income household making 250k each is not absurd, and can certainly happen with two doctors, lawyers, or even software developers.
This is why the 99% stuff misses the mark. That 1% is the best of us; our doctors, lawyers, successful small business owners, etc. People who drive the economy and create outsized value through specialized labor that is rightfully compensated. The true problem in our society is the 0.01%. There is a tiny portion of these that are the Bill Gates, and Mark Zuckerbergs who are self made. But the vast majority of them are the intergenerational wealth holders whose fortunes have simply continued to compound and provide them with an unnatural amount of power influence that is completely undeserved. It's why a wealth tax is so neccessary in this country, and if properly implemented could completely absolve the need for income tax.
How many of the 0.01% inherited their wealth, and how many have made it? Do you have any sources for that? Most people on Fortune 500 list, for example, didn't inherit any significant part of their wealth.
Well, no. These people, with their outsize influence, have aligned themselves with the wealthiest for political reasons: when they're grouped together, it's easier to fend off attacks on their income and wealth.
The fact is that the vast majority of people in above the 5% mark come from comfortable families. This would be fine, except that 1) they live in and influence a society where many live in exceedingly uncomfortable circumstances, and 2) instead of recognizing this as a moral travesty and acting accordingly, they hoard not only resources but the opportunity to better oneself.
We passed the point where "personal responsibility" was a reasonable justification for systemic suffering when we stopped hunting with rocks. Much of civilized history has been marked by the apparent ability to provide generally for the populace and the baffling decision not to. I don't think it's radical to say that we're discussing a manifestation of this phenomenon, more than anything else.
Another way the 99% stuff misses the mark is the fact that most of the 1% is closer in wealth to those of top 10% than the top 0.1%. I read an article a while back that suggested the best way to look at tiers of wealth is to consider the bottom 90%, the top 0.1%, and the 9.9% between those.
Any smaller grouping than the 1% is irrelevant. The 0.01% (which starts roughly at the secondary characters from Big Bang Theory) earns 5% of all income. They’re rich individually, but aren’t monopolizing a large fraction of society’s production.
Doctors and lawyers aren't "the best of us." Those would be teachers and firefighters and social workers and the rank and file who work at charitable foundations.
> In coastal cities, a two income household making 250k each is not absurd,
In the San Francisco area, a bit over $500k is the mean income of the top 5% of households, so while it's not too 1% locally, it still in a fairly narrow slice at the top.
>In coastal cities, a two income household making 250k each is not absurd
I guess you would have to define the threshold of “absurd,” but It’s a pretty big deviation from the median in Los Angeles and New York, where the median incomes are between 60-65K. In SF, you’re talking two people both making more than double the median (about 110K)
Considering things like the cost of things like housing in these places, the inequality seems massive anyway you slice it.
The median income, for a college graduate, nationally is >$90K. A lot of the median income stats are meaningless once you consider only the educated slices of the workforce.
It’s not necessarily absurd, just rare. 1 in 100 rare to be precise.
It’s not really relative. $500k HHI in Manhattan is a ridiculous amount of money that lets you live a ridiculous life of luxury, whether you realize it or not.
Wealthy elites really like to make this false “relativity” argument, where $500,000 isn’t “that much” because everything in New York is so expensive… but they ignore the simple fact that they get to live in New York and have access to everything that entails. Being able to live in New York at all is something many fantasize about. It’s part of why so many TV shows are based in New York. For most, it’s a fanciful life beyond their reach.
$500k is $500k. It gets you $500k worth of stuff. That $500k of stuff may be in the form of material items, access or lifestyle (e.g. weather). The fake relatively argument comes in when you only compare material items and selectively ignore everything else to make a false argument and appear like less of an elitists than you are. But $500k will get you EQUALLY absurd lifestyles in Manhattan or Kansas. In one, you get to live the high life in the middle of New York, with access to basically everything. In the other, you live in the midst of nothing, but with a pool that might qualify as a theme park and a fleet of exotic cars.
In either case, these are lifestyles only available to the 1%.
Many of the people I know who make $500k+ in Manhattan are in relatively unstable careers. Finance comes to mind. If you take a snapshot of them in the moment they may seem to have substantial purchasing power, but the smart ones realize the music could stop at any moment and their primary indulgence is saving up enough money to retire early (on much much less than $500k/year).
Don't forget, this is HN. I'm with you: where I live it's very typical for a software developer to cap in the mid-$100k range. I would wager that the eye-watering numbers you see from FAANG developers is atypical for _most_ software developers in the country. And that's totally fine.
$250k total comp is pretty common for software engineers with a bit of experience. I’ve found Blind is the best place to get actual TC numbers. But even outside of the Bay area and outside of faang $250k should be your target at this point if you’re software engineer with ~5 years of experience.
This is at Silicon Valley/software companies like Google, Amazon, Apple, Facebook, Facebook, etc. Most developers will be above 150k-200k there, especially accounting for bonuses and stock which are considered as part of compensation.
But this is actually rare across the industry as a whole in the US, and extremely rare when considering other countries. It's nowhere near as common as the heavily skewed HN comments will make you believe.
The FAANGs are starting new grads at these levels now. 150K base salary, 100K+ RSUs vesting per year, 30K+ bonus targets per year will get you there and then some.
Isn't this subjective. For someone who has a pathway to earning 500K (they and there spouse both work at FAANG) its not that absurd, but for 99% of people it is because almost everyone has no path to earning that much.
> The top 1% earned 21% of the country’s income, and paid 38.5% of federal individual income taxes. The top 1% paid a greater share of income tax to the U.S. Treasury than the bottom 90% combined (29.9%).
People at age 25 year olds are likely to make half of 35 year olds. But 45 year olds in the top 1% are roughly equal to the 35 year olds (no real increase).
I'm sure ageism is at play. Given the choice between a 30-something and a 40-something applicant, the job markets with 1%-level salaried positions tend to prefer hiring younger, because they can pay less, all other things being equal.
Let me put this in a way that a HNer can understand:
It's bad because happiness has a logarithmic dependence on income. A system that permits this amount of wealth concentration is isomorphic to one that actively creates misery.
I don’t think that’s necessarily true. Wealth is not zero sum. It’s possible for one person to make a billion dollars of wealth without taking it from someone else (increase in stock price, leverage for investment, etc etc).
There are other factors to consider, mean wealth, median wealth, quality of life, etc.
I’d rather live in a hypothetical country with $1M of purchasing power where 1% had $1B than a hypothetical country with $500k where 1% had $1M.
High inequality does not mean low quality of life. Just take a look at the inequality of the US vs the inequality of third world countries. The US has higher inequality but also higher quality of life.
There is no such thing as doing "everything right" a capitalist society is a zero sum game.
You only make money by taking it from someone else. Sure the reserve can print more money but that only leads to currency devaluation on a macro level which on a whole reduces purchasing power of the society.
You can't really address income inequality without fundamentally reshaping society.
Readit News
https://equitablegrowth.org/wp-content/uploads/2019/03/table...
Of course, in 20 years 10M will not mean as much, but nonetheless it is important to remember 20% of the population is at or near retirement age.
https://www.nerdwallet.com/investing/retirement-calculator
The ultimate measure of resources is how much a person can consume a year. Income is equivalent to what you can steady-state consume. Wealth is just what you happened to save up to that point in time.
Since the wealth gap is larger than the income gap (since wealth is saved past income), the wealth gap tends to be pointed out by people who want to overemphasize inequality.
A person earning $500k/yr is reasonably likely to be a normal guy--maybe semi talented business person or tech exec paying regular income taxes (at least partly) that could quickly become broke or at least become a mere mortal again if he stopped working. I don't really have anything against this guy. He's not a pervasive driver of inequality. He's not at the tier of wealth where you're buying influence. He's likely stuck in an expensive COL place. Unlike Mr. $10M, he probably hasn't carefully shielded his funds from divorce, family, etc.
>Wealth is just what you happened to save up to that point in time.
Nobody just "happens to save up" $10m. You either inherited it, lucked into it or grinded for years or (more likely) decades with the express aim of a payday (and you got lucky enough to get one).
That sounds way more alarming than whatever the median income is.
> the top income earners clearly have better lives than the low income earners, since the top income earners can consume more.
The top wealth owners clearly have better lives than low wealth owners because the former don't have to work, yet make more money and pay less in taxes than everyone else.
You haven't made a convincing case for why wealth shouldn't get more attention than income (or at least why it shouldn't get more attention, since the dialogue among politicians and in the media seems to exclusively focus on income despite income taxes being significantly higher than capital gains taxes).
E.g. if you needed less to join the top 1%, then it could be suggested that the gap is increasing. If you need more... well, it could just as easily follow that the bottom 99% percent have merely moved closer to the top 1%, effectively raising the bar (which, as an arbitrary point, shifts all the time anyways).
That said, it could be argued the other way - but the evidence for either direction is lacking. Because the issue is being raised by people who tend to overemphasize inequality, I tend to lean the opposite direction - perhaps we should re-evaluate the way we define upper and lower class.
Median wealth in the US ~97k. It’s quite stunning one could think a society would work with the 50-percentile being zero.
A single person in San Fransisco has a cost of living of $1125.83 without rent, according to numbeo (whatever that is). Median rent in San Fransisco is $3700 for a one bedroom.
That leaves a measly $230,736 of post-tax, post-living expenses money. Assuming this person does nothing more than hide a monotonically increasing pile of cash under a mattress, it takes just over 43 years to amass $10,000,000.
Presumably this financial cretan started working right after college, at the age of 22. This means they've acquired the full sum at the age of 65, which is not an uncommon retirement age. Cuts close, but checks out.
I'm lucky enough to be making ~$400k at 30. At 21, I was lucky enough to be making $65k. Virtually no one starts off making $500k. Even if you start at the top 1% of income earners and stay there your entire life, live relatively frugally, never have kids, never take a break from work, and invest well -- even then, you're still unlikely to accrue $10M in wealth.
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For example, if you have a $10M net-worth, according to Gabriel Zucman & Thomas Piketty, you get higher returns on average than the little guy. Not sure the exact number, but let's say an ~8% return on average (believe it's higher).
You would make ~$800K a year in "capital gains" and pay $133K in federal taxes. If you earned $500k in income, you'd pay ~$164K in federal taxes. You'd pay another ~$35k+ in states most people live in for about a 39.8% tax rate. Not to mention, your employer is paying another 5% in payroll taxes to employ you. So, really, it's a 44.8% tax.
But if your income comes from "capital gains" instead of working, you'd pay less than half that percentage in tax -- at 16.25%.
Why is there a distinction between "capital gains" and dividends and fixed income? Because only the very wealthy get most of their income from capital gains.
Even people with $1-5M in wealth... they're mostly the people that worked really hard and still got a little lucky with their investments. They're almost all old. They've paid off their house. So... 1) most of their wealth is tied up in their house, and 2) most of what's left over is tied up in fixed income like bonds -- which are taxed as "income" and not "capital gains".
(Ignoring state incomes tax of course. Since I live in Texas, I’m lucky enough to do that).
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> "For most people, their tax unit and household are the same. But there are cases where a household would include multiple tax units. When an elderly parent moves in with an adult child with kids filing taxes separately to form a three-generation household there would be multiple tax units exist in one household. The same is true when a child moves back in after college or an unmarried couple moves in together. These are groups that we probably want to think about together because they rely on each other economically. On the other hand, a group of unrelated adults living together as roommates would also count as a household."
> We might prefer tax units to households for income trend analysis because household structure is not independent of economic circumstances. For instance, adult children move back in with their parents (Gallup reported that 14 percent of 24 to 34 year olds lived with their parents in 2013 and a Pew Research Center study showed this to be increasing). Similarly, homeowners sometimes take in boarders for economic reasons. In each of those cases, the tax-unit data captures the deteriorating economic situation associated with these types of living arrangements.
> In contrast, household data captures more earners under one roof, which increases household income. Imagine a group of three graduate students living together where each makes $25,000. They would show up as three different tax units but one household making $75,000. Now image that they all got $5,000 raises and decided to get places on their own. This would show up as a 20 percent increase in their incomes by tax units, but their household incomes would have dropped by 60 percent.
Interestingly, 0.1% 'only' owns $45mil, and 0.01% owns $111 mil. It sounds rare, until 1 out of 10,000 own $111 mil.
In coastal cities, a two income household making 250k each is not absurd, and can certainly happen with two doctors, lawyers, or even software developers.
I'd much rather see metrics normalized by the local household income, which would be much more representative of relative inequality.
This is why the 99% stuff misses the mark. That 1% is the best of us; our doctors, lawyers, successful small business owners, etc. People who drive the economy and create outsized value through specialized labor that is rightfully compensated. The true problem in our society is the 0.01%. There is a tiny portion of these that are the Bill Gates, and Mark Zuckerbergs who are self made. But the vast majority of them are the intergenerational wealth holders whose fortunes have simply continued to compound and provide them with an unnatural amount of power influence that is completely undeserved. It's why a wealth tax is so neccessary in this country, and if properly implemented could completely absolve the need for income tax.
https://www.forbes.com/sites/luisakroll/2018/10/03/the-forbe...
The fact is that the vast majority of people in above the 5% mark come from comfortable families. This would be fine, except that 1) they live in and influence a society where many live in exceedingly uncomfortable circumstances, and 2) instead of recognizing this as a moral travesty and acting accordingly, they hoard not only resources but the opportunity to better oneself.
We passed the point where "personal responsibility" was a reasonable justification for systemic suffering when we stopped hunting with rocks. Much of civilized history has been marked by the apparent ability to provide generally for the populace and the baffling decision not to. I don't think it's radical to say that we're discussing a manifestation of this phenomenon, more than anything else.
In the San Francisco area, a bit over $500k is the mean income of the top 5% of households, so while it's not too 1% locally, it still in a fairly narrow slice at the top.
https://statisticalatlas.com/metro-area/California/San-Franc...
I guess you would have to define the threshold of “absurd,” but It’s a pretty big deviation from the median in Los Angeles and New York, where the median incomes are between 60-65K. In SF, you’re talking two people both making more than double the median (about 110K)
Considering things like the cost of things like housing in these places, the inequality seems massive anyway you slice it.
https://www.census.gov/quickfacts/fact/table/losangelescount...
https://www.baruch.cuny.edu/nycdata/income-taxes/med_hhold_i...
https://fred.stlouisfed.org/series/MHICA06075A052NCEN
The median income, for a college graduate, nationally is >$90K. A lot of the median income stats are meaningless once you consider only the educated slices of the workforce.
source: https://en.wikipedia.org/wiki/Household_income_in_the_United...
It’s not really relative. $500k HHI in Manhattan is a ridiculous amount of money that lets you live a ridiculous life of luxury, whether you realize it or not.
Wealthy elites really like to make this false “relativity” argument, where $500,000 isn’t “that much” because everything in New York is so expensive… but they ignore the simple fact that they get to live in New York and have access to everything that entails. Being able to live in New York at all is something many fantasize about. It’s part of why so many TV shows are based in New York. For most, it’s a fanciful life beyond their reach.
$500k is $500k. It gets you $500k worth of stuff. That $500k of stuff may be in the form of material items, access or lifestyle (e.g. weather). The fake relatively argument comes in when you only compare material items and selectively ignore everything else to make a false argument and appear like less of an elitists than you are. But $500k will get you EQUALLY absurd lifestyles in Manhattan or Kansas. In one, you get to live the high life in the middle of New York, with access to basically everything. In the other, you live in the midst of nothing, but with a pool that might qualify as a theme park and a fleet of exotic cars.
In either case, these are lifestyles only available to the 1%.
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lol. really? what software devs are making 250k a year?
Get promoted once at google / Facebook and you should be there. Promoted again and you’ll be 300-350k
But this is actually rare across the industry as a whole in the US, and extremely rare when considering other countries. It's nowhere near as common as the heavily skewed HN comments will make you believe.
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This isn't unusual at all for top talent.
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(Well not me, but..)
> The top 1% earned 21% of the country’s income, and paid 38.5% of federal individual income taxes. The top 1% paid a greater share of income tax to the U.S. Treasury than the bottom 90% combined (29.9%).
Basically, only the top 1% can buy homes in the Bay Area.
This is a good comparison for this:
https://dqydj.com/income-percentile-by-age-calculator/
People at age 25 year olds are likely to make half of 35 year olds. But 45 year olds in the top 1% are roughly equal to the 35 year olds (no real increase).
It's bad because happiness has a logarithmic dependence on income. A system that permits this amount of wealth concentration is isomorphic to one that actively creates misery.
There are other factors to consider, mean wealth, median wealth, quality of life, etc.
I’d rather live in a hypothetical country with $1M of purchasing power where 1% had $1B than a hypothetical country with $500k where 1% had $1M.
High inequality does not mean low quality of life. Just take a look at the inequality of the US vs the inequality of third world countries. The US has higher inequality but also higher quality of life.
I think the Buddhists might disagree.
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You only make money by taking it from someone else. Sure the reserve can print more money but that only leads to currency devaluation on a macro level which on a whole reduces purchasing power of the society.
You can't really address income inequality without fundamentally reshaping society.
Even in Silicon Valley, being a top manager, developer, etc. is only going to get you a very nice, comfortable life. '
The 1% wealthy you think of when you think "1%" have all gotten it the usual ways: got lucky, inherited, or shadier methods.