Business Insider recently posted an article with research showing how much money you would need to earn to be in the top 1% of Americans at every age. Using that as inspiration, I thought it’d be fun to see how much money you would need to make to be in the 1% of Louisianians … and it may not be as much as you think.
While more money won’t give you more happiness, it will give you more freedom. And it’s not common to find someone who, if asked, wouldn’t want the type of earning power that the top 1 percent of Americans have. But the reality of actually earning that type of money can seem a little less, well, real. So how much does it really take to get into that type of wealth category? A million dollars? Two million?
What if I told you that you didn’t need to have a million dollars to break into that top 1 percent? What if I told you that you only needed to earn a little over $325,000? If that sounds a little more achievable to you, then you may want to keep reading. A 2016 study from the Economic Policy Institute shows that – in Louisiana – the threshold to break into the top 1 percent of earners was $325,163. Louisiana was close to the middle of the pack when it came to breaking that 1 percent threshold, falling just below North Carolina ($327,549), just ahead of Oklahoma ($324,935), and ranking 27th in highest overall threshold.
If you think that’s high, just be thankful you don’t live in Connecticut. They had the highest barrier of entry to 1 percent earnings with more than double the threshold of Louisiana at $659,979. New Mexico had the lowest threshold with an annual income of $231,276 needed to break into the top.
Louisiana was one of fifteen states where the 1 percent captured all of their income growth between 2009-2013. This can likely be accredited to the economic increase in agriculture, tourism, and wildlife & fisheries trade, among other factors as noted in the State Department of Administration’s 2013 Annual Report.
So if the good news is that you don’t need to be a millionaire to be a 1 percenter in Louisiana, the bad news is that you need to be really close to earn what the average of those earners earn. When looking at the aggregate average of those top 1 percent earners in Louisiana, the state is higher up on the scale, coming in 16th when comparing the ratio of the top 1 percent to the bottom 99 percent. This means that the disproportionate wealth inequality in Louisiana is higher than in 34 other states. The average earners of those 1 percent of Louisianians is $859,619, while the average earnings of the bottom 99 percent is $41,600.
But don’t be discouraged. Another report from the Bureau of Economic Analysis shows Louisiana pulling in a cool $235.1 billion, ranking them 24th in the U.S. for GDP, up over $28 billion or 13.3 percent since 2006 with thriving real estate, tourism, and consumable goods markets all leading the pack in contributing to those numbers.
So what does that mean for you?
It means that, while still very difficult, there are opportunities in improve wealth – arguably now more than ever with the internet and scalability of technologies – to improve upon or start your new venture.
And you never know what could happen – that 1 percent badge of honor could be closer than you think.
What will you do once you join the top 1 percent? Reach out and let me know!
Paul can be reached on LinkedIn or via his portfolio site, paullarrieuii.com.
Follow Paul on Twitter: @heylarrieu