What It Really Takes to Be in the Top 10% Financially

A lot of folks hear the “top whatever percent” and think it’s this immutable and fixed group of select people that all have billions of dollars—the Bezoses or the Buffetts of the world. While those people are technically in the top 10% of Americans financially, they are not really an accurate picture of who is in the top 10%. I am so excited because the truth of what it takes to be part of the top 10% might surprise you.

Fortunately, thanks to recent data from the Federal Reserve’s Survey of Consumer Finances, thanks to Yahoo Finance, and thanks to Moneywise, we now have an accurate look into what net worth makes someone in the top 10% of Americans financially. We’re going to dive into what that takes, as well as some other benchmarks in this video, and how you can figure out where you stand financially and where you might be able to level up until you are in the top 10% of Americans. One way to be part of the top 10% of our favorite viewers is to like this video, because it really helps us out—and we think you should!

With that, let’s dive right in. The first key thing we have to address is that being in the top 10%—or really any percentage, for that matter—is a measure of someone’s net worth, not their income. Your net worth is made up of what you own (those are your assets) minus what you owe (those are your liabilities). Assets are going to be things like investments and real estate. And your liabilities are things like your debts and your mortgage.

If you want a little bit of help getting started with figuring out what your net worth is, we actually have a net worth template that is free to use, as well as a more robust tool that you can use at learn.moneyguy.com.

Now that we know what net worth actually is, let’s look at the numbers. How much money do you actually need to be in the top 10%? The answer might surprise you. To be in the top 10%, you would need—drumroll please—a net worth of $971,000. I know many of you are surprised that this figure is… well, it’s not that high. Now, don’t mishear me. It is an incredible accomplishment to amass this level of wealth, but it’s very attainable for the median American household. We’ll dive into that more and we’ll actually prove that a little bit later on in this video.

There are a couple of very important points to address to add context to these numbers. This is an examination of total net worth, which means there’s a really good chance that a huge portion of this net worth is through people’s homes, and their home value is being lumped into the figure. You may have heard us in the past use the term investable net worth, which excludes the home value. Some would argue that paints a better picture of overall financial health. If you’ve heard the expression “you can’t eat a house,” that’s what they’re differentiating—between actual net worth and investable net worth. So understanding these two different types can be crucial because they serve different purposes in financial planning. Your total net worth gives you the big picture of your overall financial health, while your investable net worth shows what resources you actually have at your disposal.

The other key thing to note—and so many people misunderstand this—is that your net worth and your income are not the same thing. A lot of people assume that being in the top 10%, 5%, or even top 1% is about having a huge income. They’ll say something like, “If I make $500,000 a year, that must mean that I’m a 1-percenter.” That’s not exactly how it works. We’re talking about net worth, not income. Again, net worth is what you own minus what you owe. And while income and net worth are related, they’re not all that tightly linked. Statistically, the correlation between income and net worth is only about 0.56, which means that there is a positive relationship, but not a super strong one.

While people who earn more do tend to have more net worth, it’s not a hard and fast rule. In practice, you’ll probably find plenty of high-income earners who don’t ever really build any real wealth. They’re spending most of what they make and not putting anything aside for the future. On the other side of that coin, there are tons of people with more modest incomes who quietly build wealth over time. And we see this all the time with our clients here at Bound Wealth Management. The difference usually comes down to behavior. That’s why we talk about discipline as being the very first ingredient in building wealth. It’s literally that discipline to live on less than you make that creates margin in your budget—that’s the money that you don’t spend. And then that margin, when applied over enough time, can grow into real wealth.

A high income can speed up that process, no doubt, but only if you avoid lifestyle inflation. A lot of high earners unfortunately fall into the trap of spending more as they earn more, and that’s what keeps them from actually growing their net worth.

So we have a number now. And it might seem daunting at first, but remember: building wealth isn’t about doing it overnight. It’s about making consistent, intelligent financial decisions over time. Whether your goal is to join the top 25%, the top 10%, or even the top 5%, or maybe it’s just to improve your financial position, the principles remain the same.

So let’s look at some key strategies that you can use to level up your net worth no matter where you’re starting from. First and foremost, just tracking it is a great first step. Again, we have a template and a tool that you can use at learn.moneyguy.com. And I know it sounds so simple—and that’s because, really, it is—but it’s powerful. Engaging critically with your finances in this way will help you identify areas of weakness and develop a concrete plan of action for which way and which path to use to move forward.

The next step is to prioritize paying down any high-interest debts you may have. When people think about increasing their net worth, they often focus on amassing more—saving more or investing more. And while that’s a crucial part of the equation, growing the top line is not the only lever. Reducing what you owe can be just as powerful. By shrinking those liabilities, there’s less pulling your net worth down, and more of your assets stay intact. This is especially important with high-interest debts because they can grow faster than your investments. And if they’re growing faster than your investments, it can actually erode your progress. Eliminating those gives your assets the room to grow and lets compound interest start working for you, not against you.

Then just start—or maybe continue—investing aggressively. For most people, we recommend aiming to invest 25% of your gross income. I know this might sound like a lot, but even on modest incomes, maintaining that savings rate can lead to impressive wealth accumulation over time. And in fact, you’ll actually naturally ascend through these levels as you continue to invest.

To give us some context, I want you to think about these numbers. To be in the top 25% of Americans financially, you need a net worth of $340,000. To be in the top 5%, you need a net worth of $1.2 million. And remember, the top 10% is just under a million at $971,000. I want you to keep these numbers in mind.

So let’s use an example to demonstrate how you might work through this as an average American. We’re going to assume this is just investable net worth, so that way we can keep it simple and straightforward. And we’re going to use the median household income in America right now, which is right around $80,000 a year. So if you make $80,000 a year and you have a savings rate of 25% of your gross income, that means you’d be saving $20,000 a year, or $1,667 a month. Even if we assume a modest 8% annual rate of return, this hypothetical investor would cross $340,000—remember, that’s the top 25%—in just 11 years. From there, it only takes nine more years to get to $971,000 and move into the top 10%. That’s two years less, and to be worth over $600,000 more. So that’s 20 years total, which is very doable over the course of a 40-year working career, even if you didn’t start until your 30s.

And what’s really crazy is how fast you can jump to the top 5%. Crossing that $1.2 million, 5% figure only takes another two years. This remarkable acceleration in wealth accumulation demonstrates the power of compound interest and consistent investing over time—showing that joining the ranks of America’s wealthiest isn’t just about high salaries, but about making smart financial decisions and staying the course.

But we know the market doesn’t return at even 8% annually. To protect your net worth from market swings, it’s important to hold a mix of more conservative assets along with your growth investments. Volatility is a normal part of investing, and your net worth will likely be lower in some years—and there will be little peaks and valleys along the way—but it doesn’t have to derail your progress. By maintaining a cash buffer in an emergency fund, by incorporating less risky or risk-off assets like bonds for stability, and by using investment options like target retirement index funds, you can smooth the ride as you try to climb the financial ranks of Americans.

At the end of the day though, it’s important to remember that while these net worth benchmarks can serve as useful reference points for a financial wellness check, true financial success isn’t about competing with others or about hitting some arbitrary number. It’s about building a life that aligns with your personal values and your personal goals. Money is simply a tool—albeit a powerful one—that can help you live a life of purpose and meaning. Whether your net worth places you in the top percentiles or not, what matters most is creating a financial foundation that supports the life that you want to live, that provides for the people that you care about, and that enables you to make the impact that you want to have on the world around you.

That’s it for this one. If you enjoyed this video, be sure to leave a like, subscribe if you haven’t already, and we’ll catch you on the next one.