notes3 - III Getting Ahead, Getting by A. Income and wealth...

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III Getting Ahead, Getting by A. Income and wealth 1. Income Income – monetary gain from a variety of sources - personal earnings, (most people’s income comes from this - dividends - interest payments Income as a money flow Income house hold wealth | Household expenses - mortgage/rent - automobile - health care - insurance - education - clothing - leisure/entertainment Income: You get it, You spend it It’s gone Income is like the $200 you get when you pass “GO” in monopoly 2. Wealth Wealth: the accumulated property and savings owned by a person or family Wealth is like the houses and hotels in monopoly Wealth consists of a stock of things whole durability persists over time and which can be passed from generation to generation Most Americans’ primary wealth is their house 3. Income Statistics 1974 2002 Top 5% 15.9% 21.7% Highest Quintile 43.1% 49.7% Fourth Quintile 24.7% 23.3% Middle Quintile 17.1% 14.8% Second Quintile 10.6% 8.8% Bottom Quintile 4.4% 3.5% Quintile is grouping percentage into 1/5, or 20% of the population This chart shows that the rich are getting richer the poor are getting poorer Strategies: - Over-time - Two jobs (increasing number of people have 2 jobs) - Dual-income household (in order to retain middle class status both husband and wife to work)
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4. Wealth Statistics Wealthiest person in the world 2004 – Bill Gates 46.6 billion 5 of the world’s wealthiest people are Waltons (the walmart family) Wealth distribution in U.S. falls in a 3 part division: -slightly more than 1/3 (38%) of wealth is owned by 1 percent of Americans -the next wealthiest 9% own another third -the remaining 90% of the population owns slightly less than 1/3 of the wealth -Top 1% controls more of the wealth than the bottom 90% -Bottom 45% of the American population have almost no net assets (no wealth); indeed many are in debt - statistics on poor people in this group Bottom 45% -Most people sold all their passions and paid off all their debt, they would have 3000 dollars in wealth -Many of then would still be indebt -Many Americans are less than 3 pay checks away from homeless -many Americans live from paycheck to paycheck part of the pay check is going to mortgage or rent -if something happens to that paycheck, some people may have saved up enough to get by for 3 month -most Americans are living on the edge CONSEQUENCES o having private wealth is a safety net, even if something drastic happens they can survive for a while o public safety net means government wealth is a private safety net o people with small of little wealth is simply more vulnerable o African Americans in middle class generally have less wealth than while people o Wealth can be passed on, so white people have an advantage, whites start off better off. o
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notes3 - III Getting Ahead, Getting by A. Income and wealth...

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