Room at the top

The survey I mentioned in my last post also asked people about their chances of becoming rich:  9% said "very likely," 19% said "fairly likely," 27% said "not very likely," and 45% said "not at all likely."  Only 1% volunteered that they were rich now. Applying the same subjective probabilities I used last time, this produces an average expected probability of 23.6%.

 The survey also asked about the annual income needed to make someone rich.  Answers ranged widely, but the  median was somewhere between $100,000 and $200,000 dollars a year (in 1990).  Unfortunately it didn't record the exact number, so that leaves a lot of uncertainly.  However, the distribution clearly suggests that the median is in the lower half of the range, somewhere between $125,000 and $150,000.  That would be about the top 4%.  However, since there's turnover among people with high incomes and incomes tend to rise over the course of a working life, a considerably larger number will be in the top 4% at some time (I'd guess 8 or 10 percent).

  So people seem to be optimistic about their chances of becoming "rich."  That raises the question of why--is it because they think there are a lot of people with (relatively) high incomes or because they think they will do better than almost everyone else?  That is, do the people who expect to become "rich" expect to make it to  the top 20% or the top 1% (say).  I'll see if I can find any information on that and discuss it in a later post.