Would the chant “We are the 75 percent” draw as much attention as “We are the 99 percent”? There has been so much written about the Occupy Wall Street movement and the vilified top 1 percent of income earners. But what if we considered the top 25 percenters?
Who are these people? Where do they live? What do they do? And most importantly, are they paying their fair share? Per the Bureau of Labor Statistics, these folks are everywhere and represent 189 different occupational titles! Yes, they’re lawyers, doctors, CEOs, and CFOs. But they are also nurses, scientists, accountants, policemen, firemen, fashion designers, computer software analysts, healthcare practitioners, engineers, sales representatives, human resource managers, technical writers, teachers, and art directors, just to name a few.
The top 25 percent is comprised of 48.8 million people, according to the U.S. Department of Labor. They’re your neighbors, they have kids that they are trying to get through college, they pay a monthly mortgage, and they work a full 40-plus hour week.
According to the IRS, anyone who makes over $66,193 is in the top 25 percent of all income earners in the U.S., and they pay 87 percent of all income taxes. The IRS breaks down the tax statistics into the following categories: The top 1 percent pay 37 percent of taxes; the top 10 percent pay 70 percent of taxes; and the top 50 percent pay 98 percent of taxes.
We all know that there are very few guarantees in life. However, one common similarity among those occupations in the top 25 percent is that many of the jobs require a college degree. Consider the following survey statistics from the U.S. census data: Adults with a college degree earn an average of $51,554, as compared to $28,645 for those with only a high school diploma.
The correlation between a college degree and those occupations in the top 25 percent is clear, but there are always exceptions, and having a college education does not ensure success. As financial planners and investment managers, we tend to work with entrepreneurs and small business people. The common similarity among them is a desire to move their enterprise forward and focus on efficiency, process, and planning. These traits do not guarantee success, but when combined with hard work, the outcome is often a good one.
Thomas Jefferson is rightly given much credit for emphasizing the importance of education in a democracy. He believed education for all to be a crucial part of the success of the "experiment" undertaken in 1776. Samuel Goldwyn, the film producer and movie executive, was quoted as saying, “The harder I work, the luckier I get.” The bottom line: Get your degree, work hard, and take advantage of luck when it comes your way!
Dean J. Catino, CFP®, CPRC, is a managing director and cofounder of Monument Wealth Management in Alexandria, VA., a full-service investment and wealth management firm. Monument Wealth Management is backed by LPL Financial, an independent broker-dealer. Securities and financial planning offered through LPL Financial, a Registered Investment Advisor, member FINRA/SIPC. Monument Wealth Management has been featured in several national media sources over the past several years. Follow Dean and Monument Wealth Management on their blog Off The Wall, on Twitter at @MonumentWealth and @DeanJCatino, and on their Facebook page. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for individuals. To determine which investment is appropriate please consult your financial advisor prior to investing.