2020 was a good year for the richest in the US

Author: Giles Coghlan | Category: News

Wealth rise

This is one of the great ironies of life. Those who need it the least, get it the most. That's what happened in 2020 as the richest 1% of US households took about 35% of the extra wealth generated. This is according to the latest quarterly report of household wealth by the Federal Reserve. In stark contrast to the above the poorest half of the population only received about 4% of the overall gains.

US wealthy

This is one of the reasons that President Biden is planning a tax increase on the wealthiest.

Unsurprisingly equity holders saw the largest wealth gains last year after the stellar run higher in stocks. The 2020 equity recover was not V shaped, or L shaped, but K shaped as US stocks made fresh highs in a stimulus driven year. However, equities are mostly owned by the top 10% of US households. The wealthy were further helped as mortgage debt was reduced, even as house prices climb.


Finally, one other significant finding from the Fed was that more higher net worth households put their money into cash. The dash to cash makes sense in these uncertain markets as well as making discount purchases on flash sales induced by financial uncertainty. See the chart below

Wealth rise

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose