Real estate prices in many of the top zip codes in America have doubled over the past 5 years. In some hotter markets in California, gains are in excess of 200%. The tech heavy NASDAQ is +121% over the same time period, helping buoy the richest amongst us to new heights.
According to Forbes’ Cost of Living Extremely Well Index, a basket of 40 luxury items, they’ve risen — uninterrupted — since 1982. Recession proof.
The inflation rate for the elite has been running hot since ’82, averaging 5%. Although it’s hard to get a hard reading on what the true inflation rate is for the wealthy, some argue it has been running in excess of 10% for the past decade.
Statistics released by the Federal Reserve revealed the top 1% now control a record 38.6% of America’s wealth. The bottom 90% of wage earners have been falling for 25 years — touching down at a 22.8% share in 2016, down from 33.2% in 1989.
Aside from wealth, the rich are increasing their earnings on an annual basis too, with reported incomes hitting a new high of 23.8% in 2016, up from 20.3% in 2013.
Warren Buffett believes the Dow will hit 1 million within 100 years, conservatively. All of these lofty projections and data points leave out the specter of pullbacks, an arrogant position given the historical likelihood of this being an impossibility.
One day, markets will dislocate, real estate prices careen lower, rich people flung from their windows directly into crematories, effectively leveling out these gross differences. Until then, however, let the good times roll.