Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."

Key Points

  • The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
  • All of the gains came from stock holdings thanks to an end-of-year rally.
  • Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

  • vithigar@lemmy.ca
    5·
    4 months ago

    Even accepting the absurdity of suggesting those as “good reasons” to need more than $100 million dollars in a lifetime, fine. You buy both of those and “only” have 30 million dollars to live on for the rest of your life. That’s still very comfortable and more than most people’s lifetime earnings by an order of magnitude.

    • theotherverion@lemmynsfw.com
      15·
      4 months ago

      But why should the person be limited? If they are capable of achieving that amount of wealth, why should we limit them to 100 million and give the rest to the government. I am not necessarily convinced the government would spend the money wiser…

      Edit: Better approach would be to sanction certain useless activities they practice such as using a plane for 100 kilometers, etc.

      • postmateDumbass@lemmy.world
        2·
        4 months ago

        I doubt the billionaire will spend that $100 Mil on altruistic endeavors.

        Tax shelters, itemizable donations, kickbacks into campaign funds, etc i believe.

        Actual large scale altruism? Nope.

        • theotherverion@lemmynsfw.com
          1·
          4 months ago

          Still better than many governments. Imagine this law was applied in Russia. All those millions would be used to fund the war against Ukraine.

          Edit: Hence why I believe that rather than setting a limit, we should create a set of sanctions on certain actions these people make.