Any comment on the part, below, I had in mind a 7mil networth to enter the top 1% and much more the top 0.1% how does the IRS and fed calculate the networth, how come there is such a large difference in their figures - 1.5 and 8.4million?
"A New York Times article (Economix, 1/17/12) agrees that the threshold for being in the top 1 per cent in household income is about $380k but states that, based on Fed data, the 1% threshold for net worth is $8.4M. The figure I use is around $1.5M and comes from the IRS. The Fed uses a simple formula based on assets and liabilities at a broad level of analysis with little detail. Using Fed data, about 8% of US households have a net worth exceeding $1M and the median net worth of the top 10% of US families is $1.569M. The IRS uses the estate multiplier technique to calculate the data, a more complex measure based on tax returns, capitalization of earnings power, and other factors. The estate multiplier technique has been around for decades, is more widely used, and in the opinion of many, is the more accurate number. Where the true threshold is located is impossible to determine with accuracy, but my observations in managing money support the lower number or something close to it. "
