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Zach Tripp
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Certified program manager (PMP) with a background in engineering. Fundamental investor who's portfolio consists of buy-and-hold dividend growth companies, growth companies (short-term) and index fund portfolio management (retirement / long-term savings).
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  • Example Of Income Inequality 1 comment
    Jul 5, 2012 7:05 PM

    I listened to this report on Bloomberg this afternoon and it got me thinking about income inequality. Here is a link to the broadcast: bloom.bg/M7Ycf6

    Here is my hypothetical example:

    Let's say you pick one county in the US and find the average income of the lowest 20% is $25,000 and the average income for the top 20% (in the same county) is $250,000, a difference of $225,000. You come back 10 years later, and the average salary for the lowest 20% is $67,852 and the average income for the top 20% is $619,557, a difference of $552,705. The difference has more than doubled in 10 years.

    What should be done about this?

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  • Zach Tripp
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    Author’s reply » Official answer: nothing!

     

    So, there is no income inequality. Actually, the income inequality lessen after 10 years. The lowest 20% had their income grow at a compound annual growth rate of 10.45%. The upper 20% had their income grow at a compound annual growth rate of 8.25%. The "poor" got richer and the "rich" got poorer.

     

    math can be tricky sometimes, be careful of blanket statements this political season.
    13 Jul 2012, 09:41 PM Reply Like
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