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Corresponding to financial resources, the wealthy strategically organize their money so that it will produce profit. Affluent people are more likely to allocate their money in financial services such as stocks, bonds, and other investments. Yet those who are not wealthy are likely to have their money in savings accounts and home ownership. This difference comprises the largest reason for the continuation of wealth 9L0 509 inequality in America; the rich are accumulating more assets while the middle and working classes are just getting by. Currently, the richest 1% hold about one-third of all privately held wealth in the United States while the bottom 90% held 73% of all debt. These staggering statistics suggest that wealth inequality is deeply rooted in today’s society and supports a system in the United States.
“Who is the prototypical American 9L0 402 millionaire? What would he tell you about himself? … We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors… Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent…”

Two primary causes contribute to the creation and persistence of wealth inequality:

1. Financial Resources
2. Money Allocation

Essentially, the 350-001 wealthy possess greater financial opportunities that allow their money to make more money. Earnings from the stock market or mutual funds are reinvested to produce a larger return. Over time, the sum that is invested becomes progressively more substantial. 350-030 Those that are not wealthy, however, do not have the resources to enhance their opportunities and improve their economic position. Rather, “after debt payments, poor families are constrained to spend the remaining income on items that will not produce wealth and will depreciate over time. Scholar David B. Grusky notes that “62 percent of households headed by single parents are without savings or other financial assets”. The lack of savings removes the poor any opportunity to accumulate wealth and better their conditions. Notably, for both the wealthy and not-wealthy, the process of accumulation or debt is cyclical. The rich use their money to earn larger returns and the poor have no savings in which to produce returns and eliminate debt. Unlike income, both facets are generational. Wealthy families pass down their assets allowing future generations to develop even more wealth. 640-802 The poor, on the other hand, “are less able to leave inheritances to their children leaving the latter with little or no wealth on which to build…This is another reason why wealth inequality is so important- its accumulation has direct implications for economic inequality among the children of today’s families”

The Bureau of the Census formally defines income as “received on a regular basis (exclusive of certain money receipts such as capital gains) 9L0-402 before payments for personal income taxes, social security, union dues, medicare deductions, etc.”. By this official measure, the wealthiest families have low income but the value of their assets earns enough money to support their lifestyle. Dividends from trusts or gains in the stock market do not fall under the 9L0-509 Braindump definition of income but are the primary money flows for the wealthy. Retired people also have little income but usually have a higher net worth because of money saved over time. Additionally, income does not capture the extent of wealth inequality. Wealth is derived over time from the collection of 9L0-509 income earnings and growth of assets. The income of one year cannot encompass the accumulation over a lifetime. Income statistics view too narrow a time span for it to be an adequate indicator of financial inequality. For example, the for wealth inequality increased from 0.80 in 1983 to 0.84 in 1989. In the same year, 1989, the Gini 9L0-402 Exam coefficient for income was only 0.5. The Gini coefficient is an economic tool on a scale from 0 to 1 that measures the level of inequality. 0 signifies perfect equality and 1 represents perfect inequality. From this data, it is evident that in 1989 there was a discrepancy about the level of economic disparity with the extent of wealth inequality significantly higher than income inequality.