The investment banking world is different from your world

The Wall Street Journal recently published an infographic that is producing all sorts of shocked disbelief in the social media circles I frequent:

The general gist of the comments in Facebookistan is that no one “really” makes the kind of money these people make. In one sense it’s true: Just a tiny portion of the US makes that kind of money. What portion? The sort of people who subscribe to the Wall Street Journal. According to their Rate Card, the average household income of a WSJ subscriber is $261,000 per year. That’s a little lower than the $330K average of the families on the info-graphic, but not much lower!

Given the WSJ’s US circulation of about 1.5 million, that’s a lot of people. It’s just not many people compared to the total US population of 312 million.

Is it realistic for a single mom to make $260,000 per year? It is if she is an investment banker on Wall Street. According to this site, a third-year associate investment banker with an MBA typically has a total compensation package north of $300K per year.

But what about those exorbitant investment incomes? Could a family of 6 really have $180K in investment income a year? If they’re making a 5% return,  that would require a net worth of $3.6 million. Unheard of? Not among WSJ subscribers, whose net worth averages $2.6 million. Granted, these income and investment figures are probably skewed by the ultra-rich. One billionaire can increase the “average” net worth of a thousand millionaires by $1 million.

Is this graphic horrifying? Absolutely. But not because it’s inaccurate. Rather, it’s horrifying because of the obscene amount of money still being made by the very sector of our economy that nearly bankrupted us all.

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