Wealth Distribution in the US: Climbing the Wealth Pyramid

By Tammy Trenta, CFP, Author of Wisdom to Be Wealthy

You likely know about the wealth disparity in America, but what does it really mean for everyday people trying to build financial security? In my research on the dispersion of wealth, I discovered some sobering truths. Psychological biases, a lack of financial literacy, and unequal access to quality financial advice all play huge roles in why wealth accumulates for some and erodes for others. 

In fact, many families who achieve wealth lose it by the second generation simply because they lack a solid understanding of the fundamentals of wealth preservation.

This reality made it clear to me: we must do better as a country when it comes to understanding both wealth accumulation and preservation. 

Financial literacy should not be a privilege reserved for the already wealthy.

Quality financial advice should be accessible to everyone. That’s why I’m passionate about advocating for broader education to help bridge these gaps and ultimately reduce wealth disparity.

The Wealth Pyramid: Where Do You Fit?

To help people understand the journey to wealth, I created a simple but powerful concept I call the Pyramid of Wealth. It divides Americans into four groups based on how they manage money and build wealth. I encourage you to take a moment to think about where you fit within this pyramid. The goal will then be to move up from your current level to the next one.

You may also like: The Psychology of Money: How to Navigate Biases and Opportunity Cost

Spenders: Living Paycheck to Paycheck

At the base of the pyramid are the Spenders.

Spenders are the people who live paycheck to paycheck with little to no savings, often driven by immediate gratification. This group is the largest, representing about 67% of Americans. Lack of financial literacy and deeply ingrained beliefs about money often keep spenders trapped in a cycle of earning and spending without building a secure financial foundation.

Changing this begins with education and mindset. Expanding your financial outlook means recognizing that your current income isn’t the only option. The gig economy, remote work, and upskilling offer new paths to supplement income. The first step toward building wealth is to balance acknowledging your reality with the aspiration for more.

Savers: Planning for Security but Not Growing Wealth

Next up are the Savers.

Savers are disciplined individuals who have learned to put money aside regularly, often with the goal of future security. However, many savers don’t invest their money effectively due to fear, lack of knowledge, or limited access to trustworthy financial advice.

Meet June

June is a high school teacher who saved diligently over her career but didn’t understand how to grow her money through investing. When she inherited $250,000, she sought advice at a bank and ended up with costly annuities that primarily benefited the broker. This is a common story. Savers need more than just a plan to save; they need education and fiduciary guidance to invest confidently.

Together, spenders and savers represent 91% of all U.S. households. To reach true financial growth, it’s essential to shift your mindset and behaviors toward becoming an Investor.

Investors: Actively Growing Wealth

Investors have made a conscious transition. They educate themselves, manage risk, diversify their portfolios, and consistently invest toward long-term goals. They often work with trusted financial professionals who act as fiduciaries, advisors who put their interests first.

What sets investors apart is a mindset focused on long-term wealth building rather than short-term gratification. They take action, stay disciplined, and align their finances with personal goals. This group represents a crucial 9% who leave behind the limitations of spending and merely saving.

Wealth Creators: Building Lasting Legacies

At the top of the pyramid are the Wealth Creators.

Wealth Creators are individuals or families who not only invest wisely but also actively manage multiple advisors, coordinate estate and tax planning, and leverage entrepreneurial ventures. 

This group understands the complexity of growing wealth across generations and values simplicity through cohesive, collaborative financial strategies.

Becoming a wealth creator means embracing efficiency and building a team that works together seamlessly. It’s about turning your financial goals into a lasting legacy that can endure for six or more generations.

Moving Up the Pyramid

Ascending the Pyramid of Wealth requires shifting your mindset, gaining knowledge, and taking consistent, informed actions. Here are key steps to help you climb:

• Invest in Financial Education: Understand the basics of budgeting, investing, and risk management.
  
• Challenge Your Money Beliefs: Identify and overcome fears or misconceptions holding you back. If you’re interested in learning more about money biases, read my recent blog The Psychology of Money.
  
• Seek Fiduciary Advice: Work with advisors who have your best interests at heart.
  
• Set Clear, Long-Term Goals: Align your financial decisions with your life vision.
  
• Stay Disciplined and Consistent: Build habits that support saving and investing regularly.
  
• Embrace Resilience: Stay focused on your goals despite market ups and downs.
  
• Build a Cohesive Advisory Team: When your wealth grows, ensure your advisors communicate and coordinate.

Final Thoughts

Understanding the dispersion of wealth helps us see where we are and what’s possible. The unfortunate truth is many families lose wealth due to poor education or uncoordinated advice. 

By breaking the cycle of spending or merely saving, and embracing the investor mindset, we can build not just personal wealth but generational wealth.

My hope is that more people will access the tools, education, and guidance needed to climb the pyramid and experience financial independence. When we all have the wisdom to be wealthy, America as a whole benefits.

You’ve got this!

— Tammy