Money
How the Composition of Wealth Differs, from the Middle Class to the Top 1%

A Breakdown of Wealth, from Middle Class to the Top 1%
Just as household wealth varies greatly across the population, the composition of that wealth changes as well. Simply put, the person next to you at the grocery store will likely have a much different asset mix than, say, Warren Buffett.
Today’s chart breaks down the differences in the composition of wealth between middle income, upper income, and ultra wealthy (top 1%) of American households to help us better understand the building blocks that make up net worth. Let’s dive in.
Middle Income: Home is Where the Wealth is
It’s no surprise that the principal residence is the cornerstone of net worth for most Americans in the middle class. For households that fall in this wide range ($0 to $471k of net worth) the combination of housing and pension accounts make up nearly 80% of total wealth on average.
Assets like stocks and mutual funds only make up about 4% of wealth in this income bracket, partially mirroring the trend of lower stock market participation in recent years.
As we move up the income ladder, however, this situation changes quite a bit.
Upper Income: A Diversified Portfolio
If a household has a net worth that ranges between $471,000 and $10.2 million, it is considered to fall in the upper income band above. This represents the 20% richest households in the U.S., minus the top 1%, which are put in a separate bracket.
For this group, the principal residence makes up a smaller slice of the wealth pie. Instead, we see a higher mix of financial assets like stocks and mutual funds, as well as business equity and real estate. Almost half of households in this group own real estate in addition to their principal residence.
As households become wealthier, we tend to see a lower share of liquid assets as compared with the other components of net worth.
The Top 1%: The Business Equity Bulge
In the richest 1% of households, the principal residence makes up a mere 7.6% of assets. At this stage, almost half of assets fall under the category of business equity and real estate.
A prime example of this is Jeff Bezos. The lion’s share of the Amazon founder’s net worth is tied to the value of his company. Another example is President Trump, whose sprawling real estate empire comprises two-thirds of his estimated $3.1 billion net worth.
One of the more prominent features of the ultra rich wealth bracket is a much higher level of financial asset ownership. In fact, the top 1% of households own over 40% of stocks.
As well, this tiny group of ultra wealthy households earns 22% of total income, up from 8% in the 1970s.
Central Banks
Which Countries Hold the Most U.S. Debt?
Foreign investors hold $7.3 trillion of the national U.S. debt. These holdings declined 6% in 2022 amid a strong U.S. dollar and rising rates.

Which Countries Hold the Most U.S. Debt in 2022?
Today, America owes foreign investors of its national debt $7.3 trillion.
These are in the form of Treasury securities, some of the most liquid assets worldwide. Central banks use them for foreign exchange reserves and private investors flock to them during flights to safety thanks to their perceived low default risk.
Beyond these reasons, foreign investors may buy Treasuries as a store of value. They are often used as collateral during certain international trade transactions, or countries can use them to help manage exchange rate policy. For example, countries may buy Treasuries to protect their currency’s exchange rate from speculation.
In the above graphic, we show the foreign holders of the U.S. national debt using data from the U.S. Department of the Treasury.
Top Foreign Holders of U.S. Debt
With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt.
Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.
This bond offloading by China is the one way the country can manage the yuan’s exchange rate. This is because if it sells dollars, it can buy the yuan when the currency falls. At the same time, China doesn’t solely use the dollar to manage its currency—it now uses a basket of currencies.
Here are the countries that hold the most U.S. debt:
Rank | Country | U.S. Treasury Holdings | Share of Total |
---|---|---|---|
1 | 🇯🇵 Japan | $1,076B | 14.7% |
2 | 🇨🇳 China | $867B | 11.9% |
3 | 🇬🇧 United Kingdom | $655B | 8.9% |
4 | 🇧🇪 Belgium | $354B | 4.8% |
5 | 🇱🇺 Luxembourg | $329B | 4.5% |
6 | 🇰🇾 Cayman Islands | $284B | 3.9% |
7 | 🇨🇭 Switzerland | $270B | 3.7% |
8 | 🇮🇪 Ireland | $255B | 3.5% |
9 | 🇹🇼 Taiwan | $226B | 3.1% |
10 | 🇮🇳 India | $224B | 3.1% |
11 | 🇭🇰 Hong Kong | $221B | 3.0% |
12 | 🇧🇷 Brazil | $217B | 3.0% |
13 | 🇨🇦 Canada | $215B | 2.9% |
14 | 🇫🇷 France | $189B | 2.6% |
15 | 🇸🇬 Singapore | $179B | 2.4% |
16 | 🇸🇦 Saudi Arabia | $120B | 1.6% |
17 | 🇰🇷 South Korea | $103B | 1.4% |
18 | 🇩🇪 Germany | $101B | 1.4% |
19 | 🇳🇴 Norway | $92B | 1.3% |
20 | 🇧🇲 Bermuda | $82B | 1.1% |
21 | 🇳🇱 Netherlands | $67B | 0.9% |
22 | 🇲🇽 Mexico | $59B | 0.8% |
23 | 🇦🇪 UAE | $59B | 0.8% |
24 | 🇦🇺 Australia | $57B | 0.8% |
25 | 🇰🇼 Kuwait | $49B | 0.7% |
26 | 🇵🇭 Philippines | $48B | 0.7% |
27 | 🇮🇱 Israel | $48B | 0.7% |
28 | 🇧🇸 Bahamas | $46B | 0.6% |
29 | 🇹🇭 Thailand | $46B | 0.6% |
30 | 🇸🇪 Sweden | $42B | 0.6% |
31 | 🇮🇶 Iraq | $41B | 0.6% |
32 | 🇨🇴 Colombia | $40B | 0.5% |
33 | 🇮🇹 Italy | $39B | 0.5% |
34 | 🇵🇱 Poland | $38B | 0.5% |
35 | 🇪🇸 Spain | $37B | 0.5% |
36 | 🇻🇳 Vietnam | $37B | 0.5% |
37 | 🇨🇱 Chile | $34B | 0.5% |
38 | 🇵🇪 Peru | $32B | 0.4% |
All Other | $439B | 6.0% |
As the above table shows, the United Kingdom is the third highest holder, at over $655 billion in Treasuries. Across Europe, 13 countries are notable holders of these securities, the highest in any region, followed by Asia-Pacific at 11 different holders.
A handful of small nations own a surprising amount of U.S. debt. With a population of 70,000, the Cayman Islands own a towering amount of Treasury bonds to the tune of $284 billion. There are more hedge funds domiciled in the Cayman Islands per capita than any other nation worldwide.
In fact, the four smallest nations in the visualization above—Cayman Islands, Bermuda, Bahamas, and Luxembourg—have a combined population of just 1.2 million people, but own a staggering $741 billion in Treasuries.
Interest Rates and Treasury Market Dynamics
Over 2022, foreign demand for Treasuries sank 6% as higher interest rates and a strong U.S. dollar made owning these bonds less profitable.
This is because rising interest rates on U.S. debt makes the present value of their future income payments lower. Meanwhile, their prices also fall.
As the chart below shows, this drop in demand is a sharp reversal from 2018-2020, when demand jumped as interest rates hovered at historic lows. A similar trend took place in the decade after the 2008-09 financial crisis when U.S. debt holdings effectively tripled from $2 to $6 trillion.
Driving this trend was China’s rapid purchase of Treasuries, which ballooned from $100 billion in 2002 to a peak of $1.3 trillion in 2013. As the country’s exports and output expanded, it sold yuan and bought dollars to help alleviate exchange rate pressure on its currency.
Fast-forward to today, and global interest-rate uncertainty—which in turn can impact national currency valuations and therefore demand for Treasuries—continues to be a factor impacting the future direction of foreign U.S. debt holdings.
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