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For many US citizens, the financial landscape over the past five years has been tough. Expenses have skyrocketed while salaries remains stagnant. Steep mortgage rates have made homeownership a bleak prospect. The rate of unemployment has been creeping up.

Most people have reported they're delaying major life decisions, including starting a family or moving to new employment, because of financial volatility. But for a tiny fraction of people, the last five years couldn't have been more prosperous.

Fortune Expansion

The fortune of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even during all the financial uncertainty, the stock market has only continued to grow. This increase has largely benefited just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is currently designed.

"Rich elites have bought their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," commented wealth disparity expert Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Understanding Wealth Tiers

To help others grasp what exactly it means to be "rich" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, envisioned the different levels of wealth as "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins categorizes these "affluence districts" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a annual salary of at least $110,000 and an net worth of over $1.5m.
• The villages get more select as wealth goes up: Lower Richistan has 2.6 million households who have wealth between $6m and $13m.
• Middle Richistan has 1.3 million households who have assets worth an average of $37m.
• Upper Richistan, made up of 130,000 Americans (roughly the size of a small city) has between $60m to $1bn in wealth.

Collectively, the residents of these villages constitute the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances vary dramatically.

"You could be in Lower Richistan, and you're still traveling in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're flying in a private jet. That's a really distinct lifestyle. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system collapses – you're set."

Ultra-Wealth Impact

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The control that this group has far surpasses those who are simply affluent, let alone the average American who doesn't inhabit "Richistan" at all.

But Collins thinks the political catchphrase "billionaires shouldn't exist" misses the point and has a "whiff of exterminism" to it.

"It's the separation between personal actions and a structure of regulations," Collins commented. "We should be worried about an economic system that funnels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins separates it into four parts: getting the wealth, defending the wealth, policy control and extreme wealth removal.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a reasonable quantity of wealth through establishing or managing a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires serious investment and planning in those next three steps. Collins describes what he calls the "fortune security field": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a wide variety of tools such as legal entities, international accounts, undisclosed businesses, non-profit organizations and other vehicles to hold assets," he details.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth and ensure continued growth.

The last stage is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to affect nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is searching for those areas of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people comprehend is these billionaire private-equity funds are what happens when so much wealth is parked in so few hands, and they can essentially pivot and say, 'Where else can we squeeze money out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can increase their costs."

The Real Consequences

The results of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any meaningful wage increases. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"The most powerful wealthy elites understand people are being excluded [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at tapping into a potent "phony populism".

Political Reality

The irony, Collins points out in his book, is that elected representatives have appointed a succession of billionaires to administrative posts. Along with wealthy entrepreneurs who had short yet influential roles overseeing substantial reductions to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from political partners, helped pass huge tax bills, which will make enduring decreases for the wealthy and corporations.

Potential Changes

While political parties continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the challenge is: Will the alternative political group, which has also been captured by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did represent the will of the bulk of people who really want lawmakers to solve some of these urgent problems," Collins said. "Wealthy influence is not about creating so much as blocking. It's easier to block than it is to make something meaningful happen, but the institutional knowledge is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require sustained political momentum.

"It may be sooner than expected that the balance shifts, and then it really is about sustaining a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can address this. It is solvable."