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For many individuals in the United States, the financial landscape over the last half-decade has been difficult. Costs have soared while pay remains stagnant. High mortgage rates have made buying a home a bleak prospect. The unemployment rate has been gradually increasing.

Most people have indicated they're postponing major life decisions, including starting a family or moving to new employment, because of the instability. But for a very small group of people, the last five years couldn't have been more prosperous.

Wealth Explosion

The fortune of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even throughout all the financial uncertainty, the stock market has only kept rising. This growth has largely benefited just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this division seems, it's the financial structure working as it is currently designed.

"Affluent individuals have bought their jets, they've purchased their multiple houses and mansions, but now they're acquiring senators and media outlets," stated wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Analyzing Income Brackets

To help others grasp what exactly it means to be "wealthy" 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: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins categorizes these "wealth villages" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an net worth of over $1.5m.
• The villages get more restricted 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.

In total, the residents of these villages make up the top 10% of the wealth income distribution, about 14 million Americans altogether, though their experiences vary dramatically.

"You could be in Lower Richistan, and you're still flying 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 separate reality. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system shuts down – you're set."

Ultra-Wealth Impact

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The influence that this group has far surpasses those who are simply wealthy, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" doesn't capture the real problem and has a "whiff of exterminism" to it.

"It's the distinction between individual behaviors and a framework of policies," Collins said. "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 breaks it down into four parts: getting the wealth, securing fortune, government influence and maximum resource extraction.

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

But getting to Billionaireville requires substantial commitment and planning in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their skills 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, charitable foundations and other methods to hold assets," he explains.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs political support. Wealth of over $40m becomes political power, Collins says, and can be used to defend wealth and protect its accumulation.

The last stage is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to touch nearly every single part of an Americans' daily existence largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is looking for those sectors 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 generate returns out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

Tangible Effects

The consequences 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 suffering and anger of this kind of society can lead to deep discontent.

"The most powerful wealthy elites understand people are being left behind [and] are economically suffering," Collins said, adding that Republicans have been good at accessing a potent "false common-man appeal".

Policy Situation

The paradox, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with affluent innovators who had short yet influential roles overseeing substantial reductions to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from congressional allies, helped pass huge tax bills, which will make enduring decreases for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that foreign entry and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: 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 deep changes to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the legislation really did represent the will of the most of people who really want lawmakers to fix some of these pressing issues," Collins said. "Elite control is not about creating so much as stopping. It's easier to block than it is to make something significant occur, but the institutional knowledge is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require ongoing legislative effort.

"It may be sooner than expected that the tide turns, and then it really is about preserving a sustained really popular movement to make progress on this profound imbalance we're living in," he said. "We can fix this. It is addressable."