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For many US citizens, the financial landscape over the past five years has been challenging. Expenses have skyrocketed while salaries remains stagnant. Steep mortgage rates have made buying a home a grim prospect. The rate of unemployment has been gradually increasing.

Most people have indicated they're postponing major life decisions, including raising children or changing careers, because of the instability. But for a tiny fraction of people, the recent half-decade couldn't have been more prosperous.

Wealth Explosion

The assets of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even during all the financial uncertainty, the stock market has only persisted in expanding. This expansion has largely benefited just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

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

"The wealthy have purchased their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

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

To modernize the concept, Collins classifies these "wealth villages" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a family earnings of at least $110,000 and an total assets 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 comprise 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 traveling in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really separate reality. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system fails – 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 most affluent. The power that this group has far surpasses those who are simply affluent, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" fails to address the core issue and has a "hint of elimination" to it.

"It's the separation between individual behaviors and a system of rules," Collins said. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins divides it into four parts: accumulating assets, protecting assets, political capture and extreme wealth removal.

When many Americans think about wealth, they usually think only 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 membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and tactics 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 broad range of tools such as financial instruments, foreign deposits, anonymous shell companies, charitable foundations and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth and maintain expansion.

The final phase 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' everyday life largely through capital management, which allows wealthy individuals to invest in private companies.

"Private equity is seeking those sectors of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people understand is these billionaire private-equity funds are what happens when so much wealth is accumulated in so few hands, and they can basically shift 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 increase their costs."

The Real Consequences

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 substantial income improvement. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"The most powerful oligarchs understand people are being marginalized [and] are financially struggling," Collins said, adding that Republicans have been good at tapping into a potent "fake grassroots movement".

Political Reality

The paradox, Collins points out in his book, is that elected representatives have appointed a series of billionaires to government roles. Along with affluent innovators who had brief but powerful roles overseeing substantial reductions to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from political partners, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that border policies and poor economic deals 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 effectively tackle 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, raising the minimum wage and strengthening unions.

"It was so, so close, and the bill really did reflect the will of the most of people who really want lawmakers to address some of these pressing issues," Collins said. "Elite control is not about creating so much as blocking. It's easier to block than it is to make something significant occur, but the muscle memory 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 before we know it that the tide turns, and then it really is about sustaining a continuous public campaign to make progress on this profound imbalance we're living in," he said. "We can fix this. It is addressable."