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To numerous US citizens, the financial landscape over the recent five-year span has been tough. Expenses have soared while pay remains unchanged. Elevated mortgage rates have made buying a home a grim prospect. The jobless rate has been creeping up.

The majority of individuals have reported they're delaying major life decisions, including having kids or changing careers, because of the instability. But for a very small group of people, the last five years couldn't have been more prosperous.

Fortune Expansion

The fortune of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even amid all the financial uncertainty, the stock market has only kept rising. This increase has primarily advantaged just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this division seems, it's the economic framework working as it is existing today.

"The wealthy have bought their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now entering this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

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

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

• At the lowest tier, 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 exclusive 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.

Altogether, the residents of these villages make up 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 flying in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really different cultural experience. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system fails – you're set."

Extreme Affluence Consequences

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

But Collins thinks the activist mantra "billionaires shouldn't exist" fails to address the core issue and has a "hint of elimination" to it.

"It's the difference between private conduct and a system of rules," Collins said. "We should be concerned about an economic system that directs 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: accumulating assets, protecting assets, political capture and extreme wealth removal.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a modest amount 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 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 calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as trusts, offshore bank accounts, secret corporations, philanthropic entities and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

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

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

"Private equity is seeking those corners of the economy where they can extract value 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 parked in so few hands, and they can kind of turn around 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 meaningful wage increases. And Collins said the pain and frustration of this kind of society can lead to profound dissatisfaction.

"The most powerful affluent rulers understand people are being excluded [and] are financially struggling," Collins said, adding that conservative politicians have been good at accessing a potent "phony populism".

Policy Situation

The irony, Collins points out in his book, is that political leaders have appointed a string of billionaires to government roles. Along with tech billionaires 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 political partners, helped pass major tax legislation, which will make lasting reductions for the wealthy and corporations.

The Path Forward

While legislative bodies continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the issue remains: Will the alternative political group, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "reverse the updraft of wealth", including significant reforms to the tax system, raising the minimum wage and strengthening unions.

"It was so, so close, and the law really did represent the will of the most of people who really want lawmakers to fix some of these urgent problems," Collins said. "Wealthy influence is not about building so much as stopping. 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 ongoing legislative effort.

"It may be sooner than expected that the tide turns, and then it really is about maintaining a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can address this. It is fixable."