Posted on 06/28/2007 2:19:14 AM PDT by 2ndDivisionVet
The number of millionaires in the world increased by 8.3 percent in 2006, with about 9.5 million individuals now estimated to have more than a million dollars in financial assets, a report said Wednesday.
The survey by financial services group Capgemini and US investment bank Merrill Lynch said strong global economic growth and gains on the stock market explained the expansion of the exclusive club of "High Net Worth Individuals" (HNWIs).
The financial assets owned by the group totalled 37.2 trillion dollars (27.7 trillion euros), an increase of 11.4 percent from 2005, with Singapore, India, Indonesia and Russia producing the greatest number of new millionaires.
"Real GDP and market capitalisation growth rates, two primary drivers of wealth generation, accelerated throughout 2006, which helped to increase the total number of HNWIs around the world as well as the amount of wealth they control," the report said.
The number of Ultra-HNWIs -- individuals with financial assets exceeding 30 million dollars -- increased by 11.3 percent in 2006, with the global population of this extremely affluent group now estimated at 94,970 people.
The financial assets of Ultra-HNWIs increased by 16.8 percent compared with 2005, illustrating a trend whereby wealth is increasingly concentrated in the hands of the already wealthy, the report said.
"Global wealth continued to consolidate in 2006, a trend we have reported for the past 11 years," the report said.
Capgemini and Merrill Lynch define a millionaire as someone with more than one million dollars in financial assets such as cash, equities, bonds or funds.
They do not include the value of an individual's primary residence or private collections of objects such as art, antiques or coins.
This year's report included a section looking at the money spent by millionaires on so-called "investments of passion," meaning investments in luxury goods.
More than a quarter of such investments were in private jets, sports teams, yachts or race horses, with the remainder in art, fine wine and jewelry.
"On average, art investments comprised 20 percent of HNWIs' investments of passion -- outlays that were dwarfed by the huge prices paid for private aircraft and yachts," the report said.
The survey also highlighted a trend among millionaire investors to put money into the real estate market in 2006, particularly commercial real estate, to take advantage of surging rental and property prices.
"In 2006 HNWIs overall shifted their allocations from 'alternative investments' ... to seek high returns from real estate opportunities."
This was likely to be be a short-term, tactical move, however, "rather than a long-term asset allocation shift."
For the future, Capgemini and Merrill Lynch predicted a slowdown in the global economy this year but an increase in the wealth of the world's super-rich of about 6.7 percent.
The collective fortune of the HNWI population is forecast to hit 51.6 trillion dollars in 2011, compared with 37.2 trillion last year.
Porn-rich.
It’s actually a lower number than I would have guessed.
Here’s a column that shows nine million households in the US alone with a millionaire:
A portrait of the 9M millionaire households in the United States
Julie Jason June 10, 2007
Remember when being a millionaire meant you were wealthy?
If you are a baby boomer, you might recall watching the television show, “The Millionaire.” Each week, Michael Anthony, executive secretary to John Beresford Tipton, delivered a million-dollar cashier’s check to a total stranger, creating overnight wealth.
Having a million dollars in 1960, when the show went off the air, defined the ultra-wealthy.
Today, 9 million U.S. households have wealth of $1 million or more, according to Spectrem Group, a consulting firm specializing in the affluent and retirement markets. “Wealth” excludes the value of the home. This represents about 8 percent of all U.S. households, according to the U.S. Census Bureau.
Who are the true “millionaires” of today? Probably the ultra-wealthy - the 1 million households that have more than $5 million of wealth excluding their homes, representing less than 1 percent of U.S. households.
The number of ultra-wealthy has jumped over the past 10 years. In 1996, only 250,000 households had net worth over $5 million, according to Spectrem.
In three short years, by the end of 1999, at the height of the stock market, 590,000 ultra-high net worth households were counted by Spectrem. That number dropped to 480,000 in 2002 when the market bottomed.
Since then, the number of households with $5 million or more in wealth steadily increased, to 1.14 million by the end of 2006, according to Spectrem.
Who are the ultra-wealthy? According to Spectrem, 22 percent are senior corporate executives. Fifteen percent are business owners and 11 percent are physicians or dentists.
Their average age is 65. More than half (56 percent) are retired, and 36 percent plan to retire within the next five years.
How did they achieve their wealth? You might be surprised. According to a survey released by U.S. Trust last month, they did not inherit wealth. U.S. Trust, a wealth-management company with headquarters in New York, surveyed individuals with investable assets of more than $5 million.
Eighty-four percent of the respondents reported that they made their wealth the hard way - starting from scratch and building their wealth over time, according to the U.S. Trust survey.
These ultra-wealthy have concerns, particularly about the effect of wealth on their children.
More than 50 percent are concerned about the negative impact of wealth on children, and almost all feel that it is important to teach children to manage wealth.
In fact, 80 percent believe in teaching children that wealth is a social responsibility, according to the U.S. Trust survey.
And here’s another surprise: Sixty-one percent report that their children are actively involved in managing their wealth.
Who are the up-and-coming wealthy? The affluent ($500,000 or more of investable assets) are 56 years of age on average, and represent mostly managers, senior corporate executives, and technical specialists, according to Spectrem. Forty-three percent are retired. Twenty-two percent plan to retire in less than five years.
While we’ve been talking about wealth, what about income? Based on the most recent (2003) statistics available from the IRS, the top 1 percent of household earners make more than $295,495 in adjusted gross income.
http://www.norwalkadvocate.com/business/scn-sa-nor.juliejason610jun10,0,6862013.column?track=rss
As am I...
Looks interesting, I’ll check the B&N magazine aisle for a copy.
“They do not include the value of an individual’s primary residence...”
... probably because of the huge difference between what my local taxing district thinks my home is worth and what the real world does. In my case the tax folks have me valued at 1.7 times my last real estate estimate. I wish I could sell for what the tax people think I own. Annual visits to the evaluation board to protest always result in a token reduction; nothing significant.
Also, the estimates of wealth may only count value that you can lose. Homestead exemptions and some laws prevent the taking of primary households in the event of bankruptcy.
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