The New Empire of Billionaires.
There is always Room at the Top.
The worst effects of the global recession have done little to dent the lifestyles and fortunes of the super-rich. While the world's economic output may have shrunk by two per cent during 2009, the collective wealth of the world's millionaires actually soared by 20 per cent, a major new study shows.
And the ranks of the super-rich are also expanding rapidly. The latest World Wealth Report from investment giants Merrill Lynch and Cap Gemini shows that the world's population of dollar millionaires grew 18 per cent to hit 10 million during 2009.
But what is behind this wealth surge? Where can the world's millionaires be found? And what are they doing with their fortunes?
After suffering sustained losses during 2008, the world's "high net wealth individuals" — those defined as having liquid assets not tied up in property or things that can't be sold quickly and easily of $1 million or more — saw their fortunes recover to pre-crash levels.
The wealth of the world's millionaires increased by 20 per cent during 2009 hits $39 trillion. That's a staggering $39,000,000,000,000,000 — enough to buy every house in the U.K. more than six times over.
The United States is the place where more of the world's millionaires call home than anywhere else. North America's 3 million high net wealth individuals are worth a collective $11 trillion and comprise more than 30 per cent of the world's population of millionaires. In fact, more than half of the world's millionaires can still be found in just three countries - the U.S., Germany and Japan.
For the first time ever, there are as many millionaires in the emerging economic powerhouses of Asia and the Pacific as in Europe. Hong Kong led the way, thanks to the strong stock market performance that saw it buck global trends and expand by a staggering 74 per cent, while in India the number of dollar millionaires actually doubled during 2009. And with GDP in the region forecast to grow at 7 per cent this year — the fastest pace anywhere in the world — their fortunes look secure, too.
Canada has the seventh-largest concentration of wealthy individuals in the world — but their riches have taken a hit over the past 18 months. After dipping 24 per cent in 2008, the ranks of the rich rose by 18 per cent i.e. 2 87000
A cautious trend can be detected in the investments of the super-rich, as the year saw them ditch risky ventures in favour of predictable returns. The proportion of cash ploughed into safe fixed-income instruments — such as bonds offering guaranteed returns — rose two per cent during 2009 to reach 31 per cent. Share investments rose four per cent to 29 per cent as the world's stock markets staged a tentative recovery, while the super-rich also moved to cash in on the property slump, with a proportional rise registered in residential real estate purchases.
The super-rich have long been active in charitable giving — not least for tax reasons — and following a sharp fall in donations during 2008, the proportion of cash the rich allocate to philanthropic causes is once again on the rise. Millionaires based in North America donate more than $200 billion a year to charities around the globe — and their peers elsewhere in the world are following their example.
In Europe, Asia, Latin America and the Middle East, the proportion of assets donated rose significantly during 2009.
The tentative upturn in the economy also spurred the rich into returning to what the report terms "investments of passion." The luxury collectables sector — including supercars, yachts and private jets — picked up during the second half of 2009 and accounted for 32 per cent of funds ploughed into investments of passion.
Some interesting global trends emerge from the report: While US high net worth individuals prefer luxury collectables, wealthy investors in Europe and Latin America plough the highest proportion of their funds 28 per cent into art. Elsewhere, those in the Middle East and Asia invest the highest proportion 36 per cent and 30 per cent respectively of their wealth into jewellery and precious gems.
