World’s ultra-rich getting much richer – study

2014-11-21 11:53

A bare 0.004% of the world’s adult population controls nearly $30 trillion in assets, 13% of the world’s total wealth, according to a new study released yesterday.

And perhaps unsurprisingly, the study by the Swiss bank UBS and luxury industry consultant Wealth-X said the concentration of money in the hands of the ultra-rich is growing.

The report said 211 275 people qualify as “ultra-high net worth” – those with assets above $30 million. Of them, 2 325 have more than $1 billion.

Their numbers grew by 6% over the past year, but their wealth grew by 7%, as asset markets like stocks and property soared in many places around the world.

The fastest growth, indeed, came in the “demi-billionaire” group worth a half-billion to a billion dollars apiece, the study said.

“Even amid geopolitical conflicts, socioeconomic strife, and volatile currency markets, the world’s equity markets displayed strong performances, thereby enabling ultra-high net worth individuals’ wealth to increase and their influence across industries and sectors to grow – from their importance in wealth management to their consumption of luxury goods,” it said.

“Such a large concentration of wealth in the hands of these few individuals means that they tend to have a large degree of influence, whether on global equity markets or specific industries.”

Of the nearly $30 trillion this elite group controls, just over one-third is in the hands of tycoons in North America, more than one-quarter in Europe and 23% in Asia.

Of them, 87% are men, of the average age of 59, and nearly one-quarter of them were in banking. Of them, 68% were “self-made” rich, 13% rich by inheritance, and the rest a combination of the two.

The average ultra-rich woman was 57, and more likely to be involved in nonprofit and social organisations (19%) than any other sector. Nearly half became wealthy through inheritance, while one-third were self-made wealthy.

As F Scott Fitzgerald wrote, the rich are different. The average ultra-high net worther spends $1 million a year on luxury goods and services.

Yet, the study points out, luxury items can be “part and parcel of their lifestyle and are not necessarily considered a ‘luxury’.”

“For example, ultra-high net worth individuals with private jets use their aircraft not only for leisure, but also for business purposes. On the other hand, while yachts, and particularly superyachts, are usually a non-necessity, many ultra-high net worth individuals lead very public lives, and the privacy of a family holiday on a yacht is a very special treat.”

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