Just in case you hadn’t noticed, the rich are getting richer.
According to the latest survey of the world’s wealthy by Merrill Lynch and Capgemini, there are now 192,900 high net worth individuals in Australia, up 11.1 per cent from last year. To get into this rich list you need to have more than $1 million of investable assets – not including your family home, collectible items and super.
The most startling statistic was our standing in the global wealth rankings. Australia rose one spot in 2010 to have the ninth highest number of millionaires of the 71 countries covered by the report. We’re now in front of many countries with vastly larger populations than Australia.
Another interesting statistic from the World Wealth Report was that in 2010, a mere 103,000 people of the nearly seven billion people on the planet controlled 36.1 per cent of the world’s wealth (up from 35.5 per cent in 2009).
North America had the largest number of so-called ultra high net worth individuals, with 40,000 people worth more than $30 million. By the way, that’s one of the reasons I think the USA will eventually work its way through its economic woes. It has more of the world’s high net worth individuals than any other country and there is some smart collective wisdom amongst these people. They can’t all get it wrong – can they?
But last year was not just a good year for the really wealthy. It was also a good year for the merely rich.
The number of people around the globe with more than $1 million to invest was 10.9 million, up 8.3 per cent, while the amount of money they had – $42.7 trillion – had risen by 9.7 per cent. This was driven largely by the Asian region, including China and to a lesser extent, Australia.
The report noted that the number of high net worth people in Asia – 3.3 million – surpassed the number in Europe, which was 3.1 million, for the first time. China ranks fourth behind the United States, Japan and Germany for the number of high net worth citizens.
Advice for everyone else:
The World Wealth Report also offers some practical insight for those of us who are not super rich.
For one thing, the wealthiest people around the world put more money into the equities last year and plan to continue to do so. The percentage of assets allocated to equities increased from 29 per cent to 33 per cent, while allocations to fixed interest dropped from 31 per cent to 29 per cent and cash dropped from 17 per cent to 14 per cent.
Not surprisingly they also invested in real estate. Dorus van den Biezenbos from Capgemini Australia explained: “We see the real estate market as a big contributor to the positive growth number of millionaires in Australia.”
Regardless of what they were investing in, the wealthy were spreading their investments around the world to reduce the risk from political, economic and financial uncertainty. But identifying that safe place is more difficult. The rich generally agreed that they were concerned about the American economy and the potential for political and economic unrest elsewhere.
Also not surprisingly the World Wealth Report found that wealthy Asians were the only ones confident in investing in their own region. The report estimated Asians would maintain the current percentage of their money invested in the region in 2012, while the wealthy in Europe, North America and Latin America indicated they planned to reduce their allocations to their own regions.
With the rich getting richer yet some of us feeling poorer, knowing how the very rich think about their investments and diversification in an uncertain world can be useful to everyone else.
Or it could provide some interesting gossip to share with friends.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.