There is a common perception that the rich keep getting richer, and poor keep getting poorer. The second half of this sentiment may not always be true, but the first half certainly is. According to a recent report released by the Boston Consulting Group, the wealthy percentage of the world’s population is richer than ever before.
The report stated that personal wealth globally adding up to a staggering $201.9 trillion rose by a full 12% since 2016. This means that wealth under the control of individuals, not corporations or businesses, is the highest it’s ever been. In other words, the rich really have become a great deal richer.
But this statistic may not be exactly what it seems on the surface.
The statistics say that about 50% of all personal wealth in the world is held by a relatively small margin of individuals, namely those who can already call themselves millionaires and billionaires. The rest of us who have yet to reach millionaire status need to keep on entering the lottery or playing Blackjack online in the hope of netting a win that would put us into this category!
Of the total of $201 trillion personal wealth, about $86 trillion belongs to those who reside in the United States. Of the $85 trillion in the United States, 42 per cent is held by those who have over $5 million in assets.
But the biggest personal wealth climb in recent years has not been in the United States or Europe as many might have expected. Instead, it is the Asian region that has seen the biggest personal wealth climb, specifically in China. China climbed dramatically; overtaking Japan and rocketing up to second place globally, now sitting just behind the United States. $36.5 trillion of total global personal wealth now resides in China, well ahead of previous second place holders, Japan.
Anna Zakrzewski, the author of the report from Boston Consulting Group, stated that the incredible growth of personal wealth in China is not about to slow down either. By her reckoning, China will see equal growth in the following five years, with about four times the number of millionaires created as is expected in the United States. In other words; it likely won’t be long before China holds the number one spot.
Concentration Of Personal Wealth
In terms of personal wealth concentration, Eastern Europe and Hong Kong have more billionaires than anywhere else in the world. Eastern European billionaires control roughly a full quarter of all investible wealth in that region. There are a total of 28 Eastern European billionaires in the official top 500 billionaires of the world list, controlling around $294 million between them.
In Hong Kong those who have $20 million or more in assets, a percentage that has rapidly climbed over the past five years, control almost half of all investible wealth in the region. This percentage will likely grow even higher in the coming five years.
Are the Poor Getting Poorer?
As already said; the perception that if the rich are getting richer, it ultimately means that the poor must be getting poorer, is not true. Zakrzewski cleared this up by saying that, against expectations; everyone is really getting richer, overall. The trick is that rich are simply getting richer faster than those in lower income brackets, swelling the amount controlled by millionaires.
Likewise, Zakrzewski pointed out that personal wealth gain outside the United States had an enormous boost, given the fact that the dollar is weakening, thereby granting extra value to other currencies. This does not mean that China’s wealth gain was artificial, but simply that as long as the dollar is losing value, currencies beyond the dollar will always be gaining value.