The rising tide lifts the high net worth folks

“High net worth individuals” – people with $1 million or more in ready cash to spend – are leaving behind the vast majority of people worldwide, who are treading water or sinking economically, according to a report by Capgemini, a French consulting firm, and Merrill Lynch.

High net worth individuals are more numerous and individually wealthy than before the recession.  And within this wealthy group, there is an ultra-rich group with $30 million each available to spend.  They are 1 percent of high net worth individuals, but they hold more than a third of the total wealth of people in this category.

The Guardian of London reported:

We are not all in this together. … … A new report shows the world’s wealthiest people are getting more prosperous – and more numerous – by the day.

The globe’s richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them – nearly 11 million – than before the recession struck.

In the world of the well-heeled, the rich are referred to as “high net worth individuals” (HNWIs) and defined as people who have more than $1 million (£620,000) of free cash.

According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of HNWIs around the world reached $42.7 trillion (£26.5 trillion) in 2010, rising nearly 10 percent in a year and surpassing the peak of $40.7 trillion reached in 2007, even as austerity budgets were implemented by many governments in the developed world. … … …

The report also measures a category of “ultra-high net worth individuals” – those with at least $30 million rattling around, looking for a home. The number of individuals in this super-rich bracket climbed 10 percent to a total of 103,000, and the total value of their investments jumped by 11.5 percent to $15 trillion, demonstrating that even among the rich, the richest get richer quicker.  Altogether they represent less than 1 percent of the world’s HNWIs – but they speak for 36 percent of HNWI’s total wealth. … …

The performance of investments made by wealthy individuals in shares and commodities, and their willingness to take more risks, helps drive their wealth, which in turn fuels “passion” purchases of multimillionaire must-haves, ranging from Ferraris to diamonds, art and fine wines.  Demand for such luxuries is especially high among the growing number of wealthy individuals in the emerging markets. … …

The pace of growth in the wealthy has returned to a “more sustainable pace” since last year’s report, when there was a 17 percent rise in the number of HNWIs to 10 million, reaching pre-crisis levels.

Via The Guardian.

Merrill Lynch and Capgemini analysts probably would say that it is okay for the wealthy elite to get ever-increasing shares of the world’s wealth because they are the driving force for economic prosperity.  I find that hard to believe unless you think, as some people do, that this is true by definition.

Click on World’s wealthiest people now richer than before the credit crunch for The Guardian’s complete article.

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