kopiandproperty.my has written about this topic over the years and this year, it has become worse. Worse for the poorer half of the world population.The richer are getting richer and faster too. Here’s that report in TheStar. First of all, there is nothing wrong with richer getting richer. However, their wealth as a percentage is growing much higher which meant that despite the world population growing, their share of wealth is actually on a downtrend. Asper the report, the millionaires and billionaires now hold almost half of global personal wealth, up from slightly less than 45% in 2012, says Boston Consulting Group (BCG). What do they invest in? US$121.6 trillion (60%) of global wealth took the form of investable assets – mainly equities, investment funds, currency and deposits, and bonds, with the remaining US$80.3 trillion (40%) held in non-investable or low-liquidity assets such as life insurance, pensions funds, and equity in unquoted companies.
Residents of North America held over 40% of global personal wealth, followed by residents of Western Europe, with 22%. The strongest region of growth was Asia, which posted a 19% increase. This is how these wealthy group is measured:
The personal wealth bands are generally measured as such:
1. Retail: below US$250,000
2. Affluent: between US$250,000 to US$1mil
3. Lower High Net Worth (HNW): between US$1mil and US$20mil
4. Upper HNW: between US$20mil and US$100mil
5. Ultra HNW: above US$100mil
This is where they are from. The U.S. Look closely at China. The compounded annual growth wise, it’s by far faster than the U.S. Entrepreneurs are seen to be those investing more by liquidating the equity in their own companies. The largest pool of these entreprenuers are in US, France, Italy and Japan. Meanwhile in Asia, the personal wealth is growing by 19 percent. (If we are growing by the same number, then we are not falling behind). Residents of China hold 57 percent of the growth. Asia remains a cash-and-deposit-heavy region, with 44% of personal wealth held in this asset class. (YES, FIXED Deposits as an example and Debt-Free homeowners as another example). Over the next five years however, the regional wealth is expected to grow at a CAGR of 12%. (With job increments at 6 percent, a working professional just have to make sure they could grow another 6 percent from their existing wealth…)
In Malaysia, we know of the case where the heads of GLCs are getting high salaries. There are still CEOs whose take home pay is a huge percentage of the company’s profits with the shareholders getting little or no dividends.. There are also over 60,000 hardcore poor heads of family in Malaysia as per recent report in TheStar here. These are not what we should worry about though. We should keep learning about financial investment and the opportunities it represent because if we did nothing, we will become poorer as the year passes. Inflation is not the main worry, INACTION is; taking no actions… Here’s that article in TheStar again. Happy investing.
written on 21 July 2018
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