A wealthy man once said, “You’re not making money unless you’re making it in your sleep.” The recently released list of the wealthiest people in the world is testament that this saying stays true. While the rate at which people are gaining the UHNW individual status might have slowed down, the figures show that there is still an increase in individual that joined the cohort. Consequently, this has also seen a spike in the value of assets held by members that feature in this premium club.
The latest figures indicate that there are over 172,850 UHNW individuals as of 2015 that have a total asset value of $20.8 trillion. This is almost double the GDP of the USA which also happens to have the world’s largest GDP. The figure is further expected to go up and hit about $70 trillion by 2017. This translates to about a 7.7% increase in asset value annually through to the year 2017. While the figures are nauseating especially to those that are critical to economic inequality, the truth of the matter is, other than having 40% of the world’s GDP in their hands and bank accounts, people that fall under the UHNW individual umbrella do have a lot to say about the global economy. Some experts do find this somewhat debatable but, the numbers indicate otherwise. And, numbers don’t lie. While other economic classes do factor in while considering the wellness of the global economy, members of the UHNW individual club do impact the direction of the economy in a huge way. Here are some figures that support the claims.
Distribution is Key
To have a bird’s eye view of how the presence of the richest in the world affects the economy, you just have to look at how they are distributed. The more members that any given country has, the stronger its general economy is. Take the USA for instance, it leads all the other countries and is home to some 70,485 individuals that are worth about $10 trillion. It is also not a surprise that the USA happens to have a relatively stable economy and a substantial GDP. Other countries that have substantial number of UHNW individuals that also have a great economic impact include India, China, regions like the Middle East as well as Europe which is currently recovering from an economy crisis.
Wealth and Assets
Ideally, considering that most of these individuals are shrewd businessmen and women, it would be safe to say that their investments are not only in their home countries. It is a more or less safe assumption. However, regardless of where they have invested it does add to their portfolio. Having that in mind, it is worth remember that close to 40% of the world’s economy is within their hands. It is not hard to see why when controlling such a big stake in the economy of their and other countries, they are big players and contributors to the happenings around the world.
While some of the billionaires that are featured on the list are known to be more conservative to spending, they still do present a neat target for luxury businesses. It is estimated that each member of the UHNWI club spends over a million dollars annually on luxury items. This cuts a niche in the economy for entrepreneurs and even banks. A good number of banks have introduced services and section that is tailored to target the filthy rich. Considering their vast wealth and ability to spend, it is safe to say that the luxury products industry is not the only one that benefits from such individuals. To a larger extent, workers and producers or raw materials used in the industry also benefit.
Charities are the fibre that is used to change and build future leaders and hence the support that they receive goes a long way to improving the economy and livelihoods of a nation by empowering the citizens. In 2012, there was a total of 98.4% of the UHNW homes contributing to charities. In 2013, the average amount being donated by this individual is about $68,580 per home. In the same light, it was expected that about 85% of the wealthy donors would increase their donations by at least 35% over then three years than they had in the past.
This paints a grim picture of the philanthropy and the amount that they inject in charitable organizations. A good number of them also run their own charities which means they inject even more than is document. Their ability to shape lives and change the economic status of communities is astronomical and very pragmatic.
Even though the growing number of the UNHW individuals is concern for economic inequality, the fact that these individuals are getting wealthier is proof that the economy is still stable and doing well. Ultimately, while the idea of having the super-rich leaves a bad taste in the mouths of many, they do have their place in the world and it is a significant one.