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Saturday 29 February 2020

Global wealth report


Global wealth soars to $317 trillion in 2018; U.S. share of it is largest at $98 trillion

DOUGLAS A. MCINTYRE | 24/7 WALL STREET | 

According to an annual World Wealth Report.
TIME
Global wealth reached $317 trillion this year, a figure that is 18 times the size of the U.S. gross domestic product. The number rose 4.6% from last year. The nation with the most wealth is the U.S. at $98 trillion. The report went on to say that the 4.6% increase in global wealth was more […]
Global wealth reached $317 trillion this year, a figure that is 18 times the size of the U.S. gross domestic product. The number rose 4.6% from last year. The nation with the most wealth is the U.S. at $98 trillion. The report went on to say that the 4.6% increase in global wealth was more […]
NISERIN / GETTY IMAGES
Global wealth reached $317 trillion this year, a figure that is 18 times the size of the U.S. gross domestic product. The number rose 4.6 percent from last year. The nation with the most wealth is the U.S. at $98 trillion.
The report went on to say that the 4.6 percent increase in global wealth was more than enough to outpace world population growth, so that wealth per adult grew by 3.2 percent. That means global mean wealth rose to $63,000 per adult, which is a record.
The data come from the Global Wealth Report, which is published by the Credit Suisse Research Institute. The 2018 version is the ninth that the Institute has published.  Wealth, as described by the report, is a combination of household financial assets like stocks, and non-financial assets that include real estate and individual belongings. The calculations cover a year that ends mid-2018.
The report noted a significant feature of wealth outlook was "the seemingly relentless rise in household wealth in the United States. Total wealth and wealth per adult in the United States have grown every year since 2008, even when total global wealth suffered a reversal in 2014 and 2015."
China has become the world's second-largest economy by GDP and has moved into second position based on total household wealth, replacing Japan. "The main outcome of the new wealth valuations is confirmation of what many observers already suspected, that China is now clearly established in second place in the world wealth hierarchy," the report said.
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If you make less than $100,000, you might not think you are rich, but in some cities, you technically are considered wealthy. Keri Lumm reports.
BUZZ60
Women's share of wealth in absolute terms and relative to men's wealth has also has risen in the 21st century, according to the report. The report said 40 percent of global wealth is held by women.
The Credit Suisse report had good news on wealth inequality. The report said there was evidence that suggests the wealth growth pattern has recently shifted back toward the pre-financial crisis pattern. "Wealth inequality has not yet fallen significantly, but has stabilized according to most indicators," said the report. "As a result, future prospects for inclusive wealth growth look more promising than they have been for the past couple of years."
Looking ahead, the Credit Suisse report said global wealth is projected to climb by about 26 percent over the next five years to $399 trillion. Emerging markets will account for about one-third of the growth, an increase in share from 21 percent of current wealth. The report forecasts the number of millionaires will surge to 55 million.
24/7 Wall Street is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.
These are the top factors that will impact how wealthy you become. Buzz60's Natasha Abellard has the story.
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Wealth of world


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REX NUTTING

Opinion: The super rich elite have more money than they know what to do with

By Rex Nutting
Published: Nov 2, 2019 11:01 am ET

The top 1% has run out of investing ideas, so they’ve parked $4.7 trillion in the bank

This is an update to correct an error. An earlier version of this story misstated how much wealth has been gained by the bottom 50% since 2016. It’s $680 billion, not $680 million.
For every dollar of capital owned by a typical family in the poorer half, a family in the top 1% has $730.
For every dollar of capital owned by a typical family in the poorer half, a family in the top 1% has $730.
Forget all those phony fairy tales about whether a couple who makes $350,000 is rich or poor (they are neither), and focus on the big picture: Half of Americans have almost nothing while a small fraction have almost all the capital. And the gap between the many and the few is growing every year.
Forget about $350,000, and start thinking about trillions.
A society that allows a few to capture most of the wealth is neither fair nor efficient. No one can claim that the U.S. economy is performing better now than it did when the wealthy 1% only had half as much.
It might be different if the rich really were letting their wealth trickle down by investing in the future economy. But they aren’t; at least, not enough. Not in this new Gilded Age, and this gulf between a tiny pampered elite and the grumbling masses is driving populist protests all over the globe.
While the working class and the impoverished families of America — half of our country! — have less real wealth than they had 20 years ago, the super rich top 1% have doubled theirs in a generation, according to a new data set recently released by the Federal Reserve.
The top 1% of U.S. households — about 1.2 million families — had aggregate net worth of $35 trillion as of the end of June. That’s 32% of the total, up from 27% at the end of the Great Recession in 2009, the Fed reports.
The top 10% had $74 trillion — 69% of all wealth.
The poorest 60 million American households own no more wealth today than they did 20 years ago, but they’ve finally recovered what they lost in the Great Recession.
The poorest 60 million American households own no more wealth today than they did 20 years ago, but they’ve finally recovered what they lost in the Great Recession.
Meanwhile, the poorest half — about 60 million households — owned just 2% of national wealth, around $2 trillion, down from the inflation-adjusted $2.4 trillion they owned in 1999.
With the expansion hitting its 10th year anniversary, wealth is growing for every demographic group. But the few are still getting the most, while the many are getting crumbs.
In the three years since the most recent Survey of Consumer Finances was conducted, the top 1% has increased their wealth by $7.1 trillion, the Fed reports. The next richest 9% — the 90th to 99th percentiles — added $5.8 trillion to their wealth. The next 40% — from the 50th to 89th percentile — added $5.2 trillion.
The bottom half of the population added $680 billion.
So for all the rhetoric about how wealth creation has been “democratized” by the rise of 401(k) plans, cheap trading fees, and all the financial news you could want, a tiny sliver of American society is grabbing greater and greater shares of the bounty while an increasing number of families are falling behind.
Focus on capital
The inequality gap is even wider if we exclude assets like houses and cars and focus only on the kind of assets that throw off income, such as capital gains, dividends, interest, a pension, or business income. We call this type of asset “capital.”
Capital is the secret sauce of building wealth: You don’t need to work hard for your money if your money works hard for you. If you have enough capital, you don’t need to work at all.
For every dollar of capital owned by one of the 60 million struggling households at the bottom, the typical family at the top of the heap had $730. Those two families might as well be on different planets, or living in different millennia. Their daily lives have little in common.
The richest 1% of American families have doubled their real capital wealth in 20 years, but the economy is performing worse.
The richest 1% of American families have doubled their real capital wealth in 20 years, but the economy is performing worse.
The working poor have houses and cars and few thousand dollars in a pension, while the rich own almost all of the capital. The share of income-generating financial assets that are owned by the very wealthy has been rising for decades. Now the top 10% of families have 72% of all financial assets, including a record 86% of corporate equities and mutual funds and a record 88% of the ownership of noncorporate businesses. And they own a record 68% of the money in bank accounts.
The only asset that the well-to-do have been getting out of is low-yielding debt securities, such as government and corporate bonds. They now own 79% of bonds, a record-low share.
If the poorest 50% pooled all their financial assets, they’d have enough to buy up all the shares of MicrosoftMSFT+2.42%  and Apple AAPL-0.06% If the top 1% pooled all their financial assets, they’d have enough to buy up all the shares of every corporation in America.
New source of data
The figures I’ve been quoting come from a new product from the Fed: the distributional financial accounts, which provide a timely snapshot of how changes in finances and balance sheets are affecting different demographic groups.
The new data are intended to fill a void in the source material for studying wealth and inequality. Every three years, the Fed conducts the Survey of Consumer Finances, which details the growth and distribution of assets and liabilities among different demographic categories, such as age, race, education and income.
The SCF is a great source, but the most recent data are from 2016 (the survey was conducted again this year, but the data and analysis won’t be released for another year). To bridge the gap, the Fed has begun to publish quarterly estimates of how holdings of assets and liabilities have changed, based on the aggregate data found in the Financial Accounts of the United States, formerly known as the Flow of Funds.
The wealthy have more money than they know what to do with
The poor and working classes struggle to pay their bills, and most of them could not come up with a few hundred dollars in an emergency without borrowing or selling something. On the other hand, the wealthiest 1% have so much money that they’ve run out of ideas for putting it to work.
Probably the most astonishing fact I encountered while poring over the finances of the wealthy elite is this: The top 1% have about $4.7 trillion in cash and cash equivalents, idling in bank accounts and earning next to nothing.
Remember that the next time a plutocrat tells you that we cannot possibly tax the wealthy because they can’t afford it.

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