...
For the first time, China has overtaken the United States to become the country with the largest number of people in the top 10% of world’s most wealthy people. China now has a cohort of 100 million individuals who are in the top 10% of global wealth distribution, compared to 99 million for the U.S. In addition, China has surpassed Japan as the country with the second-largest number of millionaires. The annual global wealth report was released by Credit Suisse this month and provides a comprehensive review of the world’s wealth.
In all, there are now 46.8 million adult millionaires globally, with China showing explosive growth over the past nine years. In 2010, the number of Chinese millionaires was only 38 thousand, while the number in 2019 is now 4.4 million. The number of millionaires in the rest of the world are as follows. Africa has 171 millionaires, Latin America has 673, India has 759, Asia-Pacific has 7,505, Europe has 13,290 and North America has 19,946.
In keeping with recent trends, the wealthiest individuals own a disproportionate amount of global wealth. In total, the bottom half of adults account for less than 1% of total global wealth.
Part of the reason for the high amount of income inequality is due to the fact that only roughly half of Americans are invested in the stock market. Meanwhile, stock prices have appreciated since the Great Recession, mostly benefitting those who are heavily invested in the stock market. According to the report, “From 2010 onward, the dominant influence [in U.S. inequality] was rising equity prices, which increased the share of the top 1% and reduced the relative wealth of middle groups. Lower saving by middle groups due to stagnating incomes also contributed to the fall in their wealth share between 2007 and 2013.”
The Gini Coefficient or Gini Index is the most commonly used measurement of inequality. The Gini Index ranges from zero to one. A value of zero represents complete equality, where every single person owns an equal share of wealth. On the other extreme, a value of one represents total inequality which you can think of as a single person owning all of the global wealth.
With a Gini Index of 0.852, the United States ranks as the country with the fourth highest amount of income inequality. Below are the ten countries with the highest inequality and the ten with the lowest, according to the report.
10 Countries With The Highest Amount Of Income Inequality (Based On Gini Index)
- Netherlands: 0.902
- Russia: 0.879
- Sweden: 0.867
- United States: 0.852
- Brazil: 0.849
- Ukraine: 0.847
- Thailand: 0.846
- Denmark: 0.838
- Philippines: 0.837
- Saudi Arabia: 0.834
10 Countries With The Lowest Amount Of Income Inequality (Based On Gini Index)
- Turkmenistan: 0.63
- Japan: 0.626
- Belarus: 0.621
- Eritrea: 0.621
- Ethiopia: 0.62
- Korea: 0.606
- Belgium: 0.603
- Myanmar: 0.597
- Timor-Leste: 0.565
- Slovakia: 0.498
When it comes to net worth, the average net worth globally is $70,845. The breakdown of net worth is $44,020 in financial wealth, $36,407 in non-financial wealth, and $9,583 in debt. Financial wealth is primarily made up of liquid forms of money like cash and savings, and non-cash investments like stocks. Non-financial wealth is comprised primarily of real assets like homes and land. If you want to join the top 10% of global wealth holders, you’ll need $109,430 according to Credit Suisse.
The average net worth globally in 2019 is $70,845.
CREDIT SUISSE ANNUAL WEALTH REPORT
You can quickly use my net worth calculator to see how you stack up against the rest of the world. If you’d like to increase your net worth and join the 46.8 million members of the global millionaires club, there are a few things you should do.
For one, you need to increase your savings rate. At the end of the day, your financial wealth is comprised of the amount of previous earnings you were able to save. Therefore, the more you save, the higher your net worth will be. Simple enough.
The second thing you need to do is increase your income. You aren’t going to become a millionaire any time soon if you aren’t making a decent wage. The data shows that the majority of millionaires in the U.S. are invested in the stock market. This means they not only earn a lot, but they invest a lot.
Finally, you need to avoid debt. In reality, this is tricky since most people need loans to buy homes and go to college. However, the two types of debt that can take you down are medical debt and credit card debt. To protect yourself from a medical-debt disaster, make sure you have adequate health insurance. When it comes to crippling credit debt, make a plan to pay it off as quickly as you can, so that the high interest rates don’t cause your balance to grow out of control. This may mean you need to transfer your balance to a card with a temporary 0% interest rate offer.
Clearly, it’ll take a lot of hard work and luck to join the world’s most wealthy.
No comments:
Post a Comment