The number of millionaires around the world is increasing – but a huge amount of global riches is tied into the fortunes of a small group of wealthy individuals.
The current estimated world population is 7 billion people – and the latest research suggests that just 13.7 million of those have a disposable or investable income of more than £600,000 or US$1 million.
However, the balance is slowly shifting as 2 million people joined the rich list in 2013 – a 15% increase over the number of millionaires at the end of 2012.
An annual survey by research firm Cap Gemini for the Royal Bank of Scotland tracks the number of millionaires and their net worth – reckoned to have reached £31 trillion (US$53 trillion).
Not only has the number of millionaires increased, but their share of the world’s net worth has also surged upwards by 14% in the same period. This represents the biggest increase in the amount of money held by the world’s wealthiest people since the survey was launched in 2000.
Gap between rich and poor
The conclusion drawn by the report is the wealth gap is widening between the richest and poorest in many countries.
Japan’s millionaire club welcomed 425,000 new members in 2013 – a massive 22% increase on the year before and the biggest increase in the 25 nations with the most millionaires.
The US still tops the rich list, boasting a rise of 17% or 57,000 wealthy individuals to around 4 million millionaires. Japan comes second and now has 2.3 million millionaires.
The study reveals the underlying reason was the soaraway Nikkei 225. Tokyo’s main stock market index returned a 57% rise during the year – in comparison stock values in the US were up 30% in the same period.
Rising stock markets contributed to the growing wealth of the richest individuals in many countries.
Rich getting richer
In Australia, for example, 43,000 new millionaires were created in 2013, adding £550 million a day to their net worth. Around 1 in 50 Australian households now fall under the millionaire bracket.
The research also showed that rising stock prices makes the rich even richer and widens the wealth gap.
The wealthy self-propagate their fortunes as stock values rise, but because poorer households cannot afford to invest, their net worth fails to increase at the same rate and is hit by slowing wages and job losses as fall-out from the recession.
The result is the already wealthy own most of the global stock. In the United States, 10% of the population own 80% of stocks and shares.