The super-rich are still making money despite global economic problems while the rest of us struggle to make ends meet – so how do they do it?
A recent survey offers some insight of how the wealthy stay wealthy – and how they keep adding more cash to their stockpiles.
Looking across rich lists published in many countries, Ledbury Research put together a list of the six most common sources of wealth for the ultra-rich.
The six key investments
The money was identified as coming from:
- Oil and gas
- Media and telecoms
- Food and drink
The study then scrutinised each category for clues about how the wealthy in different countries invest.
Property – More listed rich investors in China derive their wealth from property because they regard bricks and mortar as a safer investment than pensions and savings because the nation’s financial services market is less mature than in the West.
Britain, with London in particular, is regarded as a global safe haven for property investors because of continuing capital appreciation that increases the wealth of investors.
Finance – Banking and financial services are favoured by the rich more in Brazil and the United Arab Emirates than anywhere else.
“South America and the Middle East have no developed financial markets, so wealth tends to concentrate in hubs,” said a spokesman for the firm. “China is struggling to develop a market because Singapore and Hong Kong are both nearby and have strong financial sectors.”
Construction – The wealthiest families in the UAE are involved in construction and not the obvious Middle East cash cow of oil and gas.
“The UAE is looking beyond the window where oil and gas dominate Middle Eastern economies to develop infrastructure, and as a new country, has significant room for growth,” said the spokesman.
Oil and gas – Russia’s ultra-rich oligarchs source most of their wealth from oil and gas. Russia has the largest global gas reserves and is the biggest exporter of gas and produces more oil than any other country – around 12% of total global production.
Media and telecoms – The United States is the most switched on digital economy, with the most extremely wealthy individuals making money from media and telecoms. Many of the world’s leading technology brands, like Apple, Google and Microsoft, were started by pioneer developers who saw their companies grow into huge entities. Russia is another big player – but in telecoms rather than computer technology.
Food and drink – The rich in developing countries making the shift from agricultural economies to urbanisation earn substantial fortunes from food and drink. More than a third of Brazil’s exports are food or drink related.
The main conclusion from the research seems to be that the super-rich trade on a global scale but make their money from exploiting their local commodities.