When you picture a high net worth individual, in your minds eye, do they hail from any particular country?
Some may think of a Russian Oligarch, others a Wall Street trader, A Swiss banker, or a Japanese entrepreneur. This week at The Money Cloud we’ve been sifting through a report from AfrAsia Bank, The Global Wealth Migration Review, which breaks down the habits of the world’s 15.8m high net worth individuals. Yesterday, we looked at migration; where the super rich emigrate from, and immigrate to.
Today we will study which countries and cities – from the smallest principality, to the most populous, and fastest growing, in terms of wealth – and also the most equal – the world’s HNWIs are keeping their cash.
It is unlikely to surprise anybody to learn that the US is, according to the report, officially the wealthiest country in the world ($62,584bn), followed, a long way behind, by China ($24,803bn), with Japan, United Kingdom and Germany completing the top 5.
In terms of wealth growth by country, however, India leads the way, having seen its wealth rise by 25% between 2016-2017, and by an impressive 160% over the past decade to 2017. Over the next 10 years, India is forecast to grow by some 200%, with only China, 180%, able to hold a candle to its nearly-as-populous rival.
From the populous, to the elitist, when it comes to per capita income, Monaco is the clear pack leader; it’s citizens have a cool $2m per person on average of net wealth, more than double that of Lichtenstein, its closest rival, and nearly seven times as much as Luxembourg and Switzerland, third and fourth on the list. Australia takes fifth spot – a country that is becoming an increasingly popular relocation choice for the super-rich, especially those who hail from Asia.
Why do the rich choose Monaco? The short explanation is zero income tax, the longer, for its stability (Monaco has been ruled by the same family, uninterrupted, since the thirteenth century!), its location on the Cote D’Azur, so that billionaires have somewhere to park their yachts, and of course, to be amongst friends and people who occupy the same rarefied, limited, space at the top of the money tree!
When it comes to wealth equality, however, Japan’s HNWIs control a smaller percentage of the country’s total wealth than anywhere else in the world – just 23%. New Zealand (26%), Norway (27%) and Australia and Canada (both 28%) make up the top five when it comes to equality. The most unequal? Saudi Arabia (60%), Russia (58%), and Nigeria (56%).
Now for the cities – which is home to the largest collection of HNWI wealth? Drum roll please.
It’s New York, home of 2 major stock exchanges, super wealthy enclaves such as The Hamptons, and parts of Long Beach, and Manhattan, home to Trump Tower.
New York, the report reveals, is home to some $3 trillion dollars of super-rich wealth. Next on the list is London ($2.7trn), home to another major stock exchange, and some highly desirable satellite towns, such as Bray, Henley, and Weybridge.
Confirming the pattern Tokyo, home to the world’s 3rd largest stock exchange, holds some $2.5 trillion of millionaires and billionaires money, whilst San Francisco and the Bay Area ($2.8 trillion) holds off Beijing ($2.7 trillion) to take 4th place.
Cities that are home to great wealth come in all shapes and sizes, from city state Singapore, regarded as one of the most business friendly cities in the world, with accompanying low tax rates, home to $1 trillion dollars of wealth (Hong Kong is 2 places higher, $1.3 trn), to Mumbai, rapidly becoming the economic hub of India, to Chicago, Toronto, Frankfurt and Paris. All 4 historic cities place below Singapore, a city-state that did not even exist 65 years ago.
It’s never easy to draw conclusions about which direction riches are heading, or even where they have come from, but judging from AfrAsia’a report, we can say that wealth can move quickly from one place to another, drawn by low tax rates or business opportunities, or stay in one place, where its owners believe it will be safe, or even be used to prop up dynastic, “old world” cities.
If it’s growth you are after, then think about Vietnam, China, Mauritius or Ethiopia, the world’s top 4 fastest growers (India takes fifth spot), and avoid Venezuela, Greece, Italy, or Spain.
But then, it could all change again in a second. The trouble is, the world’s wealthiest don’t follow markets, they tend to make them.
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