The World's Richest 1 Percent

The wealth of our globe is continuing to concentrate in the pockets of an incredibly tiny share of the world's population. So reports the latest annual rich people census from Merrill Lynch.

June 26 , 2006

A decade ago, two companies eager to raise their profile in the wealth-management market — Merrill Lynch and Capgemini, a global consulting company — started publishing an annual count of the world's rich.

Last week, the two companies released their tenth anniversary World Wealth Report.

The new report's main message: The world's cream, as defined by financial assets, is rising ever faster to the top.

Last year, notes the latest World Wealth Report, the number of global millionaires — individuals with at least $1 million in cash and investments, above and beyond the value of their primary residence — jumped 6.5 percent over the year before.

But the combined wealth of these wealthy jumped even more rapidly, by 8.5 percent. Global millionaires last year held a combined $33.3 trillion in wealth, nearly double the $16.6 trillion they held back in 1996, the first year researchers from Merrill Lynch and Capgemini began keeping track.

Last year's vigorous “upturn” in the combined wealth of the wealthy, these researchers point out, “continues the wealth consolidation trend among the world’s wealthiest” that “we have steadily reported over the last 10 years.”

And this wealth is consolidating, most intensely, among the richest of the rich, those fortunates with at least $30 million in financial assets. These super-rich — the Merrill Lynch and Capgemini researchers call them “ultra high net worth individuals” — saw their ranks jump 10.2 percent in 2005.

The global ultra-high-net-worth set now totals 85,400, less than the number of people who watch the University of Michigan play football on a typical fall Saturday. But these 85,400 people hold about one third of the combined wealth held by the world's 8.7 million financial millionaires.

Overall, these ultra wealthy represent just one hundredth of 1 percent of the world's adult population. They hold, notes an analysis of the latest Merrill Lynch-Capgemini figures that appeared last week in the British Guardian, an amazing 24 percent of the world's financial wealth.

The United States, the new World Wealth Report makes clear, continues to host the single greatest national share of the global rich. Of the world's 8.7 millionaires, 2.67 million live in the United States.

The Merrill Lynch and Capgemini researchers base their numbers on data from 69 countries that, together, account for over 98 percent of “global gross national income” and 99 percent of world stock market value. Their research breaks down the data collected both by nation and region.

But the latest World Wealth Report also emphasizes that the world's rich are increasingly busting national and regional boundaries. Indeed, the world's financial millionaires are becoming an interconnected global class.

In 2005, notes the new World Wealth Report, 19 percent of the world's financial millionaires have children living abroad, 28 percent own a residence in a foreign country, and 37 percent have an offshore financial account.

And what does the future hold? If the wealth of global millionaires slightly cools over the rest of this decade — and averages only a 6 percent annual increase — then global millionaires will hold $44.6 trillion in financial assets by 2010, nearly triple the wealth they held in 1996.

Financial Wealth: A Decade of Concentration

Combined Wealth of World's High Net-Worth Individuals
(individuals with at least $1 million in assets above home value)

1996 16.6 trillion (in U.S. dollars)
1997 19.1 trillion
1998 21.6 trillion
1999 25.5 trillion
2000 27 trillion
2001 26.2 trillion
2002 26.7 trillion
2003 28.5 trillion
2004 30.7 trillion
2005 33.3 trillion

Source: World Wealth Report

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