Doubling in Two Decades
The population of the super wealthy, defined as individuals worth $100 million or more, has experienced an extraordinary growth over the past two decades. This remarkable surge in wealth can be attributed to the soaring asset prices that have swept across the global financial landscape. According to a comprehensive report, the number of centi-millionaires has now reached 28,420 worldwide. This represents a staggering increase of 12% over the previous year and, astonishingly, more than twice the number reported in 2003.
This meteoric rise in centi-millionaires is a testament to the rapid changes in the global financial landscape. The data, sourced from a report by Henley & Partners, a renowned wealth and migration advisory firm, and New World Wealth, paints a vivid picture of wealth accumulation in the 21st century.
Driving Forces Behind the Centi-Millionaire Boom
Delving deeper into the driving forces behind this unprecedented growth, we find a confluence of factors that have fueled the ascent of centi-millionaires. The global phenomenon of low interest rates has played a pivotal role in boosting the values of various asset classes. Real estate, land, stocks, private companies, and even art have all witnessed substantial value increments. This surge in asset prices, extending across continents, is a reflection of the shifting dynamics of wealth creation.
Another significant driver has been the ascendancy of the tech industry, particularly in the United States. The exponential growth of technology companies and the digital revolution have catapulted numerous individuals into the realm of centi-millionaires. Their contributions to the industry, often through innovation and entrepreneurship, have been instrumental in this financial transformation. It’s important to note that this tech-driven growth extends beyond national borders, with similar trends visible in other parts of the world.
The proliferation of the super wealthy is not limited to centi-millionaires alone. The number of billionaires globally has seen an astonishing ascent, soaring from under 500 individuals in 2003 to a staggering count of more than 2,600, as reported by Forbes and other reputable wealth-tracking firms. This parallel increase further underscores the changing dynamics of global wealth distribution.
The Impact of Monetary Policy
Low interest rates, combined with the abundant liquidity injected into the global financial system following the 2008 financial crisis, have indirectly contributed to the growth of centi-millionaires. In terms of real value, money has seen a decline due to the depreciation of its purchasing power. This factor has further fueled the proliferation of centi-millionaires, measured in dollars. Andrew Amoils, the head of research at New World Wealth, points out that the growth is not only due to financial factors but also the robust economic performance of the United States and Asia.
The Entrepreneurs’ Success Story
Many of today’s centi-millionaires have amassed their fortunes by either founding their own companies or providing essential funding to startups. The United States continues to be the epicenter of entrepreneurship and home to a significant portion of the global population with a net worth exceeding $100 million, accounting for 38%, as revealed in the report.
Looking to the Future
As the era of ultra-low interest rates wanes, it is anticipated that the growth rate of centi-millionaires may decelerate. The report projects that the centi-millionaire population will expand by 38% over the next decade, rising from the current count of 28,420 individuals to an estimated 39,000 by the year 2033.
Centi-Millionaires: The True Face of Super Wealth
While the media often fixates on billionaires, the report underscores that centi-millionaires are a more representative segment of the super wealthy population. The dollar threshold for attaining “super wealthy” status has experienced a rapid evolution. Juerg Steffen, CEO of Henley & Partners, highlighted this transformation, noting that in the late 1990s, $30 million was considered the benchmark. However, the surge in asset prices has redefined this status, with $100 million now being the new standard.
In many smaller, less-developed countries, there may be few billionaires, but dozens or even hundreds of centi-millionaires. Amoils points out that the lifestyle of a person worth $100 million is often not substantially different from that of a billionaire, aside from potential philanthropic endeavors. Private jets and multiple homes are common features, making centi-millionaires an increasingly vital and intriguing facet of the super-wealthy community.
This unprecedented growth in centi-millionaires challenges the conventional understanding of wealth and its distribution in the modern world. It underscores the need for a nuanced perspective on the super-wealthy, acknowledging the diverse pathways to financial success.