How rich are you?
There are now 8.7 million rich folks in the world. There would be a lot more if the value of their homes were included in the calculation.
According to the 2006 World Wealth Report by Merrill Lynch/Capgemini, we now have 8.7 million "high net worth individuals (HNWIs)" worldwide -- including 2.9 million lucky wealth-holders in North America -- folks with financial assets of at least $1 million. Together, the holdings of the fortunate few totaled some $33.3 trillion in 2005. Even more remarkable, there are the rich and then there are the RICH. The study shows that 85,400 people worldwide now have a personal worth of at least $30 million.
I disagree with the fundamental basis of the Merrill Lynch/Capgemini report. Why? The financial asset wealth measure "includes the values of private equity holdings stated at book value as well as all forms of publicly quoted equities, bonds, funds and cash deposits. It excludes collectibles, consumables, consumer durables and real estate used for primary residences." No personal residences?
Why is the real estate you rent an asset but not the real estate where you sleep? Are the bricks and mortar different? According to the Federal Reserve, the value of personal real estate in the first quarter of 2006 amounted to $22.2 trillion. Other assets included corporate equities ($5.7 billion), mutual funds ($4.5 trillion) and money market assets ($957 billion)
Unfortunately, our U.S. real estate is not owned free and clear. In total, mortgage debt amounted to $8.9 trillion -- meaning the net worth of personal real estate in the U.S. is a "mere" $13.3 trillion.
Why does it make sense to look at individual wealth and exclude the value of personal real estate? That $13.3 trillion is a big number -- bigger by far than stock, mutual funds or money market accounts -- and it's certainly important when people refinance their homes or sign-up for home equity lines of credit. It's important when people sell a home and need to show if any profit is taxable. And it may be significant when an individual dies and estates are valued.
If we assume for a moment that the world has roughly 6.4 billion people and that 8.7 million qualify for millionaire status, then the odds of material success worldwide are 736 to one. The odds of gaining financial wealth are far greater in North America than most other places: In the U.S. and Canada we have about 330 million people and some 2.9 million millionaires -- that means the odds of financial achievement in North America are 114 to one. Actually the odds are vastly better -- but only if we count the roof over your head.
According to the 2006 World Wealth Report by Merrill Lynch/Capgemini, we now have 8.7 million "high net worth individuals (HNWIs)" worldwide -- including 2.9 million lucky wealth-holders in North America -- folks with financial assets of at least $1 million. Together, the holdings of the fortunate few totaled some $33.3 trillion in 2005. Even more remarkable, there are the rich and then there are the RICH. The study shows that 85,400 people worldwide now have a personal worth of at least $30 million.
I disagree with the fundamental basis of the Merrill Lynch/Capgemini report. Why? The financial asset wealth measure "includes the values of private equity holdings stated at book value as well as all forms of publicly quoted equities, bonds, funds and cash deposits. It excludes collectibles, consumables, consumer durables and real estate used for primary residences." No personal residences?
Why is the real estate you rent an asset but not the real estate where you sleep? Are the bricks and mortar different? According to the Federal Reserve, the value of personal real estate in the first quarter of 2006 amounted to $22.2 trillion. Other assets included corporate equities ($5.7 billion), mutual funds ($4.5 trillion) and money market assets ($957 billion)
Unfortunately, our U.S. real estate is not owned free and clear. In total, mortgage debt amounted to $8.9 trillion -- meaning the net worth of personal real estate in the U.S. is a "mere" $13.3 trillion.
Why does it make sense to look at individual wealth and exclude the value of personal real estate? That $13.3 trillion is a big number -- bigger by far than stock, mutual funds or money market accounts -- and it's certainly important when people refinance their homes or sign-up for home equity lines of credit. It's important when people sell a home and need to show if any profit is taxable. And it may be significant when an individual dies and estates are valued.
If we assume for a moment that the world has roughly 6.4 billion people and that 8.7 million qualify for millionaire status, then the odds of material success worldwide are 736 to one. The odds of gaining financial wealth are far greater in North America than most other places: In the U.S. and Canada we have about 330 million people and some 2.9 million millionaires -- that means the odds of financial achievement in North America are 114 to one. Actually the odds are vastly better -- but only if we count the roof over your head.
posted by Ken Calhoon at 7:58 AM
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