The Biggest Myths About The Global Ultra Wealthy

The Biggest Myths About The Global Ultra Wealthy

The Biggest Myths About The Global Ultra Wealthy by Wealth-X

Wealth-X data dispels the biggest myths around the ultra wealthy population’s net worth, education, giving and luxury assets.

Combined Net Worth – 62 individuals own half of the world’s wealth

The wealthiest 62 people in the world have a combined net worth of US$1.72 trillion, according to Wealth-X data.

There are 211,275 ultra high net worth (UHNW) individuals with net assets of US$30 million or more, according to the Wealth-X and UBS World Ultra Wealth Report 2014. With a combined net worth of nearly US$30 trillion, these ultra wealthy individuals account for 0.004% of the world’s adult population and control almost 13% of the world’s wealth — a significant percentage, but nowhere near 62 individuals controlling 50% of the world’s wealth.

Seth Klarman’s 2021 Letter: Baupost’s “Never-Ending” Hunt For Information

Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More

The report predicts that by 2019, the size of the global UHNW population will increase to more than 250,000 individuals with a combined net worth of about US$40 trillion.

Inheritance – All ultra wealthy people inherited their fortunes

Entrepreneurship is one of the primary characteristics of the world’s UHNW population, according to the Wealth-X and UBS World Ultra Wealth Report 2014. The majority of UHNW individuals are self-made and are involved in founder-owned private businesses. Of the world’s 211,275 UHNW individuals, 63.8% (134,820 people) are self-made, while 17.4% (36,690 people) received their fortunes through inheritance and 18.8% (39,765 people) have a blend of self-made and inherited wealth.

Education – The ultra wealthy all graduated from Ivy League schools

Nearly 88% of UHNW individuals hold a bachelor’s degree, a possible reason for the popularity of higher education as a philanthropic cause among UHNW donors. However, this also indicates that 12% of the world’s UHNW population have not continued their education beyond high school, or dropped out in college, according to the Wealth-X and UBS World Ultra Wealth Report 2014. Although certain universities are particularly popular among the ultra wealthy, the top 10 universities by UHNW alumni population account for just 5% of the world’s college educated UHNW individuals. Of the top 10 schools with ultra wealthy alumni, five are Ivy League (Harvard University, University of Pennsylvania, Columbia University, Yale University and Cornell University). The other schools in the top 10 are Stanford University, New York University, Massachusetts Institute of Technology, University of Chicago and Northwestern University.

Philanthropy – The ultra wealthy don’t give back

Global philanthropic giving among the world’s ultra wealthy totaled US$112 billion in 2014, equivalent to the GDP of Morocco, according to the Wealth-X and Arton Capital Philanthropy Report 2015. The typical UHNW philanthropist donates US$28.7 million in his or her lifetime, and 65% of UHNW individuals donate over US$1 million throughout their lifetimes. Based on absolute value of total donations, India has the most generous UHNW donors, followed by the United Kingdom and Hong Kong. Based on donations as a percentage of net worth, the United Kingdom has the most generous donors, followed by the United States and Hong Kong.

In addition, 1 in 28 UHNW individuals (or 7,441 people) have donated funds toward alleviating the global refugee crisis, for a total of US$2.7 billion.

Asset Allocation – The ultra wealthy all own trophy properties around the world

Real estate accounts for 3% of billionaires’ net worth, equivalent to US$94 million per individual, according to the Wealth-X and UBS Billionaire Census 2014. The typical billionaire owns four properties, each worth, on average, US$23.5 million. Although real estate is partially an investment, for billionaires it is also a necessity: considering their global lifestyle, having numerous residences around the world is essential.

UHNW individuals tend to own fewer homes than their wealthier billionaire counterparts. On average, UHNW individuals own 2.7 properties, and hold over 8% of their net worth in real estate assets. Female UHNW individuals tend to hold more of such assets, with an average holding of US$20 million in real estate, compared to US$14 million for their male counterparts.

Of the world’s 211,000 ultra high net worth individuals, 79% own two or more residences; for the majority of these individuals, their primary and secondary homes are in the same country. At least 30% of the world’s UHNW population have at least one residence outside of their primary business country, favoring the United States (24%), United Kingdom (15%), Switzerland (7%), France (5%) and China (4%), according to the Wealth-X and UBS World Ultra Wealth Report 2014.

For their secondary homes, UHNW buyers look for residences that are environmentally sustainable, technologically sophisticated or that fit better with their personal family needs. The Wealth-X and Sotheby’s International Realty UHNW Multi-Homers Report reveals the four types of non-traditional luxury homes that have emerged as favorites: green homes, smart homes, private islands and serviced apartments.

Updated on

No posts to display