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World Wealth Expanded in 2007

Posted: Jul. 1st, 2008  |  By James Rothaar Freelance Writer |
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World Wealth Report: The twelfth annual World Wealth Report by the Capgemini Group and Merril Lynch recently published indicates that for 2007 the entire population of millionaires has grown and there are now more than 10 million high-net-worth individuals around the world. A high-net-worth individual is defined as having at least $1 million in financial assets. The areas showing the highest increase in its population of wealthy individuals are the Middle East, Latin America, and Africa. The 2007 population of high-net-worth individuals is a six percent increase compared to the same statistics for 2006.

The total global wealth of the "Fortunate" 10.1 million is $40.7 trillion, an increase of 9.4 percent over 2006. The strongest growth cited is among the ultra-high-net-worth individuals, those with more than $30 million in assets. There was an increase of 8.8 percent in the overall population of the $30-million-assets club, and gains in their wealth averaged 14.5 percent. Countries in developing economies are experiencing the most significant growth in new job creation and wealthy individuals. India, China, and Brazil are the top three. The number of wealth individuals in North America rose to 3.3 million from 3.2 million in 2006. Latin America, Africa, and North America lead the world in the highest number of ultra-high-net-worth individuals followed by the Middle East, Europe, and Asia-Pacific.

Green Issues: Sustainable Investments
Some of the new wealth is coming from green initiatives. There are more green-investment opportunities available than in previous times. The number of investments for clean technology is up 41 percent compared to 2005 and likely to increase. Systems to develop sustainable building materials, fuel alternatives, and improve conservation efforts are the key to the planet's physical and financial sustenance. So, investment strategies, such as mutual funds, exchange-traded funds (ETFs), and other pooled products in alternative investments are increasing accordingly. Many upper-echelon banks, such as Credit Suisse, Merril Lynch, and Morgan Stanley, were more involved with green-stock market listings in 2007. Those three financial institutions were the 2007 leaders with total deals summing $7.5 billion.

The Break Down
The average wealth of a high-net-worth individual is somewhat more than $4 million. Home values were excluded from total assets for this study. In descending order, investment portfolios of the these individuals broke down as follows: 33 percent in equities; 27 percent in fixed income; 17 percent in cash deposits; 14 percent in real estate; and nine percent in alternative investments. The total wealth of the richest individuals is projected to rise by 2012 to $59.1 trillion from $40.7 trillion.

Read the entire World Wealth Report by the Capgemini Group and Merril Lynch at either firm's Web site.

For LxM James Rothaar
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