World Now Has 10 Million Millionaires
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NEW YORK — Add an extra zero to the ranks of the millionaires club.
The number of people around the world with at least $1 million in assets passed 10 million for the first time last year, according to a new report. And their bank accounts are growing even faster.
The combined wealth of the globe's millionaires grew to nearly $41 trillion last year, an increase of 9 percent from a year before, Merrill Lynch & Co. and consulting firm Capgemini Group said Tuesday.
That means their average wealth was more than $4 million, the highest it's ever been. Home values were not included in asset totals.
"The growth of their wealth is outpacing the growth of their population, and that's a trend that's going to continue in coming years," said Ileana Van Der Linde, a principal with Capgemini.
The ranks of the wealthy are growing fastest in the developing economies of India, China and Brazil. The number of millionaires in India grew by about 23 percent.
The United States still reigns supreme when it comes to fat wallets, though: One in every three millionaires in the world lives in America. Combined, Africa, the Middle East and Latin America account for just one in 10.
All told, there were about 600,000 more millionaires in the world in 2007 than in 2006, for a total of about 10.1 million. That's a 6 percent increase from the previous year.
Ten million may seem like a big number for such an elite club, but it still represents less than one-fifth of 1 percent of the world's 6.7 billion people.
The rarefied group of the superrich _ those with at least $30 million in assets _ got richer, too. There were 103,000 of them around the world last year, 9 percent more than the year before, and their wealth grew by nearly 15 percent.
The 600,000 new millionaires was unsurprising to Brian Bethune, an economist with Global Insight, who said inflation and the expansion of the world economy accounts for the growth.
Besides, $1 million isn't what it used to be. One million dollars in 1996, the first year the report was issued, would have been worth about $1.3 million last year, Van Der Linde said.
Steady growth powered economies worldwide in the first half of 2007, but more mature markets were hammered in the second half by the U.S. housing and credit crises. Emerging economies were largely unaffected, the report found.
The downturn started catching up with emerging economies in the beginning of 2008, Van Der Linde said.
Already, the report found, the millionaires club wasn't expanding as fast as before. From 2005 to 2006, the group swelled by more than 8 percent. The club has grown every year since the report was started.
Because of the economic slowdown, the wealthy tended to shift their money to safer investments such as bonds and money-market savings accounts, and away from less stable investments such as real estate, the report found.
Cash deposits and fixed-income securities accounted for 44 percent of the assets of the world's millionaires, up from 35 percent in 2006.
The wealth of the world's richest is projected to reach almost $60 trillion by 2012, the report said.
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On the Net:
Merrill Lynch: http://www.merrilllynch.com
Capgemini: http://www.capgemini.com
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CANDICE CHOI 06/24/08 06:39 PM ET Associated Press