What Is This, America ? You Are Getting Richer ! : Secrets To Riches

Contradictions are hard to bear.

Median U.S. household income in 2012 is $51,017 a year, down from $51,100 in 2011
http://money.cnn.com/2013/09/17/news/economy/poverty-income/index.html

vs

The United States posted a fifth successive year of rises in personal wealth.
Source : CS Global Wealth Report

It sort of drives a wedge into your brain which is how I felt when I read the latest Credit Suisse Global Wealth Report 2013 edition.

Thanks to QE, LTRO, Abenomics  and the entire repertoire of tricks up the global central banks’ sleeves, global personal wealth is estimated to have increased 4.9% on the year to mid 2013. The total estimate being USD 241 trillion, the US accounting for USD 72..1 trillion which is 20% more than the pre crisis high in 2006 ! On 2 counts of stock market capitalisation and housing prices.

Astonishing statistics.

Japanese were, in fact, found to be poorer as a consequence of their currency devaluation but still marginally richer than 2008.

So I read on and the truth becomes clearer – it is a 64 page report that comes with a 155 page appendix.

I take the risk by sharing this pretty little pyramid to make readers feel good.

global wealth pyramidHooray. We are the rare breeds ! I cannot imagine too many Singaporeans in that chunky bottom, so great job !

There is nothing special about being in the top, by the way. Because in the apex of 32 million individuals, only 98,700 people have assets exceeding USD 50 million and only a a third of them are worth USD 100 million and finally, only 3,100 people in the entire world have assets above USD 500 million.

Besides the data is fraught with inaccuracies, especially for frontier nations out in Africa and the rest of the world where information is not readily available. And I am not entirely happy with Singapore’s number where wealth per adult is estimated at only USD 281,764, making the Swiss look good at USD 512,562. I mean, even the Australians are richer at USD 402,578. (Hint : Singapore stats dept better do something about this and the measuring scale – we need to be the top here ok ?)

Is CPF included or do we have too much debt ? Because household wealth is measured by 3 components :

  • Financial assets
  • Non financial assets (mainly, housing and land)
  • Debts

Summarising the top 10 and throwing in Hong Kong (Singapore’s favourite comparative benchmark) and … China, which has the 2nd highest number of High Net Worth Individuals in the world.

WEALTH PER ADULT (USD)
1 Switzerland 512,562
2 Australia 402,578
3 Norway 380,473
4 Luxembourg 315,240
5 US 301,140
6 Sweden 299,441
7 France 295,933
8 Singapore 281,764
9 Belgium 255,573
10 Denmark 255,066
HONG KONG 153,312
CHINA 22,230

Back to NOT THE MAIN GIST OF THE REPORT, America is growing richer ! Because as Bloomberg reports, Gatsby Is Staying On the Farm these days. Yes.

Social and income mobility is DEAD.
http://www.bloomberg.com/news/2013-10-08/gatsby-stays-on-farm-as-income-gap-limits-u-s-social-mobility.html

“The ascent to dazzling affluence achieved by fictional farm boy Jay Gatsby is becoming increasingly less plausible, posing risks for U.S. economic prospects, studies show.”

“Hong Kong – one of the wealthiest places in the world – has acknowledged for the first time that it has a sizeable poverty problem by declaring that 1.31 million of its citizens are officially poor.” But offers no solution. http://www.scmp.com/print/news/hong-kong/article/1319984/hong-kong-draws-poverty-line-13-million-living-below-it

Which is good news for the rich ! Because Plutonomy lives !!! As even Credit Suisse concludes that ” it seems almost certain that wealth has been growing faster in the top strata of the wealth pyramid since at least the year 2000, and that this trend is continuing.
For instance, total global wealth grew by 4.9% from mid-2012 to mid-2013, but the number of
millionaires in the world grew by 6.1% during the same period, and the number of UHNW individuals rose by more than 10%. It therefore appears that the world economy remains conducive to the acquisition and preservation of large and medium-sized fortunes.”

Hold on to your millions !

What is Credit Suisse Trying To Get At ?

The financial sector looks set to grow and be the heartbeat of the up and coming rich because the projection is for global wealth to rise by another 40% to USD 334 trillion by 2018. And since this report was written before the Yellen as Fed chairperson announcement, I would say that the number could be grossly understated particularly if the debt ceiling is hiked another few more rounds into 2018.

How to Get Rich ?

Do not despair, if you are not there or have no internet company to be valued at unimaginable riches. There is hope yet as the vast savannahs of Africa, tundras of Siberia and the rainforests in Kalimantan remain untapped for psf (per square foot) values ! Once they starting building condos in Myanmar and Cambodia, household wealth can only grow from strength to strength and millionaires will become too commonplace, we need to sub-categorise from there.

Who cares about Iskandar ? The developers bought cheap there (SGD 1 psf) and are now trying to hawk it for SGD 300 ? Are you joking ?

Think big ! Think bigger ! Papua New Guinea ? Nepal ? Madagascar ? Anybody wants to start a fund ?

Related Articles :

Fed : Monetary or Moral Policy (tradehaven.net) 18/09/13

For Richer Or Poorer : The Problem With India Is Ours Too (tradehaven.net) 13/09/13