06/29/09 Baltimore, Maryland The world’s rank and file of millionaires are in for quite a shake-up. Here’s some takeaways from our latest read: The 2009 World Wealth Report, by Merrill Lynch and Capgemini.
First, the number of global millionaires fell at a record rate in 2008, led by North Americans. The credit crisis wiped out 15% of the world’s millionaire population, now at just 8.6 million “high net worth individuals (HNWI),” as Merrill puts it. The total worth of the world’s wealthy fell about $7 trillion last year, to $32.8 trillion.
North America was the greatest victim of 2008, shedding 600,000 millionaires and roughly $2.8 trillion in HNWI wealth. Of course, we’re still at the top… but for how long? Check out this chart:
We should hedge this chart a bit: First, it’s from Merrill Lynch… need we say more? They use some rosy projections for global economic and market recovery for the next few years. Expecting the coffers of HNWI to grow at an annualized rate of 8.1% over the next four years is the same kind of Ivy League MBA thinking that caused Merrill’s collapse and subsequent fire sale to Bank of America.
That being said, we wouldn’t be surprised if their forecast comes true. Simple ratios alone make an Asian takeover seem inevitable: One out of every 195 North Americans are millionaires. One in about 1,700 are Asian.
(This would be one of many reasons we’re burning the midnight oil on a BRIC report, just for you… stay tuned.)
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If Merrill Lynch’s analysis is correct (and I hope you’re right that it may not be), it does look grim for our “high net worth individuals.” But maybe we can look on the bright side and find some “power of small” benefits here. If “the bigger they are, the harder they fall,” then the smaller they are, the lighter they fall. Once the recession/depression bottoms out, the rich and everyone else who lost money in the crash will have nowhere to go but up.
Geez, what a fuss the rich are making about loosing their money. Look at poor Madoff, they sent him to prison for 150 years.