A new study by Deloitte confirms everyone's worst fear (and every millionaire's wettest dream): the wealth amassed by millionaire households is set to increase by more than 100% over the next 9 years. From a total of $92 trillion held by the world's richest in 2011, by 2020 the world's millionaire households will possess $202 trillion, or roughly 4 times current global GDP. Even though much of move up is attributed to the wealth surge in the developing world, the biggest beneficiary is, you guessed it, the United States where the millionaires (those with net wealth of at least $1 million), who currently account for $38.6 trillion of total wealth, will see their assets increased by 225% to $87.1 trillion!And while a comparable study of how much wealth the lower and middle classes are set to lose over the next decade, we are confident that it will be roughly comparable...inversely. So if anyone harbored any illusions that the current status quo was about anything but the rich getting richer, all those can be promptly swiped aside.
The key findings of the Deliotte anti-Robin Hood study:
- According to our analysis, the total wealth of millionaire households in the 25 economies included in this study is forecast to grow from $92 trillion in 2011 to $202 trillion in 2020.
- Our study suggests that the rebalancing of global wealth is expected to accelerate over the next decade. Emerging market (EM) economies are likely to prove to be more dynamic in terms of growth rates, creating significant opportunities for wealth managers seeking to gain a share of these potentially lucrative markets. Among emerging markets, China may continue to be the driving force in the growth of millionaire wealth, followed by Brazil and Russia. Of the 25 economies examined in this study, China and South Korea are likely to join the top10 in terms of the total number of millionaires by 2020.
- However, there is a paradox at the heart of this story. According to our study, in spite of the rapid growth of wealth in the EM economies, U.S. and Europe will remain the global centers of wealth over the next decade, in terms of both the amount of wealth held and the number of millionaire households. Our analysis indicates that aggregate wealth of millionaire households in the U.S. in 2020 will likely reach $87 trillion, from $39 trillion in 2011.
- Our forecasts suggest that, in 2020, 43% of the world’s wealth among millionaire households will be in the U.S. Opportunities for growth potentially exist via greater U.S. state penetration. In the U.S., California will likely have the most number of wealthy households, while New Jersey may continue to have the greatest density. The East Coast is likely to see the highest growth rates —New York and Florida together may add 1.5 million new millionaire households by 2020.
- Our forecasts suggest that total wealth among millionaire households will increase from $92 trillion in 2011 to $202 trillion by 2020, a growth of 119%. In emerging markets, the growth over the next decade is potentially quite impressive (260%), significantly outpacing the growth (107%) in developed markets.
The breakdown by country. Note that millionaire assets are poised to increase by well over 100%...
According to our study, the total wealth among millionaire households of the 25 economies in this study generally exhibit little change in their ranking over the next decade. Emerging market economies will likely see some upward movement in rank (e.g., China).
...Even as the total number of millionaire households is expected to grow by well under 100%.
In terms of the total number of millionaire households, emerging markets are likely to see an upward movement in rank, with some economies rising meaningfully (South Korea, Mexico) and others dropping slightly (Taiwan, Turkey).
And then a quick look at the creme of the crop: the households who likely account for well over half of the total trillions in assets held, those who have over $30 million (remember the Talebian scale issue here), are only 871 currently, of which well over half, or 496 reside in the US. The global number of uberwealthy households is expected to rise from 871 to 1,719 in 2020, with the US once again accounting for the majtority, even as China rises by the most: from 46 to 327.
Lastly, here is what percentage of total households the uber wealthy ($30MM+) represent:
The proportion of the ultra-wealthy in relation to total households in 2020 is likely to be the highest in Singapore.
Full report, which we are confident will set off an avalanche of protests against wealth aggregation among the general media (link)
by Tyler Durden Zerohedge May 20, 2011
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