The Best and Worst Performing Wealth Markets Over the Last 10 Years
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The Best and Worst Performing Wealth Markets in the Last 10 Years

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global wealth markets 2019

The Best and Worst Performing Wealth Markets

A lot can change in a decade.

Ten years ago, the collapse of Lehman Brothers sent the world’s financial markets into a tailspin, a catalyst for years of economic uncertainty.

At the same time, China’s robust GDP growth was reaching a fever pitch. The country was turning into a wealth creation machine, creating millions of newly-minted millionaires who would end up having a huge impact on wealth markets around the world.

The Ups and Downs of Wealth Markets (2008-2018)

Today’s graphic, using data from the Global Wealth Migration Review, looks at national wealth markets, and how they’ve changed since 2008.

Each wealth market is calculated from the sum of individual assets within the jurisdiction, accounting for the value of cash, property, equity, and business interests owned by people in the country. Just like other kinds of markets, wealth can grow or shrink over time.

Here are a few countries and regions that stand out in the report:

Developing Asian Economies
In terms of sheer wealth growth, nothing comes close to countries like China and India. The size of these markets, combined with rapid economic growth, have resulted in triple-digit gains over the last 10 years.

For the world’s two most populous countries, it’s a trend that is expected to continue into the next decade, despite the fact that many millionaire residents are migrating to different jurisdictions.

Mediterranean Malaise
European nations saw very little growth over the past decade, but the Mediterranean region was particularly hard-hit. In fact, eight of the 20 worst performing wealth markets over the last decade are located along the Mediterranean coast:

Rank (Out of 90)Country% Growth (2008-2018)
89🇬🇷 Greece-37%
87🇨🇾 Cyprus-21%
86🇮🇹 Italy-14%
85🇪🇸 Spain-13%
84🇹🇷 Turkey-11%
82🇪🇬 Egypt-10%
80🇫🇷 France-7%
76🇭🇷 Croatia-6%

European Bright Spots
There were some bright spots in Europe during this same time period. Malta, Ireland, and Monaco all achieved positive wealth growth at rates higher than 30% over the last 10 years.

Australia
While it’s expected to see rapidly-growing economies as prolific producers of wealth, it is much more surprising when mature markets perform so strongly. Singapore and New Zealand fall under that category, as does Australia, which was already a large, mature wealth market.

Australia recently surpassed both Canada and France to become the seventh largest wealth market in the world, and last year alone, over 12,000 millionaires migrated there.

Venezuela
The long-term economic slide of Venezuela has been well documented, and it comes as no surprise that the country saw extreme contraction of wealth over the last decade. Since war-torn countries are not included in the report, Venezuela ranked 90th, which is dead-last on a global basis.

Short Term, Long Term

In 2018, global wealth actually slumped by 5%, dropping from $215 trillion to $204 trillion.

All 90 countries tracked by the report experienced negative growth in wealth, as global stock and property markets dipped. Here’s a look at the wealth markets that were the hardest hit over the past year:

Wealth MarketWealth growth (2017 -2018)
🇻🇪 Venezuela-25%
🇹🇷 Turkey-23%
🇦🇷 Argentina-20%
🇵🇰 Pakistan-15%
🇦🇴 Angola-15%
🇺🇦 Ukraine-13%
🇫🇷 France-12%
🇷🇺 Russia-12%
🇮🇷 Iran-12%
🇶🇦 Qatar-12%

The future outlook is rosier. Global wealth is expected to rise by 43% over the next decade, reaching $291 trillion by 2028. If current trends play out as expected, Vietnam could likely top this list a decade from now with a staggering 200% growth rate.

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Personal Finance

Mapped: Personal Finance Education Requirements, by State

Only 22.7% of U.S. students are required to take a personal finance course. Which states have the highest levels of personal finance education?

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The Percentage of Students Receiving Personal Finance Education

When you graduated from high school, did you know how to create a budget? Did you have an understanding of what stocks and bonds were? Did you know how to do your own taxes?

For many Americans, the answer to these questions is probably a “no”. Only 22.7% of U.S. high school students are guaranteed to receive a personal finance education. While this is up from 16.4% in 2018, this still represents a small fraction of students.

This graphic uses data from Next Gen Personal Finance (NGPF) to show the percentage of high school students required to take a personal finance course by state.

A Closer Look at State-level Personal Finance Education

A standalone personal finance course was defined as a course that was at least one semester, which is equivalent to 60 consecutive instructional hours. Here’s the percentage of students in each state who have a required (not optional) personal finance course.

State/Territory% of Students Required to Take Personal Finance Course
Mississippi100.0%
Missouri100.0%
Virginia100.0%
Tennessee99.7%
Alabama99.6%
Utah99.6%
Iowa91.3%
North Carolina89.2%
Oklahoma47.1%
New Jersey43.0%
Nebraska42.8%
Kansas40.8%
Wyoming38.3%
Arkansas34.6%
Wisconsin33.5%
South Dakota27.1%
Ohio23.5%
Pennsylvania16.2%
Maine15.6%
Rhode Island14.8%
Connecticut14.7%
Illinois13.9%
Maryland12.5%
North Dakota12.2%
Vermont12.1%
Nevada11.0%
Indiana10.9%
Oregon7.5%
Minnesota6.9%
Montana6.9%
New Hampshire6.0%
Kentucky5.5%
Colorado5.4%
Delaware5.0%
Massachusetts5.0%
West Virginia3.2%
Louisiana2.7%
Washington2.4%
Texas2.2%
New York2.0%
Michigan1.7%
Idaho1.4%
Arizona1.0%
California0.8%
South Carolina0.8%
Alaska0.6%
Florida0.4%
New Mexico0.4%
Georgia0.0%
Hawaii0.0%
Washington, D.C.0.0%

Eight states currently have state-wide requirements for a personal finance course: Alabama, Mississippi, Missouri, Iowa, North Carolina, Tennessee, Utah, and Virginia. Naturally, the level of personal finance education is highest in these states.

Five states have begun the process of implementing a requirement, with Florida being the most populous state yet to guarantee personal finance education for high schoolers. The state previously required schools to offer a personal finance course as an elective, but only 5% of students took the course.

Outside of the guarantee states, only 9.3% of students are required to take a personal finance course. That number drops to 5% for schools that have a high percentage of Black or Brown students, while students eligible for a free or reduced lunch program (i.e. lower income students) also hover at the 5% number.

Why is Personal Financial Education Important?

The majority of Americans believe parents are responsible for teaching their children about personal finance. However, nearly a third of parents say they never talk to their children about finances. Personal finance education at school is one way to help fill that gap.

People who have received a financial education tend to have a higher level of financial literacy. In turn, this can lead to people being less likely to face financial difficulties.

Chart showing that people with low financial literacy are more likely to face financial difficulties, such as being unable to cover an unexpected $2,000 expense, compared to people with high financial literacy

People with low levels of financial literacy were five times more likely to be unable to cover one month of living expenses, when compared to people with high financial literacy. Separate research has found that implementing a state mandate for personal finance education led to improved credit scores and reduced delinquency rates.

Not only that, financial education can play a key role in building wealth. One survey found that only one-third of millionaires averaged a six-figure income over the course of their career. Instead of relying on high salaries, the success of most millionaires came from employing basic personal finance principles: investing early and consistently, avoiding credit card debt, and spending carefully using tools like budgets and coupons.

Expanding Access to Financial Education

Once the in-progress state requirements have been fully implemented, more than a third of U.S. high school students will have guaranteed access to a personal finance course. Momentum is expanding beyond guarantee states, too. There are 48 personal finance bills pending in 18 states according to NGPF’s financial education bill tracker.

Importantly, 88% of surveyed adults support personal finance education mandates—and most wish they had also been required to take a personal finance course themselves.

When we ask the next generation of graduates if they understand how to build a budget, it’s more likely that they will confidently say “yes”.

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Markets

Charted: U.S. Consumer Debt Approaches $16 Trillion

Robust growth in mortgages has pushed U.S. consumer debt to nearly $16 trillion. Click to gain further insight into the situation.

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Charted: U.S. Consumer Debt Approaches $16 Trillion

According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. Critically, the rate of increase in consumer debt for the fourth quarter of 2021 was also the highest seen since 2007.

This graphic provides context into the consumer debt situation using data from the end of 2021.

Housing Vs. Non-Housing Debt

The following table includes the data used in the above graphic. Housing debt covers mortgages, while non-housing debt covers auto loans, student loans, and credit card balances.

DateHousing Debt
(USD trillions)
Non-Housing Debt
(USD trillions)
Total Consumer Debt
(USD trillions)
Q1 20035.182.057.23
Q2 20035.342.047.38
Q3 20035.452.107.55
Q4 20035.962.108.06
Q1 20046.172.138.30
Q2 20046.342.128.46
Q3 20046.642.208.84
Q4 20046.832.229.05
Q1 20057.012.199.20
Q2 20057.232.269.49
Q3 20057.452.359.80
Q4 20057.672.3410.01
Q1 20068.022.3610.38
Q2 20068.352.4010.75
Q3 20068.652.4611.11
Q4 20068.832.4811.31
Q1 20079.032.4611.49
Q2 20079.332.5311.86
Q3 20079.562.5812.14
Q4 20079.752.6312.38
Q1 20089.892.6512.54
Q2 20089.952.6512.60
Q3 20089.982.6912.67
Q4 20089.972.7112.68
Q1 20099.852.6812.53
Q2 20099.772.6312.40
Q3 20099.652.6212.27
Q4 20099.552.6212.17
Q1 20109.532.5812.11
Q2 20109.382.5511.93
Q3 20109.282.5611.84
Q4 20109.122.5911.71
Q1 20119.182.5811.76
Q2 20119.142.5811.72
Q3 20119.042.6211.66
Q4 20118.902.6311.53
Q1 20128.802.6411.44
Q2 20128.742.6411.38
Q3 20128.602.7111.31
Q4 20128.592.7511.34
Q1 20138.482.7511.23
Q2 20138.382.7711.15
Q3 20138.442.8511.29
Q4 20138.582.9411.52
Q1 20148.702.9611.66
Q2 20148.623.0211.64
Q3 20148.643.0711.71
Q4 20148.683.1611.84
Q1 20158.683.1711.85
Q2 20158.623.2411.86
Q3 20158.753.3112.06
Q4 20158.743.3712.11
Q1 20168.863.3912.25
Q2 20168.843.4512.29
Q3 20168.823.5412.36
Q4 20168.953.6312.58
Q1 20179.093.6412.73
Q2 20179.143.6912.83
Q3 20179.193.7712.96
Q4 20179.323.8213.14
Q1 20189.383.8513.23
Q2 20189.433.8713.30
Q3 20189.563.9513.51
Q4 20189.534.0113.54
Q1 20199.654.0213.67
Q2 20199.814.0613.87
Q3 20199.844.1313.97
Q4 20199.954.2014.15
Q1 202010.104.2114.31
Q2 202010.154.1214.27
Q3 202010.224.1414.36
Q4 202010.394.1714.56
Q1 202110.504.1414.64
Q2 202110.764.2014.96
Q3 202110.994.2415.23
Q4 202111.254.3415.59

Source: Federal Reserve

Trends in Housing Debt

Home prices have experienced upward pressure since the beginning of the COVID-19 pandemic. This is evidenced by the Case-Shiller U.S. National Home Price Index, which has increased by 34% since the start of the pandemic.

Driving this growth are various pandemic-related impacts. For example, the cost of materials such as lumber have seen enormous spikes. We’ve covered this story in a previous graphic, which showed how many homes could be built with $50,000 worth of lumber. In most cases, these higher costs are passed on to the consumer.

Another key factor here is mortgage rates, which fell to all-time lows in 2020. When rates are low, consumers are able to borrow in larger quantities. This increases the demand for homes, which in turn inflates prices.

Ultimately, higher home prices translate to more mortgage debt being incurred by families.

No Need to Worry, Though

Economists believe that today’s housing debt isn’t a cause for concern. This is because the quality of borrowers is much stronger than it was between 2003 and 2007, in the years leading up to the financial crisis and subsequent housing crash.

In the chart below, subprime borrowers (those with a credit score of 620 and below) are represented by the red-shaded bars:

Mortgage originations by Credit Score

We can see that subprime borrowers represent very little (2%) of today’s total originations compared to the period between 2003 to 2007 (12%). This suggests that American homeowners are, on average, less likely to default on their mortgage.

Economists have also noted a decline in the household debt service ratio, which measures the percentage of disposable income that goes towards a mortgage. This is shown in the table below, along with the average 30-year fixed mortgage rate.

YearMortgage Payments as a % of Disposable IncomeAverage 30-Year Fixed Mortgage Rate
200012.0%8.2%
200412.2%5.4%
200812.8%5.8%
20129.8%3.9%
20169.9%3.7%
20209.4%3.5%
20219.3%3.2%

Source: Federal Reserve

While it’s true that Americans are less burdened by their mortgages, we must acknowledge the decrease in mortgage rates that took place over the same period.

With the Fed now increasing rates to calm inflation, Americans could see their mortgages begin to eat up a larger chunk of their paycheck. In fact, mortgage rates have already risen for seven consecutive weeks.

Trends in Non-Housing Consumer Debt

The key stories in non-housing consumer debt are student loans and auto loans.

The former category of debt has grown substantially over the past two decades, with growth tapering off during the pandemic. This can be attributed to COVID relief measures which have temporarily lowered the interest rate on direct federal student loans to 0%.

Additionally, these loans were placed into forbearance, meaning 37 million borrowers have not been required to make payments. As of April 2022, the value of these waived payments has reached $195 billion.

Over the course of the pandemic, very few direct federal borrowers have made voluntary payments to reduce their loan principal. When payments eventually resume, and the 0% interest rate is reverted, economists believe that delinquencies could rise significantly.

Auto loans, on the other hand, are following a similar trajectory as mortgages. Both new and used car prices have risen due to the global chip shortage, which is hampering production across the entire industry.

To put this in numbers, the average price of a new car has climbed from $35,600 in 2019, to over $47,000 today. Over a similar timeframe, the average price of a used car has grown from $19,800, to over $28,000.

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