Money
Mapped: The World’s Ultra-Rich, by Country
Mapped: The World’s Ultra-Rich, by Country
The global number of ultra-high net-worth individuals (UHNWIs) — those with over $30 million in assets — has continued to rise over the years.
Today’s infographic draws data from Knight Frank’s 2020 Wealth Report released in March, and it shows which countries have the highest number of UHNWIs, as well as how that number is projected to change in years to come.
No Ordinary Millionaire
To start, let’s look at where the world’s wealthiest could be found in 2019, which is both the peak of the decade-long bull market and the most recent year of data covered by the report.
Rank | Country | Ultra-High Net Worth Population | 1-Year Change (%) |
---|---|---|---|
#1 | 🇺🇸 United States | 240,575 | 5.9% |
#2 | 🇨🇳 China | 61,587 | 14.7% |
#3 | 🇩🇪 Germany | 23,078 | 0.8% |
#4 | 🇫🇷 France | 18,776 | 7.9% |
#5 | 🇯🇵 Japan | 17,013 | 17.0% |
#6 | 🇬🇧 UK | 14,367 | 3.6% |
#7 | 🇮🇹 Italy | 10,701 | 20.8% |
#8 | 🇨🇦 Canada | 9,325 | 5.3% |
#9 | 🇷🇺 Russia | 8,924 | 3.9% |
#10 | 🇨🇠Switzerland | 8,395 | 3.0% |
#11 | 🇪🇸 Spain | 6,475 | -1.1% |
#12 | 🇮🇳 India | 5,986 | 0.2% |
#13 | 🇰🇷 South Korea | 5,847 | 21.6% |
#14 | 🇸🇪 Sweden | 5,174 | 0.3% |
#15 | 🇸🇦 Saudi Arabia | 5,100 | 0.0% |
While the U.S. maintained its foothold, the ultra-rich in South Korea and Italy have grown over 20% each since 2018. An economic model focused on exports, conglomerates, and select manufacturing industries could likely be behind the UHNWI boom in South Korea.
Interestingly, the number of ultra-wealthy in Saudi Arabia increased by only one individual between 2018 and 2019.
Multi-Millionaire Next Door
Taking a closer look, what made up the wealth of this ultra rich population? Knight Frank found that 27% of UHNWI wealth was locked up in property investments:
Property as an Investment | Equities | Bonds/Fixed Income | Cash | Private Equity | Collectables | Gold/Precious Metals | Crypto |
---|---|---|---|---|---|---|---|
27% | 23% | 17% | 11% | 8% | 5% | 3% | 1% |
In terms of more liquid assets, the average UHNWI held 23% of their wealth in equities, 17% in bonds, 11% in cash, and 3% in precious metals. It will be illuminating to see how, or if, this changes in the aftermath of the ongoing COVID-19 economic crisis.
The Future Destination Hubs
Fast-forward to 2024, and Knight Frank estimates that the global hotspots of the world’s wealthiest will remain consistent, with some notable winners over the decade.
The greatest difference will be the rising cohort of the ultra-wealthy in China and India, both projected to grow by triple digits between 2014 and 2024. This burgeoning middle class in China is driving domestic consumption and is transforming the consumer landscape.
Rank | Country | UHNWIs (Projected, 2024) | 10-Year Change (Projected, %) |
---|---|---|---|
#1 | 🇺🇸 U.S. | 293,136 | 67.0% |
#2 | 🇨🇳 China | 97,082 | 135.8% |
#3 | 🇩🇪 Germany | 26,819 | 45.0% |
#4 | 🇫🇷 France | 22,728 | 29.7% |
#5 | 🇯🇵 Japan | 19,110 | 63.3% |
#6 | 🇬🇧 UK | 18,818 | 36.7% |
#7 | 🇮🇹 Italy | 12,508 | 17.6% |
#8 | 🇨🇦 Canada | 11,928 | 54.8% |
#9 | 🇷🇺 Russia | 11,019 | 4.8% |
#10 | 🇮🇳 India | 10,354 | 238.3% |
As the ripple effects of COVID-19 continue to take hold, experts pose differing opinions on how its impacts on the global economy will unfold.
Could the crash hasten the number of ultra-rich as inequality is laid bare, or will wealth be redistributed in response to the unprecedented crisis?
Money
How Small Investments Make a Big Impact Over Time
Compound interest is a powerful force in building wealth. Here’s how it impacts even the most modest portfolio over the long-term.
How Small Investments Make a Big Impact Over Time
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Time is an investor’s biggest ally, even if they start with just a modest portfolio.
The reason behind this is compounding interest, of course, thanks to its ability to magnify returns as interest earns interest on itself. With a fortune of $159 billion, Warren Buffett largely credits compound interest as a vital ingredient to his success—describing it like a snowball collecting snow as it rolls down a very long hill.
This graphic shows how compound interest can dramatically impact the value of an investor’s portfolio over longer periods of time, based on data from Investor.gov.
Why Compound Interest is a Powerful Force
Below, we show how investing $100 each month, with a 10% annual return starting at the age of 25 can generate outsized returns by simply staying the course:
Age | Total Contributions | Interest | Portfolio Value |
---|---|---|---|
25 | $1,300 | $10 | $1,310 |
30 | $7,300 | $2,136 | $9,436 |
35 | $13,300 | $9,223 | $22,523 |
40 | $19,300 | $24,299 | $43,599 |
45 | $25,300 | $52,243 | $77,543 |
50 | $31,300 | $100,910 | $132,210 |
55 | $37,300 | $182,952 | $220,252 |
60 | $43,300 | $318,743 | $362,043 |
65 | $49,300 | $541,101 | $590,401 |
70 | $55,300 | $902,872 | $958,172 |
75 | $61,300 | $1,489,172 | $1,550,472 |
Portfolio value is at end of each time period. All time periods are five years except for the first year (Age 25) which includes a $100 initial contribution. Interest is computed annually.
As we can see, the portfolio grows at a relatively slow pace over the first five years.
But as the portfolio continues to grow, the interest earned begins to exceed the contributions in under 15 years. That’s because interest is earned not only on the total contributions but on the accumulated interest itself. So by the age of 40, the total contributions are valued at $19,300 while the interest earned soars to $24,299.
Not only that, the interest earned soars to double the value of the investor’s contributions over the next five years—reaching $52,243 compared to the $25,300 in principal.
By the time the investor is 75, the power of compound interest becomes even more eye-opening. While the investor’s lifetime contributions totaled $61,300, the interest earned ballooned to 25 times that value, reaching $1,489,172.
In this way, it shows that investing consistently over time can benefit investors who stick it through stock market ups and downs.
The Two Key Ingredients to Growing Money
Generally speaking, building wealth involves two key pillars: time and rate of return.
Below, we show how these key factors can impact portfolios based on varying time horizons using a hypothetical example. Importantly, just a small difference in returns can make a huge impact on a portfolio’s end value:
Annual Return | Portfolio Value 25 Year Investment Horizon | Portfolio Value 75 Year Investment Horizon |
---|---|---|
5% | $57,611 | $911,868 |
8% | $88,412 | $4,835,188 |
12% | $161,701 | $49,611,684 |
With this in mind, it’s important to take into account investment fees which can erode the value of your investments.
Even the difference of 1% in investment fees adds up over time, especially over the long run. Say an investor paid 1% in fees, and had an after-fee return of 9%. If they had a $100 starting investment, contributed monthly over a 25-year time span, their portfolio would be worth over $102,000 at the end of the period.
By comparison, a 10% return would have made over $119,000. In other words, they lost roughly $17,000 on their investment because of fees.
Another important factor to keep in mind is inflation. In order to preserve the value of your portfolio, its important to choose investments that beat inflation, which has historically averaged around 3.3%.
For perspective, since 1974 the S&P 500 has returned 12.5% on average annually (including reinvested dividends), 10-Year U.S. Treasury bonds have returned 6.6%, while real estate has averaged 5.6%. As we can see, each of these have outperformed inflation over longer horizons, with varying degrees of risk and return.
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