What's behind the world's millionaire boom?
In 2014, the world’s millionaire population grew to 14.6 million, with nearly $57 trillion in wealth. The distribution of wealth for both millionaires and Average Joe's continues to be quite stark.
More than 900,000 people became millionaires in 2014, boosting the world's millionaire population to 14.6 million
These millionaires share a combined $56.4 trillion in wealth, according to consulting firm Capgemini and RBC Wealth Management’s latest World Wealth Report. The combined increases total out to a seven percent growth.
That growth has slowed somewhat – 2014's increase was just half the growth rate in 2013. That said, it was still the sixth consecutive year of growth, thanks to strong stock market and economic performance, George Lewis, head of RBC Wealth Management & RBC Insurance, said in a press release. On top of that, the report predicts that the world's millionaires will have a combined wealth of $70 trillion by 2017, representing an eight percent average annual gain.
The United States’ millionaire population hit 4 million in 2014, with a combined wealth of $13.9 trillion. The country’s 18 percent spike in wealth among millionaires was driven by continued economic recovery, strong stock market performance, rising real estate values and a revival in energy production, the report found.
The distribution of millionaires and wealth is not equal across the US: sixty-nine percent of high net worth individuals and 75 percent of their wealth are in concentrated in 12 metropolitan areas. Those are mainly on the East and West coasts, with the exception of four cities: Dallas, Houston, Chicago, and Detroit.
Although millionaires are reaping the benefits of a stronger stock market, middle-class Americans with some stock ownership aren’t feeling a cash windfall. Between March 2009 and August 2014, the US saw one of the longest-running bull markets in history, where stocks continued to swell in strength. Investors on Wall Street and already-wealthy individuals saw their fortunes take off, as previously reported by The Christian Science Monitor. Yet, middle and lower-class Americans, whose wealth is tied up primarily in their homes, did not see much growth in their finances.
This has only made the US’ wealth gap bigger than ever. The Pew Research Center found that the median wealth of the country’s upper-class families was $639,400, but middle-class families had a median wealth of $96,500, as reported by The Monitor. That is a difference of $542,900, and that is the biggest wealth gap seen in the 30 years since the Federal Reserve started collecting the data.
The World Wealth Report also highlights the global disparity in wealth distribution; North America’s 4.68 million millionaires shared $16.2 trillion in wealth and the Asia-Pacific region’s 4.69 million high net worth individuals boasted $15.8 trillion. European millionaires, population 3.99 million, had $12.97 trillion.
Africa, the Middle East, and Latin America’s numbers looked tiny compared to the other regions. The Middle East was home to about 613,000 millionaires with $2.28 trillion in net worth. Africa had roughly 148,000 millionaires with wealth of $1.44 trillion.
Meanwhile, Latin America was the only continent to see its millionaire population and wealth shrink: its number of high net worth individuals shrank 2.1 percent to about $530,000, while those millionaires’ wealth dipped 0.5 percent to $7.7 trillion. The report said this was due to a crash in commodity prices and the resulting 14.8 percent decline in the Latin American MSCI Index.