ZURICH, SWITZERLAND – I haven’t stopped looking at international comparisons for cost of living and wealthy individuals, but I have stopped paying attention to them if they’re dollar-based. They’re mostly nonsense.
Looking at media reports about Credit Suisse’s new “Global Wealth Report” I almost dismissed it, thinking it would be just another list, until I took the time to look at the report itself.
We learn that the number of extremely wealthy Chinese is growing rapidly. And we learn, as TSR points out in its story about this, that household wealth in Switzerland has grown far faster than anywhere else – in dollar terms. The only real purpose that information will serve is to add to the jealousy of Switzerland that is already a small feature of life in Europe.
What matters in this report, is the groundshift it lays out clearly.
“The global wealth currently held by 4.4 billion adults has increased 72% since 2000 to reach USD 195 trillion. Driven by robust economic expansion in the emerging markets, the Credit Suisse Research Institute estimates that global wealth will grow 61% to USD 315 trillion by 2015. The middle segment of the wealth pyramid is composed of one billion individuals who are located in the fastest-growing economies of the world and who hold one-sixth or USD 32 trillion of global wealth.”
Move over USA, make way for Asia
This middle segment is composed of people whose average wealth per adult is $10,000 to $100,000, and 60 percent of them are in Asia.
The report underscores a shift that anyone who has recently spent time in the US will have felt, that this powerhouse of consumers is losing its strength to move the world’s economies. The introduction to the report states it baldly. “The Credit Suisse Research Institute believes that wealth provides people in the middle segment with the financial security they need to become the world’s emerging consumers and that the middle segment will replace indebted US households as the global economic growth locomotive.”
Switzerland and Norway, the report shows, are currently, in dollar terms, “the richest nations in the world in terms of average wealth per adult, which stands at USD 372,692 and USD, 326,530 respectively. They are followed by Australia, which is in third place with average wealth per adult of USD 320,909 and Singapore with average wealth per adult of USD 255,488. Figures for Australia and Singapore have both doubled in the last decade.”
Where there is wealth, there is often poverty
Growing wealth has not meant the disappearance of poverty, no real surprise, but the numbers are sobering. “At the base of the wealth pyramid there are three billion people with average wealth per adult of below USD 10,000, of which 1.1 billion own less than USD 1,000 and 307 million are in India.”
The report is, after all, published by a group backed by a bank, and one curious detail is tucked in here. “Some 2.5 billion people are as yet unbanked. As the wealth of this significant group grows, it will both require and fuel the creation of new financial services.”