Have you ever wondered who keeps track of the world’s wealth? While governments try their best, it’s really the investment banking giants like Morgan Stanley, JP Morgan, and Credit Suisse who know what they’re talking about.
According to Credit Suisse Research Institutes’ recent Global Wealth Report, which studied 5.3 billion people across the globe, having just over $8,000 USD in assets puts individuals among the wealthiest half of the world’s population. Credit Suisse also reports that total global wealth grew by 9.8% from 2021 to 2022, with the average wealth per adult growing to $87,489 USD during the same period.
In 2022, global wealth grew to a whopping $463.6 trillion USD. That’s drawing close to one quadrillion Australian dollars in purchasing power. Of the 5.3 billion people studied, 62.5 million were millionaires in 2022 or 1.18% of the studied population.
While the exceptional gains the world saw in 2021 and 2022 may experience a slight reversal in the coming years, Credit Suisse predicts that wealth will continue to grow steadily over the next five years. In fact, they’re expecting a $169 trillion USD increase in global wealth by 2026, with middle-income countries leading the charge.
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Further forecasts show that global wealth per adult is set to surpass the $100,000 USD milestone by 2024, and the number of millionaires worldwide is expected to soar past 87 million within the next five years.
It’s truly mind-blowing to think about the sheer amount of money that exists in the world today. And that’s not even factoring in the value of the derivatives market, which some financial institutions estimate to be a staggering one quadrillion USD. But although total wealth grew during 2022, some of the world’s wealthiest took a major hit.
According to Knight Frank’s Wealth Report published Wednesday, the ultra-wealthy suffered a significant blow last year, with a triple shock of energy, economic, and geopolitical factors causing them to lose a combined $10 trillion USD. This marks the most substantial annual decline in the fortunes of the super-rich since the report’s first publication in 2010, with Europe experiencing the biggest decline in wealth.
“The fall in wealth is unsurprising given the dramatic pivot in monetary policy that culminated in the worst performance for the traditional blended portfolio since the 1930s,” said Liam Bailey, Knight Frank’s head of research and editor-in-chief of the Wealth Report. “Last year the Ukraine crisis fuelled the European energy crunch and supercharged already surging inflation,” he added.
“As a result, 2022 saw one of the sharpest upward movements in global interest rates in history, leading to economic conditions which Collins English Dictionary neatly dubbed the ‘permacrisis’”.
Despite the International Monetary Fund (IMF) revising its forecasts upwards and some positive signs of hope, numerous regions worldwide are anticipated to face ongoing macroeconomic challenges in the upcoming year, Frank Knight reports.
Billionaire buys a car for $143m USD
Throughout COVID, the classic car market saw a remarkable increase in value, with a surge of 25% — the highest it has been in nine years. This growth is evident in the record-breaking sale of a Mercedes-Benz Uhlenhaut Coupé for a staggering $143 million USD, which is now the most expensive car ever sold. This sale surpassed the previous record held by a 1963 Ferrari 250 GTO, which sold for $70 million USD in 2018.
Dietrich Hatlapa, the founder of the Historic Automobile Group (HAGI), an organization that monitors the top end of the market, attributes this surge in demand to the return of wealthy collectors to the market after many sales were delayed due to the Covid-19 pandemic. These collectors are now showing renewed interest in classic cars, which are viewed as a safe and stable investment in times of economic uncertainty.
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The classic car market has continued to attract investors looking for alternative investments with a potential for long-term growth. As a result, many top-tier classic cars are now considered blue-chip assets, with their values continuing to rise at a steady pace.
Billionaires dropping millions on cars, watches, and fine art really puts 50% of the world with less than $8,360 USD in assets into perspective. Makes the average person trying their luck in the stock market or taking their first leap into business seem like child’s play — compared to the power of real money.
But the trick, as many investors and motivational speakers say, is to never give up. As Warren Buffett says, “The best investment you can make, is an investment in yourself… The more you learn, the more you’ll earn.”