The Doubling of the Centi-Millionaire Population: A Reflection of Global Wealth Growth
Surge in Centi-Millionaires Driven by Asset Value Rise
According to a recent report from Henley & Partners, the population of individuals with a net worth of $100 million or more has doubled over the past two decades. The report reveals that there are now 28,420 centi-millionaires worldwide, marking a 12% increase from last year and more than twice the number in 2003. This surge in centi-millionaires can be attributed to the rapid rise in asset values, fueled by low interest rates, which have boosted the worth of various assets including real estate, stocks, private companies, and art. The growth of tech wealth, particularly in the United States, has also played a significant role in the expansion of the super-wealthy.
The Rise of Billionaires and the Impact of Low Interest Rates
In addition to the increase in centi-millionaires, the number of billionaires globally has skyrocketed from under 500 in 2003 to over 2,600 today, as reported by Forbes and other wealth-tracking firms. The low interest rates and the subsequent influx of money following the 2008 financial crisis have effectively diminished the value of money, contributing to the growth of centi-millionaires in terms of dollars. Andrew Amoils, Head of Research at New World Wealth, explains that the decline in the value of money, along with robust growth in the United States and Asia, has fueled the rise of centi-millionaires.
Entrepreneurship and the Dominance of the United States
Amoils notes that a significant portion of today's centi-millionaires have amassed their fortunes by either starting their own companies or supporting startups. The United States remains the leading hub for entrepreneurship and centi-millionaires, representing 38% of the global population of individuals with a net worth of $100 million or more, according to the report.
Slower Growth Projected in the Next Decade
With the era of ultra-low interest rates coming to an end, the growth rate for centi-millionaires is expected to slow down. The report projects a 38% increase in the centi-millionaire population over the next decade, from 28,420 to approximately 39,000 by 2033. Andrew Amoils suggests that the next ten years may witness a slower pace of growth compared to the previous decade.
Centi-Millionaires: A More Representative Measure of Super Wealth
While the media often focuses on billionaires, the report emphasizes that centi-millionaires are a more accurate representation of the world's super wealthy. Juerg Steffen, CEO of Henley & Partners, highlights the rapid increase in the dollar threshold for being considered "super-wealthy." In the late 1990s, most banks considered $30 million as the benchmark, but the significant rise in asset prices has elevated the threshold to $100 million.
Global Disparities and Lifestyle Similarities
While smaller, less-developed countries may have fewer billionaires, they often boast dozens or even hundreds of centi-millionaires. Interestingly, Andrew Amoils points out that there is often little visible difference in lifestyle between individuals with a net worth of $100 million and billionaires. They may both fly on private jets, own multiple homes, and lead similar lifestyles, with the exception of philanthropic endeavors.
Impact of the Rising Centi-Millionaire Population on New Business Ventures
Asset Value Rise and Wealth Accumulation
The notable increase in the number of centi-millionaires, individuals with a net worth of $100 million or more, over the last two decades has significant implications for new businesses. The surge, driven by a rise in asset values and the growth of tech wealth, particularly in the United States, highlights the potential for substantial wealth accumulation in the right sectors. This wealth growth trend could inspire entrepreneurs to venture into innovative, high-value sectors.
Low Interest Rates and Wealth Expansion
The role of low interest rates in wealth expansion cannot be overlooked. The influx of money following the 2008 financial crisis, coupled with declining money value, has contributed to the growth of centi-millionaires. This scenario presents an opportunity for new businesses to tap into the wealth expansion, especially in thriving economies like the United States and Asia.
Entrepreneurship and Wealth Creation
The fact that a significant portion of today's centi-millionaires made their fortunes through entrepreneurship underscores the potential of business ventures in wealth creation. With the United States leading in entrepreneurship and the number of centi-millionaires, new businesses could consider this a favorable environment for growth and success.
Future Growth Projections and Opportunities
Although the growth rate for centi-millionaires is expected to slow down with the end of ultra-low interest rates, the projected 38% increase over the next decade indicates continued opportunities for wealth creation. New businesses can leverage these opportunities by aligning with market trends and demands.
Centi-Millionaires: A New Benchmark for Super Wealth
The report's emphasis on centi-millionaires as a more accurate representation of the world's super wealthy presents a new benchmark for wealth status. This shift in wealth perception could influence the strategies of new businesses targeting high net worth individuals.
Global Wealth Disparities and Lifestyle Implications
The disparities in wealth distribution globally, with smaller, less-developed countries having fewer billionaires but more centi-millionaires, offer insights into market segmentation for new businesses. Moreover, the similar lifestyles led by individuals with a net worth of $100 million and billionaires suggest that businesses targeting this demographic can offer high-end, luxury services or products to appeal to their sophisticated tastes.
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