The world gained approximately 920,000 new millionaires last year, bringing the total to 14.6 million millionaires.
Those millionaires are worth a collective $56.4 trillion, according to the 19th annual World Wealth Report, which management consulting corporation Capgemini and RBC Wealth Management released today.
George Lewis, the group head for RBC Wealth Management and RBC Insurance, states in a press release:
“2014 was the sixth consecutive year of growth for the High Net Worth market, with robust equity returns and economic performance enabling wealth to grow by about seven percent, following double digit growth the year prior.”
High net worth individuals are defined here as people with investable assets of at least $1 million in U.S. dollars, excluding their primary residence, collectibles, consumables and consumer durables.
In 2014, the Asia-Pacific region grew at the fastest rate and overtook North America as the region that’s home to the most millionaires.
North America continues to rank No. 1 in terms of its millionaires’ total wealth — $16.2 trillion compared with the Asia-Pacific region’s $15.8 trillion — but Asia-Pacific is expected to take the lead in that statistic by the end of this year.
Another change last year was seen in the asset classes in which millionaires invest their wealth, with equities becoming the preferred asset class instead of cash.
According to report, millionaires currently divide their portfolios into:
- Equities: 27 percent
- Cash: 26 percent
- Real estate: 20 percent
- Fixed income: 16 percent
- Alternative investments: 10 percent
Andrew Lees, Capgemini Global Financial Services’ global sales officer, explains in the press release:
“Increased exposure to equities indicates a slowly expanding appetite for risk as High Net Worth Individuals show comfort in equities taking up a larger portion of portfolios, as asset values rise.”
While Capgemini and RBC credit strong economies and stock markets for the continued rise in millionaires, some organizations credit the increase in millionaires with a widening in the income gap between the wealthiest people and the poorest.
For example, a recent Organisation for Economic Co-operation and Development’s report found that the richest 10 percent of the population among the 34 countries that are OECD members now earn 9.6 times the income of the poorest 10 percent. That is up from seven times more in the 1980s and nine times more in the 2000s.
Among OECD members, the gap between the disposable household incomes of the rich and the poor is among the widest in two North American countries: Mexico (No. 2) and the United States (No. 4). (See “Countries With the Widest Gap Between Rich and Poor.”)
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