In 2011 Asia overtook North America as the region with the most High-Net-Worth-Individuals in the world. A HNWI is someone who has at least $1 million of investable assets, not counting primary residence. But last year in 2012 there were more new millionaires in North America than in Asia and we pulled into the lead again according to a study by Capgemini and RBC Wealth Management. Fantabulous! 😀 We now have a total of 3,730,000 HNWI on this continent. We’re number 1 🙂 And Asia follows closely behind in second place with 3,680,000 HNWIs. Europe is ranked 3rd with 3,400,000.
However Asia is set to retake the top spot again by as early as 2014, the report’s researchers predict. Oh man, it seems to be a neck-and-neck millionaire race between us and Asia. C’mon fellow North Americans. We can’t let them out rich us 👿 By the way the Asian countries in this study include Australia. Sorry my Aussies friends, you guys are involved in this matter whether you want to be or not 😉
One of the reasons for the large influx of new Asian millionaires over the last decade is because of high wage inflation in most Asian countries. Right now the Asian region, including Australia, is growing their economy faster than us Westerners. Below are charts showing income growth in China and Australia.
Can you imagine working in China where your wage increases by over 10% EVERY year! Holy habanero sauce! Similar deal in Australia where if you made $1,000 a week in 2012, then chances are you’ll be making over $1,100 a week today! What?! 😯 That’s very improbable for the average North American worker. So unfortunately for us the long term trend does not look promising for Canadians and Americans 🙁 Hopefully we can find new ways to improve our competitiveness and create more millionaires!
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Random Useless Fact: The older you get, the better you get. Unless you’re a banana
Conversely, even though your wages went up by 10%, so did your expenses. Inflation is pretty rampant in those experiencing drastic wage growth. It’s the old two sides to every coin thing.
That’s a fair deduction 🙂 I suppose if a butcher is making more and more money every year, then someone else has to be paying more and more for their meat lol. If we measure the expenses in terms of the cost of living using CPI, then in India for example it’s currently at 11%, ouch 😯 That’s pretty high inflation. In the last 10 years prices of goods and services in India has risen almost 250%. Kind of sucks for the low income earners in that country 🙁 Inflation hurts the poor.
I can’t help but feel uneasy seeing that. Looks like fake money to me, as they keep the RMB devalued at the bank which is why Chinese people are converting RMB into CAD or USD, or a “real” currency or hard assets (houses in Canada) instead of keeping it in RMB and watching it crash (one day).
Also, bananas that are overripe are perfect for banana cakes.
I hope the conversion of RMB to Canadian real estate will prevent our housing market from experiencing any dramatic correction down the line 🙂
I’ve always wondered how they account for pension income in net worth calculations… My parents receive a government pension as my pops was a former federal employee. When he calculates his net worth, net of his primary residence he says its north of 500K, but with an annual indexed 52K pension on top, I calculate his actual net worth would be much higher if his pension was extrapolated to a non-pension retirement fund. Again, understanding the numbers and how they can be manipulated matters. In the end, what others have matters little. The golden rule – Inflow greater than outflow. – Cheers.
Your dad is Boss lol. He sounds like a millionaire if his pension value is included. Like father like son I guess 😀 Many retirees today don’t even have $250K in their portfolios. It’s not always clear in studies whether pensions are included in total wealth 😕 I think it’s because DB pensions are difficult to calculate. Should the pension value be some multiple of a year’s pension income or use a percentage return extrapolation method based on current interest rates? The other factor is how transferable is it. Since there’s no estate tax in Canada current assets held by an individual can be distributed through a trust or a will with predictable value after a deemed disposition. But I’m not sure if all, some, or any pension plans will continue to pay out to a widow or to dependents when the pensioner dies. Other types of pensions like the CPP can be just as hard to evaluate because a certain portion of CPP benefits are transferable to a surviving spouse but only under certain conditions, which involves the age at which the pensioner dies. Maybe there’s a formula for calculating DB or DC or other forms of pensions in… Read more »
Depends on the pension plan as to what it pays beyond pensioners death. Not really a problem for us though, as our generations are much less likely to hold DB plans let alone have golden pensions to retire with… This is why we do what we do and spend the time understanding investing and focusing on the end goal of financial independence and what it means to be financially free. – Cheers.