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8 myths about the super rich debunked
Common misunderstandings about the wealthy elite
Chinese wealthy growing faster than everyone else:
nLast year, the fastest growing wealth in one country was actually witnessed in Nigeria, at a staggering 33 percent. The second place went to the United Arba Emirates with a wealth growth among UHNW individuals of 26.7 percent. China’s UHNW population and wealth declined, and it remains only the second biggest Asian UHNW economy, behind Japan.
The world’s wealthiest inherited all their money:
nOnly 19 percent of the global UHNW population fully inherited their wealth. However, 65% made their wealth themselves and a further 16 percent inherited and grew their fortune through their own entrepreneurial endeavours. UHNW individuals – defined as those with assets of at least $30m – who inherited their wealth have a lower average net worth ($130m) than their entrepreneurial peers who made their fortunes ($142m).
UHNW individuals fly by private jet and own a superyacht:
nThe report also reveals that only a small fraction of the global UHNW population possess a high enough net worth to afford a 30 metre superyacht, which has an average price tag of $10m (before maintenance, fuel and other expenses). Due to the high cost of owning and maintaining a private jet or superyacht, many UHNW individuals charter these luxury crafts or travel on commercial airlines, albeit in first or business class.
The majority of super wealthy are investment bankers:
nWhile it is true that the finance, banking & investment industry is the single largest category from which UHNW individuals have derived their wealth, it still only accounts for 19 percent of the world’s UHNW individuals.
The wealthy are immune to economic cycles:
nThe ultra are “high beta”, in turn, their wealth tends to rise and fall more than most people’s wealth as it is tied to financial markets more than middle class individuals who have most of their wealth tied up in property. The UHNW population declined by 20 percent between 2008 and 2009, and its wealth by 22 percent. During the crisis, the wealth of billionaires fell by more than 47 percent in 2009.
“Technopreneurs” are all hoodie-wearing college dropouts in their 20s:
nWhile this certainly is the image prevalent with the technopreneur working at his/her start-up, the average age for an UHNW individual from the technology industry is 54, and many of these individuals are highly educated. In fact, the technology industry accounts for only 4.1 percent of the world’s wealthiest, a surprisingly small contribution.
“I have to go to an Ivy League University to be an UHNW individual”:
nAlthough Harvard tops the ranking of the school with the most UHNW alumni, Harvard graduates only account for a small portion of the world’s UHNW population. Six of the top ten global universities are Ivy Leagues and their combined UHNW alumni population is under 7,000 individuals, or 3.5 percent of the world’s total UHNW population. Furthermore, over 27,000 UHNW individuals, 13.6 percent of the total, do not have a higher education at all.
The wealthy don’t give back:
nThere are many ways in which the UHNW give back, and traditional philanthropy is merely one of these ways. The average UHNW philanthropist donates $25m over his lifetime, rising up to $100m for billionaire philanthropists. However, only a third of the world’s UHNW individuals are estimated to have donated at least $1m, which is less 1 percent of their average net worth.
