Soaring Stock Markets Swell Ranks of Global Millionaires
Higher Number of Dollar Millionaires Globally Than Previously Recorded - An unprecedented number of dollar millionaires globally.
Yo, let's talk about how the world's roster of millionaires has exploded, thanks to skyrocketing stock prices across the globe! According to a report from consulting firm Capgemini, a whopping 23.4 million people, that's a 2.6% boost from 2023, have stashed away a cool million or more in assets. This is a record high since the first estimate in 1997!
The riches of the super-rich also reached a new peak, with a staggering $90.5 trillion in 2024, a 4.2% jump from the previous year. Once again, the USA claimed the lion's share of the wealth gain.
Fewer greenbacks in Germany's vault
Germany held onto its third position in the league table of millionaire-rich countries, despite taking a hit with around 40,000 fewer millionaires last year: 1.605 million (versus 1.646 million in 2023) wealthy individuals ("High Net Worth Individuals" - HNWI) were part of the super-wealthy group in 2024, according to Capgemini's assessment.
The drop in millionaire count in Germany is largely attributed to slumping real estate prices, according to Capgemini. The wealth of Germany's wealthy remained relatively steady at $6.32 trillion.
Millionaires by the dozen in four countries
The USA was in pole position with a comfortable lead, boasting 7.993 million (versus 7.431 million in 2023) millionaires. Japan took second place with 3.990 million wealthy individuals. The four countries mentioned, along with China, account for an impressive 64.5% of the world's millionaires.
Capgemini's "World Wealth Report", published every year since 1997, tracks stocks, bonds, alternative investments such as private equity, cash, and real estate (unless used for personal use). Art collections, luxury automobiles, and blinged-out jewelry were left out.
The assessment covers 71 countries, which make up more than 98% of global GDP and 99% of global market capitalization. To top it off, Capgemini conducted a survey of around 6,472 millionaires in early January about their investment plans.
- Germany
- Cap Gemini S.A.
- USA
- Frankfurt am Main
In-depth Analysis:
Several elements fueled the global growth of millionaires in 2024, as per Capgemini's report:
- Global Economic Climate: The worldwide HNWI population and wealth expanded by 2.6% and 4.2%, respectively, in 2024. This growth was propelled by a generally favorable economic setting[2].
- Regional Performance: North America saw significant growth, thanks to a welcoming interest rate environment and robust US equity market returns. This was contrasted by declines in Europe, Latin America, and the Middle East due to economic challenges[3].
- Market Returns: Skyrocketing equity market performances, particularly in the US, contributed significantly to the rise in wealth among HNWIs[3].
- Alternative Investments: Alternative investments, including private equity and cryptocurrencies, also played a role in the growth of HNWI wealth. These investments now form a substantial portion of their portfolios[4].
Overall, these factors conspired to push the number of millionaires to 22.8 million in 2024, a 5.1% increase from the year before[3].
The in-depth analysis by Capgemini suggests that the global expansion of millionaires is linked to a favorable economic climate, significant growth in North America due to a supportive interest rate environment and strong US equity market returns, declines in Europe, Latin America, and the Middle East due to economic challenges, skyrocketing equity market performances, particularly in the US, and the increasing role of alternative investments such as private equity and cryptocurrencies in HNWI portfolios. Furthermore, in terms of policy and investment, it might be worth considering initiatives that promote vocational training within the community, as these could potentially lead to job creation and financial stability for a larger portion of the population, thus indirectly contributing to a higher millionaire count. For instance, one could invest in educational institutions offering vocational training, focusing on high-demand industries, as a means of fostering economic growth and generating competitive returns.
