Worldwide Success

The wealth literature is filled is the word “millionaire”.   The definition of a millionaire may have a few variations, with the most common definition being that a millionaire is someone who has at least one million US dollars in net worth excluding his or her primary residence.  Net worth is defined as total assets minus total liabilities.

Another commonly used description of millionaires is what is commonly known as High Net Worth Individuals or HNWI for short.  A HNWI is someone who has more than US$1 million in financial assets, excluding their primary residence.  As reported in the article More Than 10 Million Millionaires in the World, according to the 2008 Merrill-Lynch and Cap Gemini World Wealth Report there are 10.1 million HNWIs in the world, representing US$40.7 trillion in total wealth.  In North America there are 3.3 million HNWIs.

Less than 0.2% of the world population has the privilege of being considered a HNWI, and in relative terms HNWIs are very rich.  However, these days US$1 million is not what it used to be a few decades ago.  Just look at real estate listings in some areas in the US such as California and Washington DC metro and you will realize that, even in the current real estate crisis, it is not hard to find home prices approaching or surpassing the US$1 million mark.  You can easily be a HNWI and not feel rich at all.

But there is another label that classifies the unquestionably rich.  Those are the Ultra High Net Worth Individuals or Ultra-HNWI for short.  Ultra-HNWIs are defined as those who have financial assets of more than US$ 30 million.  If you have US$30 million in financial assets, not only are you rich, you definitely feel rich.  This kind of money invested in a conservative portfolio yielding 7% per year would provide you with over US$2 million per year in investment income alone.

In 2007 there were a total of 103,300 Ultra-HNWIs in the world, an increase of 8.8% over 2006.  North America contains the largest number of such individuals, accounting for more than 40 thousand of them.  The wealth of this elite group grew by an impressive 14.5% in 2007.  Once again, the rich keep getting richer.

There has been a recent trend in additional philanthropic and socially-responsible awareness among the rich.  Many Ultra-HNWIs have dedicated more than 10% of their wealth to philanthropy and an increasing number are asking for opportunities to invest their money in socially responsible investments.  Today, about 9% of the portfolio of the Ultra-HNWIs is dedicated to socially responsible investments globally.

The rich are certainly privileged.  But given their power and influence they also have a huge responsibility to raise the standard of living of the many that have so little.  They carry in their shoulders the weight of making the best use of their resources to assure that their wealth is being used in environmentally and socially responsible manners.  The recent trends are encouraging.  However, there is still much work to be done in this area.

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