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Add an extra zero to the ranks of the millionaires club. The number of people around the world with at least $1 million in assets passed 10 million for the first time last year, according to a new report. And their bank accounts are growing even faster.

25th June 08 - Associated Press

Link to the report: World Wealth Report 2008 (Capgemini)

The combined wealth of the globe's millionaires grew to nearly $41 trillion last year, an increase of 9 percent from a year before, Merrill Lynch & Co. and consulting firm Capgemini Group said Tuesday.

That means their average wealth was more than $4 million, the highest it's ever been. Home values were not included in asset totals.

"The growth of their wealth is outpacing the growth of their population, and that's a trend that's going to continue in coming years," said Ileana Van Der Linde, a principal with Capgemini.

The ranks of the wealthy are growing fastest in the developing economies of India, China and Brazil. The number of millionaires in India grew by about 23 percent.

The United States still reigns supreme when it comes to fat wallets, though: One in every three millionaires in the world lives in America. Combined, Africa, the Middle East and Latin America account for just one in 10.

All told, there were about 600,000 more millionaires in the world in 2007 than in 2006, for a total of about 10.1 million. That's a 6 percent increase from the previous year.

Ten million may seem like a big number for such an elite club, but it still represents less than one-fifth of 1 percent of the world's 6.7 billion people.

The rarefied group of the superrich — those with at least $30 million in assets — got richer, too. There were 103,000 of them around the world last year, 9 percent more than the year before, and their wealth grew by nearly 15 percent.

The 600,000 new millionaires was unsurprising to Brian Bethune, an economist with Global Insight, who said inflation and the expansion of the world economy accounts for the growth.

Besides, $1 million isn't what it used to be. One million dollars in 1996, the first year the report was issued, would have been worth about $1.3 million last year, Van Der Linde said.

Steady growth powered economies worldwide in the first half of 2007, but more mature markets were hammered in the second half by the U.S. housing and credit crises. Emerging economies were largely unaffected, the report found.

The downturn started catching up with emerging economies in the beginning of 2008, Van Der Linde said.

Already, the report found, the millionaires club wasn't expanding as fast as before. From 2005 to 2006, the group swelled by more than 8 percent. The club has grown every year since the report was started.

Because of the economic slowdown, the wealthy tended to shift their money to safer investments such as bonds and money-market savings accounts, and away from less stable investments such as real estate, the report found.

Cash deposits and fixed-income securities accounted for 44 percent of the assets of the world's millionaires, up from 35 percent in 2006.

The wealth of the world's richest is projected to reach almost $60 trillion by 2012, the report said.

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June 30th 08 - Sam Pizzigati, Too Much newsletter

A New Tally of the World's Wealthy

The New York-based Merrill Lynch and the Paris-based Capgemini financial companies want to manage more of the wealth of the world’s wealthy. To do that, the two financial giants have come to understand, they need to grab the attention of as many super-rich as they can.

How best to pull that off? Well, Forbes has already cornered the market on ranking the richest of the rich, with lists like the magazine’s annual Forbes 400. So Merrill Lynch and Capgemini have needed to go beyond lists — and they have. Merrill Lynch and Capgemini don’t list the rich. They count them.

Last week, the two companies released their 12th annual World Wealth Report, a work that totals just how many people on our planet have reached the lofty designations of “high” and “ultra-high” net worth.

The new report covers 2007, a year that saw the beginnings of the global credit crunch — and billions in investment losses at the world’s most powerful investment banks. This turmoil doesn't seem to have made much of a dent in the fortunes of the world’s most fortunate.

“High-net-worth individuals” — the World Wealth Report label for folks who hold at least $1 million in assets over and above the value of their residence — saw their numbers world-wide jump 600,000 in 2007, a 6 percent increase over the year before. Our planet's 10.1 million millionaires ended the year holding a combined $41 trillion in wealth, a 9 percent hike over their holdings in 2006.

But the real action continues to be at the upper end of the wealth spectrum, with the “ultras,” those individuals worth at least $30 million. Worldwide, these ultras now total 103,000, less than 0.002 percent of the world’s population.

Having trouble getting your mind around 0.002 percent? Just fill a 100,000-seat football stadium, in your mind, with a random cross-section of the world’s people. Two of those 100,000 would rank as ultra-high-net-worth individuals.

In 2007, these ultras made up a mere 1 percent of the world’s high-net-worth individual population. But they ended the year holding an astonishing 37 percent of high-net-worth individual wealth, $15 trillion in all — a jump of nearly 15 percent over ultra combined wealth holdings in 2006.

How does this $15 trillion in ultra wealth compare with the wealth of the world’s average people? Merrill Lynch and Capgemini don’t tell us, most likely because they don't have much interest in managing average people’s money. Their World Wealth Report makes no attempt to place wealth in a broader context.

To get a glimpse of this broader context, we have to go back to December 2006 when the United Nations University’s World Institute for Development Economics Research estimated the total household wealth of the world at $125.3 trillion, as of the year 2000.

Half the world’s 3.7 billion adults, at that time, had less than $2,161 to their name, the Institute reported. The richest 1 percent of these 3.7 billion — those worth at least $514,512 — then held 39.9 percent of the world's wealth all by themselves, 13,000 times more than the entire bottom 10 percent.

What’s the comparable gap today, after all the global economic turbulence of the past year, the mortgage meltdown in the United States and the explosion of prices for gasoline and food commodities all over the world?

We simply do not have an exact figure, or even an educated guess. But we do know one thing, thanks to the latest figures from Merrill Lynch and Capgemini. The wealth gap between the world’s super-rich and everyone else has, since 2000, become even scarier.

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