Do you remember in school, when you used to think numbers sounded ridiculous? Everything was a new take on the ‘-illion’ range of money. Millions. Billions. Trillions. Kids often had their own comical terms, but one that was typically thrown out there was Quadrillion. However, while these numbers are barely possible to fathom – even the concept of a million dollars in cash seems crazy to most – there is now literally a global wealth of around one half-quadrillion.
This means that the global net wealth of our planet is estimated to be around $431 trillion. That makes it close to the next one up, a quadrillion. However, while this might sound amazing, it might also lead us to a few questions. For example, why are so many people poor?
But that is beside the point. Especially when you focus on the fact that over a quarter of that wealth is controlled by millionaires alone. The new report, produced by the Boston Consulting Group, shows us the wealth of our planet when you take in financial wealth, real assets, and net of liabilities. So, the number is pretty insane – it’s almost impossible to actually grasp when you think about just how large that sum of money actually is.
Indeed, with people worth one million bucks or above controlling around one quarter of this money, it makes it easy to see why inequality is so rife. Around $126tn of the wealth in this world is owned by a small collection of people, dubbed people who are ‘high net worth individuals’ – is that sustainable?
How has COVID-19 impacted wealth?
One thing that was noted as part of the program’s discovery, though, was that HNWIs actually controlled a lot more than 25%. When you factor in financial wealth – investable assets, including things like bons and equities – then they control a mind-bending 40% of global wealth. However, many assumed that COVID-19 would have a huge impact – the opposite, though, was true. Indeed, the report found that growth of around 8.3% took place.
Why? Because, as others noted, we were all stuck at home. Those who still have income were able to basically save in a way that they never could have before. Those on furlough found it easy to save money because the things we usually sink money into – pubs, restaurants, entertainment, and the like – were more or less all closed down. So, it makes sense when you think about why wealth was able to rise over a significant period of time.
Crucially, though, many people started to put money into investments and equities that, in the past, they would never have considered. Still, the main thing to count on in this report is the fact that around 40% of global financial assets and wealth are owned by a vanishingly small number of people.
As the rest of the world continues to count the cost of years’ worth of tough decisions, those at the top are typically insulated from true harm and dropping into poverty. That might be something worth focusing on in the years to come as we further analyze how wealth is spread around.