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Number of Millionaires Declines
The global recession has had a major impact on the portfolios of most people -- including the wealthiest. The number of millionaires worldwide dropped during 2008 to levels not seen since before 2005, according to the World Wealth Report, released recently by Merrill Lynch Global Wealth Management and Capgemini, a consulting firm. The combined total wealth of all the world’s millionaires fell 19.5 percent, to $32.8 trillion.
There was a 14.9 percent drop among people with assets between $1 million and $30 million, the largest drop in the 13 years the report has been released. By the end of 2008, there were only 8.6 million people in this category.
The decrease was even steeper among the mega-rich. The number of people with more than $30 million in assets fell 24.6 percent, and their assets fell 23.9 percent.
The United States remained home to the largest number of millionaires, with 28.7 percent of the world’s total. There are 2.5 million U.S. millionaires. However, that is down 18.5 percent from a year earlier.
The United States, Japan and Germany have more than half – 54 percent – of the world’s millionaires. However, China has overtaken the United Kingdom to hold the fourth spot. The biggest drop worldwide was in Hong Kong, which saw its millionaire population plummet 61.3 percent, to 37,000.
The study also shows that, like many smaller investors, millionaires were turning away from equities and toward fixed-income investments, cash and liquid assets. Considering the assets held by all millionaires worldwide as a single portfolio, cash made up 21 percent in 2008. The very rich also increased their real estate holdings, to 18 percent of the total millionaire portfolio.
Japanese millionaires were most likely to move to cash; they had 30 percent of their portfolios in cash in 2008. North Americans were least likely, with only 14 percent in cash. But that was an increase of 3 percent over 2007.
The good news is that the authors of the study believe the downturn is only temporary. They predict that the wealth held by millionaires across the globe will grow at a rate of 8.1 percent a year, reaching $48.5 trillion by 2013. They also predict that by 2013, the Asia-Pacific region will have overtaken North America for the lead in wealth growth