#94 – Where new billionaires will be live and how will they do it?

Billionaires – In this article you’ll find:

• Billionaires – Where the billionaires are living and how they accumulate their wealth
• Billionaires – Which are the three essential characteristics for entrepreneurial success
• Billionaires – How many billionaires will have we in 2026…
• Billionaires – Which are the billionaire’s countries that are growing faster than others

Here you can find other articles:

1. US Equity Or Rest Of The World?
2. We’re Witnessing The New Energy World. Do You Know Why?
3. Are The Markets Ready For Interest Rates Rises?

Billionaires – Knight Frank

14 A Wealth Surge

Last year’s global economic rebound supercharged wealth creation. Worldwide, the number of UHNWIs (Ultra high-net-worth individual) rose 9.3% over the year, creating an additional 52,000 very wealthy people compared with just 12 months earlier.

This growth was evenly spread, with North America (up 12.2%) just ahead of the regional pack. Only Africa saw a decline in wealth. As we discuss, the growth in younger, self-made UHNWIs (21% of the total) will drive new investment themes and innovation.

20 Prompts A Backlash

With 83% of our Attitudes Survey respondents expecting their clients’ wealth to grow further this year, and our expectation of a further 28.3% rise in global UHNWI numbers by 2026, policy responses to tackle inequality are on the rise.

Expect more wealth taxation, focused on assets rather than income, and a narrowing in the number of low-tax jurisdictions.

23 Lockdowns Be Damned – Globalisation Is On The Rise

While international airport arrivals plummeted by 72% compared with pre-pandemic levels, as travellers navigated last-minute border closures, our report points to a demand for more, not less, internationalism.

Around 15% of UHNWIs plan to apply for a second passport or new citizenship and 36% of those are planning to do so for a better quality of life.

With global exports hitting record levels and crossborder real estate investment on the rise, globalisation is in the ascendancy.

36 Private Capital Drives Real Estate Investment

A growing share of private capital is pouring into property. While private investors increased their exposure to real estate investments by 52% in 2021, institutional investment volumes rose just 29%.

Private capital now accounts for 35% of all investment transactions.

With 23% of UHNWIs planning to invest in property this year, we tip offices to be the biggest target, with logistics pipping residential to second place for the first time.

Billionaires – UBS

Personality traits

Distinct personality traits allow creators of great wealth to thrive, according to our research. Billionaires typically have three characteristics in common: an appetite for clever risk taking business focus and determination.

But while some highly visible entrepreneurs excel in risk taking and starting up businesses, they are often less good at running and scaling a business which explains why they often team up with strong partners. Others are able to both build and sell as they observe a niche that is not covered and fill it.

Wealth generation: a cyclical pattern

In the story of great wealth creation, this is certainly the case. At the beginning of the 20th Century, a small number of US and European entrepreneurs took advantage of new industrial technologies to drive forward some of that century’s greatest innovations.

In the process they amassed great fortunes.

Almost one hundred years later, the cycle is happening again, only this time it’s innovation in technology and finance, the economic rise of emerging markets, and inflating asset prices which have fuelled extraordinary wealth generation.

Billionaire personality traits

Billionaires are different. Their fortunes aren’t the result of good luck or social background.

Instead, self-made billionaires have distinct personality characteristics that allow them to approach the challenge of creating new value differently from most corporate managers and leaders.

Our research and analysis consistently identified three personality traits as essential for entrepreneurial success. These are: smart risk taking, obsessive business focus and dogged determination.

Starting young

Billionaires tend to have had the benefits of experience and education. Almost half of self-made billionaires worked in a large company before making their breakthrough, while 82% have a college degree.

Showing just how recently Asia has made its economic breakthrough, the region’s new tycoons differ from those in other regions.

25% of them grew up in poverty, compared with just 8% in the US and 6% in Europe. They’re also younger than their peers in other parts of the world.

Asian self-made billionaires have an average age of 57, making them almost ten years younger than their counterparts in the US and Europe.

Social investing is a new trend, where successive generations embrace a socially responsible cause such as healthcare, housing or treatment of substance abuse, seeking to do some good.

Billionaires – Knight Frank

Globally, pandemic-related restrictions and lifestyle shifts have led to amassed savings and an increase in levels of wealth that has not been seen for years.

Our number crunching reveals that the world’s population of UHNWIs (those with net assets of US$30 million or more, including their primary residence) rose by 9.3% in 2021, following on from growth of 2.4% in 2020.

Top five gainers

The top five gainers for UHNWIs, in absolute terms, were the US, the UK, France, Japan and the Chinese mainland.

Equity markets played a big role with the French CAC 40 up around 30% during 2021, the US S&P 500 rising over 25% and the UK FTSE 250 around 15% higher.

Over the ten years to 2026 the global UHNWI population will have more than doubled.

5-year forecasts 2021-2026

The five-year forecasts generated by our Wealth Sizing Model have duly increased given the prospects for wealth growth and creation in the coming years.

Between 2021 and 2026, we forecast that the global UHNWI population will grow by a further 28%. Over the ten years to 2026 that represents a more than doubling in the number of global UHNWIs – from 348,355 to 783,671.

By 2026, Asia will surpass Europe as the second largest regional wealth hub.

During that time we predict, for example, that Singapore will have witnessed a 268% growth in its UHNWI population to around 6,000. However, tenyear growth is led by Australasia.

The region’s UHNWI population, led by New Zealand (from 1,249 to 4,618), is expected to more than treble by 2026.

My Conclusions

The Ultra high-net-worth individuals are growing and the three countries right now that has most billionaires are: US, China and Germany.

They are substantially entrepreneurs and launch their business before the 40s for becoming billionaires after their 50s.

The characteristics for entrepreneurial success are smart risk taking, obsessive business focus and dogged determination.

They acquire these characteristics over the life and over many experiences they do.

Today we have 350,000 billionaires worldwide, but Knight Frank estimate that in 2026 we will have 784,000 billionaires and Asia will surpass Europe as the second largest regional wealth hub.

Even the billionaire’s countries are changing respect the past. Even if the US has the primary in this ranking, countries like China, Singapore, New Zealand and Australasia are growing really fast.

Institutional Considerations

• Worldwide, the number of UHNWIs (Ultra high-net-worth individual) rose 9.3% over the year, creating an additional 52,000 very wealthy people compared with just 12 months earlier.
• The growth is present even in the younger, self-made UHNWIs (21% of the total) will drive new investment themes and innovation.
• Expect more wealth taxation, focused on assets rather than income, and a narrowing in the number of low-tax jurisdictions.
• Around 15% of UHNWIs plan to apply for a second passport or new citizenship and 36% of those are planning to do so for a better quality of life.

• According to Knight Frank, private investors increased their exposure to real estate investments by 52% in 2021, institutional investment volumes rose just 29%.
• Billionaires typically have three characteristics in common: an appetite for clever risk taking business focus and determination.
• Billionaires are different. Their fortunes aren’t the result of good luck or social background.
• Self-made billionaires have distinct personality characteristics that allow them to approach the challenge of creating new value differently from most corporate managers and leaders.

• Always Knight Frank affirm that billionaires are identified by three personality traits as essential for entrepreneurial success. These are: smart risk taking, obsessive business focus and dogged determination.
• The top five gainers for UHNWIs, in absolute terms, were the US, the UK, France, Japan and the Chinese mainland.
• Between 2021 and 2026, the global UHNWI population will grow by a further 28%. Over the years to 2026 that represents a more than doubling in the number of global UHNWIs – from 348,355 to 783,671.
• By 2026, Asia will surpass Europe as the second largest regional wealth hub.

Join the conversation with your own take on these topics in the comments below.

About the Author

Alessandro is a Financial Markets enthusiastic and he loves learning from articles/papers on many financial topics and in doing so he shares with you the most interesting charts and comments.

Disclosure

This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.