Got $2,200? In This World, You’re Rich
A global study reveals an overwhelming wealth gap, with the world’s three richest people having more money than the poorest 48 nations combined.
The richest 2% of the world’s population owns more than half of the world’s household wealth. You may believe you’ve heard this statistic before, but you haven’t: For the first time, personal wealth — not income — has been measured around the world. The findings may be surprising, for what makes people “wealthy” across the world spectrum is a relatively low bar. The research indicates that assets of just $2,200 per adult place a household in the top half of the world’s wealthiest. To be among the richest 10% of adults in the world, just $61,000 in assets is needed. If you have more than $500,000, you’re part of the richest 1%, the United Nations study says. Indeed, 37 million people now belong in that category.
Half the world, nearly 3 billion people, live on less than $2 a day. The three richest people in the world –- Microsoft Chairman Bill Gates, investor Warren Buffett and Mexican telecom mogul Carlos Slim Helú — have more money than the poorest 48 nations combined.
The study also reveals the differences in the types of financial assets owned. Savings accounts are strongly featured in transition economies and some rich Asian countries, while stock and other types of financial products are more commonplace in Western nations. The authors say there is a stronger preference for saving and liquidity in Asian countries because of lack of confidence in financial markets. That isn’t so much the case in the United States and the United Kingdom, which have private pensions and more-developed financial markets, they say.
Surprisingly, household debt is relatively unimportant in poor countries because, the study says, “while many poor people in poor countries are in debt, their debts are relatively small in total. This is mainly due to the absence of financial institutions that allow households to incur large mortgage and consumer debts, as is increasingly the situation in rich countries.” Meanwhile, “many people in high-income countries have negative net worth and — somewhat paradoxically — are among the poorest people in the world in terms of household wealth.”
