According to the Global Rich List, my estimated income of $70,000 for this year puts me in the top 0.85% in the world on the basis of annual earnings. However, according to a new global study commissioned by the United Nations, my net worth of under $70,000 translates to “only” the top 10% of all individuals throughout the world, ranked by total “wealth.”
From an article on MarketWatch, providing the details of the study:
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.
The study shows that cultural differences, even in developed countries, contribute to differences in wealth.
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.
Poor individuals in less developed areas of the world do have debt, but it is not as pronounced as debt in countries with a mature consumer industry. According to the report, due to large amounts of consumer debt, “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.”
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My net worth is minus $20K, where does that put me on the global scale?
I wonder how accurate these numbers are. Definitely seem quite low to me, considering how much assets have appreciated in the past couple decades.
Would you like to make it to the top 1% in a few years on the same income, adjusting for inflation? Read “The Millionaire Next Door” by Stanley and Danko if you haven’t already read it. The secret of the millionaries next door: living beneath their means, frugality, and discipline.
In “The Millionaire Next Door,” many of the millionaires were owners of (unglamorous, even boring) businesses. (And, yes, they excel at living beneath their means. I know a retired architect who lives in a modest neighborhood and rents out his spare bedrooms – and the car he drives is right out of the book!)
Frugality and discipline won’t get a minimum-wage earner anywhere close to the top 1%, and I didn’t see any low earners in the book.
My net worth is in the red… It’s going to be a long journey to the top 1%… Slave to the corporate machine… =)