The wealth front is growing internationally

Millionaires' wealth grows twice as fast as that of others

The development of global private wealth has proven to be very resilient over the past two decades. Neither the burst internet bubble at the turn of the millennium nor the financial or euro crisis slowed down the expansion in the long term, so that at the end of the year the fabulous sum of 226 trillion US dollars was available to private households. This corresponds to almost a threefold increase compared to 1999, as shown in the 20th Global Wealth Report the Boston Consulting Group emerges.

However, Anna Zakrzewski, study author and partner of the consulting firm, points out: "Covid is much stronger than the financial crisis." The decline in economic output is greater than it was then, while the increase in unemployment is greater. In addition, the corona crisis is getting things moving. "Things that we thought were impossible last year have started to happen this year." But what does this mean for the future?

In the short term, Zakrzewski expects global private wealth to come to a standstill at best because of the corona crisis in 2020, with the particularly rich layers, i.e. billionaires and millionaires, most likely to come to the kiss of the hand. The reason for this is their higher holdings of risky investments such as stocks, which were particularly neglected during the crisis. However, they had surfed a wave of success for a long time beforehand, because: "We have been experiencing a bull market for ten years," emphasizes Zakrzewski.

Double the return for the rich

This tipped the global distribution of wealth in favor of the rich: While in the decade up to 2009 all asset classes achieved a similarly rapid increase in wealth, people with more than a million dollars galloped away on the high edge: They achieved an average annual return of eight over the past decade Percent - twice as much as those on less than a quarter of a million dollars. The gap between the wealth classes was clearly widening. The result: The now 26 million billionaires and millionaires around the world together with 51 percent have more than half of the total assets.

What is striking is the rapid catching up in the growth regions, especially in Asia, compared to the saturated markets, i.e. the once western industrialized countries: Their share of global private wealth has risen from nine percent to more than a quarter since 1999, with China alone contributing almost half Has.

Austria is falling behind

The development in Austria is different: With around 900 billion US dollars of private assets, the republic ranks 26th in a country comparison - with a downward trend: 20 years ago Austria was still in 19th place. The proportion of risky investments is surprisingly high: a third is in stocks and mutual funds. "Contrary to the prevailing opinion, it turns out that Austrians are open to the stock market," says Zakrzewski. Many prefer to play it safe, so that 41 percent of private assets are bunkered in safe deposits such as savings books. In the crisis year 2020 an advantage, but what happens after that?

Zakrzewski sees three possible scenarios, from a sustained standstill to a slow to a rapid recovery - in the worst case, there is a risk of a standstill by 2023, at best the economy will grow in 2021 as it did before Corona. Regardless of which scenario occurs, the Boston consulting expert has identified two areas that benefit from the investment: Digitization, because it passed the practical test during the Corona crisis. And sustainability, because systems designed in this way performed more than one percentage point better during the crisis. (Alexander Hahn, June 18, 2020)