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Millionaire Households

If you were asked to generate a list of which countries had the most millionaires as a percentage of their population would you have come up with this list.

Proportion of millionaire household by market

1. Singapore         15.5%
2. Switzerland        9.9%
3. Qatar                    8.9%
4. Hong Kong         8.7%
5. Kuwait                  8.5%
6. UAE                       5%
7. United States    4.5%
8. Taiwan                 3.5%
9. Israel                    3.4%
10. Belgium            3.1%
11. Japan                 3%
12. Bahrain             2.6%
13. Ireland              2.3%
14. Netherlands    2.3%
15. UK                       2.2%

This data comes courtesy of the Boston Consulting Group’s Global Wealth Report 2011, where wealth is defined as total assets under management including cash, money market and equities either held directly or through managed funds. It excludes the likes of residential property.

The reason for the success of Singapore is given as –

Singapore is more plugged into wealth creation than any other nation,” says Mykolas Rambus, CEO of intelligence provider Wealth-X . He adds that Singaporeans are not just benefiting from China’s phenomenal growth, but also that of India and Southeast Asia. Boston Consulting Group’s study found wealth in Asia ex-Japan grew the fastest of any region in 2010, increasing more than 17%.

A quick look at the list shows Australia is nowhere to be seen because of the excessively low saving rates we see domestically. And because we are simply not switched on enough to take advantage of the emerging economic giants. To most Australian businesses it seems that digging something out of the ground and selling it to someone only to import back at 100 times its original value as a product makes good sense.

Anyone remember Pig Iron Bob?

 

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Comments

  1. …. and what will we be doing when all digging is done, and the holes are empty?

  2. Greg Rowney says:

    The average Australian has the bulk of their assets type up in their own home, which rightly or wrongly isn’t included in these figures.

    After reading this I leapt to the conclusion that the home ownership rate in Australia probably surpasses the likes of Singapore, explaining why Aussies don’t make the cut.

    Wrong … A quick google shows respective home ownership rates as:
    Singapore – 87.2% in 2010 (http://www.singstat.gov.sg/stats)
    Australia – 70% (approx) (http://www.abs.gov.au/ausstats)

    About time we started doing something more productive with our hard earned cash than burying it in residential property.

    • Greg Rowney says:

      On further reflection, forget those numbers, they aren’t really showing what I was originally trying to determine i.e. % of population owning residential property. What they show is the % of owner occupied private dwellings. And even on that front I may be comparing apples with oranges as the bulk of Singaporeans appear to be living in government subsidised HDB dwellings.

      The more telling number would be the amount of equity that is tied up in the residential property.

    • I see a few problems with a country having the bulk of its wealth tied up in residential property.

      1. It leaves the economy bereft of investment capital – witness the poor state of venture capital in Australia. There is no money floating around the system because of an obsessive with owning a quarter acre block.

      2. It leaves governments essentially beholding to a block of voters that own homes at the expense of those that dont. As such nothing serious can be done to address housing affordability and you have government policy that is directed to propping a given sector of the economy to keep one voting block happy.

      3. The country is exposed to endless cycles of boom and bust because of a single economic sector which is a low value add, low tech sector that still in many ways uses building practices that have been around for 300 years. This is because the housing sector is lazy – it knows that it is subsidised so it can afford not to take an interest in new technologies.

    • Greg Rowney says:

      One of my early ahaa moments in terms of investing came after attending a presentation by Peter Thornhill and then following up with a read of his book (Motivated Money). Although I no longer agree with his long term buy & hold share strategy I am indebted to him for his compelling argument for shares over property. I highly recommend it for anyone who is wavering in this area.

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