With So Many New Millionaires, Is The Seven-Figure Club That Special Anymore?
It's estimated there's 7.7 billion people in the world. According to the Global Wealth Report from Credit Suisse, 46.8 million of them are millionaires holding 44% of the world's wealth. The seven-figure club welcomed 1.1 million new members since 2018 and now represents a combined $158.3 trillion of global wealth.
The world's nearly 47 million millionaires represent only 0.9% of the total adult population. Conversely, 2.9 billion people, or about 57% of all adults globally, have less than $10,000 in wealth.
The U.S. is the greatest country in the world, if you're measuring in terms of the number of millionaires, with nearly 40% of the world's millionaires. Despite income inequality in the U.S. now at the highest level since the Census Bureau started tracking it in 1967, the U.S. added 675,000 new millionaires, bringing its total to 18.6 million individuals.
Rounding out the top five countries with the largest number of millionaires are China, Japan, the United Kingdom and Germany. Despite having the most millionaires, the U.S. now trails China in the number of "global wealthy," defined as those in the top 10% of wealth in the world.
The report couldn't ignore the issue of wealth inequality, saying "There is no doubt that the level of wealth inequality is high, both within countries and for the world as a whole." The bottom half of the world's adults now account for less than 1% of total global wealth.
In what is surely a result of global central bank policies, the aggregate wealth of adults with more than $1 million in wealth has grown nearly four-fold from $39.6 trillion in 2000 to $158.3 trillion in 2019. Over this period, their share of the global wealth has risen from 34% to 44%. The report even points a finger at central banks, saying "Financial assets grew rapidly in response to quantitative easing and artificially low interest rates. These factors raised the share of the top 1% of wealth holders."
The wealth segment that has seen the largest increase since 2000 is adults with wealth between $10,000 and $100,000. This segment, which may reflect an expanding middle class in the developing world, tripled in size from 514 million individuals in 2000 to 1.7 billion last year. The report makes the case that, by this measure, wealth inequality may be declining, saying "While it is too early to say that wealth inequality is now in a downward phase, the prevailing evidence suggests that 2016 may have been the peak for the foreseeable future."
With central banks unlikely to reverse their policies that have enabled millionaires to control nearly half of the world's wealth anytime soon, it remains to be seen how this ends. Should the day come where those who are not members of the millionaire club have had enough, they will certainly have an advantage in size.
That's the downside of low mortgage rates. Following two months of gains, existing home sales fell last month as prices jumped the most since January 2018. Along with rising prices, inventory declined by 3% from the same period a year ago, the fourth-consecutive month of annual declines. Matthew Speakman, chief economist at Zillow, said "Sales are coming back to earth, largely because of an ongoing shortage of inventory. There simply are not enough lower-priced homes to keep the market humming."
It's not just Libra losing friends. New York Attorney General Letitia James' antitrust investigation into Facebook now has the support of 47 attorneys general from across the U.S. They are seeking "To determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising." Notably, California, where Facebook is headquartered, was not on the list. Facebook will have its hands full as this investigation is separate from antitrust investigations from the DOJ and FTC.
So no more strip club visits? Under Armour CEO Kevin Plank, who founded the company as a college student in 1996, announced he is resigning as CEO effective January 1, 2020. He will be replaced by Chief Operating Officer Patrik Frisk, who was formerly CEO of Aldo Group before joining Under Armour in 2017. Plank will transition to executive chairman and assume a new role as "brand chief." Plank said "Under Armour remains my priority."
Is Lime a lemon? Lime, which last raised money at a $2.4 billion valuation, is burning cash a lot more quickly than some may have anticipated. The scooter company's operating loss is on track to exceed $300 million this year on sales of more than $420 million. The company blames the operating loss on scooter depreciation and the cost of maintaining warehouses to repair and position them. Lime believes operating losses can be halved by next year with revenues topping $1 billion. The company may be able to become profitable by increasing volume, but given the crowded space and poor economics of the business, that remains to be seen.
It took them two years to make it? Pizza Hut is testing a round pizza box in Phoenix following more than two years of development with the help of the startup Zume. Some of the benefits of the round pizza box include crispier pizza, less packaging and eliminating the need for employees to fold pizza boxes. Depending on the reception of the test in Phoenix, Pizza Hut may expand it nationally. Nicolas Burquier, chief customer and operations officer at Pizza Hut, said "One day in the future we’ll reminisce about the idea of round pizzas in square boxes and laugh."