The Rich Got a Bit Poorer Last Year
3 min
The wealthy took a big hit last year.
The global population of billionaires sank for the first time since 2018, dropping 3.5% to 3,194, while their wealth declined by 5.5% to US$11 trillion, London-based Altrata, a data firm focused on the rich, reported in its annual Billionaire Census earlier this week.
The drop in wealth was the second-largest fall in the last decade, although Altrata noted that it only partially offset a double-digit jump in billionaire wealth in 2021. The company’s report draws from data collected by its Wealth-X unit.
Zooming out, the global population of those with US$1 million or more in assets fell by 3.3% to 21.7 million individuals, while their wealth sank by 3.6% to US$83 trillion, Paris-based Capgemini, an information technology and services consulting company, said in its annual World Wealth Report released on Thursday. The drops are the biggest in 10 years, Capgemini said.
The population of the ultra-rich, those with at least US$30 million in assets, fell the most, sinking 4.6% last year after a 9.6% surge in 2021, the company said. The wealth of this group of 210,000 individuals fell by 3.7% last year.
Altrata noted that billionaires represent just 0.8% of those with at least $30 million or more in net worth, yet they have a 24% share of this group’s total wealth.
Both Altrata and Capgemini credit slumping economies, falling stock markets, rising interest rates, and geopolitical tensions as contributing to the declines. The reports also both noted that many of the world’s richest responded by turning to wealth preservation strategies.
Among billionaires, this had mixed results, Altrata said. Those who made their money in technology, healthcare, and real estate lost more than 5% of their wealth last year, while those whose wealth accumulated through aerospace and defense, construction and engineering, and food and beverage, saw their fortunes rise, the company said.
According to Capgemini, two-thirds of those with US$1 million or more turned to wealth preservation by cutting their stock holdings by nearly six percentage points to 23% of their total portfolios and boosting their cash and cash-equivalent holdings by almost 10 percentage points to 34% as of January this year.
While global and domestic economies, capital markets, and currency movements affect all the rich, Altrata noted that gains or losses are also due to individual strategies for business and investments, wealth planning, taxes, and philanthropy.
“No billionaire’s asset structure is the same as another’s, and the impact on their wealth will be different for each person,” the report said.
The Billionaire Census also reported that the richest of all, those with US$50 billion or more, lost 23.2% of their wealth, while those at the bottom of the pyramid, with US$1 billion to US$2 billion in assets (representing just over half of all billionaires), lost 3.2%.
Most billionaires, 955, live in the U.S., although the population dropped by 2.1% last year. There are 357 billionaires in China, down by 10.8% and 173 in Germany, down by 1.7%. The only population gains reported last year were in Singapore, which now has 54 billionaires, up by four; and in Moscow, which has 76 billionaires, up by one.
The average age of the world’s billionaires is 67, with those under 50 accounting for just 10% of the total, Altrata said. There are more female billionaires under 50 than over, although they comprise just under one-fifth of the under-50 group.
While the population of rich individuals, and their total wealth, dropped in Europe, Asia Pacific, and North America last year, both the population of the rich and their wealth rose in Africa, Latin America, and the Middle East, Capgemini said.
The number of rich in Latin America rose by 4.7% as their wealth increased by 2.1%; Africa’s rich gained 4.3% new members who combined wealth increased by 1.6%, while the Middle East’s rich gained 2.8% new members as their wealth rose by 1.5%, Capgemini said.
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The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
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Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
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