The World Has 192 People Worth More Than US$10 Billion, Wealth-X Says

Despite the Covid-19 pandemic, the global billionaire population continued to expand in 2021 for the third year in a row.

There were 3,311 billionaires by the end of last year, up 3.3% from 2020’s 3,204. Their combined wealth surged 17.8% to a record US$11.8 trillion, according to a report released Wednesday by Wealth-X, a global wealth information and insight provider.

Out of the billionaire population, more than half were considered to be “lower end,” which includes those with a wealth between US$1 billion and US$2 billion. About 192 individuals, or 6% of the global billionaire population, each had a net worth in excess of US$10 billion. But this group’s combined wealth, at US$4.8 trillion, accounted for 41% of the total billionaires’ wealth and was just shy of the annual market value of the Japanese economy, the third largest in the world, according to the report.

Around 17% of the total billionaires’ wealth was held by 20 “super-billionaires,” or individuals with a net worth of more than US$50 billion. This exclusive list includes SpaceX’s Elon Musk with an estimated net worth of US$234.5 billion; LVMH’s Bernard Arnault, whose family has more than US$151 billion; and Amazon’s Jeff Bezos, with a net worth of US$142.2 billion.

This trend—wealth increasingly concentrated in the top-tier even of the world’s richest class—has many contributing factors, including the rapid digitalization of the global economy, central bank stimuli, the rise of “big tech,” and real estate growth, according to the report.

“Since 2020, the disruptive impact of the pandemic on the global economy has reinforced many of these trends,” the report said.

Regionally, North America still dominated with 1,035 billionaires, exceeding the 1,000 threshold for the first time. That was a 5.6% increase from 2020.

Europe registered the strongest growth, with its billionaire population rising 6.8% year over year to 954. Asia, not including the Pacific, accounted for 899 billionaires, up 1.8% from a year ago.

At the country level, the U.S. topped the list with 975 billionaires and a combined billionaire wealth of US$4.45 trillion. China (excluding the Hong Kong Special Region) came second with 400 billionaires, down 2.4% from 2020.

Germany, India, and the U.K. completed the top five countries with the largest billionaire populations.

Of note was India, which, with 124 billionaires, jumped four places from a year ago and replaced Russia as the fourth-ranked billionaire country. Russia’s billionaire population shrank 10.8% in 2021 to 107 individuals, landing to the eighth place on the list, according to the report.

India’s billionaire wealth creation “is being supported by a combination of robust economic growth, structural reform, infrastructure development and political patronage,” the report said.

Other key findings in the report include:

New York was the top city for billionaires with 135, followed by Hong Kong (114) and San Francisco (85);
Kuwait City, the capital of Kuwait on the Persian Gulf, was the top-ranked city for billionaire density, with one billionaire for approximately every 33,000 residents; San Francisco and Hong Kong came second and third, respectively;
The banking and finance sector was the dominant primary industry, accounting for more than one-fifth of the global billionaire population. It was followed by industrial conglomerates, real estate, tech, and manufacturing;
The top philanthropic cause among the billionaire class was education, with 65.9% of billionaires giving to this cause. Other top causes included healthcare and medical research (42.7%); art and culture (41.2%); social services (38%); and environmental and animal protection (19.1%);
40% of billionaires were aged 70 and over; 11% were younger than 50, with a median age of 66; Tech billionaires had a median age of 55;
About 13% of billionaires were female.

Superannuation is the first thought when it comes to self-funding retirement. Yet it is hardly the only option for doing so.

Just as we have a choice in how and where we work to earn a living, many people also have a choice in how to fund their retirement.

It is possible and sometimes preferable to leave your superannuation untouched, allowing it to continue growing. Some or all of your income can come from alternative sources instead.

Here are some alternatives you can consider.

1. Downsize your home

For many who own their own homes, the equity accrued over decades can eclipse the funds in superannuation. However, it’s theoretical money only until it is unlocked.

Selling up the family home and downsizing – or rightsizing – for retirement allows you to pocket those gains tax-free and simultaneously relocate to a more suitable home with lower upkeep costs.

Up to $300,000 from the proceeds can be contributed by a downsizer to boost your super, and the remainder can be used to fund living expenses or actively invested.

Remember that while the sale proceeds of your home are tax-free, any future profits or interest earned from that money will be taxable.

2. Part-time work

Semi-retirement allows you to gradually step into retirement. You continue earning income and super while working part-time, keeping a foot in the workforce while testing the waters of your new found free time.

Doing so also offers scope to move into different roles, such as passing on your skills to future generations by teaching/training others in your field of expertise, or taking employment in a new area that interests you and is closer to home.

3. Self-employment

Retirement from a full-time position presents a good opportunity to pursue self-employment. With more time and fewer commitments on your hands, you have greater scope to turn your hobby into a business or leverage your professional skills and reputation as an external consultant.

Also, for the self-employed and those with a family business, director’s loan repayments from the company are typically tax-free, offering a potentially lucrative source of

income and a means of extracting previous investments into the business without selling your ownership stake.

4. Investments

Rental property income (from residential or commercial properties) can supplement or even provide a generous source of income. The same applies to dividends from shares.

These are likely to be more profitable if you own them well before retirement.

Income that is surplus to your everyday needs can be reinvested using tax-effective strategies to grow your future returns.

5. Family trust

A family trust could be used to house investments for yourself and other relatives, building intergenerational wealth.

Trusts allow funds to be allocated to beneficiaries to manage marginal tax rates and stretch the money further, you have control over how income is split between different family members and have flexibility for changing circumstances.

6. Selling collectables

You may not realise the value of items you have collected over the years, such as wine, artwork, jewellery, vintage cars, and antiques.

Rather than have them collect dust or pay to store them, they could be sold to fund your living costs or new investments.

Where possible, avoid selling growth assets in a depressed market – wait until you can extract maximum value.

7. Obtaining a part-pension

Part-pensions are not only possible but valuable in making your superannuation stretch further. They still entitle you to a concession card with benefits in healthcare, transport, and more.

Take these savings even further by requesting pensioner discounts with other companies, on everything from utilities to travel and insurance to eating out.

Also, don’t overestimate the value of your assets as part of the means test. It’s a common mistake that can wrongly deny you a full or part-pension.

Plan ahead

However, you ultimately fund your retirement, planning is crucial. Advice would hopefully pay for itself.

Understand your spending and how those habits will change before and during retirement, then look to investments that offer the best fit.

Consider a mixture of strategies to diversify your risk, manage your tax liabilities and ensure ongoing income.

Above all, timing is key. The further ahead you plan, the more time you have to embrace additional opportunities and do things at the right time to maximise their value. You’ve worked hard and now is your chance to enjoy the fruits of your labour!

Helen Baker is a licensed Australian financial adviser and author of the new book, Money For Life: How to build financial security from firm foundations (Major Street Publishing $32.99). Find out more at www.onyourowntwofeet.com.au