The Super Rich But there's an even more elite club you can join. Knight Frank calls it UHNWI, or ultra-high-net-worth individuals. These are people with a net worth of $30 million or more. This global group of super-rich individuals expanded 4.2% last year, to almost 627,000 (from just over 601,000 the year before). Regionally, the UHNWI group grew 7.2% in North America and 6.2% in the Middle East last year. North America led the way due to the rapid US economic recovery after the COVID pandemic. What was behind all the newly minted super rich last year? Knight Frank found it was primarily surging stock markets across the globe. Not surprising. The S&P Global 100 - which tracks the performance of 100 multinational companies - was up more than 25% in 2023. Bonds and real estate also played a part, as did increases in the prices of gold and Bitcoin. This 2023 increase in UHNWIs more than reversed a small decline in 2022, which was due to the terrible global investing environment that year. Alternative Investments So, where do the super wealthy put their money? Well, as the report states, they tend to become wealthy through stocks and, to a lesser extent, bonds and real estate. But the UHNWI group also allocates about 20% of its wealth to what the report calls "investments of passion." These are luxury and collectible items that the super wealthy buy for both enjoyment and returns. The most popular luxury investment category in 2023 was art, followed by classic cars. Here's the list of the top 10, ranked by how popular they were last year. The super wealthy invest in these types of objects principally for the joy of ownership, according to the survey in the report. Other reasons include a desire for returns, status seeking, the desire to belong to a community, and intellectual interest, in that order. Interestingly, art was also the best performing luxury asset class last year, with prices up 11% from the year before. The Millionaires Club Finally, there's more good news just a bit further down the wealth scale. Last week, Fidelity - which is one of the largest managers of retirement accounts - said the number of people with $1 million or more in their 401k accounts jumped 20% in the fourth quarter and now stands at 422,000. That's near a record high. So, what does a person have to do to join the swelling ranks of the 1% club, or even just the millionaire retirement account club? Invest wisely. Matt |
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