According to the UBS Global Wealth Report, the world saw a 3% fall in global wealth in 2022. This drop has been attributed to a decline in both equity and bond markets and an appreciation of the U.S. dollar against other currencies.
But 2023 suggested this dip was temporary as global wealth rebounded by 4.2%. This trend was most concentrated in the U.S. economy, which saw an increase of nearly 2.5% in average wealth per adult.
“Wealth is steadily growing throughout the world – albeit at different speeds – with very few exceptions,” the UBS reports. “The proportion of people in the world in the lowest wealth bracket has shrunk since 2008, while the proportion of people in every other wealth bracket has grown.”
On The Global Stage
All over the world, people are now three times as likely to have wealth exceeding $1 million.
At the end of 2023, the United States led the pack with an estimated 22 million millionaires, representing approximately 38% of the global millionaire population, despite only representing about 4.2% of the global population. That means 1 in 15 Americans are millionaires — many in the form of cumulative net worth, including the value of their homes, assets, and various savings accounts.
Mainland China came in at a distant second with a millionaire population of just over six million. But relative to China’s 1.4 billion person population, less than 0.5% of Chinese citizens are millionaires.
Though China may have twice as many millionaires as the United Kingdom, which claimed third place, a U.K. citizen is nearly ten time more likely to be a millionaire than a Chinese citizen considering its small population of just under 67 million people.
The increase in the global millionaire count resulted from steady economic growth, rising asset values, and strong financial market performance.
Still, despite these on-paper gains and recovery from the slump that immediately followed the COVID-19 pandemic, long-term analysis reveals that global wealth growth has slowed from an annual average of 7% between 2000 and 2010 to barely over 4.5% between 2010 and 2023 — a nearly 35% decline.
The US is one of the few countries that has seen its cumulative wealth growth accelerate since 2010, growing from 3.7% between 2000-2010 to nearly 6.3% from 2010-2023.
What Lies Ahead
Over the next four years, the UBS predicts that there will be a rise in wealth mobility for an increased number of adults. They estimate that those in the lowest bracket (currently defined as earning under $10,000 annually) have a 60% chance of moving from the to earning between $10,000 and $100,000. They note that there will be more opportunities for upgrading than downgrading and anticipate the percentage of adults in the lowest wealth bracket to decrease.
Most of this predicted growth will come from Asia — specifically Taiwan — with it microchip industry coming into global focus.
The US’s population is expected to grow by 16% to over 25 million people by 2028.
America’s Place In Global Wealth Distribution
According to the latest UBS global wealth report, nearly 7% of the American adult population has wealth exceeding one million dollars. However, an in-depth look into the demographics of these numbers will reveal specific trends regarding the distribution and inequalities of that wealth.
The St. Louis Fed’s Institute for Economic Equity reports that the top 10% of households held 66.9% of the total wealth, averaging $6.7 million per household. The bottom 50%, however, only claimed 2.5% of the total.
Along the racial divide, Black and Hispanic families, on average, owned 23 cents and 19 cents for every $1 of white family wealth, respectively. Boomers are the foremost of America’s millionaires, followed by GenX and Millennials.
Recent studies show that younger Americans (Millennials and GenZ) technically have more money than the previous generations did at the same age: About $1.25 to every $1.
The rise, however, is more than offset by increased living expenses and debt, leading to lesser of a chance for the younger generation to accumulate wealth or reach other important financial milestones, such as owning a home.
Related: Americans Have More Than $1.1 Trillion In Credit Card Debt
However, while this gap seems vast, the UBS report points out that wealth inequality has reduced since 2008, a claim backed up by the St. Louis Federal Reserve Bank.
“Despite increased volatility, average wealth grew for all groups over the past five years. Wealth gains partially eroded starting in 2022 as economic headwinds put pressure on household finances. That said, average wealth outcomes as of the fourth quarter of 2023 remain elevated relative to pre-pandemic levels,” the Federal Reserve reported.
