Asset report - 3300 super-rich own 23 percent of German financial assets
Previous year, global wealth grew by 4 percent worldwide. This may not seem like much considering high inflation, but it's better than 2022 when global wealth shrank due to the Ukraine war and Corona aftermath. The wealth gap also grew, as per the Boston Consulting Group (BCG) "Global Wealth Report 2024".
Germany's numbers are worse than the global average: In 2023, there were only slight increases, with the report referring to "stagnation." Germany still belongs to the wealthiest countries in the world, but a significant portion of the wealth here is in real estate – and its value developed in contrast to others very poorly: While German financial wealth grew by 5 percent, the value of tangible assets shrank by 2.3 percent.
Interestingly, Germans love cash, checking accounts, savings accounts, and deposits. Around 41 percent of German financial wealth is invested in such forms – or parked. They are safer in times of crisis than, for example, stocks, but they yield little return. In Western Europe, it is only 32 percent, and worldwide, it is even a tick less.
73,000 Super Wealthy Globally
As every year, the study by Boston Consulting Group closely examines the distribution of financial wealth. Particularly intriguing is the phenomenon of the super wealthy. BCG calls them "Ultra High Net Worth Individuals" or UHNWIs. In German, this translates to "ultrahigh net worth individuals" or simply "super rich."
Boston Consulting counts all individuals who possess more than 100 million dollars in financial wealth in this category. In Germany, there are 3,300 such individuals. Worldwide, there are a total of 73,000 super wealthy – one-third of whom live in the US.
Super Wealthy Hold 14 Percent of Global Wealth
Together, all super wealthy individuals control over 14 percent of the global wealth: That's 38 billion US dollars. And the BCG analysis shows: The higher the initial wealth of an individual, the higher their wealth growth. In other words, the rich got richer.
In Germany, wealth distribution is "overproportionally unequal." The super rich in Germany hold 2,100 billion dollars – and thus 23 percent of the financial wealth in the country.
Smaller Fortunes Grew Slower in Germany
According to the study, the financial wealth of the super rich in Germany grew by more than 10 percent. Wealthy individuals with between 1 and 5 million dollars in financial wealth could only enjoy an average increase of over five percent. The average German, with less than 250,000 US dollars in financial wealth, saw an average increase of only 1.5 percent – significantly below the inflation rate.
"High net worth investors have a higher share of their wealth in the capital market and in high-yield investment classes like private equity," explains BCG partner Akin Soysal. "Less wealthy individuals typically invest in risk-averse investment classes like savings accounts, cash, or insurance – at the expense of returns."
555,000 Millionaire Dollar-holders in Germany
The number of millionaires in Germany has increased, as well as the number of dollar millionaires. Currently, there are 555,000 of them in Germany. The reason for the increase in the number of millionaires and super-rich people is also due to the fact that money loses value. Unfortunately, these numbers are not inflation-adjusted – and comparisons with the previous year have limited significance.
Additionally, there are fluctuations in exchange rates between Euro and Dollars. The numbers in the study are calculated with the exchange rate at the end of 2023. At that time, one Euro was worth around 1.10 Dollars. A dollar millionaire therefore had "only" 910,000 Euros at the reference date.
The "Global Wealth Report" appears for the 24th time. Every year, the Boston Consulting Group assesses the global wealth in this report and describes how it is distributed among the different wealth classes. For better global comparability, all information is provided in US-Dollars.
The high inflation rates globally might impact the returns of assets, as seen in the BCG's "Global Wealth Report 2024". Regarding asset reports, it was mentioned that a significant portion of Germany's wealth is in real estate, which developed poorly compared to other assets due to poor value growth.
Given the BCG's finding, it's evident that the super wealthy individuals, also known as Ultra High Net Worth Individuals (UHNWIs), hold a sizable portion of global wealth. In fact, they control over 14% of the global wealth, amounting to 38 billion US dollars.
