Young super-rich people usually only inherit

The super-rich are getting richer, and there are more and more of them. The next generation of billionaires have often inherited their wealth. They tick very differently to the self-made billionaires - and also have to do something to keep the money in the family.

Luxury watches, champagne, expensive cars: luxury has become chic and a buying boom has broken out after the pandemic. Despite inflation and wars, people are spending a lot of money on exclusive things.

This has led to a massive increase in sales and share prices in the luxury and cosmetics industry. Bernard Arnault, head of the LVMH empire with 75 fashion and cosmetics brands, including Louis Vuitton, Dom Pérignon and Bulgari, is leading the way. The head of the largest luxury group ever became the richest man in the world after the pandemic. Forbes magazine estimates Arnault's fortune at around 200 billion dollars.

The super-rich are getting richer all over the world. According to a study by the major Swiss bank UBS, the approximately 2,500 richest people now own a total of twelve trillion dollars. For the first time, there are more new billionaires who have inherited their wealth, not earned it: 53 heirs received a total of around 150 billion dollars last year. The 84 new self-made billionaires, on the other hand, "only" earned a fortune of around 140 billion dollars.

Ageing super-rich bequeath five trillion dollars

There are also an above-average number of heirs among the rich in Germany, says Johannes König in the ntv podcast "Wieder was gelernt", economist at the Socio-Economic Panel at the German Institute for Economic Research in Berlin. "Among the top 1 percent of wealthy people, 48 percent, or almost half, have inherited something. 20 percent inherited a company. If you look at the bottom 90 percent, they have around 20 percent heirs. Business assets are very concentrated at the top end."

It's the great changing of the guard among the super-rich: The former founders are ageing and passing on their money and responsibilities to the next generation. In the next two to three decades, over 1000 ageing billionaire entrepreneurs will pass on a total of over five trillion dollars to their heirs, according to the study.

The entrepreneurial boom since the 1990s has laid the foundation for generations of billionaire families. They are accumulating more and more wealth.

Many young billionaires go their own way

However, heirs do not automatically remain rich: they also have to make use of the capital, says economist König. "The best combination of characteristics is to inherit a company with a high value and then continue to be entrepreneurially active at the same time. This increases the basic chance of ending up in this population, which is less than one percent, to a quarter. That's why you find a disproportionate number of self-employed people and entrepreneurs among the rich." Inheritance is an important component for the intergenerational continuation of wealth dynasties.

Many of the next generation of the super-rich want to live differently than the generation before them. They are more international and have often completed their education abroad. Over two thirds of heirs want to continue and build on what their ancestors have achieved - in the form of their own companies, brands or assets. After all, they want the next generation to benefit from all that money.

However, the family business is not an option for many young billionaires: over half of them do not get involved. More than two thirds go their own way. "Heirs are always at a crossroads: do I continue or develop what I have inherited, as a business or as a fortune, or do I go my own way," says König in the "Wieder was gelernt" podcast.

More and more super-rich people

One thing is clear: there are more and more billionaires in the world. In the USA, the United Arab Emirates, the UK and Italy, among others. There are also more of them in Germany: there are currently 109 billionaires, 15 more than a year ago.

According to Manager Magazin, the BMW heirs Susanne Klatten and Stefan Quandt are the richest Germans, with a fortune of 40.5 billion euros. There are many other dynasties in the top ten: the pharmaceutical entrepreneur family Merck, the Aldi family Albrecht, the Porsche, Henkel and Otto families.

The Boehringer Ingelheim pharmaceutical family should actually be at the top, with an estimated fortune of at least 50 billion euros according to figures from the Netzwerk Steuergerechtigkeit (Tax Justice Network) and the Hans Böckler Foundation of the German Trade Union Confederation. However, according to ZDF , some rich families took legal action against the magazine's list of the rich years ago.

So is it becoming increasingly difficult to become rich without an inheritance? Expert König doesn't think it's impossible, but the conditions have to be right. Education is an important characteristic, "especially if you want to make it into the top 10 percent of the income and wealth distribution." For the top 1 percent, it is the basic prerequisite. "Working your way up is certainly possible, but it's a much rockier road than inheriting and then continuing to build wealth with your inheritance."