High Net Worth Individual Statistics: Who and Where Are HNWIs?

Whenever financial markets undergo periods of instability, many individuals are motivated to examine their own financial health. Those without a high net worth will often carefully consider ways to build their financial security, and those with a high net worth will seek ways to increase their wealth and to protect their assets. Even with the changing economic climate, the number of high net worth individuals (HNWIs) in the world is increasing.

Increasing HNWIs

According to the 2010 Merrill Lynch-Capstone World Wealth Report, 10.9 million people in the world are classified as high net worth individuals, or people with investable assets in excess of $1 million. This is an increase of 8.3% over previous years. Those classified as Ultra-HNWIs (people holding investable assets that exceed of $30 million) have also increased by 10.2% worldwide. While the numbers of HNWIs fell significantly between 2007 and 2008 (from 10.1 million to 8.6 million), the high net worth individual statistics for 2010 show that there are more HNWIs now than in 2007 before the decline.

Geographic Allocation

High net worth individual statistics for 2010 show that while North America still boasts the most HNWIs, Asia and the Pacific Rim are quickly gaining ground. While Europe showed an increase of only 100,000 HNWIs in 2010, North America and Asia/Pacific Rim both show an increase of about 300,000 new millionaires. The number of millionaires in Africa, the Middle East, and Latin America remained stable in 2010 with no significant change. North America has the largest number of Ultra-HNWIs in the world with 40,000 in 2010.

Investments

Throughout the world, one third of all HNWI financial assets were invested in equities, and HNWIs have been more willing to invest than in 2009. North American and Latin American HNWIs tend to invest most frequently in their home country or region, while Asian, Pacific Rim, and European HNWIs are more open to international investments. Real estate investments among HNWIs have continued to fall, although real estate investment trusts have seen gains.

Impact on Global Economy

High net worth individuals have a dramatic impact on the global economy. In 2010, the world population of HNWI had $42.7 trillion in investable assets. Within the United States, HNWIs had investable assets of more than $12 trillion. To understand the perspective, the gross domestic product in the United States in 2010 was $14.7 trillion. With American investors more likely to invest in American firms, the impact of high net worth individuals on American markets is significant. The wealthiest 10% of U.S. households account for almost half of all consumer spending.

Demographics

The richest Americans are middle-aged or older, married, and well-educated. In the United States, high net worth individuals are most likely to be Caucasian. They are also likely to live in middle-class or upper-middle-class neighborhoods, often in older homes. They tend to drive older vehicles and they have a tendency to spend money sparingly, often opting for reliability over luxury.

High net worth individual statistics indicate that the number of wealthy individuals and households is growing worldwide. Given this trend, it is reasonable to assume that the high net worth individual market is expanding and that wise marketers will capitalize on the increased pool of HNWI investment capital.