The top 10% of the world’s population controls about 87 % of the world’s wealth. This is according to Credit Suisse’s annual Global Wealth report.
The ongoing rise in global inequality was one of the major themes of the report. The report’s analysis takes into consideration 2 periods: 2000-2007 and 2007-2014.
“Personal wealth varies greatly across individuals,” the analysts write. “During much of the last century, wealth differences contracted in high income countries, but this trend may have gone into reverse.”
Essentially, countries saw wealth inequality drop during the very first period and increase throughout the second period.
Between 2000 and 2007, 74% of countries studied in the report saw a decrease in wealth inequality. On the other hand, in between 2007 and 2014, wealth inequality increased in 76% of the countries.
China, Egypt, and Hong Kong viewed the most rapid increases in wealth inequality over the last 14 years. All 3 really saw a rapid increase throughout both interval.
On the other hand, the analysts found inequality has dropped swiftly in Poland as well as Saudi Arabia from 2000 to 2014.
Most of the wealthy individuals own businesses and investments. So if you hope to get really rich, working for someone else will never get you there. But don’t just take our word for it, the government agrees.
The IRS Statistics of Income Division, has published “400 Individual Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992-2009,” or in non government-speak, “400 People Who Earned a Freaking Boatload of Money.”
In 2009, it took $77.4 million in adjusted gross income to crack the top 400. (That just barely got you in; the average income of everyone on the list was $202.4 million.)
Where it gets interesting is how the top 400 made their money:
- Wages and salaries: 8.6 percent
- Interest: 6.6 percent
- Dividends: 13 percent
- Partnerships and corporations: 19.9 percent
- Capital gains: 45.8 percent
A few conclusions are obvious:
- Working for a salary won’t make you really rich, unless you are one of the few highest paid Chief Executives.
- Making only safe “income” investments won’t make you really rich.
- Investing only in stock of large companies won’t make you really rich.
- Owning a business or businesses could not only build a solid foundation of wealth but could someday…
- Generate a huge financial windfall – and make you really rich.