Even during the pandemic, the very high net worth population grew – and it could add a million more by 2025

woman atm credit card
  • A new Wealth-X report looks at very high net worth individuals, worth between $5 million and $30 million.
  • Their ranks still grew slightly in 2020, even during a global pandemic and economic turmoil.
  • The report estimates their ranks could grow even more by 2025, and add over $11 trillion in wealth.
  • See more stories on Insider’s business page.

A new report from Wealth-X found that, even during a pandemic, the very high net worth (VHNW) population grew.

Wealth-X defines the VHNW as those with a net worth between $5 million and $30 million. The report, called Very High Net Worth Handbook 2021, looks at where they are, who they are, and how big their ranks have grown.

In 2020, their global population increased “slightly,” by 1.3%, to around 2.7 million people. In 2019, by contrast, the population saw 10% growth.

“This was a sharp slowdown from double-digit growth a year earlier, and masked large regional differences, but was a resilient performance set against the backdrop of a global pandemic, national lockdowns, international travel bans, trade disruption and the deepest contraction in world economic output for a generation,” the report said.

Their total wealth also saw a similar increase, increasing by 1.2% to a total of $26.8 trillion.

Meanwhile, their global billionaire peers tacked on an additional $4 trillion to their wealth during the pandemic. That was a 54% increase for the world’s 2,365 billionaires, bringing their cumulative wealth to $12.39 trillion – a little under half of the VHNW’s cumulative wealthy.

But the VHNW class may be in for more growth than their smaller showing in 2020. The Wealth-X report anticipates that they’ll add around 1.2 million members, for a total population of 3.8 million. Wealth-X also predicts that their wealth will increase by $11.4 trillion to $38.2 trillion.

Those in the global middle class did not fare as well. A recent report from the Pew Research Center – which classifies the middle class as those who earn about $14,600 to $29,200 a year (or live on $10 to $20 a day) – found that 54 million fell out of the global middle class.

While the number of VHNW individuals grew, so did another group: A January report from Oxfam estimated between 200 million to 500 million people may have fallen into poverty during 2020.

Read the original article on Business Insider

There’s a wealth gap even between millionaires, and it says a lot about growing inequality

millionaires
The wealth gap even at the top shows just how bad wealth inequality is overall.

  • There’s a wealth gap among very high net worth individuals, per a new Wealth-X report.
  • Those worth $15 million to $30 million make up just 16% of that cohort, but account for double the wealth.
  • It shows just how concentrated wealth really is at the top, and how stark inequality is.
  • See more stories on Insider’s business page.

Even millionaires have a wealth gap.

One out of every 10 millionaires has a net worth between $5 to $30 million, which Wealth-X defines as “very high net worth” (VHNW) individuals in its annual report. But the wealth among this wealthy class is lopsided.

Two-thirds of the VHNW class (about 1.7 million people) comprise the cohort’s lowest wealth tier of $5 million to $10 million, per the report. But those in the upper two tiers – the $15 million to $20 million range and the $20 million to $30 million range – represent just 421,170 people, less than 16% of the VHNW population. And they hold twice as much wealth, or 32% of the total.

The VHNW class is collectively worth $26.8 trillion, accounting for a quarter of millionaires’ total global wealth of $105 trillion. Those worth $1 million to $5 million account for 40% of this total wealth, while those worth over $30 million account for 34%.

This means that across both the larger millionaire population and the VHNW cohort, vast amounts of wealth are held by an exclusive group.

The pandemic has widened wealth inequality

Pre-pandemic, wealth inequality was lurking underneath America’s surface. As Insider’s Andy Kiersz reported, there was a “two-track” economy: those who owned stocks, or were already firmly middle or high-income, were reaping the benefits of a booming economy. An increasing share of national income was going to the top 1%.

The pandemic has since exacerbated the economy’s uneven dynamics, reported Insider’s Juliana Kaplan. Inequality deepened with a K-shaped recovery, as the different tracks diverged.

The bottom of the K dragged downward, with lower-income individuals continuing to struggle with the economic fallout. The poor were financially vulnerable, with many on unemployment benefits or risking their health as an essential service worker. From June to November, about 7.8 million Americans fell below the poverty line.

Meanwhile, higher-income Americans were six times more likely to be able to work from home than lower-wage workers, according to research from the Economic Policy Institute. They were spending less and saving more, and the very richest have been growing their billions.

The wealth gap among VHNW millionaires, and millionaires overall, says a lot about the wealth gap among the rich and the poor. It shows just how concentrated wealth is at the very top.

Read the original article on Business Insider

Inside America’s first private terminal for millionaires

  • Los Angeles International Airport (LAX) is home to America’s first private terminal.
  • The Private Suite is popular among the world’s celebrities and millionaires.
  • The terminal has 12 individual suites, its own TSA check, and a fleet of BMWs that drive guests to their planes.
  • Non-members can utilize the suite for $4,000 per international flight.
  • See more stories on Insider’s business page.

Following is a transcript of the video.

Narrator: Airports suck. Camping out in customs lines, sprinting a mile to your gate, it’s the worst and the furthest thing from luxury. But imagine you had some extra cash saved up, would you spend it to skip all of that airport madness? Well, that’s what the minds behind America’s very first private terminal are betting on. In 2017, The Private Suite opened up at LAX. And for $4,000 per international flight, guests get access to a luxurious, super secure, private terminal just two miles from the normal one.

Amina: At LAX, it takes about 2,200 steps to get from the check-in counter to your plane door. For us, it takes 70 steps.

Narrator: Each year, thousands of the world’s millionaires and celebrities relax between flights in the terminal’s 12 individual suites. The Private Suite coordinates with 70 airlines, has an onsite TSA check, and owns a fleet of BMWs that drives travelers right to their planes. So what’s it like inside the place claiming to make travel not only easy but enjoyable? We had our LA team go and check out The Private Suite themselves.

Caroline: Hello, so I just arrived to The Private Suite at LAX. And there is a lot of security, like when you pull in, they asked for my ID, and this guy in like a bulletproof vest. So it is very highly secured. I am going to pretend I am very affluent for an hour.

Narrator: When you first pull up, you enter through these ominous gates with armed guards and a sign warning no filming is allowed. Right away, you’re assigned a logistics team of eight people. They take care of everything during your stay from valeting and detailing your car to checking in your baggage. And don’t worry about missing your flight, the team’s watching the clock. When you enter the terminal, there’s no check-in. You’re escorted straight to your private suite.

Caroline: Wow. Oh, my gosh, it’s like your private hotel room.

Narrator: Each suite has a fully stocked kitchenette loaded with snacks. You can also order food off a curated menu ahead of time, so it’s ready when you arrive.

Caroline: Oh, my gosh, they have food. It’s not like the fast food options you get at the airport. You get, like, healthier options. This is exactly what I ordered. Narrator: There’s a minibar with spirits, Champagne, and white wine. You can get red wine upon request. There’s even a candy wall.

Caroline: This is perfect for kids, but it’s also, like, perfect for me as an adult. We got M&M’s, chocolate-covered, I’m assuming they’re raisins, jelly beans, Hershey’s, and Skittles.

Narrator: All of the suites come with an en suite bathroom stocked with toiletries. There’s no shower in these, but the members can utilize the spa shower just down the hall. They can also book complimentary massages, manicures, or haircuts right in their suites. And in case you forgot something, each suite has pillows, power adapters, and travel accessories on hand. One of the suites even has a backyard complete with a putting green and cornhole. When your flight time approaches, your team will let you know it’s time to pack up. You’ll breeze through TSA in under a few minutes, and you don’t have to worry about bags, The Private Suite’s taken care of checking those in. Once cleared, you’ll hop on a 7 Series BMW that drives you the seven minutes across the tarmac to your flight.

Amina: When you’re driving, being driven through the airfield, you know, between the airplanes to your plane, that’s a really special kind of experience that frankly only we can deliver, and that’s something that, a memory that people take away with them all the time.

Narrator: So how does The Private Suite manage to cut down on travel times and still maintain privacy? With lots and lots of planning.

Amina: Most people don’t realize the operational complexity that happens in the background to even getting one member through here. For example, we have a control room. It looks like, you know, the NASA space center or something. We know exactly what container in the airplane your luggage is in before your airplane actually lands so that we can intercept your luggage and take it out for you before it hits the conveyor belt. That’s the kind of meticulous coordination that happens in the background every step of the way.

Narrator: Members of The Private Suite pay a yearly fee of $4,500 and an extra $3,000 per international flight, but you can utilize the suite even if you’re not a member. You won’t have a yearly fee, but you’ll pay between $500 and $1,000 more per flight.

Caroline: I can really see the benefits of being a member if you’re traveling a lot because I think that would decrease the price a little bit. But also, if you wanna splurge on a really fun trip that you’re taking with your friends, and you’re just like, “You know what, we saved up. We need to do this, like, the best way possible. Why don’t we just come in, come into the lounge, and just get on the flight with ease.”

EDITOR’S NOTE: This video was originally published in March 2019.

Read the original article on Business Insider

An author who surveyed over 10,000 millionaires found the qualities that make them successful hinge on a distinct behavior

rich man cigar
Many millionaires know that building wealth takes consistency.

  • Millionaires tend to have five characteristics in common, according to Chris Hogan, an author who studied more than 10,000 millionaires.
  • They take personal responsibility, practice intentionality, are goal-oriented, and work hard in order to build wealth.
  • Consistency in each of these areas, Hogan wrote, is what ties everything together.
  • Visit Business Insider’s homepage for more stories.

Millionaires have more than just seven-figure net worths in common – they also tend to share several of the same habits and attributes.

Many used resilience and perseverance to build their wealth, and once they got there, forewent a budget.

But millionaires also tend to share five of the same characteristics, according Chris Hogan, author of “Everyday Millionaires: How Ordinary People Built Extraordinary Wealth – and How You Can Too.” Along with the Dave Ramsey research team, Hogan studied 10,000 American millionaires (defined as those with a net worth of at least $1 million) for seven months, and he found certain attributes kept resurfacing.

“When you see these five attributes working in high gear, you’ll get a clear picture of what financial independence really looks like – and what it could look like for you,” Hogan wrote.

Here’s a closer look at each.

1. Millionaires take personal responsibility

Average millionaires take control of their money decisions, according to Hogan. “They know their success is up to them, and they own it,” he wrote.

Two millionaires he interviewed, Mike and Stephanie, particularly exemplified this – they diligently saved, avoided debt, worked with an investing professional, and committed to improving themselves and their earning potential. They’re now retired and have a net worth of $2.6 million.

The majority of millionaires in Hogan’s study deemed themselves optimistic and willing to try difficult things for new results – and more than 90% will quickly admit when they’re wrong and actively integrate feedback from other people.

“[Millionaires] don’t count on anyone else to make them rich, and they don’t blame anyone else if they fall short,” Hogan wrote. “They focus on things they can control and align their daily habits to the goals they’ve set for themselves.”

Read more: Most people believe 6 myths about millionaires, and it can keep them from building their own wealth

2. Millionaires practice intentionality

Hogan found that many millionaires live on less than they make and exercise discipline when it comes to budgeting. More than half of the millionaires he studied believed the main reason people don’t become millionaires is because they lack financial discipline.

“Millionaires don’t accidentally live on less than they make,” Hogan wrote. “They do it on purpose, because they have a plan. They’re deciding. Living without a budget, though, is the very definition of sliding into misfortune.”

This finding aligns with research by Sarah Stanley Fallaw, author and director of research for the Affluent Market Institute who also studied millionaires – her subjects stressed to her the freedom that comes with spending below their means.

According to Thomas C. Corley’s “Rich Habits” study, living off of 80% of your income or less “will leave you with an excess you can use to build wealth,” he wrote in a post for Business Insider.

3. Millionaires are goal-oriented

“They think ahead and refuse to be swept away by the current of life,” Hogan wrote. He found that 92% of the millionaires surveyed develop a long-term plan for their money, and 97% almost always achieve the goals they set for themselves.

They put in a long-term plan for financial independence, which “helps them avoid distractions and the ‘shiny object syndrome’ the general population suffers from because millionaires aren’t focused on what might make them happy today; they’re focused on their long-term wealth-building plan.”

Consider JP Livingston, who retired early at age 28 with a $2 million-plus nest egg. She lived frugally, tucking away 70% of her take-home pay – 40% in investments, 60% in savings. Even as her income increased each year, she didn’t succumb to lifestyle inflation. Instead, she stuck to her long-term plan and saved even more money.

Read more: An early retiree who interviewed 100 millionaires discovered nearly all of them got rich using the same 3-step strategy

4. Millionaires are hard workers

“They do what it takes even when what it takes isn’t easy,” he wrote. Of the millionaires Hogan studied, 93% said they became millionaires because of their hard work, rather than big salaries.

“Millionaires constantly work to better themselves,” he wrote. “They don’t settle for what they have and who they are today; instead they work to increase their education and their skill set to build more for tomorrow.”

And when it comes to work, rich people often take on jobs that they love – doing what they love and getting paid for it is what self-made millionaire Steve Siebold calls a smart strategy.

5. Millionaires know building wealth takes consistency

Consistency, Hogan wrote, is what ties everything together.

“You can take responsibility, you can be intentional, you can set goals, and you can work hard,” he wrote. “But, if you don’t do these things repeatedly – year after year, decade after decade – then you’ll never get the results you want.”

He added: “They know from experience that wealth-building is a long-term frame, and they’ve seen that sticking to the plan over decades leads to millions at retirement.” 

But being consistent requires two things, according to Hogan: Patience for a long-term view to help you stay focused through the years, and passion to find ways to get the job done.

Read the original article on Business Insider