UBS reports revealed billionaires actually made more money in 2017 than any other year recorded in history. The Swiss bank reports that the richest people on earth increased their wealth to $8.9tn (£6.9tn).
“The past 30 years have seen far greater wealth creation than the Gilded Age” the UBS Billionaires 2018 report said. “That period bred generations of families in the US and Europe who went on to influence business, banking, politics, philanthropy and the arts for more than 100 years. With wealth set to pass from entrepreneurs to their heirs in the coming years, the 21st century multi-generational families are being created.”
The world’s 2,158 billionaires increased their combined wealth by nearly $1.4tn last year, which is more than the GDP of Spain or Australia. The booming stock markets already assisted in the very wealthy achieving the “greatest absolute growth ever.”
“A major wealth transition has begun,” the report said. “Over the past five years, the sum passed by deceased billionaires to beneficiaries has grown by an average of 17% each year, to reach $117bn in 2017. In that year alone, 44 heirs inherited more than a billion dollars each.
“The calculation is simple. There are 701 billionaires over the age of 70, whose wealth will transition to heirs and philanthropy over the next 20 years, given the statistical probability of average life expectancy.”
UBS believes the adage that “the first generation makes the fortune, the second generation preserves it and the third generation squanders” no longer applies. Some families have even kept vast fortunes for five or six generations, while some heirs increased the overall fortune.
“As we work with our billionaire clients, many of the next generation seem highly motivated, committed to their chosen careers, the family business and/or doing social good,” the report said.
One billionaire told the researchers that: “The new generation, born in the internet era, are more willing to take risks. They have more information and can be more courageous about trying new ideas and being entrepreneurial.”
A 30-year-old billionaire heir said: “I think that my generation wants to achieve a more holistic life and shed some of the hypocrisies of previous generations. We want to have a return but with impact. Our investments should reflect who we are and what we believe.”
Though most of the world’s billionaires are in the United States, China’s ultra-wealthy is growing immensely, as two new billionaires are minted every week. “Twelve years ago, the world’s most populous country was home to only 16 billionaires,” the report said. “Today, as the ‘Chinese Century’ progresses, they number 373, nearly one in five of the global total.”
One Chinese billionaire told the researchers: “Nowhere else in the world can you find better conditions for growth than in China. The continued progress of wealth creation is supported by government policies liberating the economy, while urbanisation and business model disruption has crafted powerful new entrepreneurs.”