Millionaire Population Bounces Back to Pre-Crisis Peak

The Wall Street Journal

The number of millionaire households in the world has bounced back to boom-time levels, according to a new study.

The 2010 Global Wealth Report by The Boston Consulting Group says there were 11.2 million millionaire households in the world at the end of 2009, a 14% jump from 2008. That puts the millionaire count about where it was in the good old days before the global financial crisis.

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The U.S. had especially strong growth, with the number of millionaire households rising to 4.7 million -- still the largest number of millionaire households in the world. That means that roughly 4% of American households are millionaire households. (Singapore had the highest "millionaire density" with 11% of all households being millionaires).

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The global growth at the top -- driven by last summer's rebound in financial markets -- marks a stark contrast with the continued malaise at the middle and bottom. As a result, inequality around the world has widened.

The study said 83% of the world's households own only 13% of the wealth, down from 14% the previous year. The top 0.5% of households (those with $5 million or more) owned 21%, or $23 trillion, of the world's wealth. That is up from 19% in 2008.

Does all this mean the rich never had a crisis? Are the people of Richistan opening up their storm shutters to find a sunny morning rather than the widely predicted hurricane?

Not really, says Bruce Holley, senior partner at BCG. While the aggregate numbers suggest the wealthy have recovered, they mask widespread differences among the wealthy.

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Many millionaires lost their fortunes, he said, while other folks made new ones. Some millionaires rode the crash then pulled out of the market at the bottom, while others stayed in cash on the way down and scooped up bargains on the way up.

"When we got this data back we were very surprised, this caused a lot of discussion internally," Mr. Holley says. "I'm out there talking to a lot of wealthy families who have been burned."

He added that it is "not the same people who gained, lost, and gained it back again."

What is more, he says, billionaires who lost large chunks of their fortunes feel poorer, even though they still are wealthy on paper. "Someone with a billion looks at their numbers and complains like they're someone with $100,000. ... They say, 'I have big mortgages to pay, I may have to liquidate some assets, I can't make certain investments.' We all have our own version of pain."

Do you think Richistan is back to its 2007 "normal"?

(NOTE: BCG defines "millionaire household" as a household with $1 million or more in assets under management. Those assets don't include real-estate, private businesses or luxury goods. It does include cash deposits, money-market funds, listed securities held directly or indirectly through management investments, and onshore and offshore assets.)

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