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article imageNew reports suggest that the rich are getting richer

By Jenna Cyprus     Nov 24, 2014 in Business
According to recent data and news reports, it’s true that the rich are getting richer. While that revelation may not surprise many, the reason why could.
Depending on what data you use and who you speak to, becoming rich is less about extravagance and more about being financially savvy.
The Ultra Wealthy Add $2 Trillion
Data found in the Wealth-X and UBS World Ultra Wealth Report 2014 shows that 12,040 new individuals have crossed the $30 million threshold in net assets this year. As CNN.com’s Emily Jane Fox points out, that is a 6 percent year-over-year increase. That somewhat exclusive club now has 211,275 worldwide members, consisting of 183,810 men and 27,465 women. Alarming to many is the fact that while this group only accounts for .004 percent of the adult population, they control nearly 13 percent of the total global wealth.
Who Are the Ultra Wealthy?
Are you interested in finding out more about who the individuals behind these numbers are? Many other people are, as well. According to the demographics in the report, the individuals listed have an average of 2.2 kids, 1.9 grandchildren, own 2.7 properties, and are in their late fifties. This report suggests they spend an average of $1.1 million on luxury goods and services each year, including clothing, travel, cars, and wine. Sixty-four percent are reportedly self-made millionaires and billionaires.
The Other Side of the Story
While these numbers certainly suggest lavish living among the upper-upper class, Gregory Bresiger of the New York Post sees a different story. “Yes, the rich are getting richer, but many of them also go to Walmart, clip coupons and don’t drive a Lexus,” he writes.
According to Bresiger, “Having short arms and deep pockets is the main driver that allows the one percenters to keep accumulating wealth.” Instead of chasing high-end luxury brands like Louis Vuitton, Gucci, Prada, and Rolex, he believes the majority of the top one percent has learned to make smart financial decisions.
According to Robert Frank of CNBC, the rich get richer as a result of the higher investment returns of the upper class. From his research, he found that the wealthiest one percent put nearly 75 percent of their savings into investment assets, while the middle class has 63 percent tied up in their homes. As Frank writes, “The wealth gap is caused in large part by the investment gap.”
Other Interesting Facts
The Wealth-X study revealed some other interesting information. Nearly 88 percent of the ultra wealthy have a bachelor’s degree, while 12 percent never received a degree beyond high school. Of those with college degrees, the top three universities are Harvard University, University of Pennsylvania, and Stanford University. Collectively, there are 5,950 graduates in the group with net worths above $30 million.
In a separate study referenced by Bresiger, 44 percent of the wealthy individuals surveyed feel high profile brands are overrated and aimed at status-seekers more than quality conscious consumers. However, members of the ultra wealthy annually spend $40 billion on cars, $23 billion on air travel and private aviation, $22 billion on yachts and boats, and $8 billion on alcohol.
Depending on which data is referenced and who you ask, the wealthy achieve their status and maintain it in different ways. If this year’s numbers are any indication, 2015 will likely set new records, as thousands more join the $30 million club — otherwise known as the ultra wealthy. Of that money, much will be spent and much will be saved.
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