More than 5 million people become millionaires despite the pandemic

The coronavirus pandemic has caused misery and economic damage around the world, but it has also been a boon to the wealthy, with an estimated 5.2 million people becoming dollar millionaires last year, while the number of those worth at least $ 50 million increased by almost a quarter.

A Credit Suisse report found that the aggregate global wealth accumulated by households increased by around $ 28.7 billion in 2020, as central banks flooded financial markets with cheap money, inflating asset prices.

Rising valuations of equity and residential properties have taken overall household net worth – assets, including real estate, minus debt – to about $ 418.3 billion. The increase was equivalent to a 4.1% increase at constant exchange rates – barely below the annual average for the past two decades, even as global economies grapple with the health crisis and lockdown restrictions.

“The contrast between what has happened to household wealth and what is happening in the economy at large has never been more striking,” the Credit Suisse report said. He found that the richest benefited the most from a policy response that inflated assets, with the gap between rich and poor widening in most countries.

The combined wealth of individuals with net worth of at least $ 1 million has almost quadrupled since 2000 to reach $ 191.6 billion, while their share of global wealth has increased from around 35% to 46%.

An estimated 2.9 billion people, or the equivalent of 55% of all adults, had less than $ 10,000 in net assets. “The differences in wealth between adults widened in 2020 for the world as a whole and also in most countries,” said the paper, co-authored by economists Anthony Shorrocks, James Davies and Rodrigo Lluberas.

The study estimated that there were 56.1 million millionaires worldwide at the end of 2020, up 5.2 million from the previous year. About a third of the new millionaires were from the United States.

While about 90% of millionaires had a net worth of less than $ 5 million, about $ 7 million had more than that. At the highest level, 215,030 had a net worth of more than $ 50 million, compared to 173,620 recorded a year earlier.

“It would be a huge increase every year, but it’s especially striking in a year of social and economic turmoil,” the authors wrote. “The nature of the political response to the pandemic has of course had a major influence. “

Millionaires have remained rare in India, Indonesia and Russia, at about one in a thousand adults, and also relatively rare in China, at one in 200. This compared to 8 percent of the population in the United States and 15 percent in Swiss. Credit Suisse’s methodology included real estate as well as investable assets.

Countries severely affected by the coronavirus were among those that recorded the strongest expansion in household net worth. The gains were largest in North America and Europe, where total wealth increased by about 10 percent, according to the study.

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