Sunday, June 10, 2007

Distribution Of Wealth

Many individuals living in wealthy societies are very unaware of the concentration of wealth within their nation and around the world. According to the World Institute for Development Economics Research of the United Nations University, 90 percent of the worlds wealth is held within North American, Europe, Japan, and Australia. The study found that an adult with $2,200 of assets would be classified within the top half of the global wealth table, while those with $61,000 were in the top ten percent.

Membership to the top 1 percent of the world wealthiest group would require an individual to have more than $500,000 in assets, around 37 million have a membership.

The millionaires and billionaires club continues to grow globally reaching record highs. Meanwhile, the middle and lower classes have seen increasing debt, fewer pay raises, and less benefits. Statistics indicate that while individuals with 1-5 million dollars in assets is increasing, the wealthiest individuals with 5 million dollars or more is growing even faster. Being the richest nation in the world, the United States is home to an estimated 7.5 millionaires among 302 million people. Several surveys have shown a large portion of the recent increase of wealth has been due to stocks, real estate, and mutual funds.

As debt levels continue to rise due to the average individual trying to live beyond their financial means, we will continue to see an increase of overall wealth to those individuals at the top. The access to easy credit and low interest rates can blind oneself of their true financial status as interest compounds, hidden fees add up, and the national savings rate nears zero. Wealthy individuals who are invested in financial institutions and other sectors of our consumer drive economy will truly prosper. As the rich get richer many others will just get by making nickel and dime.

The American Ruling Class

The World Distribution of Household Wealth

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