Who is Your “Typical” Billionaire?
The latest statistics from the Wealth-X and UBS Billionaire Census paint an interesting portrait of the current ‘typical’ billionaire. Marketing strategies for luxury brands need to be constantly tweaked and adjusted in order to be representative of these ultra high net worth (UHNW) individuals. So just who is this billionaire to represent all billionaires?
The typical billionaire is 63 years of age and has a net worth of approximately US$3.1 billion. He would have waited until his late forties before he reached the US$1 billion benchmark and was officially considered a member of this exclusive club.
His wealth is distributed as follows:
• 46.9% private holdings
• 28.9% public holdings
• 19.1% cash
• 5.1% real estate and luxury assets
So what does this mean?
• 46.9% private holdings versus 28.9% public holdings
This shows that the majority of the billionaire’s wealth is concerned with his ownership of privately held businesses, rather than publicly held wealth. This indicates that he is confident in the performance of his businesses, exerting a high degree of control over those in which he is heavily involved.
• 19.1% cash
Approximately one fifth of his wealth is cash from previous salaries and investments. He has reinvested most of this in highly liquid, diversified securities. This enables him to invest in new business ventures and opportunities.
• 5.1% real estate and luxury assets
The ‘typical’ billionaire owns four properties. Each of these is worth, on average, US$23.5 million. His global lifestyle necessitates him having several homes around the world. Other luxury assets that accompany the billionaire lifestyle could include a number of things, such as: sports teams, racehorses, yachts, planes, cars and art.
5 Things to Know about Today’s Billionaires
This year’s Wealth-X and UBS Billionaire Census has raised several significant factors that are pertinent to marketing to ultra high net worth (UHNW) individuals. Luxury brands would do well to take cognizance of these facts as they have an important influence on current and future luxury market trends, amongst other things. So here are 5 Things to Know about Today’s Billionaires:
1. When it comes to billionaires, it is cities that count, rather than countries.
Billionaires are transnational and move from city to city, rather than country to country. This is of particular importance in emerging markets such as Africa and the Middle East. In addition, cities such as London that have a high density of foreign billionaires are becoming increasingly popular.
2. Becoming a billionaire requires entrepreneurialism and private wealth.
This trend is true for both male and female billionaires. More and more billionaires are those who inherited only part of their wealth and then through entrepreneurism became billionaires. Almost two-thirds of billionaires’ primary companies are privately held.
3. This past year, billionaire wealth was volatile and under-performed global equity markets.
Although 500 billionaires were added to this year’s census, the net gain was only 155 billionaires. Many increased their liquidity holdings, waiting for the best time to make further investments. The billionaires who performed best in emerging markets outside Asia were those with diversified portfolios and international investments.
4. US$10 billion is the new wealth ‘ceiling’.
The vast majority of the world’s billionaires are worth between US$1- and US$10 million. Older billionaires, who are in the majority, are transitioning from wealth accumulation to wealth preservation.
5. The number of billionaires is increasingly globally due to wealth transfers to the next generation.
Some billionaires are already passing on their wealth to the next generation, and this is expected to increase in the future. This increases the number of billionaires but not their total wealth.