There were an estimated 7.7 million millionaires in the world at the end of 2003, half a million more than at the end of 2002, as stock markets and economic growth picked up and the rich took more risks with their cash.
These wealthy individuals saw their riches increase by 7.7 percent to $28.8 trillion in 2003, recovering to levels seen before the global recession took hold in 2001, according to a survey on Tuesday from U.S. investment bank Merrill Lynch and technology consultancy Capgemini.
And the rich are set to get richer, with their wealth forecast to grow by seven percent a year and to exceed $40.7 trillion by 2008, the survey predicted.
These wealthy individuals are classed as those with financial assets of at least $1 million, excluding the value of their homes.
As stock markets revived last year, the wealthy were quick to shift their money back into higher yielding investments, particularly equities, but also specialized products and alternative investments, including hedge funds, the survey found.
Ian Mackenzie, vice president at Capgemini UK financial services, said there had been a move away from a very conservative investment stance towards “cautious bullishness.”
The wealthy were now focused on long-term growth for their money rather than the “batten down the hatches, wealth preservation” approach they had adopted during the market downturn, he said.
Money invested in equities increased to 35 percent of the total assets of these so-called “high-net-worth individuals” in 2003 from 20 percent in 2002. Cash investments fell to 10 percent from 25 percent in 2002.
Investments in so-called alternative investments that can offer higher returns such as hedge funds, increased to 13 percent of the total in 2003, from 10 percent in 2002.
Robert Fairbairn, managing director of Merrill Lynch Investment Managers, said: “Investment in these has become mainstream in the last three to four years.”
The United States led the field in terms of wealth creation, with the number of millionaires rising by 14 percent to 2.27 million, the largest gain in actual numbers of any country.
North America as a whole saw growth in high-net-worth individuals of 13.5 percent and Asia 8.4 percent.
In China, which saw surging economic growth last year, the number of high-net-worth individuals rose 12 percent and India 22 percent.
Europe showed a more modest increase, with the number of millionaires up 2.4 percent to 2.6 million.
“That partly can be attributed to the more restrictive European income-tax policies which impeded personal wealth accumulation,” the report said.
Britain was in the global top 10 for growth in high-net-worth individuals. The survey found that 383,000 people were in the high-net-worth bracket in the UK last year, an increase of eight percent.
Their combined wealth also rose eight percent, to $1.34 trillion.
The survey also highlighted a small, but fast-growing global group of 70,000 super rich individuals with more than $30 million in financial assets. It found that this group was growing at a faster pace than those in the $1 million-plus bracket.