Saturday, June 20, 2015

who wants to be a millionaire?

Hankering to be a millionaire?  Move to India.

At least, that is what you would believe if you listened to recent stories in the popular press.  Once again lazy reporters have misled us.  It turns out the rub is in that term "millionaire." 

But I will come back to that.  Let's look at some numbers.

Each year, the consultancy of
Capgemini and RBC Wealth Management releases its "World Wealth" report.  According to the 2015 edition, the subcontinent's contingent of "millionaires" increased by 26% -- faster than any other nation last year.

Even so, the number was relatively small for the nation with the second largest population.  In raw numbers, its 198,000 millionaires rank just above the Netherlands's 190,000 and barely below Italy's 219,000.

The big winners in the worldwide sweepstakes?  You already know the first.  The United States, of course, with 4,351,000.  Rounding out the top four are: Japan (2,452,000), Germany (1,141,000), and China (890,000).  Those four countries contain 60.3% of the world's millionaires.

As a side note, Mexico with 125,000 is 21st on the list -- below Norway (127,000) and tied with Taiwan (125,000).

The Mexico number is what caught my eye.  I know people living in Mexico whose net value exceeds one million dollars.  People with assets in Mexico who are not Mexican citizens. 

Where are they counted?  And just how would a consultancy be able to gather reliable numbers on the large number of people who hold assets throughout the world?  What is the consultancy's methodology?

A closer look at the report answered my first question.  I use the term "millionaire" to mean a person's total assets (everything they own) exceed one million US dollars.

At least I was correct in using US dollars.  That is the standard for international comparisons of wealth.  Where I went wrong was believing that all assets are included in the equation to determine who is a millionaire.

They are not.  The report uses a different concept: HNWI -- which sounds a lot like the cable that goes from my Blu-ray player to my television.

HNWI stands for high net worth individual.  That is how the consultancy uses the term "millionaire."  But the one million US dollars, to qualify for that designation, must be available for investment.  And it does not include the value of a primary residence.

The popular press failed to note that distinction in any of the stories I read in the newspapers I read online.  But that is what come from reporters writing about topics on which they have little background.  (I am far to aware of that failing in my own writing.)

Stripping out the primary residence dumps most of the people I know out of the list.  It does not matter whether the consultancy is measuring their assets because they simply are not candidates for inclusion.

I am not one of the elite -- either in The States or in Mexico.  But I suspect I am just as fulfilled as most of the people on the list.

As I write this piece, I am sitting in my courtyard enjoying the warmth of the day, the breeze rustling high in the palms, and listening to the inevitable rooster in the distance crowing his defiance that wealth does not matter at all when you have found peace and joy.

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