A new wave of billionaires is invading the world’s richest 1%, and they didn’t make their wealth through humble beginnings.
Inheritance Surpasses Wealth Creation
A shift in global wealth has occurred for the first time in the nine years that UBS has monitored billionaires.
Inheritance Driving Billionaires
In a report from UBS, the new members of the billionaire community managed to acquire more assets through inheritance than entrepreneurship.
Passing on the Wealth
“After the surge in entrepreneurial activity witnessed over the past few decades, many business founders are now ageing and passing their wealth to the next generation,” according to a survey.
Expanding on Wealth
68% of billionaires in the survey said “that they aim to continue and grow what their forebears achieved.”
Inheritance vs. Entrepreneurship
In the past year, the “84 new self-made” billionaires across the world accumulated $141 billion from entrepreneurship.
Heirs Overtake Self-Made Billionaires Total
At the same time, the 53 heirs inherited a larger sum of $151 billion.
A Common Trend
UBS’s Benjamin Cavalli stated, “This is a theme we expect to see more of over the next 20 years, as more than 1,000 billionaires pass an estimated $5.2tn to their children.”
A Worldwide Phenomenon
The “growing significance of these families can be seen across all major geographical regions”, according to the report.
Ambitions to Succeed
Despite the unimaginable wealth inherited, “they also have ideas and ambitions of their own,” according to the report.
Building the Family Legacy
“They appear conscious of the fact that they may need to reshape and reposition their wealth if they want to continue the family legacy,” it said.
Rise in Billionaires
The billionaire community worldwide saw the addition of 200 new members, an increase of 7%, in the 12 months leading up to April 2023.
Pandemic’s Rise in Wealth Gap
Back in 2020, 100 million people sank into extreme poverty across the globe, while billionaire’s wealth grew during the pandemic.
Disrupting a Positive Trend
A report from the BBC showed that before this period, the world’s extreme poverty cases had been shrinking consistently for 25 years.
Joining the Poverty Line
“While the wealth of billionaires rose by more than $3.2tn, 100 million more people joined the ranks of extreme poverty,” the report said.
A Good Quarter of a Century for the Rich
In the last 25 years, the world’s richest 52 individuals saw their wealth rise by 9.2% each year.
Momentum Grows Across Generations
We’re currently in a period of what is described as the ‘great wealth transfer’ as baby boomers and Generation X share their wealth with millennials and younger individuals.
Huge Numbers of Generational Wealth
Cerulli Associates estimated a staggering $73 trillion will be inherited in the U.S. alone by 2045, “The great wealth transfer is really gaining momentum now,” another UBS member noted.
New Generation
The world’s wealth gap is increasing each year, and now billionaires are passing their wealth down to rich and hungry sons and daughters; it’s clear it won’t get better any time soon.
Featured Image Credit: Shutterstock / Tyler Olson.
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