According to Credit Suisse, the global number of millionaires expanded by 5.2 million to reach 56.1 million in 2020. That’s a 9.8% increase in the number of millionaires since the pandemic began.
As a result, an adult now needs more than $1 million to belong to the global top 1%. But to be in the top 1% in America, an adult needs to have more than $10 million.
When it comes to wealth, everything is relative. Therefore, let’s take a closer look at the millionaire data by country.
Change In The Number Of Millionaires By Country
To no surprise, the United States has the highest number of millionaires in the world at roughly 22 million millionaires. Not only do we have the most millionaires in the world, but we also saw the largest change ever in the number of millionaires in 2020, an increase of 1.73 million.
22 million millionaires in the United States out of a population of 332 million is 6.6%. Then if you drill down into the cities, places like San Jose, Bridgeport, San Francisco, Washington, D.C., Napa, Boston, Princeton, Thousand Oaks, and Boulder all have millionaire populations of between 10% – 13.6%.
If you want to be a millionaire, you probably go where there are the most number of millionaires. Of course, going to retirement towns like Napa probably won’t help.
Despite having roughly 1.4 billion people, China comes a distant second with only about 5.28 million millionaires. Japan, with a population of about 126 million, has roughly 3.66 million millionaires.
Tough Times For Brazil And India
On the flip side, it’s surprising to see Brazil’s millionaire population declined by 34% from 315 to 207 thousand millionaires. Brazil’s GDP fell by an estimated 4% in 2020 compared to only a 2.3% decline in the United States.
India has a population of roughly 1.3 billion, similar to China’s. Yet, partly because India is a democracy, it hasn’t been able to move things forward as quickly as China, which has a command economy.
I went to India and China many times for work. And it was always so striking how much more chaotic cities in India were compared to cities in China. The Indians I spoke to strongly believed in democracy as they aggressively tried to fight corruption. However, there was a constant frustration in the slowness of getting things done.
Think about how long it takes to pass legislation here in America. Now think about how difficult it is to move forward with a population 4X larger than ours that speaks 22 official languages. Luckily, America already has the infrastructure in place to tolerate long periods of government inefficiency.
Mean And Median Wealth Per Adult By Country
Below is a chart that shows the country rankings by mean and median wealth per adult.
The United States has a mean wealth per adult of $505,420, up $41,870 from 2019. It’s pretty impressive the average person in our country is a half-millionaire.
If the average American continues to grow their net worth by 7.2% a year for 10 years, then the average person will become a millionaire in America. Of course, some will complain that we shouldn’t look at averages, despite having a population of over 330 million. Instead, we should look at median.
But you’ve got to ask yourself: Do you want to be median or do you want to be average? Personally, I want to be as far above average as possible! Therefore, I’ve got no problem using average as a net worth benchmark.
Switzerland Has The Highest Mean Wealth
To no surprise, Switzerland has the highest mean wealth per adult of $673,960, up $70,730 from 2019. Switzerland only has a population of roughly 8.6 million, but it is consistently one of the richest countries in the world. Their taxes are high and government support is sound.
The last time I went to Zurich, where Credit Suisse’s world headquarters is located, I spent $10 on a Whopper at the train station. Of course, I also ate a lot of yummy raclettes. Even coming from San Francisco, Zurich felt very expensive.
If you haven’t visited Lucern, Switzerland, you must go. Even though I had to leave my tick-infested hotel room at 3 am, I wandered around the area until I could see the sunrise over Chapel Bridge (Kapellbrücke). Always think positive! Great things can come out of bad situations.
Australia Has The Highest Median Wealth
Australia, impressively, has the highest median wealth per adult. This should mean that wealth inequality in Australia should be relatively benign given Australia’s mean wealth per adult is $483,763.
Australia’s high median wealth per adult can partly be attributed to its superannuation retirement system. It is mandatory for Australians to contribute at least 9.5% of their annual income to their “super.” By July 2027, the compulsory contribution will rise to 12%. In the U.S., employees have a FICA tax rate of 6.2% that caps out at $142,800 per person.
What’s interesting about Credit Suisse’s wealth chart is that the United States is not in the top 20 countries for median net worth. The latest data from Federal Consumer Finance Survey for 2020 says the median household net worth in America is $97,300. Credit Suisse, on the other hand, is measuring mean and median wealth per adult. The GDP per capita in America is roughly $65,000.
Therefore, with a mean wealth around 7.7X greater than the median wealth in America, there may be growing wealth inequality and unrest. Let’s see if my assumption holds true.
Wealth Inequality By Country
To calculate wealth inequality, economists generally use the Gini coefficient. The Gini coefficient measures the inequality among values of a frequency distribution (for example, levels of income). The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y-axis) that is cumulatively earned by the bottom x of the population.
A Gini coefficient of zero (or 0%) expresses perfect equality, where all values are the same e.g., everyone has the same income). A Gini coefficient of one (or 100%) expresses maximal inequality among values e.g., only one person has all the income or consumption and all others have none.
Most Unequal Countries
Based on the chart above, Brazil (89%), Russia (87.8%), the United States (85%), India (82.3%), Germany (77.9%), and the United Kingdom (71.7%) are the top six most unequal countries in terms of wealth.
Russia’s top 1% has the highest wealth share at 58.2% followed by Brazil at 49.6%. The United States is in the middle with our top 1% controlling 35.3% of total wealth.
The Gini coefficient for the United States hasn’t changed much since 2010 (84% to 85%), despite numerous reports the wealthiest Americans have gotten much richer. Therefore, perhaps we’re blowing the wealth inequality gap out of proportion as more Americans participate in the wealth boom.
Millionaire Growth By Country Forecast 2025
Now let’s look at Credit Suisse’s forecast for the number of millionaires by country. The United States still leads the way with the total number of millionaires by 2025 at 28 million and the largest absolute growth in the number of millionaires by 6.1 million.
However, what’s most interesting is the percentage change. The higher the percentage change, perhaps the greater the opportunity to get rich quicker and lift the overall standard of living for a country.
Poland (98%), China (92.7%), India (81.8%), Denmark (82.4%), Canada (77.2%), (Brazil 74.4%), and France (70.1%) lead the way in terms of estimated millionaire percent growth.
Seeing China and India in the top seven fastest countries for millionaire growth is not a surprise. India should rebound given it lost so many millionaires during the pandemic.
Poland, Denmark, And Canada As The Fastest Growers Of Millionaires?
Seeing Poland, Denmark, and Canada, on the list of countries with the fastest growth in millionaires is unexpected. You seldom hear about these countries innovating on a global stage to command such growth.
Poland is the 6th largest economy in the EU. The largest component of Poland’s economy is the service sector (62.3.%), followed by industry (34.2%) and agriculture (3.5%). The country’s top export goods include machinery, electronic equipment, vehicles, furniture, and plastics.
Roughly 80% of Denmark’s economy consists of the service sector and 11% work in manufacturing. Meanwhile, I Canada looks to be in a big housing bubble. The average Canadian wage is much lower than the average American wage. Smart Canadians are coming to the U.S. to work and then going back to retire.
Perhaps the reason for the high growth estimates is because the Poles, Danes, and Canadians already have high mean and median wealth figures per adult. Therefore, it’s easier to become a millionaire if you already have a lot of money and a relatively small population.
Overall, Credit Suisse estimates the number of millionaires in the globe will increase by 27.93 million in 2025. By 2025, roughly 8.5% of North Americans will be millionaires. Not bad!
The More You Care About Money, The More You May Get
Ever since starting Financial Samurai, I’ve always believed in beating the mean and median net worth figures in America. To become financially wealthy, we must outperform.
I’m pleased to report a much higher percentage of Financial Samurai readers are millionaires than the current 6.5% in North America. Check out this massive net worth poll consisting of over 31,000 entries.
An astounding 35% of you reading Financial Samurai are millionaires!
Therefore, it sure seems like the more we care about money, the higher our chances of having more money. For example, if you subscribe to my post e-mail distribution list and free newsletter like tens of thousands of people do, you can’t help but pay attention to your finances.
We’ll talk about everything from investing in stocks, finding a good deal in real estate, and strategies for reducing our tax liability. We’ll even talk about family finances, retirement planning, and ways to lead happier and more fulfilling lives!
If you’re listening to the latest podcast episode while going on a run, how can you not get motivated to improve your finances? Let’s make becoming a millionaire an inevitability.
The Millionaire Mindset
As we come to the end of this post, I’d like to share with my millionaire mindset to help you build more wealth.
1) Belief. There is no monopoly on being rich. The amount of money in this world is endless. Believe you also deserve to be rich. Adopt a positive money mindset. If you’ve ever played competitive sports, you know that half the battle is believing you can win no matter how big of an underdog you are.
2) Grit. Never fail due to a lack of effort because effort requires no skill. This is a motto I came up with after getting in trouble during my senior year of high school. I wondered whether my future had been doomed due to teenage restlessness. However, I’ve since learned it’s very hard to fail if you keep on going. You start looking at failures simply as setbacks on your way to inevitably achieving what you want.
3) Time. There’s a great Chinese proverb, “If the direction is correct, sooner or later you will get there.” Just make sure you have a healthy enough body and mind to last. We tend to underestimate how much progress we can make over a long period of time. In addition, we must delay gratification.
4) Community. If you can’t surround yourself in person with highly motivated people who also want to build wealth, then you can easily do so online. Please rid yourself of the naysayers, doubters, and haters in your life. Let them project their dissatisfactions elsewhere. You’re too busy taking action to complain about why the world isn’t fair.
The number of millionaires in the world will continue to grow. I hope all of you are a part of it!
Readers, anything else that jumps out at you from Credit Suisse’s global wealth report? If you could travel to any country to work to make your fortune over the next 10 years, which would it be? Why do you think the Poles, Danes, Canadians, and French are forecasted to have the highest millionaire growth rates over the next five years?
Recommendation: One more thing millionaires do is diligently track their finances. An easy way to do so is by using Personal Capital’s free financial app to track net worth, cash flow, and plan for retirement. Link your accounts so you can see all your finances in one place. I’ve used Personal Capital since 2012 and it’s made managing my finances so much easier.