Much has been said about the richest 1% of the global population holding more than half of the total global wealth -but where do you fit in on the global wealth scale?
Global charity organisation, Oxfam, published research in January, which emphasised the staggering level of wealth disparity across the globe.
However, few realise that they are probably closer to the wealthier side of the spectrum than they think.
The claim, and data used to back it up, originates from Credit Suisse’s Global Wealth Report for 2014.
The group’s data shows that approximately 35 million people – or 0.7% of the global adult population – are worth US$115.9 trillion, while just over 90% of the population account for only US$38.7 trillion.
South African wealth
In a South African context, Credit Suisse estimates that 63,000 South Africans are part of the top 1% of global wealth holders – and 47,000 of these individuals are dollar millionaires.
The group estimates that the average adult in the country has net wealth of US$22,073 (based on an average of US$19,761 in financial assets, US$7,296 in non-financial assets minus US$4,984 in debt).
This accounts for 0.3% of world’s wealth, spread across the country’s adult population of 31.1 million.
Here’s a breakdown of how South Africa looks in the global context of wealth distribution:
|Net worth||South Africa distribution||Global distribution|
|US$10,000 – US$100,000||28.9%||21.5%|
|US$100 000 – US$1 million||2.8%||7.9%|
According to the group’s data, about 920,000 people (2.8% of the adult population in SA) are worth over US$100,000, fitting comfortably within the top 10% of wealth holders in the world.
How rich are you?
In order to fit into the world’s richest 10%, all you would need is a net worth of around R897,000.
Here is the minimum you would need to be worth to fit into each decile of global wealth distribution:
|% of Global population||Minimum Net Worth USD||Minimum Net Worth ZAR|
|70%||$1 086||R12 580|
|60%||$2 129||R24 662|
|50%||$3 641||R42 178|
|40%||$5 824||R67 466|
|30%||$10 103||R117 035|
|20%||$20 909||R242 214|
|10%||$77 450||R897 196|
|5%||$209 586||R2 427 886|
|1%||$798 285||R9 247 493|
Conversions at 1USD = 11.58 ZAR
You are what you earn
For its findings on wealth distribution, Credit Suisse considers net wealth – that is, a person’s total asset value, minus debt.
For this reason, the bottom decile (10%) of the global population in fact has a negative net worth, significantly changing where one would expect wealth distribution to lie.
An individual with R500 to their name and with zero debt is considered to be wealthier than a person who has assets worth R500,000, but is R500,001 in debt.
Analysts have argued that this does not provide an accurate representation of “rich” and “poor” as it is conventionally understood.
Thus looking at income distribution is another metric one could use to seek out their “rich” standing.
According to globalrichlist.com – which bases its calculations on income data from the World Bank – with purchasing power parity applied, it only takes an annual income of R75,000 (R6,250 a month) to fall into the world’s richest 10%.
In fact, the site’s data shows that earning R590 a month would make you a higher earner than half the world.
Income required for the top 5 deciles
|% of Global population||Gross Annual Income|
Economist Mike Schussler agrees with the findings, saying that a total net pay of about R8,500 per month (after taxes but including pension payments) would put someone in the top 5% of the world’s adults.
“A middle manager in a private company, or a director in the public service taking home, say, R300,000 after taxes…they certainly are in the top 0.25%,” he said in a column on MoneyWeb.
“We can concentrate on the differences and see big gaps between earnings – but we can also see that many South Africans who have formal work end up rather on the wealthy side of the world.”