{"id":257463,"date":"2018-07-10T11:20:39","date_gmt":"2018-07-10T09:20:39","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=257463"},"modified":"2018-07-10T11:20:39","modified_gmt":"2018-07-10T09:20:39","slug":"how-to-tell-if-youre-rich-or-not","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/257463\/how-to-tell-if-youre-rich-or-not\/","title":{"rendered":"How to tell if you’re rich or not"},"content":{"rendered":"

Economists at the University of Chicago alongside the\u00a0National Bureau of Economic Research, have published a new paper<\/a> <\/strong>that investigates the best indicators of wealth over the past three decades.<\/p>\n

The US-focused report provides interesting insights into how\u00a0media consumption, consumer behavior, time use, or social attitudes may differ based on education and income levels.<\/p>\n

“Our ability to correctly guess one\u2019s education based on consumer behavior has remained mostly stable, with maybe a slight increase over time,” the researchers said.<\/p>\n

“This is also true when we attempt to predict education using products and brands separately.”<\/p>\n

The researchers found that the products and brands most indicative of someone having attended college are dominated by technological goods.<\/p>\n

This is because specific goods reflect waves of technological innovation with the more educated separating themselves from the less educated by being earlier adopters of new technologies, the researchers found.<\/p>\n

“For example, personal computers and PC-related devices are more dominant in the early years, while owning a tablet is most indicative of being educated in 2016,” the report found.<\/p>\n

“Having bought Kodak film, owning Windows XP, and owning an Apple iPhone are most informative about someone\u2019s education in 1994, 2005, and 2016, respectively.”<\/p>\n

Similarly the brand most predictive of top income in 2016 is the ownership of Apple products<\/strong> (iPhone and iPad).<\/p>\n

Owning an Android<\/strong> phone<\/strong> (59.5%), an HP printer<\/strong> (58.2%), and a Samsung TV<\/strong> (58.0%) were also highlighted as some of the brands most indicative of being high-income.<\/p>\n

Click on image to enlarge.<\/em><\/p>\n

\"\"<\/a><\/p>\n

While the data above is US-centric, you can easily replace certain products or brands with local equivalents – Verizon and AT&T with Vodacom and MTN; Cascade Complete with high-end detergents, etc.<\/p>\n

\n

How much money do you need to be considered rich in South Africa?<\/strong><\/p>\n

As highlighted in a previous BusinessTech<\/a> <\/strong>article, one of the best ways to differentiate the wealth of a South African is to see which bank accounts they qualify for.<\/p>\n

South Africa\u2019s major retail banks offer a variety of banking products that cater for all markets – from entry level starter accounts, to mid- and higher-tier accounts that open banking to customers with more varied banking needs.<\/p>\n

However, the level of banking that is reserved for the \u2018rich\u2019 is the world of private banking, which comes with strict requirements in order to be considered.<\/p>\n

For South Africa\u2019s\u00a0top-rated<\/a><\/strong>\u00a0private bank, Investec, in order to become a client, you need to be a professional (engineer, accountant, lawyer, doctor, etc) and need to apply and let the group run a credit check on you.<\/p>\n

The bank does not have a standard base requirement, with its packages catered to individuals based on their financial needs and background. However,\u00a0a report by the Financial Mail\u2019s Investors Monthly in\u00a02017<\/a><\/strong>\u00a0mentioned that a prospective Investec client would need to earn a minimum R800,000 a year (R67,000 a month), or have at least R20 million in assets.<\/p>\n

Other prominent banks in South African have also stepped up their requirements to enter the world of the elite banking. FNB\u2019s private wealth offering requires that a prospective private client earn\u00a0R1.5 million per annum or have a net\u00a0asset value of R15 million or more.<\/p>\n

Nedbank Private Wealth carries the same salary requirement (R1.5 million per annum), but brings the necessary net asset value down to R5 million \u2013 while Absa\u2019s Exceller Package doesn\u2019t specify a net asset requirement at all, and has the lowest salary barrier of R750,000 per annum (R62,500 per month).<\/p>\n

Standard Bank\u2019s Signature account has a minimum salary requirement of R92,000 a month (or just over R1.1 million a year).<\/p>\n

The table below outlines the various requirements needed to access private banking in South Africa, as well as an average value based on the numbers.<\/p>\n

\n
\n\n\n\n\n\n\n\n\n
Bank<\/th>\nAnnual salary needed<\/th>\nMonthly salary needed<\/th>\nInvestable assets<\/th>\n<\/tr>\n
FNB Private Wealth<\/td>\nR1 500 000<\/td>\nR125 000<\/td>\nR15 million<\/td>\n<\/tr>\n
Nedbank Private Wealth<\/td>\nR1 500 000<\/td>\nR125 000<\/td>\nR5 million<\/td>\n<\/tr>\n
Standard Bank Signature<\/td>\nR1 100 000<\/td>\nR92 000<\/td>\n–<\/td>\n<\/tr>\n
Investec Private Bank<\/td>\nR800 000<\/td>\nR66 700<\/td>\nR20 million<\/td>\n<\/tr>\n
Absa Exceller<\/td>\nR750 000<\/td>\nR62 500<\/td>\n–<\/td>\n<\/tr>\n
Average<\/strong><\/td>\nR1 130 000<\/strong><\/td>\nR94 100<\/strong><\/td>\nR13 million<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

Taking the above into consideration, the value to be considered a HNWI in South Africa is more or less on par with the $1 million used by researchers, in that the average ‘rich’ person who qualifies for private banking, would either have a monthly salary of R94,000 a month – or net assets worth R13 million.<\/p>\n

\n

Read: This is how much money you need to be considered rich in South Africa<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Economists at the University of Chicago alongside the\u00a0National Bureau of Economic Research, have published a new paper that investigates the best indicators of wealth over the past three decades.<\/p>\n","protected":false},"author":10,"featured_media":192080,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-257463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/257463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=257463"}],"version-history":[{"count":15,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/257463\/revisions"}],"predecessor-version":[{"id":257569,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/257463\/revisions\/257569"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/192080"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=257463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=257463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=257463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}