Global Wealth Pyramid: Decreased Base
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Global Wealth Pyramid: Decreased Base

With global wealth growing to 280 trillion dollars, the poorest base tier of the wealth pyramid shrank slightly. The three other tiers took in new members and the world welcomed over 2,000,000 new dollar millionaires.

In order to analyze the distribution of wealth, the researchers established four wealth ranges: 1) below 10,000 dollars; 2) 10,000−100,000 dollars; 3) 100,000−1,000,000 dollars; 4) above 1 million dollars. Since the first issue of the Global Wealth Report in 2010, the composition of the pyramid has remained largely stable. The only wealth segment with an unbroken spell of expansion and wealth accumulation is the top tier, representing dollar millionaires.

The Global Wealth Pyramid 2017

The Global Wealth Pyramid 2017

Source: Credit Suisse Global Wealth Databook 2017

Heavy Base

The lowest wealth range remains the largest and forms the base of the wealth pyramid. As much as 70 percent of adults fall into this range, owning less than 3 percent of global wealth, or below 8 trillion dollars. Despite remaining the largest, this wealth band shrank by 3 percentage points in terms of number of adults compared to the previous year, while at the same time slightly increasing the band’s total wealth.

Although this wealth range seems most evenly spread across the regions, there are still significant differences. One quarter of its members come from Asia-Pacific (excluding China and India). And if we were to add the two excluded countries, their common share would increase to 66 percent. On the other hand, North America, Europe, and Latin America all have single-digit shares in this group – 2, 7, 8 respectively – and together account for less than 18 percent.

For the majority of adults from developed countries, membership in this wealth band is temporary, but for many residents of low-income countries it is often a life membership.

Chinese Domination in the Mid-Range Segment

The mid-range band (10,000−100,000 dollars) covers 1.1 billion adult representatives of the middle class. Their combined wealth is estimated at 33 trillion dollars.

The unquestionable leader of this wealth segment is China, whose global share has risen dramatically since the turn of the century. In 2000 it was only 12.6 percent, and has risen to 35 percent today. Over the same period, the country experienced a continued growth in inequality. The researchers see an explanation in the strong urban/rural divide.

Regional Membership of Global Wealth Strata

Regional Membership of Global Wealth Strata

Source: Credit Suisse Global Wealth Databook 2017

More Millionaires

Typically, the two top tiers are in the limelight, as they represent the most affluent groups: those with net worth above 100,000 dollars. Although it is a relatively small group – less than 10 percent of the global population, they collectively own 86 percent of global wealth. The regional composition of this segment differs quite significantly from the lower tiers: North America, Europe, and Asia-Pacific (excluding China and India) dominate comfortably.

The year in scope welcomed 2.3 million new dollar millionaires, with the highest increase observed in the US. Today, the country is home to 43 percent of the world’s millionaires.

Shifting the Focus

While the top segments of the pyramid will likely continue to be the main driver of private asset flows and investment trends, Credit Suisse Research Institute highlights the importance of the lower two tiers. Together they represent a whopping 90 percent of global adults with unquestionable political power and a combined wealth of 40 trillion dollars.