Choose your birthplace carefully if you wish to be among the millionaires of the Asia-Pacific region.
This is the obvious conclusion to recent data compiled by The Economist, which showed the time taken to reach millionaire status, based on pre-tax median household income, ranges from more than three centuries in Mexico to the fastest pace of barely 20 years in the United States.
In the Asia-Pacific region, Australia was the next quickest for households followed by Japan and then South Korea, with China lagging well behind.
However, a different report offered far better news for the region’s aspiring rich.
According to a study by consultants Capgemini and RBC Wealth Management, the Asia-Pacific region (excluding the United States) had 3.37 million millionaires compared with 3.35 million in the United States and 3.17 million in Europe. 2011 was thus the first time that Asia-Pacific millionaires outstripped those in the United States.
In the Asia-Pacific, the number of such “high net worth individuals” – those with investable assets excluding their primary residence of more than U.S. $1 million – grew by 0.8 percent in 2011, twice the global average.
Japan made up more than half the region’s millionaires, with the number increasing by 4.8 percent despite the impact of the March 2011 disasters. The number of Chinese millionaires rose by 5.2 percent in another strong year of economic performance to account for 17 percent of the total, while resource-rich Australia accounted for 5 percent.
That being said, the rise in wealthy individuals did not occur uniformly across the region. Indeed the number of millionaires actually declined in Hong Kong and India, while gaining in China, Japan, Indonesia, Malaysia and Thailand.
Furthermore, even if fewer in number, the total investable wealth of rich Americans still outstripped the Asia-Pacific region, with American millionaires hording U.S. $11.4 trillion compared to their Asian counterparts’ U.S. $10.7 trillion.
Entrepreneurship, commerce key drivers
Political connections have undoubtedly helped the region’s ruling elites accumulate vast wealth, as seen in the reported assets controlled by China’s key leaders.
However, according to Capgemini and RBC Wealth Management’s report, entrepreneurship and commerce are the main drivers of wealth, led in recent years by the healthcare, information technology, automobile and infrastructure industries.
For those looking to the next lucrative business opportunity, the authors predict that future wealth growth will likely come from businesses “aimed at improving the wealth of society…including financial services, education, healthcare, and value-added manufacturing.”
Disaggregating their forecast, the authors say growth in Japan’s millionaire population will be driven by the automobile and infrastructure segments, while financial services, healthcare and education would be critical for China’s rich.
In India, e-commerce and healthcare are expected to produce more millionaires, with financial services and mining reigning supreme in Australia. And in South Korea, government-led initiatives boosting the growth of key industries are expected to support gains in wealth.
Who are Asia’s rich?
For those aspiring to join Asia’s rich list, there are plenty of examples of self-made millionaires along with those “born with a silver spoon.”
According to Forbes, Japan’s richest man in 2012 was Uniqlo founder Tadashi Yanai with a net worth of U.S.$10.6 billion, followed by Nobutada Saji, third-generation owner of the Suntory drinks business, who’s worth was estimated at U.S. $7.9 billion. In third place was SoftBank founder Masayoshi Son’s U.S. $6.9 billion fortune, followed closely by online shopping mall operator Rakuten’s Hiroshi Mikitani, who is estimated to hold U.S. $6.3 billion.
In China, Zong Qinghou of beverages giant Wahaha topped the rich list with a net worth of U.S. $10 billion, followed by Robin Li of search engine Baidu’s U.S. $8.1 billion, real estate developer Wang Jianlin of Dalian Wanda Group with U.S. $8 billion and internet entrepreneur Ma Huateng with US$6.4 billion.
Perhaps aided by a lack of inheritance taxes, Australia’s richest include a number of individuals who inherited their wealth, such as Gina Rinehart with an estimated fortune of U.S. $17 billion, and third-ranked James Packer with U.S. $5.8 billion.
Recent studies have shown that while economics’ law of diminishing returns affects material wealth – another Porsche car is less enjoyable when you already have five – richer countries are on the whole happier than poorer ones.
However, inequality could act as “a tax on happiness” by dragging down the overall mood. In other words, making your fortune in one of the region’s less inequitable societies could be much more fun than being one of a few in an emerging economy. But as many would say, that’s a nice problem to have.