Wealth-X has released its 2021 Wealth Report, detailing how the world’s richest people make their money.
Contrary to often popular conceptions of wealth, most wealthy individuals around the world are self-taught and have created their fortunes without inheritance, the report says.
This is especially true at the Very High Net Worth (VHNW) level, where more than eight in ten people are self-taught. Wealth-X defines this group as those with net worth between $ 5 million and $ 30 million.
Of the remainder, about two-thirds have net worth that stems from a combination of inherited and self-created wealth, with only a small proportion relying solely on inheritance.
How South Africans Make Their Money
Data released by New World Wealth in April shows that there are currently 36,500 millionaires living in the country – a decrease of 1,900 from the number recorded in 2020.
Data from 2020 shows that most of the country’s HNWIs have acquired their wealth through financial and professional services (including banks, law firms, accountants, fund managers and wealth managers), closely followed by the real estate sector.
However, the data shows that these HNWIs typically studied law, finance, or accounting in college.
The University of Cape Town is the most popular university among HNWIs (20%), followed closely by the University of the Witwatersrand (18%) and the University of Stellenbosch (12%).
|Industry||Percentage of HNWI|
|Financial and professional services (includes banks, law firms, accountants, fund managers and wealth managers)||32%|
|Technology and telecommunications (includes software, Internet, hardware and telecommunications)||9%|
|Basic materials (includes agriculture and mining.)||8%|
|Transport and logistics||3%|
|Hotels and leisure||2%|
How millionaires make their money in the world
International data shows South Africa broadly matches global trends, with banking and financing of primary industries for wealth creation in North America, Asia and Europe
Business and consumer services rank second, together accounting for well over a third of all industries.
âBanking and finance dominate, reflecting the important role financial services have played in overall wealth creation over the past decades,â Wealth-X said.
âBusiness and consumer services have been strengthened by the continued business opportunities offered by the growing middle class in emerging markets over the past two decades, although Covid-19 has ended it in many markets, as well as the dominant role of services. and increasing digitization in developed economies.
Real estate is also popular, spurred by continued urbanization, the growing spread of rentier capitalism, and the persistent low interest rate environment.
The nonprofit sector ranks in the top five of the three regions. As careers or businesses mature, or as their own lifecycle progresses, more and more people in VHNWs are choosing to devote a large portion of their time to philanthropic initiatives.
âSmall changes happen from year to year, but over time new economic and industrial trends can lead to substantial changes in the ranking of major industries,â Wealth-X said.
âIn North America, the enormous growth of technology companies of all sizes – in Silicon Valley and in many other technology hubs, such as Austin and Seattle – has created new people and wealth VHNW, the technology listed for the first time in the top five. “
Read: Only one South African billionaire has climbed the global wealth rankings – and he is now the third richest man in the country