Where Is All The Money?

Where Is All The Money?

While we see an increase in financial disparity across the globe it’s interesting to see where all that money actually is? Join us today we look at what are the wealthiest countries in the world and which individuals control a large part of that money?

 

Transcription

Rob (00:00):

Hello, this is Rob and Mike from The McClelland Financial Group of Assante Capital Management, and this is Think Smart with TMFG.

Rob (00:11):

Today on Think Smart with TMFG Mike and I are going to be discussing where is all the money? Mike, I came across a couple of interesting articles just talking about wealth, and we’re going to look at countries, where is all the money, we’re going to look at who are the wealthiest people in the world? I think it’s interesting to know some numbers about what’s going on. Let’s start with the 10 wealthiest countries, so who do you think is on number one?

Mike (00:45):

That one’s easy, U.S.

Rob (00:48):

You’re right. So we’re going to look at things as if the whole world was a dollar. So if the whole world was a dollar the U.S. would be 29 cents of that dollar, that’s a pretty big number, it’s almost 30% of that dollar. They’re worth about $106 trillion.

Mike (01:08):

And when you say what they’re worth Rob, what do you mean by that? Is that the cash of the people, the companies, what are we talking about there?

Rob (01:16):

What we’re looking at, we’re looking at the value of the real estate, we’re looking at the value of their companies, their equities, their bonds, the whole thing.

Mike (01:27):

Gotcha.

Rob (01:28):

Now it’s $106 trillion, I’m pretty good with billions, I kind of lose touch when it gets into trillions.

Mike (01:37):

Yeah. I remember I had a university professor once in economics and he was in… You’re in one of these giant rooms right, those big lecture rooms, and he went and drew a little line on the board with a piece of chalk, he said that’s a million dollars. And he went around the whole lecture wall to show you what a trillion dollars looked like. He walked around the whole room. So some of you don’t understand how much a trillion dollars really is.

Rob (02:01):

You know the million dollars has six zeros after it, I guess the trillion has nine of them, and that just looks outrageous. But again, we’re looking at total country wealth. So number two, who would number two be?

Mike (02:14):

I saw this on the chart and it can sometimes be a surprise because it’s not that big part of our portfolio because again, you’re into it… It is China, and China comes in at 18 cents of the dollar. So China’s been catching up very quickly on the U.S., right? And the only problem with China is they’re not publicly traded companies. China’s the government, right? China is still communist country so you forget that when you look at the U.S that’s free marketed and what’s available to people, china is mostly owned by the government. But it’s 18 cents of that dollar is owned by China.

Rob (02:57):

Many Chinese investors have been buying up real estate companies around the world and so no surprise that they’re at 18% of the dollar, $64 trillion.

Mike (03:11):

Yeah. We know China in GDP will catch the U.S., we know it will, it’s just a question of when, and it will probably happen sooner than later.

Rob (03:20):

Number three is a bit of a surprise for me, Japan, 7 cents of that dollar, $25 trillion. Japan hasn’t had a lot of growth in a long time and yet they still account for 7% of global wealth. That’s impressive

Mike (03:40):

At a certain time in the ’80 I think Japan was almost one of the biggest in the world.

Rob (03:45):

It was and then it had a big correction, but it’s $25 trillion. We then go to Germany at $15 trillion, or 4 cents of the dollar. And once we get into that group we get into a lot of countries that are similar in size. We get the UK at $14 trillion, France at $14 trillion, India at $12 and a half trillion, Italy $`11 trillion. Where does Canada stand?

Mike (04:16):

Canada, we’re at about eight and a half trillion. So if you put that in terms we’re about 2 cents. You know how they say you can put in your 2 cents, that’s us.

Rob (04:24):

That’s us. That’s not much. We think we’re a pretty big deal but we’re actually a pretty small deal. Let’s look at some other factors.

Rob (04:34):

Where are the wealthiest individuals in the world? So no surprise the U.S., the 10 wealthiest individuals in the world are from the U.S. If you put China and the U.S. together they contain half of the world’s billionaires, so 50% of the world’s billionaires. No surprise, if you look they are 47% of the world’s wealth, no surprise that they have more than half of the billionaires as well.

Rob (05:06):

Here’s another interesting fact, the top 1% of U.S. households hold 32% of that wealth. So let’s work backwards, what’s that 1% Mike if it owns 32% of $106 trillion?

Mike (05:26):

So that 1%, well you-

Rob (05:29):

Owns about $30 trillion.

Mike (05:31):

Yeah. That’s a lot.

Rob (05:32):

That’s why there’s a lot of wealthy people out there, right?

Mike (05:36):

Yep.

Rob (05:37):

I mean the 1%, what’s 1% when you’ve got a population of 330 million?

Mike (05:42):

Yeah, so you’re 3 million.

Rob (05:44):

3 million people that are worth over $30 trillion, that’s impressive.

Mike (05:51):

Yep.

Rob (05:51):

Next we’re going to go to the wealthiest men in the world. We’re going to look at men and women, some interesting things. So who is it Mike? And I guess this number changes a lot depending on what’s going on with individual companies, but there’s no surprise here. Who’s number one?

Mike (06:09):

It’s companies and divorces, you got to put the two together. That’s changed a few positions over the last few years too. Elon Musk is number one right now anyway, but that’s changing every day. But when this was done he was coming in about $212 billion. Then you go into Jeff Bezos. So without the divorce might have been bigger than Elon Musk, but he’s at $168 billion. Then you go through a few people-,

Rob (06:36):

Bernard Arnault and family $159 billion. Bill Gates is on the list.

Mike (06:42):

$129 billion. You wonder how much he’s given away already too because it doesn’t include that. Warren Buffet $120 billion. We have Larry Page at $108 billion. Then we have the second Larry, Larry Ellison at $105 billion. And then we get into the Google money with Serge with a $104 billion.

Rob (07:00):

That’s a lot of people with over a hundred billion dollars. Those would be the 10 wealthiest men in the world.

Mike (07:08):

But think of the great stuff they’ve done. I mean, you look at that and everyone wants to hate billionaires but the only reason we’re able to do the Zoom call and do all this, I think it has a lot to do with Bill Gates and what he developed over the time. The reason why we survive these pandemics and that a lot of this has had to do with the Jeff Bezos and all these people have made it so we’ve survived this whole thing. So sometimes I don’t mind these people having that money and I know we’re going to get some bad comments on the podcast for me saying that but.

Rob (07:40):

The reality is that most of that money will be distributed to the rest of the world when each of them are gone. Very, very little of it will pass from one generation to the next. And I guess probably the best example of that would be Warren Buffet and Bill Gates and the amount that they’ve contributed and continue to contribute on an ongoing basis. What about the wealthiest women in the world, who are they?

Mike (08:06):

Let’s see. We started off with Fran Schwab and what is she worth?

Rob (08:10):

$76 billion. Alice Walton $66 billion of Walmart, Julia Koch and family $52 billion, Mackenzie Scott, Jeff Bezos former wife, $42.6 billion, and she continues to give literally billions away on a regular basis. And then we go down to Jacqueline Mars at $32 billion and Gina Reinhart at $30 billion. But not a single woman with over a hundred billion at this point but that’s bound to change.

Mike (08:42):

That will change with time.

Rob (08:43):

So we’ve got a lot of concentrated wealth with individuals, we’ve got a lot of concentrated wealth by countries, is it different this time?

Mike (08:53):

There is more of a concentration coming at the top of wealth, we do realize that. They talk about that over the year, I guess it’s the idea that the rich do get richer, but it’s not new it’s been a continuing trend for the last hundred years and it’s probably been a continuing trend for the last thousands of years. So you’re going to have the capital sitting with that 1% are going to hold the majority of capital, it’s hard to get away from.

Rob (09:19):

It is especially when those companies are truly global companies that in many cases have changed the world. That brings us to the end of another week, thank you for joining us. This is Rob and Mike with Think Smart from the McClelland Financial Group of Assante Capital Management, reminding you to live the life that makes you happy.

Assante Capital Management (10:03):

You’ve been listening to The McClelland Financial Group of Assante Capital Management Limited. Assante Capital Management Limited is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Insurance products and services are provided through Assante Estate And Insurance Services Incorporated. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources. However, no warranty can be made as to its accuracy or completeness. Before acting on any of the previous information. Please make sure to see a professional advisor for individual financial advice based on your personal circumstances. The opinions expressed are those of the authors and not necessarily those of Assante Estate Management Limited.

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