To see where the world is going, follow the money. Last year global private financial wealth grew 7.8 percent, to $135.5 trillion, according to Boston Consulting Group. Thats more than double 2011s increase of 3.6 percent. BCG projects that the total will hit $171.2 trillion by the end of 2017, a 4.8 percent compound annual growth rate. David Darst, New Yorkbased chief investment strategist for Morgan Stanley Wealth Management, names three recent drivers of private wealth. Its real estate, its the stock market, and its the underlying businesses of a lot of these tycoons, whether theyre listed or theyre private, he says.
As BCG reports, 1 percent of the worlds population now controls 39 percent of all wealth. They tend to move in packs, Darst says of the ultrarich, citing their ability to shift the real estate and art markets and potentially even entire national economies in regions such as Asia and Africa. A few people in Germany go there and they like it, and they decide theyre going to buy in, and the others copy.
Noting that the No. 1 concern of the extremely wealthy is security, Darst points to recent riots in Brazil and Turkey. The broader middle class must advance if those at the top hope to hang on to their riches, he warns: Itll be expropriated; itll be taxed; itll be attacked.