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NWWealth TABLE OF CONTENTS 1 1.1 1.2 1.3

2 2.1 2.2 2.3

3 3.1 3.2 3.3 3.4

Introduction ........................................................................................................................4 What is this Report About? ....................................................................................................... 4 Notes and definitions ................................................................................................................ 4 Why do we compile a global wealth migration report? ........................................................... 5

Country benchmarks .........................................................................................................6 Global wealth statistics ............................................................................................................. 6 W10: The 10 largest wealth markets worldwide ...................................................................... 6 The wealthiest countries worldwide ......................................................................................... 9

Country performance and trends ...................................................................................10 Wealth growth trends over the past 10 years ........................................................................ 10 Wealth growth trends over the past year (2018) .................................................................... 12 Future trends............................................................................................................................ 14 Sources for country wealth data............................................................................................. 15

4

Wealth inequality..............................................................................................................17

5

Population density and wealth........................................................................................19

6

The wealthiest cities worldwide ......................................................................................20

6.1 6.2

7 7.1 7.2 7.3 7.4 7.5 7.6 7.7

8 8.1 8.2 8.3 8.4

9

World cities .............................................................................................................................. 20 Cities to watch ......................................................................................................................... 22

Wealth migration trends ..................................................................................................23 The immigration debate .......................................................................................................... 23 Countries with large inflows of HNWIs in 2018 ...................................................................... 25 Countries with large outflows of HNWIs in 2018 ................................................................... 26 Country spotlights ................................................................................................................... 27 Cities with large inflows of HNWIs in 2018............................................................................. 30 Mechanisms of migration ........................................................................................................ 31 Sources for migration data ..................................................................................................... 31

HNWI review .....................................................................................................................32 Top countries and cities for HNWIs ........................................................................................ 32 Top countries and cities for billionaires ................................................................................ 33 Most popular hobbies for HNWIs ............................................................................................ 34 Key investment trends for HNWIs in 2018 and beyond ......................................................... 37

Global prime property index ...........................................................................................39

10 Drivers of wealth growth .................................................................................................41 10.1 Factors that encourage wealth growth................................................................................... 41 10.2 Woman safety index ................................................................................................................ 42 10.3 Media neutrality index ............................................................................................................. 44

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NWWealth 11 Spotlight: The rise of Australia .......................................................................................45 12 About the Sponsor / Author ............................................................................................47

LIST OF TABLES Table 1: World: HNWI wealth band definitions .......................................................................................................................................................4 Table 2: W10: The 10 largest wealth markets worldwide, 2018............................................................................................................................6 Table 3: W10: Wealth growth by country, 2017 - 2018 ..........................................................................................................................................7 Table 4: W10: Wealth growth by country, 2008 - 2018 ..........................................................................................................................................7 Table 5: W10: Wealth growth forecast by country, 2018 - 2028F .........................................................................................................................8 Table 6: World: The 10 wealthiest countries in the world by per capita wealth, 2018 ......................................................................................9 Table 7: World: The 20 best performing wealth markets worldwide, 2008 - 2018 ...........................................................................................10 Table 8: World: The 20 worst performing wealth markets worldwide, 2008 - 2018 .........................................................................................11 Table 9: World: The 10 worst performing wealth markets worldwide, 2017 - 2018 .........................................................................................12 Table 10: World: Countries ranked by HNWI net inflows, 2018 .........................................................................................................................25 Table 11: World: Countries ranked by HNWI net outflows, 2018 .......................................................................................................................26 Table 12: World: Cities with large (1,000+) inflows of HNWIs in 2018...............................................................................................................30 Table 13: World: The top 10 countries for HNWIs, 2018 .....................................................................................................................................32 Table 14: World: The top 10 cities for HNWIs, 2018 ............................................................................................................................................32 Table 15: World: The top 10 countries for billionaires, 2018 ..............................................................................................................................33 Table 16: World: The top 10 cities for billionaires, 2018 .....................................................................................................................................33 Table 17: World: Most popular hobbies for HNWIs, 2018 ...................................................................................................................................34 Table 18: World: Top 20 most expensive prime property locations worldwide, 2018 ....................................................................................39

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NWWealth 1 Introduction 1.1

What is this Report About? This report covers global wealth and wealth migration trends over the past 10 years, with projections for the next 10 years. The following table breaks down the various wealth bands that we look at in this report.

Table 1: World: HNWI wealth band definitions Wealth group

Definition

Billionaires

Those individuals with wealth of US$1 billion or more.

Centi-millionaires

Those individuals with wealth of US$100 million or more.

Multi-millionaires

Those individuals with wealth of US$10 million or more.

Millionaires (HNWIs)

Those individuals with wealth of US$1 million or more.

Mass Affluent

Those individuals with wealth of over US$100,000.

Source: New World Wealth

1.2

Notes and definitions 

“Wealth” refers to the net assets of a person. It includes all their assets (property, cash, equities, business interests) less any liabilities.

“Total wealth” refers to the private wealth held by all the individuals living in each country/city. It includes all their assets (property, cash, equities, business interests) less any liabilities. We exclude government funds from our figures.

All the growth rates and figures in this report are in US$ terms.

Stats mentioned in this report are from New World Wealth unless otherwise stated.

For the purposes of this report, the “review period” relates to the years 2008 to 2018.

For the purposes of this report, the “forecast period” relates to the years 2018 to 2028.

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NWWealth 1.3

Why do we compile a global wealth migration report? We consider wealth to be a far better measure of the financial health of an economy than GDP. Reasons for this include: 

In many developing countries, a large portion of GDP flows to the government and therefore has little impact on private wealth creation.

GDP counts items multiple times (for instance, if someone is paid $100 for a product/service and they then pay someone else that $100 for another product/service, then that adds $200 to a country’s GDP, even though only $100 has been produced at the start).

GDP disregards income levels in a country.

GDP ignores the efficiency of the local banking sector and the local stock market at retaining wealth in a country.

GDP largely ignores the impact of property and stock market moves. These two factors obviously have a massive impact on wealth.

GDP is quite a static measure - it tends to only move slightly year on year. As a result, it is not a great gauge of the performance of an economy.

Wealth figures, on the other hand, do not have any of these limitations, making them a far better gauge of the financial health of an economy than GDP figures.

Why wealth migration figures are also important: Wealth migration figures are a very important gauge of the health of an economy. For instance, if a country is losing a large number of HNWIs to migration, it is probably due to serious problems in that country (i.e. crime, lack of business opportunities, religious tensions etc.). It can also be a sign of bad things to come as HNWIs are often the first people to leave - they have the means to leave unlike middle class citizens. If one looks at any major country collapse in history, it is normally preceded by a migration of wealthy people away from that country.

Conversely, countries that attract HNWIs (like Australia and USA) tend to be very healthy and normally have low crime rates, good schools and good business opportunities.

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NWWealth 2 Country benchmarks 2.1

Global wealth statistics Worldwide stats (as at end of Dec 2018):

2.2

Total private wealth held worldwide amounts to approximately US$204 trillion.

The average individual has net assets of around US$27,000 (wealth per capita).

There are approximately 14 million HNWIs in the world, each with net assets of US$1 million or more.

There are approximately 560,000 multi-millionaires in the world, each with net assets of US$10 million or more.

There are approximately 25,000 centi-millionaires in the world, each with net assets of US$100 million or more.

There are 2,140 billionaires in the world, each with net assets of US$1 billion or more.

W10: The 10 largest wealth markets worldwide The top 10 countries in the world by total wealth held (also known as the “W10”) are listed below. “Total wealth” refers to the private wealth held by all the individuals living in each country. It includes all their assets (property, cash, equities, business interests) less any liabilities. We exclude government funds from our figures. As reflected, the US is currently the largest wealth market in the world by some margin. Australia’s high ranking is also impressive when considering that it has only 25 million people living there.

Table 2: W10: The 10 largest wealth markets worldwide, 2018 Rank

Country

Wealth (US$ billion), 2018

1

United States

60 707

2

China

23 563

3

Japan

19 131

4

United Kingdom

9 125

5

Germany

8 790

6

India

8 148

7

Australia

6 020

8

Canada

6 009

9

France

5 851

10

Italy

3 849

Note: Figures for Dec 2018. Source: New World Wealth

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NWWealth W10 growth rates over the past year are reflected below. As reflected, wealth held in all W10 markets declined over the past year (2018). Notably, Australia overtook Canada and France to become the 7th largest wealth market in the world this past year.

Table 3: W10: Wealth growth by country, 2017 - 2018 Country

Wealth (US$ billion), 2017

Wealth (US$ billion), 2018

Growth %

United States

62 584

60 707

-3%

China

24 803

23 563

-5%

Japan

19 522

19 131

-2%

United Kingdom

9 919

9 125

-8%

Germany

9 660

8 790

-9%

India

8 230

8 148

-1%

Australia

6 142

6 020

-2%

Canada

6 393

6 009

-6%

France

6 649

5 851

-12%

Italy

4 276

3 849

-10%

Source: New World Wealth

W10 growth rates over the past 10 years are reflected below. Despite the Brexit vote, the UK was not the worst performing W10 market over this period - France and Italy both performed worse.

Table 4: W10: Wealth growth by country, 2008 - 2018 Country

Wealth (US$ billion), 2008

Wealth (US$ billion), 2018

Growth %

United States

47 929

60 707

27%

China

10 246

23 563

130%

Japan

16 213

19 131

18%

United Kingdom

8 790

9 125

4%

Germany

8 249

8 790

7%

India

4 157

8 148

96%

Australia

4 067

6 020

48%

Canada

4 886

6 009

23%

France

6 322

5 851

-7%

Italy

4 454

3 849

-14%

Source: New World Wealth

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NWWealth 10 year forecast The W10 is expected to have the same 10 countries in it in 2028, although the order is expected to change quite a bit. See below. Ranked by 2028 total wealth. Notably, India and Australia will overtake Germany and the UK to become the 4th and 5th largest wealth markets in the world by 2028.

Table 5: W10: Wealth growth forecast by country, 2018 - 2028F Country

Wealth (US$ billion), 2018

Wealth (US$ billion), 2028F

Growth %

United States

60 707

72 848

20%

China

23 563

51 839

120%

Japan

19 131

24 871

30%

India

8 148

22 814

180%

Australia

6 020

10 835

80%

United Kingdom

9 125

10 038

10%

Germany

8 790

9 669

10%

Canada

6 009

7 812

30%

France

5 851

6 436

10%

Italy

3 849

4 234

10%

Source: New World Wealth

Note: Forecast growth rates rounded to nearest 10%.

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NWWealth 2.3

The wealthiest countries worldwide The following table ranks the top countries worldwide by average wealth per person (wealth per capita). As reflected, small financial hubs such as Monaco and Liechtenstein top the list.

Table 6: World: The 10 wealthiest countries in the world by per capita wealth, 2018 Rank

Country

Wealth per capita (US$), 2018

1

Monaco

2 114 000

2

Liechtenstein

786 000

3

Switzerland

315 000

4

Luxembourg

300 000

5

Australia

244 000

6

Norway

198 000

7

United States

186 000

8

Singapore

177 000

9

Hong Kong

169 000

10

Canada

163 000

Note: Figures for Dec 2018. Source: New World Wealth

The high average wealth of people living in Monaco reflects: 

Good tax structure - people living in Monaco pay no income tax. This attracts wealthy people to move there and also promotes business formation in the country. Notably, there are only three countries worldwide where residents pay no income tax - they include: the UAE, Monaco and Bermuda.

Offshore center - Monaco operates as an offshore center for the European wealth sector, which brings a large number of wealthy financiers to the country. Its location on prime part of the French Riviera. High proportion of multi-millionaires - approximately 2,700 of Monaco’s 40,000 residents are worth over US$10 million. It is a hotspot for super-yacht owners and one of the most popular yacht docking spots in the Mediterranean. High real estate prices - only the wealthy can afford to buy homes there. Monaco apartments are the most expensive in the world per square meter (see global prime property section). Snob appeal - Monaco is synonymous with wealth, luxury and fame.

    

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NWWealth 3 Country performance and trends 3.1

Wealth growth trends over the past 10 years

Global wealth has risen by 26% over the past 10 years (from US$161 trillion at the end of 2008 to US$204 trillion at the end of 2018), assisted by strong wealth growth in Asia. The following table lists the top performing wealth markets in the world over this period (in US$ terms).

Table 7: World: The 20 best performing wealth markets worldwide, 2008 - 2018 Country

10 year wealth growth, 2008 - 2018

China

130%

Mauritius

124%

Ethiopia

102%

India

96%

Sri Lanka

94%

Vietnam

94%

Indonesia

71%

Kenya

64%

Philippines

64%

Korea, Rep.

63%

Peru

58%

Thailand

57%

New Zealand

52%

Ghana

51%

Hong Kong

50%

Chile

50%

Singapore

50%

Australia

48%

Botswana

46%

Israel

45%

Source: New World Wealth

The high growth rates recorded in New Zealand, Australia, Hong Kong, Singapore, Korea and Israel are particularly impressive, as these countries are already high income markets. Normally high income markets struggle to record such high growth.

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NWWealth The following table lists the worst performing wealth markets in the world over the past 10 years (in US$ terms). As reflected, several major EU countries performed poorly over this period, as did numerous countries in the Middle East.

Table 8: World: The 20 worst performing wealth markets worldwide, 2008 - 2018 Country

10 year wealth growth, 2008 - 2018

Venezuela, RB

-68%

Greece

-37%

Ukraine

-24%

Cyprus

-21%

Italy

-14%

Spain

-13%

Turkey

-11%

Egypt, Arab Rep.

-10%

Russian Federation

-10%

Portugal

-8%

France

-7%

Netherlands

-7%

Lebanon

-7%

Croatia

-6%

Norway

-6%

Nigeria

-4%

Iran, Islamic Rep.

-4%

Belgium

-3%

Finland

-3%

Denmark

-3%

Source: New World Wealth

Note: War-torn countries such as Syria, Libya and Iraq are excluded due to lack of reliable data. It is likely that they also performed poorly over this period.

Spotlight on the EU: As reflected, most major EU countries performed poorly over this period. Notwithstanding this, there were a few good spots in Europe including: Malta, Ireland and Monaco (all of which achieved positive wealth growth of over 30% during the 10 year period).

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NWWealth 3.2

Wealth growth trends over the past year (2018) Global wealth dipped by 5% in 2018 (from US$215 trillion at the end of 2017 to US$204 trillion at the end of 2018).

Notably, all of the 90 countries that we track experienced a drop in US$ wealth during 2018 as global stock markets and global property markets dipped across the board.

Notably, all major global stock market indices were down in US$ terms during the year. Notables listed below: 

S&P 500 index down 6%.

Dow Jones Industrial Average (DJIA) down 6%.

MSCI world index down 11%.

MSCI emerging market index down 18%.

Perhaps, more importantly all major currencies depreciated against the US$ during the year (with the exception of the Japanese and Thai currencies which appreciated only slightly). This had a major impact as all our wealth figures are in US$ terms.

Some of the worst performing countries (in terms of US$ wealth growth over the past year) are listed below.

Table 9: World: The 10 worst performing wealth markets worldwide, 2017 - 2018 Country

1 year wealth growth, 2017 - 2018

Venezuela, RB

-25%

Turkey

-23%

Argentina

-20%

Pakistan

-15%

Angola

-15%

Ukraine

-13%

France

-12%

Russian Federation

-12%

Iran, Islamic Rep.

-12%

Qatar

-12%

Source: New World Wealth

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NWWealth Most of these 10 countries were negatively impacted by large local stock market losses and ongoing HNWI migration (outflows).

The likes of Turkey, Argentina, Pakistan, Russia and Angola were all hit hard by large currency depreciations against the US$ during the year.

Russia, Iran and Qatar also have sanctions/embargos to deal with. In the case of Qatar, Saudi Arabia and the UAE have an embargo on Qatar, whilst Russia and Iran face sanctions from most Western countries.

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NWWealth 3.3

Future trends Global wealth is expected to rise by 43% over the next decade, reaching US$291 trillion by 2028. This will be driven by strong growth in Asia. The fastest growing wealth markets are expected to be: 

Vietnam: Emerging manufacturing hub of Asia. We expect Vietnam wealth numbers to be boosted by strong growth in the local healthcare, IT, manufacturing and financial services sectors (10 year wealth growth forecast: 200%).

India: Large number of entrepreneurs, competitive wages and English speaking. Strong growth forecast in the local financial services, IT, business process outsourcing, real estate, healthcare and media sectors (10 year wealth growth forecast: 180%).

Sri Lanka: Should benefit from strong growth in the local technology, manufacturing, real estate, healthcare and financial services sectors (10 year wealth growth forecast: 150%).

Mauritius: Safe country, business friendly and has low tax rates when compared to the rest of Africa. Hotspot for migrating HNWIs. We expect it to benefit from strong growth in the local financial services sector (10 year wealth growth forecast: 130%).

China: Expected to benefit from strong growth in the local financial services, entertainment, IT, automotive and healthcare sectors (10 year wealth growth forecast: 120%).

Note: Forecast growth rates rounded to nearest 10%.

Spotlight on China: As mentioned, over the next decade, China is expected to benefit from strong growth in several key sectors. In the entertainment sector, Chinese made films are beginning to break into the top 10 grossing films worldwide, with films such as the Mermaid (2016), Wolf Warrior 2 (2017), Operation Red Sea (2018) and the Wandering Earth (2019). Growing box office receipts are a good indicator of a growing middle class, so this is a particularly good sign for China.

However, China’s plan to become a global hi-tech hub has been damaged over the past year as several countries have ganged up against Huawei, China’s most important hi-tech producer. In last year’s report we wrote the following: “In the hi-tech sector, China is moving away from being a component manufacturer towards finished products (example: Huawei). If more companies such as Huawei come along, China could soon take over from the United States as the dominant player in the global hi-tech sector. Hi-tech sector growth is critical to any economy as it is a primary sector that generates exports and other sectors can feed off it (i.e. a bigger hi-tech sector leads to a bigger financial services sector and so forth). The hi-tech sector also offers good salaries and high quality jobs, which boosts the middle class.”

Obviously, events over the past year have negatively impacted on this suggestion and as a result our growth forecasts for China are lower than they were last year.

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NWWealth 3.4

Sources for country wealth data We use a model to calculate wealth breakdowns for each country, with key inputs including: 

Stock market stats in each market.

Property stats in each market.

Income stats in each market.

GDP per capita stats in each market.

Wealth data from our in-house HNWI database.

These metrics are combined together in our model to calculate the total wealth held in each country and to calculate the number of people in each wealth tier. For the top wealth tiers (such as billionaires and centimillionaires) we mainly rely on our in-house HNWI database.

Our model also maps historical wealth growth trends in each country by considering: 

Currency movements in each market vs. the US$ (note: all our stats are in US$ terms).

Stock market movements in each market (in US$ terms).

Property price movements in each market (in US$ terms).

The average person worldwide has around 50% of their wealth tied up in residential property and equities so large residential property market and stock market moves heavily impact on the total private wealth held in a country.

We then use our HNWI database for the demographic splits within each country (i.e. city, sector, age and suburb wealth breakdowns). So for instance if 30% of the HNWIs in our UK database are living in London, then that would mean that London should account for around 30% of the UK’s HNWIs. Notably, we use public prime property stats (property registers and property sales stats) as a sanity check on all our city and suburb estimates.

We have a sample of around 150,000 HNWIs worldwide in our database. Most of the individuals in our database have the following work titles: Directors, Chairman, CEOs, Founders and Partners. We do not give out the names of these individuals to anyone. We purely use this database for in-house statistical studies.

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NWWealth Our wealth forecasts take into account: 

GDP forecasts.

Recent wealth migration trends - which we see as an insight as to future wealth trends.

Competitiveness of country’s wages relative to worldwide peers.

Competitive advantages of each economy.

Safety levels in country and the efficiency of the local police service.

Ease of doing business in country.

Education standard in country - special focus on Science, Maths and Literacy.

Level of innovation and entrepreneurship in country.

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NWWealth 4 Wealth inequality As part of this report, we examined the level of wealth inequality in major countries globally. We did this by looking at the proportion of wealth controlled by millionaires (HNWIs) – the higher the proportion the more unequal the country is. For instance, if HNWIs control over 40% of a country’s wealth then there is very little space for a meaningful middle class. Ideally the ratio should be less than 30%.

The most equal countries in the world (based on % of country’s wealth held by HNWIs): 

Japan (24%)

New Zealand (27%)

Norway (27%)

Germany (28%)

Sweden (28%)

Denmark (29%)

South Korea (29%)

Finland (29%)

Australia (30%)

Canada (30%)

Japan’s low ratio is assisted by: 

A large middle class or “mass affluent” community of over 35 million people. “Mass affluent” refer to individuals with net assets of over US$100,000.

A small number of billionaires. Japan has only 34 billionaires which is well below the likes of USA, China, India, Russia and the UK.

Very few “super-billionaires” (i.e. billionaires with over US$10 billion). Only 3 of Japan’s billionaires are worth over US$10 billion and the wealthiest person in Japan is worth around US$20 billion (which means he does not even make it into the top 30 wealthy people worldwide).

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NWWealth Other notable economies worldwide (% of country’s wealth held by HNWIs): 

USA (36%)

UK (36%)

China (40%)

South Africa (42%)

India (48%)

UAE (51%)

Russia (54%)

Saudi Arabia (56%)

Worldwide average (36%).

Another interesting measure is the proportion of a country’s wealth held by billionaires. Russia tops this list with 21% of total Russian wealth held by billionaires. Japan again is the most equal with billionaires only controlling 3% of total wealth there.

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NWWealth 5 Population density and wealth During our analysis we noticed that countries with low population densities such as Canada and Australia are some of richest countries in the world on a wealth per capita (wealth per person) basis, whereas densely populated countries such as Nigeria, Ethiopia, Bangladesh and Pakistan are some of the poorest.

Rainfall also has an effect here as some countries are able to sustain more people due to higher rainfall Ethiopia for example is very dry which makes it difficult for it to sustain such a large number of people (over 100 million) at a reasonable standard of living.

Ofcourse, there are exceptions to the rule that high population density = low per capita wealth. Prominent examples include Hong Kong, Monaco, Liechtenstein, Luxembourg and Singapore (all financial hubs), which are all relatively wealthy on a per capita basis despite their high population densities.

Notably, among the W10: Canada and Australia have relatively low population densities when compared to the other countries on the list. We expect this to assist these two countries in the future.

Reasons why a lower population density is good in our view: 

Less dependence on other countries for trade and resources.

Less competition for land and resources within country.

Less waste and pollution. Water reserves are better - river systems less impacted.

Allows for more wild spaces. Wildlife has better opportunity to thrive, which improves quality of life for locals.

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NWWealth 6 The wealthiest cities worldwide 6.1

World cities

We recently examined the top cities worldwide by total wealth held. Results reflected below.

Note: “Total wealth” refers to the private wealth held by all the individuals living in each city. It includes all their assets (property, cash, equities, business interests) less any liabilities. We exclude government funds from our figures.

Note: Figures for Dec 2018.

Top 20 cities: 1. New York City: Total wealth held in the city amounts to US$2.9 trillion. Home to the two largest stock exchanges in the world (Dow Jones and NASDAQ). Areas around New York City such as Connecticut (Greenwich, Darien, Westport), the Hamptons and the North Shore (Old Westbury, Great Neck, Sands Point) also contain a large amount of wealth that is not included in this figure. 2. Tokyo: Total wealth held in the city amounts to US$2.5 trillion. Tokyo is home to the 3rd largest stock exchange in the world. 3. London: Total wealth held in the city amounts to US$2.4 trillion. Home to the 7th largest stock exchange in the world. Small towns around London such as Windsor, Ascot, Virginia Water, Leatherhead, Weybridge, Henley, Marlow and Bray also contain a large amount of wealth that is not included in this figure. 4. San Francisco Bay area: Total wealth held in the area amounts to US$2.3 trillion. The San Francisco Bay area includes San Francisco and the area known as ‘Silicon Valley’. Silicon Valley includes cities/towns such as San Jose, Palo Alto, Redwood City, Los Altos and Mountain View. 5. Beijing: Total wealth held in the city amounts to US$2.1 trillion. Beijing is the official capital city of China and is home to the head offices of most of China’s largest companies. 6. Shanghai: Total wealth held in the city amounts to US$1.9 trillion. Shanghai is the “Financial Capital of China” and is home to the Shanghai stock exchange, the largest stock exchange in China and the 4th largest in the world. 7. Los Angeles: Total wealth held in the city amounts to US$1.3 trillion. Our figures for Los Angeles include wealth held in Los Angeles, Malibu, Laguna Beach, Newport Beach and Beverly Hills. 8. Hong Kong: Total wealth held in the city-state amounts to US$1.3 trillion. Hong Kong is considered to be the gateway between Europe and Asia and it is home to the 5th largest stock exchange in the world. 9. Sydney: Total wealth held in the city amounts to US$1.0 trillion. Sydney is one of the top financial centers in Asia and has become one of the most sought after destinations for the world’s super-rich

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NWWealth due to its lifestyle, safety and climate. Major industries in the city include financial services, real estate, IT, tourism, retail and media. 10. Singapore: Total wealth held in the city-state amounts to US$995 billion. Singapore is known to be one of the most business friendly countries in the world and has particularly low tax rates. 11. Chicago: Total wealth held in the city amounts to US$968 billion. Highly diversified economy. Strong in a large number of key sectors. 12. Mumbai: Total wealth held in the city amounts to US$941 billion. Mumbai is the financial center of India. It is also home to the Bombay Stock Exchange (BSE), the 10th largest stock exchange in the world. Major industries in the city include: financial services, real estate and media. 13. Toronto: Total wealth held in the city amounts to US$887 billion. Toronto is home to the 9th largest stock exchange in the world. Major industries include financial services, real estate, IT, media and telecoms. 14. Houston: Total wealth held in the city amounts to US$852 billion. Major industries include basic materials (oil & gas), biotech, engineering and aeronautics. Home to a large number of Fortune 500 companies. 15. Geneva: Total wealth held in the city amounts to US$821 billion. Wealth management and family office hub. Home to a large number of wealthy retirees. Has the highest density of millionaires per capita of any city worldwide (after Monaco). Major sectors there include financial services and professional services. 16. Frankfurt: Total wealth held in the city amounts to US$820 billion. Frankfurt is home to the 12th largest stock exchange in the world and is the financial capital of mainland Europe. Major industries include financial services and professional services. 17. Osaka: Total wealth held in the city amounts to US$788 billion. Second largest city in Japan. Major sectors in the city include: manufacturing, IT, retail, real estate and transport. 18. Seoul: Total wealth held in the city amounts to US$765 billion. The economic hub of South Korea and home to over 50% of the country’s HNWIs. Major sectors in the city include: IT, financial services and manufacturing. 19. Paris: Total wealth held in the city amounts to US$758 billion. Major industries include financial services, real estate and manufacturing (automotive, luxury consumables). Our figures for Paris include Hauts-de-Seine. 20. Shenzhen: Total wealth held in the city amounts to US$753 billion. Located next to Hong Kong, Shenzhen is considered to be the “Hi-tech Capital of China”. It is also home to the Shenzhen stock exchange, the 2nd largest stock market in China and 8th largest in the world. Notably, tech companies Huawei and Tencent are based in the city.

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NWWealth 6.2

Cities to watch The following cities are expected to grow strongly over the next 10 years: 

Melbourne: Many of Australia’s largest companies (such as Rio Tinto, ANZ, Telstra and BHP) are based in Melbourne. Major industries there include: financial services, basic materials (mining), IT, biotech, telecoms and manufacturing. Notably, Melbourne is often rated as the most liveable city in the world by the EIU.

Delhi: Delhi is the 2nd wealthiest city in India, after Mumbai. Unlike the rest of India, it is home to a large number of well-established affluent residential neighborhoods. It has a well-diversified economy and is strong in a large number of key sectors.

Dubai: Dubai is the top financial center in the Middle East. It is also one of the safest cities in the region and a popular destination for migrating HNWIs and wealthy expats. Major industries there include: financial services, professional services, transport, retail and real estate.

Hangzhou: Hangzhou is the fastest growing major city in China (in terms of wealth growth over the past decade). Many wealthy people that work in nearby Shanghai, have homes in Hangzhou as it is considered to be more scenic. Notably, media and retail company Alibaba is based in the city.

Tel Aviv: Tel Aviv is the economic and financial center of Israel. It is home to a large number of successful startup companies, especially in the hi-tech arena. It is also a popular destination for migrating HNWIs. Major industries there include: IT, financial services, professional services and real estate.

Bangalore: Fast growing Bangalore is known as the “Garden City” and the “Silicon Valley of India”. Major industries in the city include: IT, business process outsourcing and biotech. Bangalore is also home to several research and development centers for international companies.

Ho Chi Minh City: Previously known as Saigon. The economic hub of Vietnam and one of the fastest growing cities in the world. Major industries there include: basic materials, manufacturing, construction, tourism and financial services. Expected to become a major IT hub in the future.

Colombo: The economic hub of fast growing Sri Lanka. Major sectors there include: basic materials, manufacturing, tourism and transport.

Hyderabad: Hyderabad has a reputation as the “Pharmaceutical Capital of India”. Major sectors include: pharmaceuticals, IT and business process outsourcing. Notably, Hyderabad contains a large number of special economic zones, which help encourage new business formation.

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NWWealth 7 Wealth migration trends 7.1

The immigration debate

Is immigration good or bad for the destination country?

This is a complicated discussion that often depends on one’s political ideology.

It is important to note that many of the traditional arguments against immigration (i.e. that immigrants place pressure on public healthcare and social services and that they push down wages due to oversupply of cheap labor) do not apply to wealthy people as HNWIs are unlikely to take low paying jobs and they are very unlikely to claim benefits. In fact, most HNWIs send their children to private schools without relying on state funding and pay for their own housing and medical needs without state support.

Also, there are only 14 million wealthy people (HNWIs) worldwide, so taking in some of these individuals is unlikely to create the over-population problems that were mentioned in section 5 of this report.

In our view, the only possible negative of taking in a wealthy person is that they can push property prices up to levels that locals cannot afford. However, there are controls that can be put in place to prevent this from getting out of hand, such as those introduced in Australia which prevent foreigners from buying ‘second-hand homes’ (i.e. foreigners can only buy newly built homes). This essentially forces these foreigners to sell their properties to locals at a price that locals can afford, which means prices should not be inflated (as there is no point in them paying $2 million for a house that they can only sell for $1 million).

Future problems: There are concerns that a large portion of the world’s population want to move to a hand full of countries, most notably Australia and the US. These two countries are normally on the top of most immigration ‘wish lists’ for a variety of reasons.

Going forward, we expect growing kick-back against immigration in these two countries (i.e. we expect their governments to become more and more tough on immigration). It is possible that in an effort to stop general immigration into these two countries, their governments may also deter HNWI immigration.

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NWWealth USA Mexico wall: The wall between the US and Mexico has become a major discussion point over the past few years. Some argue that the Republicans want the wall as immigrants from Mexico are unlikely to vote Republican if they get citizenship in the US (i.e. they are more likely to vote Democrat) - there is probably some truth to this.

One interesting event that was not covered much in the media was when the Democrats ended the “wet foot dry foot” program in Jan 2017 which had allowed Cubans that made it to the US to apply for residency and ultimately citizenship. This seemed strange as the Democrats are normally pro-immigration.

One possible explanation for this may lie in voting preferences - if one looks at who Cuban Americans vote for, it becomes clear that many of them vote Republican - people fleeing Cuba tend to be heavily against socialism/communism as it has not worked well in Cuba hence they support the Republican Party in the US. This could explain why the Democrats ended the program.

Notes: 

The term “pathway to citizenship” is often used in the US. It refers to the process whereby someone gets citizenship in the US. First one needs to get residency (green card). Then after a period of five years one can apply for citizenship.

Only citizens can vote in US national elections so green card holders (permanent residents) cannot vote.

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NWWealth 7.2

Countries with large inflows of HNWIs in 2018

Global wealth migration is accelerating. Approximately 108,000 millionaires (HNWIs) migrated in 2018, compared to 95,000 in 2017.

The following countries experienced the biggest wealth inflows in 2018.

Table 10: World: Countries ranked by HNWI net inflows, 2018 Country

Net inflow of HNWIs in 2018

% of HNWIs gained

Australia

12 000

3%

United States

10 000

0%

Canada

4 000

1%

Switzerland

3 000

1%

United Arab Emirates

2 000

2%

Caribbean*

2 000

3%

New Zealand

1 000

1%

Singapore

1 000

0%

Israel

1 000

1%

Portugal

1 000

2%

Greece

1 000

2%

Spain

1 000

1%

Notes: Figures rounded to nearest 1000. *Caribbean includes Bermuda, Cayman Islands, Virgin Islands, St Barts, Antigua, St Kitts & Nevis etc. Source: New World Wealth

Note: ‘% of HNWIs’ refers to the inflow divided by the total number of HNWIs living in that country.

The following countries also experienced significant (100+ HNWIs) wealth inflows during the past year. 

Monaco

Malta

Mauritius

Latvia

Hong Kong

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NWWealth 7.3

Countries with large outflows of HNWIs in 2018

The following countries experienced the biggest wealth outflows in 2018.

Table 11: World: Countries ranked by HNWI net outflows, 2018 Country

Net outflow of HNWIs in 2018

% of HNWIs lost

China

15 000

2%

Russian Federation

7 000

6%

India

5 000

2%

Turkey

4 000

10%

France

3 000

1%

United Kingdom

3 000

0%

Brazil

2 000

1%

Saudi Arabia

1 000

2%

Indonesia

1 000

2%

Notes: Figures rounded to nearest 1000. Source: New World Wealth

Note: ‘% of HNWIs’ refers to the outflow divided by the total number of HNWIs living in that country. So for instance, one could say that 10% of Turkey’s HNWIs left the country in 2018.

The following countries also experienced significant (100+ HNWIs) wealth outflows during the past year. 

Nigeria

Venezuela

Ukraine

Egypt

Lebanon

Iran

Note: War-torn countries such as Syria, Libya and Iraq are excluded due to lack of reliable data. It is likely that they also experienced big HNWI outflows.

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NWWealth 7.4

Country spotlights

Australia dominates Australia was the top country worldwide for HNWI inflows in 2018, beating out its main rival the US for the 4th year running. Popular places for them to move to in Australia included: Sydney, Melbourne, Gold Coast, Sunshine Coast, Perth and Brisbane.

Possible reasons for Australia’s popularity among migrating HNWIs: 

The safety of the country - low crime rate.

The appeal of bringing up children and going to school/university in the country.

English speaking country. Almost all HNWIs globally know English as their first or second language.

First world economy.

First class healthcare system.

Growing economy. One of the few high income economies that has grown strongly over the past decade.

Space - Australia has only 25 million people and is a large country.

Climate, nature and scenery.

Tax rates - although company tax and income tax rates in Australia are quite high it should be noted that unlike most other developed countries, Australia has no inheritance taxes - this encourages wealthy people to stay in the country and build their businesses for future generations.

Reasons why migrating HNWIs may be preferring Australia to the US: 

Safety. Australia was recently rated as the safest country worldwide in our annual woman safety ratings. Australia is also a particularly safe country to raise children. The US has some safety problems especially in the big cities like Chicago and Los Angeles.

Australia has no inheritance taxes. In the US, individuals with wealth of over US$5.5 million (or US$11 million per married couple) pay inheritance taxes (top rate of 40%).

Problems in the US healthcare industry. In the US, getting healthcare insurance can be difficult for incoming HNWIs. Notably, several international medical aids cover patients in all developed countries with the exception of the US (which is a big warning sign). In particular, the Affordable Care Act enacted in 2010 has not turned out well for wealthy and middle class patients in the US, with average premiums rising by over 120% since the act was passed in 2010.

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NWWealth USA still a steady performer The US was the second most popular destination for migrating HNWIs in 2018. Popular places for them to move to in the US included: New York City, Los Angeles, Miami and the San Francisco Bay area (including San Francisco, Palo Alto, Silicon Valley etc.).

What makes USA popular? Possible reasons include: 

Its status as the world economic leader.

Home to the top tech, financial services, media and entertainment sectors in the world.

The appeal of bringing up children and going to school/university in the country.

English speaking country. Almost all HNWIs globally know English as their first or second language.

First world economy.

Climate, nature and scenery.

UK spotlight Over the past 30 years, the United Kingdom has been one of the biggest recipients of migrating HNWIs. We estimate that over 80,000 HNWIs have moved to the UK since 1990. However, over the past two years (2017 and 2018) the UK has lost around 7,000 HNWIs (approx. 4,000 left in 2017 plus the 3,000 in 2018).

Possible reasons for the UK’s poor performance over the past couple years: 

Brexit impact.

New taxes on non-doms and foreigners with homes in the UK have made it more expensive and more complicated for migrating HNWIs to buy homes in the UK.

High inheritance taxes. Such taxes deter HNWIs from moving to the UK and encourage many wealthy people to leave. In the UK, individuals with wealth of over £325,000 pay inheritance taxes (at rate of 40%). The £325,000 threshold is quite low (compared to the US and others), which means that a large portion of people in the UK have to pay these taxes.

Rising crime levels and rising religious tensions (especially in London). Crime deters HNWIs from staying in a country.

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NWWealth Concerns for London London was obviously a hotspot for migrating HNWIs for many years. However, this trend appears to have changed over the past couple years as migrating HNWIs now prefer moving to other “international cities” such as Sydney, Melbourne, New York, Geneva and San Francisco. “International cities” refer to first world cities which attract business people from all over the world. They tend to have English as their main language.

Notably, over the past few years, many wealthy Londoners have moved out of the city to nearby small affluent commuter towns such as Bray, Taplow and Marlow. This is a notable trend that is gaining momentum. A large number of wealthy Londoners have also left the UK altogether - many of these individuals have gone to the US and Australia. Some have also gone to Switzerland and Portugal.

Brexit and UK future The UK faces a tough few years until the Brexit issue is finalized. Going forward, we would recommend that the UK re-introduces automatic two year work visas for citizens from Canada, Australia and New Zealand as soon as possible. Plus USA should be added to this list aswell. This would allow the UK to strengthen bonds with these important English speaking countries, whilst also moving away from its dependence on EU workers.

China and India outflows not a concern The outflows of HNWIs from these countries are not particularly concerning as they are still producing far more new HNWIs than they are losing. Also, once the standard of living in these countries improves, we expect several wealthy people to move back.

Notwithstanding this, the ongoing trade war between the US and China is a bit of a concern, especially as relates to the crackdown on Chinese hi-tech exports (i.e. Huawei). If this trade war continues, it could encourage more wealthy Chinese people to leave China.

Over-taxation in Europe Over-taxation has become a problem in most major European countries. In particular, inheritance taxes are very high in France and the United Kingdom (around 40%). This could be one of the reasons why many HNWIs are now moving away from these countries.

Problems in Turkey Turkey experienced a significant outflow of HNWIs in 2018. This is the third straight year that over 4,000 HNWIs have left the country. These outflows are very concerning as Turkey is not producing many new HNWIs to replace the ones that are leaving. As a result, the total number of HNWIs living in the country is declining all the time.

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NWWealth Common reasons why HNWIs leave a country:

7.5

Safety - woman and child safety especially.

Lifestyle: climate, pollution, space, nature and scenery.

Financial concerns.

Schooling and education opportunities for their children.

Work and business opportunities.

Taxes.

Healthcare system.

Religious tensions.

Standard of living.

Oppressive government.

Cities with large inflows of HNWIs in 2018 The following cities experienced significant wealth inflows in 2018.

Table 12: World: Cities with large (1,000+) inflows of HNWIs in 2018 City (alphabetical)

Location

Dubai

UAE

Los Angeles

USA

Melbourne

Australia

Miami

USA

New York City

USA

San Francisco Bay area

USA

Sydney

Australia

Source: New World Wealth

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NWWealth 7.6

Mechanisms of migration Investor visa programs are becoming increasingly popular, especially with HNWIs from the Middle East and Asia. They generally require an investment of between US$300,000 and US$3 million in local property, bonds or businesses and most of this money is usually redeemable after a period of 5 years. Some programs such as the one in Malta offer citizenship right away, rather than just a residence visa.

However, despite the recent rise of such programs, it should be noted that only a fraction (around 30%) of migrating HNWIs come into countries under investor visa programs. Most still come in via second passports, work transfers, ancestry visas, spousal visas and family visas.

Notes: 

Our migration figures focus only on people who have truly moved (i.e. who stay in their new country more than half of the year).

A large number of wealthy individuals get residency in a country but never actually move there. Many wealthy people also have no permanent home (i.e. they have homes in several countries and move around). We try to exclude these individuals from our figures and our stats are therefore on the conservative side.

It is worth noting that most of the HNWIs that get residency in Australia actually move there, whilst most of the HNWIs that get residency in places such as Latvia and the Caribbean do not move there permanently.

7.7

Sources for migration data

Our HNWI migration figures are estimates, based on sources below.

Sources include: 

Investor visa program statistics in each country.

Regular interviews with HNWI intermediaries (migration experts, second citizenship platforms, wealth managers).

Tracking of HNWI movements in the media and tracking of HNWI property purchases.

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NWWealth 8 HNWI review 8.1

Top countries and cities for HNWIs The following countries and cities are home to the most millionaires (HNWIs). All figures for Dec 2018. Figures rounded to nearest 100.

Table 13: World: The top 10 countries for HNWIs, 2018 Rank

Country

No. of resident HNWIs

1

United States

4 896 000

2

Japan

1 314 100

3

China

833 800

4

United Kingdom

760 700

5

Germany

740 100

6

Switzerland

398 800

7

Australia

369 100

8

Canada

350 300

9

India

327 100

10

France

268 600

Source: New World Wealth

Table 14: World: The top 10 cities for HNWIs, 2018 Rank

City

No. of resident HNWIs

1

New York City

377 800

2

London

318 200

3

Tokyo

315 400

4

Hong Kong

235 700

5

Singapore

222 300

6

San Francisco Bay area*

220 000

7

Los Angeles*

191 300

8

Chicago

147 200

9

Beijing

141 600

10

Shanghai

138 500

Source: New World Wealth

*San Francisco Bay area includes: San Francisco, Palo Alto, Silicon Valley etc. Los Angeles includes: Los Angeles, Malibu, Laguna Beach, Newport Beach and Beverly Hills.

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NWWealth 8.2

Top countries and cities for billionaires The following countries and cities are home to the most billionaires. All figures for Dec 2018. It is interesting to note that Japan (which is ranked 2nd in terms of HNWIs worldwide) does not even make the top 10 countries for billionaires.

Table 15: World: The top 10 countries for billionaires, 2018 Rank

Country

No. of resident billionaires

1

United States

715

2

China

237

3

India

118

4

United Kingdom

95

5

Germany

75

6

Russian Federation

70

7

Hong Kong

53

8

Canada

41

9

France

36

10

Australia

35

Source: New World Wealth

Table 16: World: The top 10 cities for billionaires, 2018 Rank

City

No. of resident billionaires

1

New York City

65

2

Hong Kong

53

3

Beijing

49

4

Shanghai

49

5

London

42

6

San Francisco Bay area*

41

7

Moscow

40

8

Los Angeles*

34

9

Mumbai

28

10

Seoul

27

Source: New World Wealth

*San Francisco Bay area includes: San Francisco, Palo Alto, Silicon Valley etc. Los Angeles includes: Los Angeles, Malibu, Laguna Beach, Newport Beach and Beverly Hills.

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NWWealth 8.3

Most popular hobbies for HNWIs As reflected below, art collecting is currently the most popular pastime for HNWIs globally. Notably, over the past few years cycling, watch collecting, fly-fishing and car collecting have become more popular, whilst golf, tennis and horses have become less popular among the world’s wealthy. We collected this data from regular interviews with HNWI intermediaries.

Table 17: World: Most popular hobbies for HNWIs, 2018 Rank

Hobby

1

Art collecting

2

Yachting and sailing

3

Skiing

4

Golf

5

Collecting cars

6

Cycling

7

Horses

8

Fishing and fly-fishing

9

Collecting watches

10

Tennis

11

Hunting

12

Collecting wine and wine-tasting

13

Sports betting

14

Surfing

15

Bird watching

Source: New World Wealth

Spotlight on Art The global top-end art market is valued at around US$75 billion. Globally the leading artists (in terms of price) include the likes of: Leonardo da Vinci, Vincent van Gogh, Pablo Picasso, Claude Monet, Rembrandt, Renoir, Cezanne, Andy Warhol, Jackson Pollock and Gustav Klimt.

The ‘Mona Lisa’ by Leonardo da Vinci and ‘Starry Night’ by Vincent van Gogh are arguably the most valuable paintings in the world. However, neither of them have ever come up for auction. They are considered “priceless”.

According to our in-house indices, global fine art prices have risen by 18% over the past 10 years (in US$ terms).

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NWWealth Spotlight on watch collecting Popular watch brands for collectors include the likes of: Patek Philippe, Breguet and Vacheron Constantin. Vacheron Constantin is considered to be the oldest watch maker in the world - it was founded in 1755.

Patek Philippe, which was founded about 100 years later (in 1851) tends to achieve the highest prices, both for classic watches and new watches.

Spotlight on classic cars The global classic car market is valued at around US$5 billion. According to our in-house indices, classic car prices rose by a strong 150% over the past 10 years (in US$ terms), making it the best performing investment class for wealthy people globally.

Popular classic cars for wealthy car enthusiasts worldwide are listed below (ranked by price in US$). 

Ferrari 250 GTO (1960s): $24 000 000

Ferrari 250 GT California Spider (1960s): $18 000 000

Bugatti Royale (1930s): $16 000 000

Porsche 917 (1970s): $10 000 000

Ferrari 166 Barchetta (1950s): $9 000 000

McLaren F1 (1990s): $8 000 000

Porsche 550 Spyder (1950s): $2 000 000

Mercedes Gullwing 300sl (1950s): $1 900 000

Porsche 959 (1980s): $1 500 000

Ferrari F40 (1990s): $1 400 000

Aston Martin DB4 (1950s): $1 400 000

Aston Martin DB5 (1960s): $1 100 000

Ferrari F50 (1990s): $1 100 000

Lamborghini Miura (1970s): $800 000

Lamborghini Countach (1980s): $500 000

Ferrari Dino (1970s): $260 000

Jaguar XK140 (1950s): $130 000

Jaguar E Type (1960s): $120 000

Ferrari 328 (1980s): $100 000

Ferrari Testarossa (1980s): $80 000

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NWWealth 

Ferrari 348 (1990s): $70 000

Ferrari 355 (1990s): $70 000

Ferrari 308 (1980s): $60 000

Note: US$ price above if car in good and working condition.

The top performers (in terms of % US$ price growth over the past 10 years) were: 

Lamborghini Countach (1980s): up 360%

Ferrari 250 GT California Spider (1960s): up 320%

Ferrari 250 GTO (1960s): up 310%

Lamborghini Miura (1970s): up 270%

McLaren F1 (1990s): up 250%

Classic car models that we expect will perform well in the future: 

Ferrari 328 (1980s)

Mercedes Gullwing 300sl (1950s)

Porsche 959 (1980s)

Spotlight on fly-fishing Fly-fishing is an increasingly popular pastime for wealthy people globally. Popular fly-fishing spots include (river only): 

Snake River - Jackson Hole, Wyoming, USA.

Kenai River - Alaska, USA.

Madison and Yellowstone Rivers - Montana, USA.

River Spey - Scotland.

Ahuriri River - New Zealand.

Limay River - Patagonia, Argentina.

West Ranga River - Iceland.

The top countries worldwide for river fly-fishing include: Iceland, Scotland, Canada, Greenland, Russia, New Zealand, Argentina (Patagonia), and USA (especially Montana, Wyoming and Alaska).

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NWWealth 8.4

Key investment trends for HNWIs in 2018 and beyond Hotel residences Originally a New York phenomenon, the hotel residence trend has started to catch on in other major cities and holiday hotspots around the world. ‘Hotel residences’ refer to apartments/villas in existing hotels which can be purchased. They essentially allow owners to live in a hotel permanently and enjoy the same services as normal guests do (i.e. room service, dining, cleaning etc.).

Hotel residences are often difficult to identify such as ‘One Hyde Park’ in London - the apartments there are essentially hotel residences serviced by the Mandarin Oriental next door.

Reasons for their rising appeal include: 

Appeal to those that travel a lot - facilities are maintained whether one is there or not.

Access to services - room service, cleaning.

Access to facilities - pool, spa, entertainment, dining, bar.

Good security and big reception area for meetings.

Unsurprisingly, hotel residences sell at a premium to normal apartments.

Banyan Tree, the St Regis, the Mandarin Oriental, the Four Seasons, the Conrad Hilton and the Ritz Carlton are the main providers of hotel residences worldwide.

Notable examples: 

Mandarin Oriental Residences (One Hyde Park) - London, UK.

St Regis Residences - New York, USA.

Four Seasons Private Residences - Seychelles.

Baccarat Residences - New York, USA.

Palazzo Tornabuon - Florence, Italy.

The Plaza Private Residences - New York, USA.

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NWWealth Residential estates Residential estates are another growing segment. Reasons for their rising popularity include: 

Security - access gate, private security personnel.

Activities - gym, swimming pool, golf, horse riding, skiing, tennis.

Lifestyle and community - parks, gathering places, children playgrounds, schools.

Limited and controlled traffic - safer for children.

Residential estates can be tricky to define. The easiest ones to define are golf estates. Countries with large numbers of golf estates include: Portugal, Spain, South Africa and USA (mainly Florida area). They are also becoming increasingly popular in the UAE, New Zealand, Mauritius, Mexico and the UK.

By our definition, residential estates encompass: golf estates, equestrian estates, parkland estates, wildlife estates and retirement estates.

Notable examples: 

Yellowstone Club - Big Sky, Montana, USA.

Wentworth Golf Estate - Surrey, UK.

Royal Palm Yacht and Country Club - Boca Raton, Florida, USA.

Jumeirah Golf Estates - Dubai, United Arab Emirates.

Quinta do Lago - Algarve, Portugal.

PGA Catalunya Resort - Spain.

Bighorn Golf Estate - Palm Desert, USA.

Kukio - Hawaii, USA.

Millbrook Estate - New Zealand.

Jacks Point - New Zealand.

Quivira Los Cabos - Mexico.

Monte Rei - Algarve, Portugal.

Fancourt - South Africa.

Zimbali - South Africa.

Val de Vie - South Africa.

Anahita - Mauritius.

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NWWealth 9 Global prime property index On a quarterly and annual basis we review the most expensive cities and towns for prime property worldwide. As reflected, 2018 was a bad year for residential property with prices in most major cities declining in US$ terms.

Table 18: World: Top 20 most expensive prime property locations worldwide, 2018 City

US$ per sq meter, 2016

US$ per sq meter, 2017

US$ per sq meter, 2018

Monaco

47 000

48 000

45 000

New York

33 000

37 000

33 000

St Tropez

34 000

33 000

30 000

St Jean Cap Ferrat

32 000

32 000

30 000

London

42 000

35 000

29 000

Hong Kong

28 000

28 000

27 000

Geneva

26 000

26 000

25 000

Sydney

21 000

25 000

24 000

Lake Como

21 000

21 000

20 000

Lake Lugano

21 000

21 000

20 000

Porto Cervo, Sardinia

21 000

21 000

19 000

Zurich

20 000

20 000

19 000

Singapore

19 000

19 000

18 000

Tokyo

16 000

17 000

16 000

Paris

19 000

18 000

16 000

Nice

19 000

18 000

16 000

Melbourne

15 000

16 000

15 000

Los Angeles & Malibu

14 000

14 000

13 000

San Francisco

13 000

14 000

13 000

Miami

13 000

14 000

13 000

Note: Refers to the price of a 200-400 square meter apartment/villa in prime part of each city. Rounded to nearest 100. Source: New World Wealth

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NWWealth Sources: It is important to note that our property indices work off a different basis from most other residential indices. Our indices track the square meter prices achieved in selected prime 200 to 400 square meter apartments in each area, which we believe is the best way to check for price movements. We focus on the most exclusive apartment complexes in each area (i.e. prime). So for New York, we would focus on the best apartment complexes on 5th Avenue.

The four main ways used to check price growth in an area include: 

Transactional indices - these are normally compiled by major banks. They are based on the total/average value of purchases that go through the bank during a period. In our view, these are the least accurate - they are often restated heavily over time.

Average sales price indices - also normally compiled by major banks. These indices can be distorted by big sales (i.e. the sale of a mansion) during a particular month/quarter. Repeat sales indices - this index is very accurate but difficult to compile over a short period of time or in a small area as it requires multiples sales on the same property. Square meter price growth - we use this one. By focusing on sales in certain apartment complexes, one can get an idea on how square meter prices are changing. This does not require a large sample. Normally for an area such as New York, tracking 3 to 4 prime apartment blocks can give one a very good indication of price movements. The only limitation of these indices is that they only work well on apartments as houses normally have gardens and additional land which is difficult to value on a square meter basis.

 

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NWWealth 10 Drivers of wealth growth 10.1 Factors that encourage wealth growth Based on our research, the top factors that encourage wealth growth in a country include: 

Strong safety & security - woman and child safety is particularly important.

Media freedom and neutrality - it is important that major news outlets in a country are neutral and objective.

Strong ownership rights - Zimbabwe offers a case in point as to what happens when ownership rights are stripped – once assets are taken away they tend to lose value as no one is willing to buy anything.

Strong economic growth - economic growth is usually linked to wealth growth.

A well-developed banking system and stock market - insures that people invest and grow their wealth locally. Also insures that GDP growth leads to wealth growth.

Low level of government intervention – government tampering in the business sector creates large inefficiencies within an economy. Government owned enterprises and parastatals are also a problem.

Low income tax and company tax rates - Dubai and Singapore are examples of the power that tax rates can have in encouraging business formation – both have very low tax rates.

Ease of investment - barriers such as exchange controls inhibit wealth growth.

Wealth migration - the migration of HNWIs to the country helps create wealth.

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NWWealth 10.2 Woman safety index

On an annual basis we review the safest countries for woman worldwide. Woman safety has become very topical over the past few years, following several high profile celebrity assault cases in the US. Notably, woman safety is one of the best ways to gauge a country’s long term wealth growth potential, with a correlation of over 90% between historic wealth growth and woman safety levels. This means that wealth growth is boosted by strong levels of woman safety in a country.

Notable findings: 

Australia is the safest country for woman worldwide.

Out of the 195 countries in the world, only 58 have reasonably reliable crime statistics.

Woman can be arrested for even reporting rape in over 40 countries worldwide. Many of these countries are located in the Middle East and North Africa. In these countries woman are sometimes arrested for adultery or for sex outside marriage when they report rape to the police.

In countries with reasonably reliable crime stats such as USA and Australia, for every one sexual assault reported, about 3 are not reported.

In countries where woman can be arrested for reporting sexual assault for every one reported, a much higher number (100+) are unreported - it is fair to say that if woman feel unable to report sexual assault, then the real assault rates are likely to be very high in these countries.

In our view, it is surprising that the international media has not placed more of a spotlight on the 40+ countries where woman can be arrested for reporting sexual assault.

Countries such as India and South Africa are often quoted in the media as being among the least safe countries for woman. However, in our view this is a mistake. It is important to note that these two countries are among the 58 countries worldwide that have reasonably reliable crime stats so it is unfair to say they are the least safe. They are simply more transparent than the 130+ countries worldwide with unreliable stats. Woman are also freely able to report sexual assault in these two countries. In truth, India and South Africa are probably mid-range (80-90) out of the 195 countries worldwide in terms of woman safety.

Safest countries: The 5 safest countries for woman worldwide are: 

Australia

Malta

Iceland

New Zealand

Canada

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NWWealth The safest countries in each region are: 

Europe: Malta, Monaco, Iceland, Switzerland.

Asia Pacific: Australia, New Zealand, Japan, South Korea.

Africa: Mauritius, Botswana, Namibia.

Americas: USA, Canada.

Other findings: 

Most of the countries in our top five are also popular destinations for migrating HNWIs. Also, most of them have experienced strong wealth growth over the past 20 years.

Big European cities such as London and Paris have become less safe for woman over the past few years.

Crimes considered in this study included: 

Rape.

Slavery of woman.

Trafficking of woman.

General assaults on woman (physical assaults, acids attacks etc.)

Notes: 

Results based on the % of each country’s population that has been a victim of one of these crimes over the past year (2018).

Countries with unreliable crime statistics were excluded from top 5.

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NWWealth 10.3 Media neutrality index

Media freedom and media neutrality also have a big impact on wealth creation in a country. Media neutrality, in particular, has become a big discussion point over the past decade, as social media and the internet have drastically changed the way the media operate.

Perhaps the biggest issue facing the global news media in the current age is the overuse of “selective journalism” techniques. “Selective journalism” refers to news outlets that overly focus on certain stories and ignore others in an effort to push or promote a certain political narrative. This has become highly prevalent among US and UK news outlets over the past 10 years.

Another issue being faced by the global news media at the moment is the increasing power of advertisers and large donors. In the past, before the internet, news outlets made most of their money from sales of newspapers and subscriptions but now most rely on advertising and donor funding to survive. This is a major challenge as powerful advertisers/donors may try to amend or dictate content.

The immigration debate During the past few years, a number of key themes and debates have dominated global headlines. One of the main ones has been immigration. The immigration debate has been particularly contentious, with some global news outlets openly pushing for open borders while others openly push for closed borders. Ideally news outlets should not be taking a set view on such topics.

The 3 main principles of media neutrality: 

Political neutrality - Media outlets should not actively promote one political party against another.

Neutrality over headline story selection. Refers to giving all major stories equal visibility. This is very important and rarely achieved.

Telling both sides of each story.

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NWWealth 11 Spotlight: The rise of Australia After several years of strong growth and development, Australia is now arguably the world’s leading economy. Notably, if one excludes financial hubs like Monaco, Liechtenstein, Luxembourg and Switzerland then Australia ranks as the wealthiest country in the world (on a wealth per capita basis).

Reasons why Australia has such a high wealth per capita: 

It has consistently been the fastest growing first world market over the past 20 years (in terms of economic growth, wealth growth, income growth and property price growth).

Low population density - only 25 million people and large land area. Also mineral rich.

It is very safe, which encourages wealth growth.

High and rising real estate prices, especially on the East Coast.

Consistent HNWI migration to the country over the past 20 years.

Location - it benefits from strong business ties with emerging Asian giants such as China, Japan and Korea.

High minimum wage (lack of cheap labour).

Interestingly, over the past 20 years, wealth held in Australia has risen by around 140% compared to 90% growth in the United States (in US$ terms). As a result, the average Australian is now significantly wealthier than the average US citizen, which was not the case 20 years ago.

In fact, on several measures (including safety, healthcare, social services and wealth per capita) Australia is now the leading first world country worldwide (not the US). The US is only the leading country worldwide by total wealth and total GDP but it’s important to remember that the US has over 300 million people living there.

Australia has also attracted more millionaires (HNWIs) than any other country over the past few years (see HNWI migration section), which shows that many wealthy people feel that it is the best long-term prospect.

Additional factors that make Australia one of the world’s leading countries: 

Political structure - Australia is arguably the most politically developed country in the world. Politicians in Australia are seen as everyday public servants and do not have extreme power. Notably, the prime

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NWWealth minister of Australia is often replaced between elections if party members feel they need a change. Australian politicians also don’t have much security around them and often wonder around public spaces on their own. In most other countries (including the US), politicians have excessive security which sends a very bad message to the everyday person - it sends a message that politicians are better/more important than the everyday person. In Australia politicians are seen as easily replaceable which is probably the way it should be. 

Australia has the highest minimum wage in the world. In general, there is a lack of cheap labour in the country as the population is low and immigration is limited. Also, most of the immigrants that are allowed into Australia are professional people (i.e. doctors, lawyers, engineers etc.). As a result, many manual jobs such as: babysitting, nanny jobs, painting and building are done by young Australians in the years before they go to college. Notably, in Australia the people that paint your house are often the same people that go onto become CEOs of major companies, as many young people in Australia take a few years off before/after university to travel and do manual labour jobs. Notably, in Australia there is only a small difference in wages between manual labour jobs and corporate jobs – this encourages a more equal society.

New trends often start first in Australia. For instance, the climate change movement started early in Australia, as did the woman safety movement. Also, the plastic bank notes started early there. Going forward, Australia’s points based immigration policy looks like it will be copied in the US and the UK. Also, Australia’s policy of not allowing foreigners to buy second hand homes (they can only buy newbuilds) will also probably be copied elsewhere in the future.

The only area where Australia is still well behind the US is in terms of big multi-nationals (especially in the tech space). As of Dec 2018, the US is home to 8 of the 10 largest companies in the world by market cap (the other two are based in China). Australia has some catching up to do in this area.

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NWWealth 12 About the Sponsor / Author AfrAsia Bank - Sponsor Strategically based in Mauritius with a representative office in South Africa, AfrAsia Bank is continuously leveraging its African footprint and positioning itself as a boutique financial services provider. The Bank’s entrepreneurial approach helps to tailor innovative banking solutions for both local and international markets, by connecting Africa, Asia and the World using Mauritius as the gateway for investment.

AfrAsia Bank develops tailored financial solutions in four distinct business lines: 

Corporate Banking.

Global Business Banking.

Private Banking and Personal Banking.

Treasury and Markets.

In addition to its anchor Mauritian shareholder, IBL, the largest conglomerate in the country, other strong strategic partners include National Bank of Canada, and Intrasia Capital (Singapore).

The Bank’s core banking and transactional capabilities are also complemented by its asset management arm, AfrAsia Capital Management Limited.

With an experienced team and regional foundations giving customers the reliability and trust of a global banking network, the Bank helps clients achieve their financial aspirations, all delivered with boutique agility and service. AfrAsia Bank is an award-winning bank who has bagged several awards from reputed institutions namely Euromoney, The Banker and EMEA Finance.

For more information on AfrAsia Bank please visit www.afrasiabank.com.

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NWWealth New World Wealth - Author New World Wealth is a global market research group, based in Johannesburg, South Africa. We specialize in ratings, surveys, country reports and wealth statistics. We also provide management consulting and public relations services to our clients. Our research covers 90 countries and 150 cities worldwide.

Services on offer include: 

Ratings and surveys.

Country, city and regional wealth statistics.

Residential property surveys.

Wealth migration studies.

Management consulting.

Custom research.

Safety index.

For more information on New World Wealth please visit www.newworldwealth.com.

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NWWealth

Contact Andrew Amoils New World Wealth andrew@nw-wealth.com +27 11 706 1185 www.newworldwealth.com

Suneeta Motala AfrAsia Bank Suneeta.Motala@afrasiabank.com +230 403 5500 www.afrasiabank.com

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Profile for New World Wealth

Global Wealth Migration Review 2019  

Global Wealth Migration Review 2019  

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