Key Highlights

  • Total wealth held by billionaires reached $10.2T in July 2020, a new high
  • According to new study by UBS Global Wealth Management and PwC Switzerland, total billionaire wealth increased to $10.2T from $8.9T in 2017
  • Now 2,189 billionaires across 43 markets world-wide, up from 2,158 in 2017

Entrepreneurs in tech, health care and industrial sectors gained more wealth during 2018, 2019 and the first seven months of 2020. Much of that additional wealth gain was accelerated by the COVID pandemic fueling already established trends in 2018 and 2019.

According to a new study by UBS Global Wealth Management and PcW Switzerland, there are now a total of 2,189 billionaires in the world (up from 2,158 in 2017) holding a massive all-time wealth total of $10.2T, up from $8.9T in 2017.

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Just as there is great polarization taking place between people among the top tier of the economic ladder and everyone else, there is polarization among the fortunes of the billionaire class. Tech, healthcare and industrials billionaires have pulled far ahead of their peers working in other categories just since the pandemic outbreak. Check out the differences in wealth gains as of July 31, 2020 from April 7, 2020.

  • Technology – +41% – from 400.9 to 565.7
  • Health Industries – +36.3% – from 402.3 to 548.0
  • Industrials – +44.4% – from 261.3 to 376.9
  • Real Estate – +12.9% – from 303.1 to 342.5
  • Consumer & Retail – +26.0% – from 237.7 to 300.1
  • Other Diversified – +20.7% – from 22.3 to 268.1
  • Financial Services – +12.8% – from 203.5 to 229.1
  • Materials – +29.6% – from 159.1 to 206.1
  • Entertainment & Media – +20.7% – from 168.6 to 204.1

Clearly, according to this report, “Those that are the innovators and the disruptors, the architects of creative destruction in the economy, are increasing their wealth…(while)…other billionaires, on the wrong side of economic, technological, societal and environmental trends, are become less wealthy…” with wealth gain increases of 10% or less.

Specific to the real estate industry, the billionaire class has had a long-standing love affair with real estate for two reasons: one, as a store of value and two, as an asset that can be handed down to heirs/successors. Regardless of the business sector in which billionaires originated their wealth, approximately 50% of all billionaires have 21% – 40% of their net wealth invested in real estate.

At the end of the 2010’s decade, however, challenges within the real estate sector mounted as the COVID pandemic undermined demand for commercial real estate and “…an increasingly digital economy undermined demand for physical space.” One Thai real estate billionaire quoted in this report said, “If the real estate situation looks bad from the outside in, it’s actually worse from the inside.”

17% of billionaires within the real estate industry made their wealth as innovators and disruptors while 83% generated their wealth traditionally. Compare that to the tech industry wherein 94% generated their wealth as innovators and disruptors and just 6% generated their wealth traditionally.

Going forward, it looks as though the residential sector within the real estate industry is the place to be for the time being. People will always need a place to live and perhaps increasingly, that place will become the place to live AND work.

 

Thanks to UBS Global Wealth Management and PcW Switzerland.

Also read: eXp Realty Now Offering Its Agents A Healthcare Plan, Podcast: Zillow, Gary Keller Quits Being CEO And End of Buyer Agent Commissions | Tim and Julie Harris, Podcast: 2021 Real Estate Market Predictions | What Happens Next For Housing? | Tim and Julie Harris