[OPE-L] Money, money, money, it's so funny in a rich man's world

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Mar 19 2007 - 17:22:49 EDT

Talking empirical research, here's two lists of the world's billionaires
according to Forbes Magazine, by rank and by country of residence. Just a
quick stick-and-paste job. To get an idea of the type of economic activity
that they made the money from would take some additional research, which I
haven't done yet, but it would reveal where the priorities of world
capitalism really are at. Taxman-type calculations have been done of the
type that an annual levy of 5.2% on the fortunes of the world's top 500
or so billionaires would be financially sufficient to guarantee essential
needs for the whole world population. Of course if your socialism just
consists of thinking that you have a better way to spend tax dollars,
it is not much good yet. Spending tax dollars so you really get the
result you want, is another story. Plus of course those who generate
a lot of wealth don't take very kindly to people who want to take
it off them, for the sake of some ethical principle. They would say,
go and generate some wealth yourself! Which gets us back to
the question of who really generates the wealth (it cannot be
me, surely! and who is prepared to take responsibility for it).

According to the CapGemini/Merrill-Lynch report on High Net Worth
Individuals (US$1m+), the assets of the rich are invested as follows
(2007 estimate):

22% alternative investments (structured products, hedge funds, managed
funds, foreign currency, commodities including precious metals, and private
equity and investments of passion such as fine arts & collectables).
15% real estate including direct real estate investments and REITs.
11% cash deposits
21% fixed income investments
31% equities

In 2005, 8.7 million people owned more than US$ one million
in financial assets, totalling US$33.3 trillion in assets.
But as you can see, the wealthy aren't really all that great
entrepreneurs in terms of their own investments, less than a
third of their wealth is directly invested in stocks & shares
and the like. Of course you could argue that indirectly
more of their money is invested in equities.


Here's part of the Forbes blurb:

The World's Richest People
Edited by Luisa Kroll and Allison Fass 03.08.07, 6:00 PM ET

It has been a busy year for Forbes' team of fortune hunters. Strong equity
markets combined with rising real estate values and commodity prices pushed
up fortunes from Mumbai to Madrid. Forbes pinned down a record 946
billionaires. There were 178 newcomers, including 19 Russians, 14 Indians,
13 Chinese and 10 Spaniards, as well as the first billionaires from Cyprus,
Oman, Romania and Serbia.

Ingenuity, not industry, is the common characteristic; these folks made
money in everything from media and real estate to coffee, dumplings and
ethanol. Two-thirds of last year's billionaires are richer. Only 17% are
poorer, including 32 who fell below the billion-dollar mark. The
billionaires' combined net worth climbed by $900 billion to $3.5 trillion.
That equates to $3.6 billion apiece.

The average billionaire is 62 years old, two years younger than in 2005.
This year's new billionaires are seven years younger than that. Of list
members' fortunes, 60% made theirs from scratch. (...)

But even in such a prosperous year, 44 people dropped off the list for
various reasons.

All our numbers are based on a snapshot of balance sheets taken on Feb. 9,
the day we locked in stock prices and exchange rates. So the five executives
who took their Fortress Investment Group (nyse: FIG - news - people ) public
at 9:30 a.m. on that morning made the cut. Also on the list is Ernest Gallo,
founder of E.&J. Gallo Winery, who died on March 6. But our numbers don't
reflect the volatility that shook the markets three weeks later. Between
Feb. 9 and March 2 the world's stock markets, as measured by the Morgan
Stanley All Country World Local Index, fell by 3.7%. Some fortunes (those
based on private accumulations of real estate, for example) didn't feel a
blip. But some suffered severe damage. One big loser was a Spaniard, Enrique
Banuelos, whose fortune fell 30% in four days.

Are there billionaires we don't know about? Surely, yes. For instance, we
didn't uncover Ireland's Denis O'Brien, who pocketed $800 million in a junk
bond offering, until 13 days after we'd locked in fortunes, so he is not
reflected in the rankings.


Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
All the things I could do
If I had a little money
It's a rich man's world

- Abba, "Money, money, money"

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