Millionaires Increasing Quickly Despite Recession

Perhaps it is no surprise: the world's wealthiest individuals were easily able to grow their net worth and expand in numbers while the vast majority of people were simply hoping not to lose their job, home, and standard of living. I just finished reading a BusinessWeek article about how the number of Millionaires in the World rose sharply during 2009 : a period when many others were not faring quite so well to say the least.

The statistics are almost unbelievable given the constant "gloom and doom" about the economy that we all hear daily on TV or read in newspapers. Job losses and foreclosures did not seem to hit the millionaire group much. As quoted from the article I was reading:

The number of millionaire households, or those with at least $1 million in investable assets, excluding primary residences, expanded to 10 million [in the entire world] from 8.6 million a year earlier, the firms said in their 14th annual World Wealth Report published today. Asia-Pacific, led by Hong Kong and India, now match the number of millionaires in Europe at 3 million. North America had the second-biggest increase, 17 percent, to 3.1 million [millionaires], the largest number in a region.

So, the United States of America, even with 10% unemployment (and vastly greater underemployment) is still quite the land of opportunity if you are one of those that knows how to somehow leverage conditions here and abroad and cash in during a time of general economic strife and uncertainty for the masses. I can not help wondering how these people did it?!? Is this where all that deficit spending and stimulus spending ultimately ended up? (I have said since early on in the stimulus-spending-spree that it WOULD end up going to the upper 10% more than anything).

I have speculated that the AIG bailout money (i.e., $185Billion+) was essentially distributed to the very wealthy who had made "bets" with AIG (aka "credit default swaps") that the government made good on. And, those bailed-out banking / investment firms that "repaid government loans" (with essentially zero interest!) and then paid their executives, traders, and other brilliant employees ("brilliant" for managing to make money by lending and/or reinvesting that near-zero-interest-loan money elsewhere; e.g., lending it to consumers at ever increasing interest rates, even while benchmark rates were otherwise supposedly in free-fall)... they surely helped up the ranks of the millionaires among their own.

By the way, those bank bailouts would have been acceptable perhaps (to prevent an utter collapse of the banking system) were it not for the fact that our bonehead government and Federal Reserve does not know how to invest: who else would buy into a portfolio of companies, or loan a ton of money to companies at essentially zero interest, and then let only the "good" one - i.e., profitable ones - buy their way out of the portfolio and out from under compensation-limit conditions and such by "repaying government loans" (again, with essentially zero interest paid!); all while holding all the JUNK company positions - i.e., ones that will likely never be able to pay off the investments, like AIG, GM, etc?? Unreal. The government really should have been able to get some "returns" on that lending, from the companies that repaid their way out from under compensation conditions, just like any other investor would have demanded for having saved them. At least that would have helped average out the wins with the losses against firms like AIG (giant $$sucking machine). Oh well.

And, I have to guess this next quote covers some of those banking execs that, year after year, see it as their RIGHT to compensate themselves with tens of millions, and as much as a billion or more, for their wonderful performance on Wall Street and their lack of creating any jobs or real value to the economy (aside from siphoning off their spoils from the cash-movement that would occur regardless of their presence!):

Ultra-high-net-worth individuals with more than $30 million to invest saw their wealth rise by almost 22 percent in 2009, faster than other millionaires, according to the report, which attributed the gain to a “more effective re-allocation of assets.”

WOW! It truly must be wonderful to be in THAT group! That is some fabulous ROI! All it takes is $30 million to join the club!

So, if you want to get rich quick, it helps to be rich to start with! Increasing your wealth, at least on average, sure seems to a lot simpler if you already have some millions to start with, even during a recession. And, perhaps the lesson here is that when the government "prints money" (via "stimulus" or tax cuts or anything else), those at the top have little to worry about: in the end, they sure seem to be able to get a large portion of that newly minted money. So, while everyone else watches their money "rot" (for lack of being able to keep up with inflation - and I mean REAL inflation; not this government published BS they claim as CPI and such), those with substantial worth seem to be able to keep their cash-pile growing in-check with the money-supply growth.

Now, one can also see that the *number* of millionaires grew in this country... this does offer hope for "the land of opportunity", and perhaps we all have a chance at finding our way to "make it big" in the United States still - recession or not. But, at the rate we print cash lately, perhaps the saying "a million is not what it used to be" is very real, and you need to get into that $30MM+ group to be a modern "millionaire"?