Report: Number of Rich Americans Fell in 2011, But Rich Chinese Increased

Being rich isn't as easy as it used to be.

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China_flag.jpg
Chinese unwind a large Chinese flag in Beijing, China Monday Nov. 20, 2006. The flag said to measure 23.1 meters (about 75 feet) long and 15.4 meters (about 50 feet) wide was made with 2004 red Chinese young pioneers scarves. The school who organized the event plans to apply their project to the Guinness World Record.

Here's some consolation for the 99 percent: The rich are falling behind, too.

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The annual world wealth report by financial firms Capgemini and RBC Wealth Management depicts a global investor class that is struggling amid widespread economic turmoil. The total number of people with investable assets of more than $1 million (characterized as "high-net-worth individuals," or HNWIs) rose by a scant 0.8 percent in 2011. That's the slowest growth rate in 16 years, with the exception of 2008, when the financial crisis slammed everybody. And the total amount of assets they control dropped by $700 billion, or 1.7 percent, compared with 2011.

The United States still has the most rich people, with about 3.1 million HNWIs. But declinists will find plenty to worry about in the details. The number of rich Americans fell by about 36,000 in 2011, or 1.1 percent. That might sound like comeuppance for the one percent, but it's generally bad news for the U.S. economy. Like 'em or not, the wealthy spend money and generate economic activity, and the fewer there are, the less spending there is.

The decline reflects a tough year for the stock market in 2011, when the S&P 500 index was essentially flat. A slow-growing economy is another factor, since it depressed the number of Mark Zuckerbergs breaking into the top tier of earners. Plus, the turbulent economy, especially in Europe, compelled a lot of wealthy people to move their money out of riskier but higher-returning assets into safer assets like low-yield bonds or even cash. That trend has intensified so far in 2012.

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In the Asia-Pacific region, the number of HNWIs increased 1.6 percent, even though the total amount of assets they control fell by 1.1 percent. Money centers such as Hong Kong and Singapore suffered the biggest losses, because they're highly exposed to global financial markets.

In Japan, the number of rich people increased by about 83,000, or 4.8 percent. But that is likely due to the strengthening of the yen, making it something of a paper gain. The more notable gain in Asia was in—you guessed it—China, where the number of HNWIs rose by 27,000, an increase of 5.2 percent. China ranks fourth on the list of rich countries, ahead of France and the United Kingdom but behind the United States, Germany and Japan. It has about one-sixth as many HNWIs as the United States. But in a tough year, China forged ahead while much of the developed world fell behind, yet another reminder of its growing economic power.

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When the numbers for 2012 come out, they'll probably show a continued convergence between rich countries and the upstarts. Europe is getting hammered this year as debt problems in Greece, Spain and Italy swell to crisis proportions. That will almost certainly cut into the holdings of European aristocrats. The U.S. economy has hit another weak patch and stock markets seem to be in retreat.

Growth in Asia has slowed as well, and exporters like China suffer when their customers in Europe and the United States cut back. But that will probably mean just a temporary slowdown in the growing ranks of the rich in Asia. As in many other things, America's moneyed class is still outsized compared to the rest of the world. But the gap is shrinking.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.