Tuesday, Mar 23, 2010
Compiled by estate agents, I don't believe it, do you?
Times: The really rich put their money in homes
Property has pipped equities to the title of most popular asset class among the world’s wealthiest individuals, according to a report published today. The survey by Knight Frank of Citi Private Bank’s international high-net-worth clients — those with assets worth more than $10 million (£6.6 million) — showed that the bulk of their portfolios (33 per cent) were invested in property
Posted by mark @ 10:22 AM (1057 views) Add Comment
6 Comments
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1. inbreda said...
when you have that much money you dont need to worry about the basics (i.e. feeding and clothing yourself) and you dont need to worry about the future too much either. So you can concentrate on showing off how considerably wealthy you are by buying a big house. That doesnt make it a clever investment. You'll probably also find that they pump an awful lot more money into cars and holidays and yachts - but none of them are investments.
2. estrader said...
Hilarious, nobody in the top 10 Forbes rich list made it through property.
1. Carlos Slim Helu (£35.7bn)
Telecoms, Mexico
Tycoon who pounced on privatisation of Mexico's national telephone company in the 1990s becomes world's richest person for first time after coming in third place last year.
2. Bill Gates (£35.4bn)
Microsoft, US
More than 60% of fortune held outside Microsoft including Four Seasons hotels, Televisa, Auto Nation.
3. Warren Buffett (£31.3bn) Investments, US
Shrewdly invested £3.3bn in Goldman Sachs and £2bn in General Electric amid 2008 market collapse.
4. Mukesh Ambani (£19.3bn)
Petrochemicals, oil and gas, India
His Reliance Industries, India's most valuable company, bid £1.3bn for 65% stake in troubled Canadian oil sands outfit Value Creations.
5. Lakshmi Mittal (£19.1bn)
Steel, India
London's richest resident oversees ArcelorMittal, world's largest steel maker. Net profits fell 75% in 2009. Mittal took 12% pay cut but improved outlook pushed stock up one-third.
6. Lawrence Ellison (£18.7bn)
Oracle, US
Database giant has bought 57 companies in the past five years. Completed £5bn buyout of Sun Microsystems in January.
7. Bernard Arnault (£18.3bn)
Luxury goods, France
The richest European thanks to shares of his luxury goods outfit LVMH - maker of Louis Vuitton, Moet & Chandon - surging 57%.
8. Eike Batista (£18.2bn)
Mining, oil, Brazil
This year's biggest gainer added £13bn to his personal balance sheet. Son of Brazil's revered former mining minister got his start in gold trading and mining.
9. Amancio Ortega (£16.6bn)
Fashion retail, Spain
Owns Inditex; fashion firm, which operates under brand names including Zara, Massimo Dutti and Stradivarius. It has 4,500 stores in 73 countries.
10. Karl Albrecht (£15.7bn)
Supermarkets, Germany
Owns discount supermarket giant Aldi Sud, one of Germany's (and Europe's) largest stores. Estimated sales: £24.7bn.
3. mark wadsworth said...
That article summary is the lousiest maths I have ever seen.
1. "the bulk of their portfolios (33 per cent) were invested in property" Firstly, 'the bulk' suggests more than half, secondly it should be "the bulk is" not "the bulk are".
2. I suspect that the proportion of property 'wealth' as % of total assets is rather higher for people lower down the scale.
3. It's an equation with two unknowns. If you bought a house with a 90% mortgage in the 1990s, you'd only have a few quid's worth of net property 'wealth'. If your house has trebled in 'value' and you've paid off half the mortgage, then you'd have at least £100,000 in property, while the rest of your assets stay the same, ergo, net property wealth as % of total wealth has gone up from half to ninety per cent without anybody doing anything.
4. hpwatcher said...
Sadly, most estate agents talk absolute hogwash.
5. fallingbuzzard said...
@3, Definitely some bad maths. The survey isn't weighted for wealth level so they don't get one chart to add up to 100% but miraculously get another similar one to 100% (101%, close enough). As you say, the poorer rich do generally have much more of their assets in property while the real rich don't. I would bet that less than 15% of these people's overall assets are in property and that equities and bonds are vastly under-represented.
6. nubbers said...
Presumably the rich bought into property near the bottom of the market, whereas the not so rich like Grant and Fergus bought nearer the top.