WITH DRAGON COMES FIRE, SELLING AND BUYING PROPERTY IN A PERIOD OF CHANGE

 

Selling and buying property in a period of change 

Selling and buying property in a period of change 

As the economy continues its slow recovery, Feng Shui practitioners are embracing the dragon when it comes to the property outlook in the coming year. 

“For followers of Feng Shui, the anticipation of Period Nine‘s arrival has held a mystical allure, brimming with excitement and adventure. Finally, it is here yet there is fear and thoughts among the Feng Shui enthusiasts; particularly concerning its effects on individuals,” Feng Shui master Joe Choo said.

She pointed out that understanding the essence of Period Nine allows individuals to tap into its benefits with less worry and adapt to potential changes more effectively.

Period Nine spans from 2024 to 2043, Choo explained. It is a segment within Feng Shui that holds influence on energy shift patterns. The period is characterised by the fire element, symbolising expansion, transformation and passion. 

“During this period, it is expected to usher in an emphasis on innovation, growth and breakthrough across various aspects of life, including technology, culture and social structures.  Aligning spaces and activities with the energies of period 9 is believed to amplify opportunities and foster progress,” she said.

According to Choo, period 9 is associated with Li Gua (fire), and as such its location aligns with the South. This positioning indicates a more favourable economic trend in the southern geographical region, poised for significant development during Period 9. 

“For individuals seeking to tap into this energy, adherence to basic Feng Shui principles might suffice instead of relocating homes,” Choo pointed out.

From the perspective of property ownership, there are two groups of buyers; homeowners and investors. Their Feng Shui differs depending on their needs.

“Homeowners are advised to select properties with ideal landform which is Feng Shui compliant, aligning main entrances that is commensurate with the year of birth of the eldest earning male of the family,” Choo said.

“Kitchen and master bedroom should be in the ideal sectors based on the year of birth of the mistress of the house, then the rooms for other occupants should be based on their year of birth,” she added.

She pointed out that investors, on the other hand, are encouraged to consider properties in the southern regions of various areas, and anticipate extraordinary economic performance in the next two decades. For example, the southern region of Penang Region is Bayan Lepas, Batu Maung, Teluk Kumbar and nearby pockets. In Peninsular Malaysia, eyes should turn to Johor.  

“For business owners to have a prosperous year, you may apply 2024’s auspicious colours in offices or shops that attract positive events. Additionally, you may place living plants if the entrances of offices or shops are in the Southeast, which is the governing planet… to sail through the year smoothly,” Choo said.

“In terms of Feng Shui, each sector has a wealth area and you may place living plants, water features or crystals at the general area of the office or shop to further enhance the business,” she added.

To do this, business owners should identify the main entrance of their place of business, before they identify its wealth sector from the table. Turn the general area of the business into a square shape before standing at the centre of the space with a compass to identify the main entrance and wealth area.

Main entrances and their wealth sectors

Main Entrance	Wealth Area	Crystals
North	Southeast(127.5° - 142.5°)	White/Green Phantom
Northeast	Southwest(217.5° - 232.5°)	Citrine/Amethysts
East	South(187.5° - 202.5°)	Rose Quartz
Southeast	North(7.5° - 22.5°)	White
South	East(97.5° - 112.5°)	White/Green Phantom
Southwest	Northeast(37.5° - 52.5°)	Citrine/Amethysts
West	Northwest(307.5° - 322.5°)	Amethysts
Northwest	West(277.5° - 292.5°)	Amethysts

Source: Joe Choo

If you are planning to buy a property in 2024, it is beneficial to consider Feng Shui factors in order to harness the positive energy while living there, Choo pointed out.

“It is simply observing the landforms, for example, avoid having rivers, seas, ponds or big monsoon drains at the back of the house,” she said.

The decision to buy a property is ultimately based on need and financial means, Feng Shui master Stephen Chin added.

He agreed that as with Feng Shui principles, one should first consider the terrain surrounding the site. Alongside water bodies, he noted that one should consider the mountains, hills, roads and highways. 

“The most basic rule of thumb is to choose a property that has a higher back and a lower front. This applies to both high-rises and landed property. I co-wrote a series of articles some time ago with Professor Master David Koh that covered the Klang Valley and explained this principle of landform Feng Shui,” Chin said.

Once the area and orientation of the property are shortlisted, Chin explained that homeowners need to ensure that the main entrance to the property is compatible with the master of the house. 

“It is based on the male because it is Yang energy being introduced into the house. To determine this, calculate the Gua or Kua (personal energy) of each occupant - there are plenty of free online Gua calculators out there, so I'm not going to give out any formula!” he said.

From the Gua, one can determine if they are a West or East group person. All West group people have Northwest, West, Southwest and Northeast as their good sectors. North, East, Southeast and South are good for East group people.

“To determine the door's location, stand in the centre of the house with a compass and after aligning the needle, look and see where the main door is located. That needs to be in the good sector of the master of the house. The kitchen and master bedroom should be in the good sector of the lady of the house. The other bedrooms should be matched to the respective occupants,” Chin said.

However, he pointed out that there are a few other things to consider, and one should engage a qualified consultant for ease of mind. 

Choo added that homebuyers are also encouraged to avoid properties which have a T-junction, convex of the road or a higher land mass in front of the house, such as hospitals, shopping malls, schools, high-tension cable and others. 

Knowing the sector of governing planets and Three-Killers of 2024, it is advisable to avoid buying the property having the main entrance located in the South and the Southeast.  

“It may be difficult for buyers who are living in condominiums or apartments because there is only one entrance, so you may place a pot of living at the sector mentioned above to prevent negative events from taking place,” Choo added.

Landed properties with two entrances offer more flexibility, allowing buyers to choose an entrance away from the southeast or south to avoid potential issues.

“After studying the external factors, matching the year of birth of the occupants with the main entrance, kitchen, bedrooms and others is very important to create harmonious energy,” Choo said.

The eye of the beholder

When asked how homeowners should decorate their homes this year, Chin pointed out that they should decorate it any way they wish. “If you want to create a festive mood, go big!” he exclaimed.

While he noted that interior design was not strictly related to Feng Shui, the Chinese are big on symbolism, therefore it's natural to decorate the house with auspicious objects. 

He pointed to anything that symbolises good fortune, wealth, prosperity, longevity, productivity and creativity, as many of these came from Chinese myths and legends. Some symbols are newer inventions, such as the money ship, or the cat with a waving paw.

Chin noted that the cat was the Maneki-Neko from Japanese folklore, with several versions of the story. 

“According to our calculations, the dominant element in 2024 is Yang Fire. Hence, the auspicious colours for the year are light red, light brown or yellow, and light green. These are, respectively, representative of the elements of Fire, Earth and Wood,” he said.

Homeowners can decorate their house or give it a splash of new paint using these colours. However, Chin pointed out that the mileage may vary. 

“Every person has his or her own unique set of colour requirements based on the life profile, also known as the eight Character Stem-Root or Bazi. If your colour requirements match these colours, then they are especially good for you. If not, they may not be as good or may even cause some bumps along the road ahead,” he said.

He noted that it would likely be a good year for the property market as the element of Fire produces Earth. 

“There should be an uptick in earth-related industries which include real estate development and management, construction, civil engineering, and agriculture. The year 2024 is also likely to see a spurt of economic growth and development,” he said.

“However, this is likely to be temporary. One should make hay while the sun shines, but must not overcommit,” he added.

Tips to sell property

In the dynamic and competitive property market, selling can be challenging. For the Year of the Dragon, Feng Shui master Joe Choo offers a few tips for home sellers to expedite the process.

“Applying auspicious colours of 2024 to attract potential buyers to walk into the property. The auspicious colours of 2024 are light red, pink, orange, yellow, green and turquoise green.  You don’t need to repaint the property with such colours, you may apply them on the curtain, carpet or rugs, decorative items and others to enhance the luck,” she pointed out.

According to Feng Shui principles, the governing planet in 2024 is the Southeast sector and the Three-Killers is in the South. 

Choo pointed out that if a property has its main entrance in either the Southeast or South sector, it is advisable to place living plants in the living hall and kitchen to improve the luck of selling the property. 

If the property has a Southeast-facing main entrance, owners are encouraged to place living plants in the West sector, from 262.5° to 277.5°. If the property has a South-facing main entrance, owners are encouraged to place living plants in the Southwest sector, from 202.5° to 217.5°. 

“To find out the position of the plants for the living hall and kitchen, you may square up the place and stand at the centre with a compass to identify the sector mentioned above,” Choo said.

While more could be done to enhance the selling potential of a property, Choo noted that it would involve a much more complicated process. The tips she offered were simple and cost-effective.

Some of its principles could be compared to architectural principles, feng shui master Joe Choo said.

“Decorate it any way you wish!” Chin said.

---

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Chermaine Poo, a chartered accountant by profession, was trained in corporate finance. A former beauty queen, she has since gained popularity as an actress, TV host, commercial talent and emcee. If you have any questions on money matters, send her an email at info@chermainepoo.com or follow her on www.chermainepoo.com, www.facebook.com/chermainepoo and www.twitter.com/chermainepoo.

Reponsible housing developers' traits and qualiies expected

Fear-of-missing-out factor in property market

 

FOR those who are interested to know about the health of the residential property market, Bank Negara Malaysia’s article “Developments in the Residential Property Market” (https://bit. ly/373eyeg) is a must-read.

The article, published in Bank Negara’s latest Financial Stability Review, states that house prices in Malaysia are seriously unaffordable at 4.7 times median house price to annual median income (median multiple). A house is considered affordable if the median multiple is 3.0 or below.

Why do Malaysians find houses seriously unaffordable? On the supply side, there is a mismatch due to market failure to provide enough affordable housing. On the demand side, housing affordability is limited by insufficient income and high indebtednes for some.

I think buyers’ buoyant sentiment or fear of missing out (FOMO) also contributes to the high median multiple or price-to-income ratio.

The most probable reason why investors buy houses is because they think the price will go up further. Yes, the current house prices are high and stagnating, but they reason that in the long term, prices will maintain their upward trend.

For investors, property investment can be even more lucrative compared to stocks because they can have a bigger leverage, which make their returns much higher if prices go up.

Also, they do not receive margin calls even if prices decline as long as they can service the monthly mortgage repayment.

For owner-occupiers, one of the reasons for buying houses at the current high prices is the fear that if they do not buy now, the price may go up later.

In the same article, Bank Negara pointed out that 57.3% of approved housing loans in the second half of 2021 were granted to owner-occupiers. Presumably, the other 42.7% of approved housing loans were granted to investors.

Researchers at the Federal Reserve Bank of Dallas, United States, recently published a study titled “Real-time Market Monitoring Finds Signs of Brewing U.S. Housing Bubble” (https://bit.ly/36zs0jj).

Here is what they say: “But real house prices can diverge from market fundamentals when there is widespread belief that today’s robust price increases will continue.

“If many buyers share this belief, purchases arising from a ‘fear of missing out’ can drive up prices and heighten expectations of strong house price gains.

“This self-fulfilling mechanism leads to price growth that may become exponential (or explosive), resulting in the housing market becoming progressively misaligned from fundamentals until investors become cautious, policymakers intervene, the flow of money into housing dries up and a housing correction or even a bust occurs.”

The study listed the many consequences associated with explosive appreciation in real house prices. “Expectations-driven explosive appreciation (often called exuberance) in real house prices has many consequences, including the misallocation of economic resources, distorted investment patterns, individual bankruptcies and broad macroeconomic effects on growth and employment.”

I think an extreme example is Japan. For 30 years or so since 1950, house prices in Japan had only gone up.

Property prices rose by as much as six to seven times during the 1980s asset bubble as Japanese house buyers, whether investors or owner-occupiers, were all piling into real estate for fear of missing out based on the belief that prices could only go up.

Property prices in Japan continued to rise until the early 1990s and then started a drastic decline. Even some 30 years later, they have still not recovered.

In sum, should the FOMO sentiment be prevalent, prices will continue to be high relative to income or rent until the trend changes.

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We need a global summit on inequality

 

Climate concern: The sun rising behind the chimneys of a thermal power station. A recent International Monetary Fund study points out that the richest countries represent only 16% of the world population but almost 40% of CO2 emissions. — AFP

 

 

 

INCOME and wealth inequality is unjust, and yet the world continues to tolerate rising injustices, the most recent being inequalities in vaccine distribution.

French political economist Thomas Piketty and his colleagues at the World Inequality Lab has just published the World Inequality Report 2022, a real goldmine for data and insights on global inequalities.

I found at least three nuggets inside that are blindingly obvious, but no one has quite tied it together so well as Piketty and his team.

First, inequality is primarily a political issue. We can all do something about it, but since politics has been captured by money, the few remain more equal than the many.

Between 1995 and 2021, the top 1% wealthiest people in the world captured 38% of the growth in global wealth, whereas the bottom 50% had a pitiful 2% share.

Similarly, the richest 10% of world population take home 52% of global income, whereas the bottom 50% earned only 8.5%.

The report showed why these inequities could not be reduced despite increases in average income and wealth per capita.

The progressive tax rates where the rich paid more than the poor, introduced in the first half of the 20th century to deal with inequality, were dismantled in the 1980s.

The neoliberal free market philosophy preached low taxes and small governments to encourage entrepreneurship, but effectively handed more income and wealth to the elite few.

Piketty’s second historical insight is that Europe and later America got rich on the back of both the Industrial Revolution and colonisation.

In 1820, between country (inter-country) inequality was only 11% of global inequality meaning that most inequality was domestic (intra-country).

But inter-country inequality rose when the West advanced with industrialisation and resource extraction from the colonies.

That peaked in 1980 when it represented 57% of global inequality.

Since then, the rise in income of China, India and other newly independent countries narrowed the gap with the West, but by 2020, domestic inequality again accounted for 68% of global inequality.

This meant that the developing countries allowed their own inequalities to worsen, even as they were narrowing the gap with the West.

In short, the rich are the same everywhere. They have more and want more.

But there is a twist to this story.

One reason why the Rest has caught up with the West is that “nations became richer, but governments have become poor.”

In essence, because the Europe, north America and Japan governments used debt to tackle slow growth since the 1980s, private wealth grew at the expense of public wealth.

Privatisation policies transferred public wealth such as utilities to the private sector, whereas public sector debt continued to increase.

The UK and US public wealth which was around 15% to 30% of total wealth before the 1980s declined to net liabilities of minus 10% to minus 20% of total wealth respectively.

Contrast this with China and Russia, where public wealth represents around 30% of national wealth, down from 70% at the end of the 1980s.

The third report insight is that inequalities and climate change are highly co-related.

Between 1850 and 2020, half (49%) of historical carbon emission was accounted by north America (27%) and Europe (22%),

China accounted for 11%, but has become the largest emitter, although per capita emission remains lower.

A recent International Monetary Fund study pointed out that “the richest countries represent only 16% of the world population but almost 40% of CO2 emissions.

The two categories of the poorest countries in the World Bank classification account for nearly 60% of the world’s population, but for less than 15% of emissions.”

The COP26 debate was all about whether China, India and other emerging markets that are increasing their carbon emissions should do more on net-zero pledges.

The entanglement between CO2 emission and income and wealth levels suggests that climate warming policies should focus more on making those responsible for carbon emissions pay more for remedial climate action.

The bottom 50% of population in Europe emits around five tonnes of carbon per person per year, with their counterpart emitting three tonnes in east Asia and 10 tonnes in north America.

But the top 10% in these regions account for 29 tonnes in Europe, 39 tonnes in Asia and 73 tonnes in North America.

Indeed, the top 1% in the United States account for 269 tonnes of carbon per person per year, compared with 139 tonnes for the top 1% in China.

The rich everywhere are the biggest carbon emitters.

This suggests that tackling climate change and social injustice are part of a total political package, cutting across nations.

It’s one thing to promise to cut carbon to net zero, it’s another to design the projects and programmes to deliver on their promises. Back home, each government will face huge resistance from vested interests that want to delay or just green-wash any action. In other words, talk more and do less.

The report has made some excellent suggestions to tackle inequality, such as progressive tax measures and a global asset register, that are bound to be controversial. But to be effective, they need global cooperation.

No single country can impose higher tax rates or tougher action without being undercut by another country.

Since everything is politics, I have to agree with inequality blogger Branko Milanovic that the recent Summit on Democracies is the wrong idea for the world, because it tried to divide the world into two opposing ideological camps.

The priority should be to work together globally to tackle climate and human inequalities that require domestic action against vested interests that are common across nations.

The next global summit should be about how to tackle inequalities.

Given such complex issues and facts raised by the Piketty and his colleagues, the least we can do is to have a democratic, transparent and constructive dialogue on how those who can afford and emit more carbon should pay more taxes to foster a more sustainable and inclusive world.

Andrew Sheng writes on global issues from an Asian perspective. The views expressed here are the writer’s own.

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Behind crazy rich Singapore’s mask, a growing class divide

Inequality bites: In Singapore, households with accumulated wealth and connections over past generations, like the hit movie’s protagonist Nick Young’s family and friends, can pass on advantages to their offspring. —AP

Two Singapores: Poverty has always existed in the cosmopolitan city state, but the setting of the hit movie ‘Crazy Rich Asians’ has seen a widening income gap in the past few years. — Reuters

 There is another side to the Lion City's fabled wealth: a widening gap between rich and poor that is forcing its citizens to question whether their home is really the land of opportunity they once thought.

IN the background, a luxury goods shop, a stooped elderly cleaner sweeping its storefront; on one side of the bridge sits expensive condominiums, bars and restaurants, on the other, rental flats housing Singapore’s poorest.

These scenes unfolded in a documentary titled Regardless of Class by Channel News Asia released on Oct 1, with a security guard revealing he felt as though he was not treated like a person. A cleaner said: “I know I’m invisible. I have to get used to this, and learn to stop caring.”

Poverty and inequality in the city state – the setting of the hit movie Crazy Rich Asians and where the per capita income is among the highest in the world, hitting US$55,000 (RM228,494) last year – has always existed.

But in the last year, Singaporeans have been confronted with discomfiting evidence of growing social stratification, shaking to the core a belief that meritocracy can smooth out unequal beginnings and lead to more equal outcomes.

Sociologist Tan Ern Ser from the National University of Singapore said class origin or background now had a greater influence on opportunity and social mobility, as the country faced slowing growth, job losses and obsolescence and an ageing population.

Singapore’s Gini coefficient, a measurement of income inequality from zero to one – with zero being most equal – has fluctuated above 0.40 since 1980 before adjusting for taxes and transfers. It was 0.417 last year. In the United Kingdom, it was 0.52 in 2015, the United States was at 0.506, and Hong Kong reached a record high of 0.539 in 2016.

Experts say inequality in itself is not worrying – sociologist Tan said it could even “be good for motivating people to want to do better”.

But in Singapore’s case, it has allowed households with accumulated wealth and connections over past generations to pass on advantages to their offspring, helping them to shine, while those without the same social capital and safety nets are forced to toil harder to do the same.

As Singapore University of Social Sciences economist and nominated Member of Parliament Walter Theseira put it: “If you can buy advantages for your child, such as tuition and enrichment, they are going to end up doing better in terms of meritocratic assessments.”

Donald Low, associate partner at Centennial Asia Advisors and the former associate dean at Lee Kuan Yew School of Public Policy, said Singapore’s meritocratic and universal education system for the past 50 years led to a great deal of social mobility initially, but society would “settle” after a few decades.

“This is amplified by marriage sorting. That is the well-educated marrying one another and passing on their advantages to their children,” Low said.

A paper published last December by local think-tank Institute of Policy Studies, which demonstrated the sharpest social divisions were based on class, not race or religion, started the latest debate on the impact of inequality.

The report, co-authored by sociologist Tan, showed low interaction between students who attended elite and regular schools, and between Singaporeans living in private and public housing.

This was followed by a bestselling book by Nanyang Technological University sociologist Teo You Yenn titled This is What Inequality Looks Like, which told of the experiences of the low income group, and the systemic issues keeping them poor.

In early October, a six-minute clip on Facebook of the Regardless of Class documentary sparked feelings of discomfort, guilt and self-reflection among Singaporeans – possibly from realising “there may well be two Singapores in our midst”, said former nominated Member of Parliament Eugene Tan, a law don at Singapore Management University.

In it, six students from different education streams talked about their dreams and school experiences.

Some were aiming for an overseas degree and a minimum of A’s; others just wanted to pass their examinations.

When presenter Janil Puthucheary, a Cabinet member, mooted putting students of mixed abilities together in one classroom, a girl from the higher education stream said it was not viable, as “it might even increase the gap if these students feel like they can’t cope so they just give up completely”.

Puthucheary asked if the conversation was awkward.

One boy from the lower education stream said: “The way they speak and the way I speak (are) different, I feel like.

” Another student completed the sentence: “Like they are high class and we are not.”

Seetoh Huixia, a social worker for 13 years who is assistant director of AWWA Family Services, said she had seen this sort of low self esteem in the people she works with. “The sense of us versus them, the inferiority complex, that they’re not good enough,” she said.

The Straits Times opinion editor Chua Mui Hoong wrote: “It got me thinking; how did we become a society that looks down on people for the work they do or the grades they get? Are we all complicit in this? Can anything be done to turn our society inside out so that we are all less disdainful, more respectful, of one other?”

Academics felt the documentary was a good conversation starter, but urged Singaporeans to look at the underlying causes of this class divide.

Low said the documentary was problematic because “the root causes of economic inequality, an elitist education system and the government’s anti-welfarism are not interrogated, and that a complex issue (of structural inequality) is reduced to people not having enough empathy or being snobbish”.

“All this class consciousness and implicit bias is a function of our systems and policies,” he added.

Teo urged Singaporeans to look beyond attitudes and focus on the inequality that had led to the divide.

“We must not focus on perceptions – whether of ourselves or others – at the expense of real differences in daily struggles and well-being. The perceptions exist in response to those differences. Just as thinking about gravity differently would not stop a ball rolling downhill, pretending differences don’t exist isn’t going to magically make the differences disappear,” she said.

Sociologist Tan said structural changes through policies would be critical. “It can’t be just about telling people to be nice and respectful toward one another.”

Experts have in the last decade proposed ways in which Singapore can mitigate gnawing income inequality, ranging from policy changes in the areas of wages, taxes on wealth, social spending, housing and education.

The government has responded by increasing its social spending — supplementing the income of low-wage workers, introducing a universal health insurance scheme, increased personal income tax rates for high earners. It has also expanded its network of social service touchpoints and just in September tweaked the education system to reduce the emphasis on examinations.

But its social spending is still lower than Nordic countries and personal income taxes remain competitive to attract talent, leading developmental charity Oxfam and non-profit research group Development Finance International to this month call out the government for “harmful tax practices”, low public social spending, no equal pay or non-discrimination laws for women and lack of a minimum wage.

They ranked Singapore in the bottom 10 of 157 governments (at 149th place), ranked on how they were tackling the growing gap between rich and poor.

The government staunchly disagreed with the report, with Minister for Social and Family Development Desmond Lee saying Singapore’s outcomes in health care, education and housing were better than most countries despite spending less. The World Bank’s Human Capital Index, leaders noted, placed Singapore top for helping people realise their full potential.

One area experts agree on is that more tweaks are needed to the education system.

Singapore Management University’s Tan said apart from higher wealth taxes, “the education system needs to ensure not just equal opportunities but endeavour to provide for equal access to opportunities. There is a world of difference between the two. We may have focused on the former but not enough on the latter”.

Low said the education system needed to be “truly egalitarian”.

He suggested the state funds a national early childhood education system for children aged four onwards to remove segmentation from the get-go, to remove the national exam sat by 12-year-olds in Singapore and have schools run for the entire day so parents do not fill their children’s afternoons with tuition.

Theseira had a more novel solution: affirmative action that accords favours to the disadvantaged.

“It basically says that somebody from a disadvantaged background who achieves the same thing as somebody from a privileged background should be given much more credit because that is actually a much bigger achievement given the starting point,” he said.

“Are we willing to contemplate that? I don’t think we are at the moment but it’s a very obvious policy that addresses this problem with the definition of meritocracy.”

There must be a sense that a class divide is harmful for everyone, especially among those who have thrived under the current system, Eugene Tan said.

“A class divide could threaten Singapore’s existence because it would pit Singaporeans against Singaporeans. The divide would render Singapore to be rife with populism and to be consumed by sub-national identities. The class divide is also likely to reinforce existing cleavages based on race, religion and language.” — South China Morning Post by kok xing hui

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China leads the way as world's billionaires get even richer

The United States created 53 new billionaires in 2017, down from 87 five years ago China produced around two new billionaires a we...

 

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China leads the way as world's billionaires get even richer

The United States created 53 new billionaires in 2017, down from 87 five years ago

China produced around two new billionaires a week last year as the fortunes of the world's ultra-rich soared by a record amount, a report said Friday.

Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

China produced two new billionaires a week last year as the fortunes of the world’s ultra-rich soared by a record amount - AFP

 China produced around two new billionaires a week last year as the fortunes of the world's ultra-rich soared by a record amount, Swiss banking giant UBS and auditors PwC said.

Billionaires' wealth enjoyed its "greatest-ever" increase in 2017, rising 19 percent to $8.9 trillion ($7.8 billion euros) shared among 2,158 individuals, said the report by Swiss banking giant UBS and auditors PwC.

But Chinese billionaires expanded their wealth at nearly double that pace, growing by 39 percent to $1.12 trillion.

"Over the last decade, Chinese billionaires have created some of the world's largest and most successful companies, raised living standards," said Josef Stadler, head of Ultra High Net Worth at UBS Global Wealth Management.

"But this is just the beginning. China's vast population, technology innovation and productivity growth combined with government support, are providing unprecedented opportunities for individuals not only to build businesses but also to change people's lives for the better."

The report said China minted two new billionaires a week in 2017, among more than three a week created in Asia.

In the Americas region, the wealth of billionaires increased at a slower rate of 12 percent, to $3.6 trillion, with the United States creating 53 new billionaires in 2017 compared to 87 five years ago.

Currency appreciation saw European billionaires' wealth grow 19 percent although the number of billionaires rose by just 4.0 percent to 414.

Wealth transition from just five families accounted for 30 percent of the continent's wealth expansion, the study said.

It warned of lower economic growth in the United States and China if the trade war between the two countries escalates.

"US and Asia ex-Japan equities could fall by 20 percent from their mid-summer 2018 levels."

Asia challenging US dominance

For China's young billionaires "the country's fundamentals of a huge population and rising technology will continue to offer fertile conditions for entrepreneurs to grow their businesses," the study said.

It there were only 16 Chinese billionaires as recently as 2006.

"Today, only 30 years after the country's government first allowed private enterprise, they number 373 – nearly one in five of the global total."

It said 97 percent of them are self-made, many of them in sectors such as technology and retail.

Billionaires from Asia, especially in the Chinese city of Shenzhen, are now challenging the traditional dominance of Americans as technology entrepreneurs.

"In 2017, they equalled America's level of venture capital funding for start-ups, registered four times as many Artificial-Intelligence-related patents and three times as many blockchain and crypto-related patents as their US counterparts."

Ravi Raju, head of Asia Pacific Ultra High Net Worth at UBS Global Wealth Management, said Asia's billionaires "are young and relentless. They are constantly transforming their companies, developing new business models and shifting rapidly into new sectors."

The report said that globally, self-made billionaires have driven 80 percent of the 40 main breakthrough innovations over the last 40 years.

UP AND OUT OF POVERTY - Xi Jinping

https://youtu.be/SYWz2bwCUEE

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Asia's billionaires see fastest wealth growth: report  September 17, 2014 

 

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Asia's billionaires led by Chinese tycoons enjoyed the fastest increase in their wealth this year compared to their peers in the rest of the world, a report said Wednesday.

Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

Asia's billionaires see fastest wealth growth: report

September 17, 2014

Asia's billionaires led by Chinese tycoons enjoyed the fastest increase in their wealth this year compared to their peers in the rest of the world, a report said Wednesday.

Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

The rich are becoming richer

They are becoming richer at a faster rate too

DON’T the rich always grow richer, while the poor well, remain poor.

If you’re already disheartened, it gets worst. The rich are getting richer, and at a faster rate too.

A 36-page report released by the Boston Consulting Group (BCG) last month showed that global personal financial wealth grew by 12% in 2017 to US$201.9 trillion.

This total, roughly 2.5 times as large as the world’s gross domestic product (GDP) for the year (US$81 trillion), more than doubled the previous year’s rate, when global wealth rose by 4%.

It also represented the strongest annual growth rate in the past five years in dollar terms.

“The main drivers were the bull market environment in all major economies, with wealth in equities and investment funds showing by far the strongest growth and the significant strengthening of most major currencies against the dollar,” said BCG in the report.

The increasing millionaires and billionaires now hold almost half of global personal wealth, up from slightly less than 45% in 2012, says BCG. In North America, which had US$86.1 trillion of total wealth, 42% of investable capital is held by people with more than US$5mil in assets. Investable assets include equities, investment funds, cash and bonds

In terms of asset classes, US$121.6 trillion (60%) of global wealth took the form of investable assets – mainly equities, investment funds, currency and deposits, and bonds, with the remaining US$80.3 trillion (40%) held in non-investable or low-liquidity assets such as life insurance, pensions funds, and equity in unquoted companies.

Residents of North America held over 40% of global personal wealth, followed by residents of Western Europe, with 22%. The strongest region of growth was Asia, which posted a 19% increase. All wealth segments grew robustly, but high growth rates were especially prevalent in the uppermost wealth segments.

The market sizing review encompasses 97 countries that collectively account for 98% of the world’s gross domestic product.

The personal wealth bands are generally measured as such:

1. Retail: below US$250,000

2. Affluent: between US$250,000 to US$1mil

3. Lower High Net Worth (HNW): between US$1mil and US$20mil

4. Upper HNW: between US$20mil and US$100mil

5. Ultra HNW: above US$100mil

Everybody is getting richer

The US is home to the largest number of people with more than US$20mil. Globally, the classes of the ultra-rich are expected to reach 671,000 by 2022.

Meanwhile, the Middle East is the region with the greatest share of wealth held in investable assets US$3.1 trillion of a total US$3.8 trillion. Western European residents held 56% in currency and deposits, while in North America the attention was on equities and investment funds, with 62% of US$47 trillion of investable wealth parked in those assets.

Should personal wealth creation continues at the rate of the past few years, BCG forecasts a compounded annual growth rate of about 7% from 2017 to 2022, in US dollar.

Events like stock market corrections and geopolitical uncertainties could knock that down to 4%.

In a worse-case scenario, such as a major economic crisis, global wealth might produce a compound growth rate of only 1% over five years, the study found.

BCG says opportunities abound for wealth managers seeking to increase their focus on different client segments.

For example, despite being far apart on the wealth spectrum, both the above US$20mil segment (upper HNW and ultra HNW) and the affluent segment are attractive because they represent very large wealth pools with high growth rates.

In 2017, the upper HNW and ultra HNW segments held more than US$26 trillion in investable wealth.

US residents held over 30% of this wealth, making the US easily the largest country of origin.

Other economic areas with large pools of ultra HNW investable assets include developing markets such as China (in second place), Hong Kong, India, Russia and Brazil, and developed markets such as Germany (in third place), France and Italy.

The share of wealth held by upper HNW and ultra HNW individuals varies widely aong the top 15 countries, ranging from 47% in Hong Kong to 8% in Japan.

Over the next five years, the upper HNW and ultra HNW segments wealth is likely to post the highest growth across all regions.

“Financial institutions looking to acquire and serve these segments will need to bring a broad international skill set to the table,” said BCG.

Affluent individuals

Afluent individuals is a segment whose population is burgeoning, hold a large and increasing amount of the world’s personal wealth at US$17.3 trillion or 14% of investable assets in 2017. (see chart)

This group of about 72 million people represents the growing middle class and many of its members will become the millionaires of tomorrow.

“We expect the wealth of this segment to post a compound annual growth rate (CAGR) of around 7% over the next five years, increasing its pool of wealth to nearly US$25 trillion. To successfully tap into this segment, wealth managers must have at their disposal an efficient service model and significant skill in and innovative digital technologies,” said BCG.

Entrepreneurs

The entrepreneur segment represents another attractive opportunity for wealth managers to tap into money in motion and provide needed services.

“We expect these individuals, who have equity in their own companies – recorded as unquoted equities (non-investable wealth) – to significantly increase their pool of investable assets, by liquidating some or all of their equity through sales and by earning new wealth through their entrepreneurial activities. The largest pools of entrepreneurial wealth are in the US, France, Italy and Japan.  

Asia

Personal wealth in Asia grew by 19% to US$36.5 trillion, with residents of China holding nearly 57% of that amount, and the region registered per capita wealth of US$13,000. Although the asset allocation share of equities ad investment funds has grown over the past five years (from 22% in 2012 to 31% in 2017), Asia remains a cash-and-deposit-heavy region, with 44% of personal wealth held in this asset class. We project regional wealth to grow over the next five years at a CAGR of 12%.

Meanwhile Switzerland remains the largest offshore centre, domiciling US$2.3 trillion in personal wealth in the country. The next largest booking centres are Hong Kong (US$1.1 trillion) and Singapore (US$0.9 trillion) which have grown at yearly rates of 11% and 10% respectively – more than three times the rate (3%) of Switzerland over the past five years.

Over the next five years, BCG feels off

By Tee Lin Say, Starbiz

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