Millionaires' ranks may be diminishing

By Marc Wolfensberger
Bloomberg News Service

GENEVA — Millionaires' ranks may have thinned in 2002 for the first time in at least a decade after falling stock prices and slowing economic growth cut the value of their holdings.

Stock prices have fallen for a third straight year for the first time since World War II, erasing more than $8 trillion in wealth. Global economic growth is forecast to register just 2.8 percent because of lower company equipment spending and consumer demand.

"We will see wealth declines in North America and Europe, and some growth in Asia," said Christopher Humphry, vice president of financial services at Cap Gemini SA and lead researcher since 1998 of the World Wealth Report with Merrill Lynch & Co.

Still, the combined wealth of people with $1 million or more in assets will remain little changed at $26.2 trillion after rising 3 percent last year, although a drop in the number of millionaires would be the first since at least 1992, he said.

Economic growth, stock markets, savings rates and foreign-exchange rates are four key factors influencing millionaires' wealth, Humphry said.

There were 200,000 new millionaires last year, swelling their ranks by 2.9 percent to 7.1 million — about the population of Switzerland.

Cap Gemini estimated in February that the combined wealth of millionaires would rise an average of 8 percent a year through 2006, bringing the total to $38.5 trillion. But Hum-phry said now that was too aggressive and based on an assumption that the stock market would recover.

Microsoft Corp. chairman Bill Gates, 46, is the wealthiest American for the ninth year in a row, even after the founder of the world's largest software maker lost $11 billion in the past year, according to Forbes magazine. Warren Buffett, chairman and chief executive of insurance and investment firm Berkshire Hathaway Inc., comes second, followed by Karl and Theo Albrecht, owners of German discount grocery stores Aldi.

The World Wealth Report, which comes out in June, is compiled by measuring the wealth of the 59 countries included in the research using International Monetary Fund statistics and calculating how it's distributed across populations.