Just how much money do you need to be among the global 1 percent? According to the 2018 Global Wealth Report from Credit Suisse Research Institute, you need a net worth of $871,320 U.S. or $1,141,429.20 CDN using an exchange rate of 1.31 as of the time of this post.
Credit Suisse defines net worth, or “wealth,” as “the value of financial assets plus real assets (principally housing) owned by households, minus their debts.”
From page 29 of the report specifically addressing Canada, the average wealth per adult in Canada, at USD 288,260 ($377,620 CDN), is 29% lower than that in the United States. However, wealth is more equally distributed in Canada than in the United States, which accounts for the much higher median wealth in Canada – USD 106,340 ($139,305 CDN) compared with USD 61,670 ($80,787 CDN) in the United States. Relative to the United States, Canada has both a smaller percentage of people with less than USD 10,000 ($13,100 CDN) and a larger percentage above USD 100,000 ($131,000 CDN). Hurray, lets here it for more big government and social programs! Canada has 1.3 million millionaires, and accounts for 3% of the top 1% of global wealth holders, despite having only 0.6% of the world’s adults.
The data sounds compelling until ones applies some math. We know, math is hard.
Consider though for a minute one of those “fortunate Canadian one percenters” with a whopping net worth of $1,141,429.20. Consider they live in an average home that they worked hard to pay off sitting there free and clear valued at the current Canadian average of $496,500.00. This alone leaves their investable net worth at $644,929.20. Consider now they are fortunate to be receiving an average return of 4% annually on those investments…wow that’s $25,797.17 in annual investment income. Take out of that $3000.00 a year alone in municipal property tax on that house and you’re down to $22,797.17 a year or $1899.76 per month. Wow, lavish! (We know, we know, for all you out there with the overwhelming confidence in government you can add an additional $18,616 per year in maximum CPP benefits if you hold off on collecting until your 70 and consider yourself incredibly blessed raking in $41,413 per year).
Now think for a minute of those other 99% of Canadians not in the 1 percent? Considering the above we suspect as a collection in agency operating in Edmonton, Calgary and the GTA we will continue to have our work cut out for us.
So then to conclude, what is the point of generating global wealth studies and comparisons? We’re not sure, other than to provide us all with a brief distraction and reprieve from what the future holds for us all.
Not only is math hard, its brutally honest.