A person who has a wealth or fortune greater than 30 million dollars is known as ultra-rich, which is why they are considered the ‘richest of the rich’, that is, those who have fortunes greater than other millionaires, to the point to accumulate much of the wealth in the world.
According to a recent report from the United Nations International Labor Organization (ILO), the richest 10% of people in the world hold 52% of all world income.
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Despite the fact that this small group of people would have nothing to worry about, the truth is that they are no strangers to economic crises and for the sample a button: at the beginning of 2023, Elon Muskthe owner of companies like Tesla, SpaceX and Twitterrhad a historic drop of 200 billion dollars in his wealth.
This case is just one of several examples of ultra-rich who saw their assets contracted in the year 2022According to a report by Knight Frankthe main real estate consultancy in the world.
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According to the study, the so-called ultra-rich they had an average decrease of 10% in their fortunes due to the investments made by them during times in which interest rates in the world’s central banks only rose due to the Russian invasion of Ukraine.
“Last year, the Ukrainian crisis fueled Europe’s energy recession and sent inflation skyrocketing. As a result, 2022 saw one of the steepest hikes in interest rate history.”, mentioned Liam Bailey, Director of Research at Knight Frank.
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Likewise, the report details that four out of ten ultra-rich “saw their wealth increase in 2022, but the overall trend was negative, which is not surprising given that rate hikes by several central banks to deal with inflation weigh on investment portfolios.n”.
Regarding regions, Knight Frank explained that the area of the world where these people registered fewer falls was Europe (-17%)followed by the convergent region between Asia and Australia (-11%) and Americas (-10%).
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Exchange rates were also a determining factor, since “the strength of the dollar was unmatched, fueled by the Federal Reserve’s unwavering commitment to one of the fastest rate hike cycles in historyBailey explained.
The director of the consulting firm assured that although in 2023 “As significant risks remain for the global economy, market sentiment will change rapidly with very real opportunities emerging in global real estate markets.” having exchange rates as the main turning point, Therefore, expectations for the coming months will begin to see an improvement in inflation and interest rate issues.