
A new analysis of how the world’s wealth is distributed - edward
http://www.economist.com/news/business-and-finance/21710771-new-analysis-how-worlds-wealth-distributed-you-may-be-higher-up?fsrc=scn/tw/te/bl/ed/
======
jasonkester
_the world’s households owned property and net financial assets worth almost
$256trn in mid-2016. That is about 3.4 times the world’s annual GDP. If this
wealth were divided equally it would come to $52,819 per adult._

I can understand why it's tempting to perform this calculation (you've got two
numbers, may as well divide them), but I kind of wish people would stop doing
so then trying to draw conclusions about the result. Especially if they work
for an organization that calls itself "The Economist", which implies that the
author knows something about Economics.

Because all it serves to do is convince people who _don 't_ understand how
economies work that there is in fact some big fixed pile of "wealth" out
there, and that all those rich people have hoarded it already and are now
sitting on it, preventing anybody else from having any of it.

... which is, of course, silly. And the author should know that.

~~~
cm2187
The biggest factor being real estate. As houses appreciate in value, home
owner become wealthier on paper, but that doesn't change anything to their way
or quality of life. They can't afford a nanny more than before. They can't buy
a bigger car than before. But these statistics would suggest the contrary. The
only way home owner can monetize their asset is by selling it and go live in a
cheap place. That's only a meaningful argument if tens of millions of people
do that which they do not.

~~~
MagnumOpus
> They can't afford a nanny more than before. They can't buy a bigger car than
> before

If they want to inherit their house to children, that might be the case. But
that is the case with any asset - it is irrelevant whether any jewellery or
painting you own is worth $1 or $1 million if you never intend to sell it,
ever.

But the house is real wealth and that wealth can be unlocked - a reverse
mortgage is not unusual, and the more valuable the house, the higher the
annuity you can earn from releasing the equity from it step by step. And that
allows you to get a nanny or make car payments or go on cruises or whatever.

~~~
cm2187
A mortgage is not creating wealth. You are merely borrowing against your
future revenues. The house is merely used a collateral.

The only way you can release this wealth is by selling it and moving to live
in a cheaper place. But to a family who lives in London, always had and has no
plan to leave, this is only theoretical wealth. It doesn't really say much
about wealth inequality between different cities or countries.

------
dangero
_It includes a surprising number of Americans (over 21m), whose debts outweigh
their assets._

Coincidentally there are 20.5 million college students in the US. That 21
million number actually seems small to me just from college students and grads
alone, let alone other sources.

[http://nces.ed.gov/fastfacts/display.asp?id=372](http://nces.ed.gov/fastfacts/display.asp?id=372)

------
nraynaud
Once I ran my salary in a statistical tool, I was in the 8% highest salary of
the country. That felt strange, I live in a rented 3 bedroom apartment, no
car, no savings.

~~~
roel_v
Well it depends on your age, doesn't it. Project earnings and savings
potential into the future, look at you at median age, then assess again.

~~~
nraynaud
I'm 37

------
jokoon
I'm a poor moocher, on long term unemployment (for reasons I won't talk about
here), and honestly, life could be much worse if I was not living in a
developed country.

That's how I must view things if I don't want to die from desperation.

~~~
robotresearcher
Shared between us, we can afford to keep you ticking over. Good luck to you.
Don't waste it.

I grew up poor on welfare, and I will never forget what it was like, nor will
I forget the generosity of the society that educated me and kept me in food
and shelter. Thank you all for taking care of me and my sister when we were
children.

Now I'm doing OK. I teach your college kids and make robots a little better.
I'll pay far more in tax than I ever cost. I'm proud to pay those taxes and
vote to support the next generation of people who need a little help.

~~~
antisthenes
> I'll pay far more in tax than I ever cost.

Not if you end up living a very long time.

~~~
jokoon
So are you saying we should "unplug" people who are too old, so that young
people can have better lives?

~~~
antisthenes
Among other things, yes.

------
pcurve
750K only gets you to top 1%?

~~~
GuiA
The really wealthy people are just _really wealthy_ , beyond what most of us
here can probably conceive of. Even if you strike it big in Silicon Valley and
make $10M-$50M from your startup, you're still nowhere near all the Chinese
real estate magnates, Saudi oil magnates, the people whose family fortune has
been accumulating for the past hundred years or so, etc.

I was actually surprised to find that the net worth of many celebrities that
most of us imagine as really wealthy is not all that much compared to the
aforementioned. For instance, let's pick Benedict Cumberbatch, an actor who
just had the lead role in a Marvel movie being shown around the world that a
lot of people would immediately recognize on the street - a cursory internet
search indicates his net worth is about $20M. Not a crazy amount by any means.

~~~
siddboots
It's surprising not because of how rich it makes the richest, but because of
_how many_ rich people it implies. In order for that to be true, 75 million
people out there make $750k or more.

~~~
joss82
It's not revenue, it's wealth.

s/make/have

------
antisthenes
I can't believe The Economist of all things published this garbage.

The article doesn't even mention if the numbers are PPP adjusted, how the
wealth was measured and how much of the wealth is simply sitting in the bank
account versus being invested.

Is this for real?

------
zhengiszen
If there was one constant in the human history it got to be injustice. What
the current economical system does is just organise the injustice through a
just livable repartition of a very small part of the wealth.

------
jgalt212
Trump could possibly be the great equalizer.

Under him, higher interest rates will crush global property values (which are
disproportionately held by the ultra wealthy).

Global warming, which he doesn't plan to do much about, will be a great threat
to coastal real estate (also controlled by the global wealthy).

------
benevol
The thing is, there should be no pyramid.

