Number of millionaires in Singapore to surge 62% by 2025 to 437,000: Report (read here)
To quote the above article: “Singapore may have 437,000 millionaires by 2025 compared with 270,000 in 2020, according to the bank’s 2021 Global Wealth Report.“
Yup, 270,000 millionaires in Singapore in 2020. So what does this mean? Well, very little in fact, if you ask me; if we just look at this number alone. However, please hold on to this number in your mind first. Let’s think about this number in relation to some other facts and figures.
Oh yes, one more thing, these are USD millionaires (not SGD millionaires), if we go by the definition in the Global wealth report 2021. At the time of writing this post, USD 1 million is equal to SGD 1.34 million.
You can find the The Global wealth report 2021 published by the Credit Suisse Research Institute here.
Roughly 1% of adults in the world are (USD) dollar millionaires. The percentage of USD millionaires in Singapore has been steadily increasing over the years, reaching 5.5% in 2020. If you are one of them, yes you are part of the 1%.
Definition of a millionaire
According to the report, they mentioned that their estimates of the numbers of USD millionaires are sometimes much higher than those given in other wealth reports.
They believed their estimates are more accurate because they derive from the application of standard statistical techniques to solid data from reliable sources.
One reason why other wealth reports report lower numbers is that they cover only “investable assets,” which disregard owner-occupied homes. Credit Suisse Research Institute used a comprehensive definition of net worth that encompasses both financial assets and non-financial assets together with debts (but not “human capital”). In other words, they included the assets such as the owner-occupied homes.
Second, as stated, their estimates are firmly founded on the household balance sheets produced by national statistical agencies. They aim to provide a comprehensive coverage of the assets that people would recognize as part of their personal wealth: dwellings, land, savings, investments, etc. But they also generally cover the market value of pension funds assembled for the purpose of paying current and future pensions to those enrolled in occupational pension schemes. In the Singapore context, I am assuming the cash value of CPF accounts would be included as well.
Personally I think that is fair. It is the whole definition of net worth, as how most people would define it. Although I typically exclude the value of the property I am staying in (with my wife and family) from my net worth tabulations and projections as it is not a cash generating asset in my opinion (unless we rent it out or sell it).
Well from another point of view, not everyone owns a property anyway, so yeah… Whether it generates income or not, we did use a portion of our wealth to purchase it (which would otherwise be in the form of assets like cash, CPF, etc).
By the way, in 2019, 1.24 million resident households, or 90.4 per cent, owned their homes. Ownership has remained high with more than 9 in 10 resident households owning their homes since 2012.
Japan, Korea, Singapore and Taiwan (Chinese Taipei) – Millionaire statistics
Since 2010, wealth per adult grew at 3.9% p.a. in Singapore, 5.1% in Taiwan (Chinese Taipei) and 5.5% in Korea. However, over the same period, wealth per adult has declined in Japan by 0.6% p.a., partly due to exchange rate depreciation, without which wealth per adult would have risen at an annual average rate of 1.8%.
Financial assets account for over half of personal wealth in Japan, Singapore and Taiwan (Chinese Taipei), ranging from 58.5% of gross assets in Singapore at the end of 2020 to
68.7% in Taiwan (Chinese Taipei).
During 2020, net worth per adult rose in Japan, Korea, Singapore and Taiwan (Chinese Taipei) by 7.1% on average. This breaks down into a 9.8% gain in financial assets per adult, a 4.0% rise in non-financial assets, and a 4.5% increase in debt.
One worrying trend is wealth inequality in Singapore. Wealth inequality is relatively low in
Japan, Korea and Taiwan (Chinese Taipei), with 2020 wealth Gini coefficients of 64.4, 67.6, and 70.8 in these countries, respectively. Singapore is different. Its wealth Gini, at 78.3, is much higher than in the other three countries, as is the wealth share of the top 1%, which was 33.9% at the end of 2020. In a small country like Singapore, higher wealth inequality can result from an unrepresentative cluster of very high net-worth individuals.
S’pore has 207,000 millionaires in 2019, but over 700,000 have less than S$13,500 to their name (read here)
Singapore millionaires: Figures in perspective
The above is a comparison of Singapore millionaire figures in relation to other countries’ figures, like Japan, Korea and Taiwan. As mentioned earlier, the report stated that Singapore may have 437,000 millionaires by 2025 compared with 270,000 in 2020.
Also as mentioned earlier, these figures by themselves mean very little.
Let’s think about these numbers in relation to the population of Singapore.
Singapore population (click here)
The total population of Singapore in 2020 is 5.69 million. Of which 4.04 millions are Residents (3.52 million citizens and 0.52 million permanent residents). 1.64 million are non-residents.
Typically, the growth of the population is around 1.2 to 1.3%, although in recent years there are slower growths of 0.1% (2017), 0.5% (2018) and negative growth of 0.3% (in 2020).
In this website, the population of Singapore is expected to grow to 6.12 million in 2025 (See below).
Technically, the (projected) annual percentage growth rate of USD millionaires in Singapore is much higher than the population growth (see below).
As mentioned earlier, the total population of Singapore in 2020 is 5.69 million and there are 270,000 millionaires in Singapore, in 2020. That will be 1 in 21 people (is a USD millionaire) in Singapore, in 2020.
The total population of Singapore is projected to grow to 6.12 million in 2025 and Singapore is projected to have 437,000 millionaires by 2025. That will 1 out of 14 people (is a USD millionaire) in Singapore, in 2025.
Now, I do not have the breakdown of the age profile of total population in Singapore. However, within the population trend report, there is a breakdown of the age profile of resident population (citizens and PRs) in Singapore, in 2020.
There are in total, 4,044,210 residents.
a) 2,996,233 of them are aged 25 and above or approx. 74% of the resident population.
b) 2,709,236 of them are aged 30 and above or approx. 67% of the resident population.
c) 2,411,438 of them are aged 35 and above or approx. 60% of the resident population.
d) 2,111,923 of them are aged 40 and above or approx. 52% of the resident population.
Assuming that the age profile of non-residents is similar to that of the resident population in 2025 (highly unlikely but let’s just assume so), then base on the projected total population in Singapore in 2025 (eg. 6.12 million) and the respective assumed percentage as per above, we arrive at the below figures:
a) 4,528,800 of the total population in Singapore will be aged 25 and above, in 2025 (74% of the projected total population).
b) 4,100,400 of the total population in Singapore will be aged 30 and above, in 2025 (67% of the projected total population).
c) 3,672,000 of the total population in Singapore will be aged 35 and above, in 2025 (60% of the projected total population).
d) 3,182,400 of the total population in Singapore will be aged 40 and above, in 2025 (52% of the projected total population).
Now let’s again assume that majority (if not all) of these (projected) 437,000 USD millionaires in 2025 are in the below stated min age, then the proportion of total residents to millionaire will be as per below. Basically I am excluding majority of the people who are still schooling / not working, or just started working, etc, in (a). Yes, I know , there are technically people who automatically a millionaire once they are born (inheritance, etc).
a) If these millionaires are only among people aged 25 and above, then that will around 1 out of 10 people in this age group (is a USD millionaire) in Singapore, in 2025.
b) If these millionaires are only among people aged 30 and above, then that will around 1 out of 9 people in this age group (is a USD millionaire) in Singapore, in 2025.
c) If these millionaires are only among people aged 35 and above, then that will around 1 out of 8 people in this age group (is a USD millionaire) in Singapore, in 2025.
d) If these millionaires are only among people aged 40 and above, then that will around 1 out of 7 people in this age group (is a USD millionaire) in Singapore, in 2025.
Singapore banks unable to cope with surge in new millionaires (read here)
Is there a point in setting a personal financial milestone? (read here)
For some, having USD 1 million (SGD 1.34 million) is just the first step.
Well according to Knight Frank’s 2021 Global Wealth Report, you’ll need to have a net wealth that exceeds US$2.9 (S$3.85) Million to be considered the wealthiest 1 per cent in Singapore.
S$3.85 Million of Net Wealth is Needed to Join The Top 1% in Singapore: But Will it Make You Happy? (read here)
Singapore may be land scarce, but lacking in rich people it is not. Just don’t go too crazy.
Crazy Rich Asians: The Real Lives of Singapore’s Elite (read here)
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