An individual's net worth is the amount by which his or her assets exceed liabilities, calculated by subtracting total liabilities (what is owed) from total assets (what is owned). Our net worth can tell us many things, but mainly it provides a measure of one's financial situation at this point in time - steady increases in net worth over time indicate good financial health. A small, but growing number of individuals are labeled "high net worth individuals," or HNWIs. The present article will explain this classification, and explore the top ranking nations by population of HNWIs.

HNWI Classification
Although there is no exact definition for how much wealth a person must have in order to be considered an HNWI, the classification generally refers to those who have at least $1 million in liquid financial assets. The 2012 World Wealth Report, released by business consultant Capgemini and its partner RBC Wealth Management, further clarifies the definition to include only those individuals who have at least US$1 million in investable assets, excluding primary residence, collectibles, consumables and consumer durables. In other words, only assets that can be easily converted into investments contribute to the net worth figure.

Global Trends in HNWI
The 2012 World Wealth Report by Capgemini and RBC Wealth Management found that in 2011 the financial wealth of HNWIs decreased 1.7% for all regions except the Middle East, the first decline since the 2008 financial crisis, when global HNWI wealth dropped by 19.5%. Multiple factors contributed to this second decline in wealth in four years, particularly the uncertainty over the continuing eurozone debt crisis, which increased market volatility and slowed global economic growth.

Despite this decline in wealth, the worldwide HNWI population grew to 11 million in 2011, a modest 0.8% growth over the prior year. George Lewis, Group Head at RBC Wealth Management stated, "While more people surpassed the US$1 million disposable income level in 2011, the aggregate wealth of high net worth individuals declined overall, as market volatility to its toll."

The World Wealth Report also cited that while North America remained the largest region in terms of HNWI wealth, the Asia-Pacific region became, for the first time, the world's leader in HNWI population, with 3.37 million high net worth individuals. The United States remained the leading nation in terms of population.

The World's HNWI Population Leaders
During 2011, the United States, Japan and Germany accounted for 53.3% of global HNWI population. The previous year, these three nations represented 53.1% of the world's HNWI population. For 2011, the top 13 ranking nations by HNWI population were:

The United States
2011 HNWI Population: 3,068,000
2010 HNWI Population: 3,104,000
Percent change: -1.2%

2011 HNWI Population: 1,822,000
2010 HNWI Population: 1,739,000
Percent change: 4.8%

2011 HNWI Population: 951,000
2010 HNWI Population: 924,000
Percent change: 3.0%

2011 HNWI Population: 562,000
2010 HNWI Population: 535,000
Percent change: 5.2%

United Kingdom
2011 HNWI Population: 441,000
2010 HNWI Population: 454,000
Percent change: -2.9%

2011 HNWI Population: 404,000
2010 HNWI Population: 396,000
Percent change: 1.9%

2011 HNWI Population: 280,000
2010 HNWI Population: 282,000
Percent change: -0.9%

2011 HNWI Population: 252,000
2010 HNWI Population: 243,000
Percent change: 3.6%

2011 HNWI Population: 180,000
2010 HNWI Population: 193,000
Percent change: -6.9%

2011 HNWI Population: 168,000
2010 HNWI Population: 170,000
Percent change: -1.3%

2011 HNWI Population: 165,000
2010 HNWI Population: 155,000
Percent change: 6.2%

South Korea
2011 HNWI Population: 144,000
2010 HNWI Population: 147,000
Percent change: -1.5%

Countries Losing the Most HNWIs in 2011
South Korea made the list of the top 13 largest HNWI populations at India's expense. India had been included in the world's top 12 NHWI segments in 2010, but lost its spot due to a significant drop in HNWI population during 2011. In fact, India and Hong Kong were the hardest-hit nations in terms of the number of HNWIs. In India, the size of the HNWI population fell by 18% in response to several economic and political factors including a slump in its equity-market capitalization. Hong Kong, by comparison, lost 17.4% of its HNWIs over the previous year, a decrease spurred by a decline in stock-market capitalization and concerns about the eurozone crisis.

Singapore and Poland also experienced significant declines in HNWI population, partly because of the effects of the eurozone crisis. Poland saw a drop in foreign investment, while Singapore lost exports, and both countries suffered losses in equity-market capitalization. As a result, Singapore lost 7.8% of its HNWI population and Poland's HNWI dropped by 7.3%.

The Bottom Line
The United States, Japan and Germany together make up 53.3% of the total worldwide high net worth individual population. While the number of HNWIs increased in 2011, the overall wealth decreased. The eurozone debt crisis was considered the single largest investor concern during 2011. However, other economic and political factors contributed to investor uncertainty, including:

  • Numerous sovereign-debt rating downgrades in Europe

  • Massive public-debt levels in Greece

  • Standard & Poor's downgrading of the U.S. sovereign-debt rating

  • Geopolitical tension in the Middle East

  • Rising inflation, declining exports and natural disasters in the Asia-Pacific region

  • While the number of HNWI may be interesting to some from a trivial perspective, certain analysts use this data to help evaluate historical and current global economic trends and conditions, and to predict future paths.
Related Articles
  1. Economics

    Understanding Income Inequality

    Income inequality refers to the uneven distribution of income across a single economy.
  2. Credit & Loans

    10 Ways Student Debt Can Destroy Your Life

    If you're getting a student loan, think critically about how you will manage your loan. Student debt could have a profound negative impact on your life.
  3. Insurance

    What is a Force Majeure?

    A force majeure clause frees both parties in a contract from fulfilling their obligations in the event of some catastrophic or unexpected occurrence.
  4. Economics

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  5. Economics

    What's Economic Capital?

    While regulatory and economic capital use some of the same measurements of risk to determine how much capital a firm should hold in reserve, economic capital uses more realistic measures.
  6. Economics

    What is Economic Rent?

    Economic rent typically occurs when a product, service or property is in short supply, but demand is high.
  7. Economics

    Oil Is Cheaper Than Bread In Venezuela...The Country Is In Chaos

    Venezuela is floundering, and the story has more to do with just the falling price of oil.
  8. Economics

    Understanding Production Efficiency

    Production efficiency is the point at which an economy cannot increase output of a good or service without lowering the production of another product.
  9. Economics

    What Does a Central Bank Do?

    A central bank oversees a nation’s monetary system.
  10. Investing

    Will Donald Trump Be Able to Fund His Entire Campaign?

    Discover why Donald Trump's extravagant wealth and vast net worth may still not be sufficient to self-finance a successful presidential campaign in 2016.
  1. Is Colombia an emerging market economy?

    Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >>
  2. Is Mexico an emerging market economy?

    Mexico meets all the criteria of an emerging market economy. The country's gross domestic product, or GDP, per capita beats ... Read Full Answer >>
  3. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... Read Full Answer >>
  4. Is Brazil a developed country?

    Brazil is not a developed country. Though it has the largest economy in South America or Central America, Brazil is still ... Read Full Answer >>
  5. What is the difference between marginal utility and marginal value?

    Depending on the context, marginal utility and marginal value can describe the same thing. The key word for each is "marginal," ... Read Full Answer >>
  6. In economics, what is an index number?

    Economists often make comparisons between sets of data across time. For example, a macroeconomist might want to measure changes ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  4. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  5. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!