Wealth Calculator - compared to the world's population

[Sultan of Swing]

Here's a wealth calculator that places us in some sort of order compared to the worlds population.

I don't know how accurate it is because I'm not sure that anyone would have access to everyones financial details but I think they'd only need to have the western worlds info to get it fairly right.

Most of us on here are within the top 2% wealthiest in the world.

I think the Canadian dollar is closest to our own $aus

http://www.globalrichlist.com

 

[skater]

That calculator has a serious flaw. I was just playing around with it & putting in various numbers & noticed that if you put in an annual income of $250k (USD) it gives you the exact same readout as someone who is earning $100mil.

 

[wish-ga]

Yeah, that's 'cause it is designed by someone like me....
for whom $250K seems like a mill

 

[MichaelW]

Ah well, still 37,867,766 people in front of me. Just when you think you're doing well, that helps put you in your place doesn't it...

Cheers,
MW

 

[Dazz]

One's annual income has little bearing on one's wealth.

 

[alexlee]

One's annual income has little bearing on one's wealth.

When you're amongst the 1 billion people making $1 a day (World Bank stats), wealth isn't even an issue, though. The idea of income having no bearing on wealth is a luxuury that is only relevant to 'lucky' people like us who are far richer than the vast majority of the population of the world.

 

[Peter Parker]

It's only useful if you want to take over Microsoft, ie are concerned about absolute dollars.

But if you're just interested in meeting your needs it's meaningless since it doesn't calculate according to purchasing power parity.

That is unless you wanted to move to a third world country.

But having raised that, just as guest workers from 3rd world countries migrate to first world countries, I wonder if it is possible to build or buy property developments in 3rd world countries at a price low enough to allow first world residents (either bored with their job or retirees with not enough super) to migrate there & retire on their current assets, living a cheaper lifestyle?

Since their spending power would be higher and they'd provide foreign exchange (and tourism with their families), people importation (subject to certain conditions) might be a possible boom industry for countries that are otherwise banana republics with few other industries.

Peter

 

[lowb]

When you think of Bill Gates...

1. He did not invest primarily in property. Are property inherently limited as the best investment strategy?

2. In general, does running a business have more potential than investments?

 

[Peter Parker]

2. In general, does running a business have more potential than investments?

I think it probably does from a return on capital point of view.

Eg a small business like a milkbar, butcher or cafe might support a couple or family. But look at the capital used.

There might be some special equipment, stock and maybe some sort of accredation plus goodwill.

It ocurred to me that the total capital involved (especially where the building is rented) in most small businesses is smaller than even a modest residential real estate portfolio. Especially mobile ones where tools and a van/truck are the main assets.

Yet the yield generated from such few assets is most likely greater; maybe 20 - 500% instead of 5%. Capital gain may or may not exist and you could be subject to the vagaries of your landlord if renting (noting that consumer protection doesn't help much).

But when the work effort is added and fully costed then such high yields look much less compelling (ie effectively buying yourself a job). That is unless you can do something clever like build up the business and sell it for a high price or make it a franchise and sell these.

Peter

 

[quoll]

I wonder if it is possible to build or buy property developments in 3rd world countries at a price low enough to allow first world residents (either bored with their job or retirees with not enough super) to migrate there & retire on their current assets, living a cheaper lifestyle?

Since their spending power would be higher and they'd provide foreign exchange (and tourism with their families), people importation (subject to certain conditions) might be a possible boom industry for countries that are otherwise banana republics with few other industries.

Peter

This is a good idea. Bit like buy cf+ props in the USA. Worth thinking about a bit more.

Cheers
quoll

 

[Peter Parker]

This is a good idea. Bit like buy cf+ props in the USA. Worth thinking about a bit more.

A package combining a 'revese mortgage' with a Pacific island lifestyle could be irresistable. And it might be more amenable to their governments than our detention centres. The 'ruining local culture' issue could be got around by making it a seperate compound, though this would also increase costs for residents.

For electoral purposes these people could retain their vote through a senate seat for Australian expatriates (as has been suggested by serious political commentators). Hence they would not get a vote in the country they'd move to, which might further improve local acceptance. They could even keep receiving any portions of their Aussie pension, the small cost involved could be written off as 'foreign aid' to our nearest (and poorest) neighbours.

Note there are climate change risks so you'd need to get an 'environmental actuary' to combine life expectancy with sea level calculations to make sure it doesn't all end up 'bottom of the harbour'.

Peter

 

[alexlee]

When you think of Bill Gates...

1. He did not invest primarily in property. Are property inherently limited as the best investment strategy?

2. In general, does running a business have more potential than investments?

No one said property is the best investment strategy. Personally, though, I think it has the best combination of risk and return. Bill Gates is an outlier event. The chance of you being the next Bill Gates is MUCH lower than, say, becoming financially independent using invesment property.

Most businesses fail, even small ones. On the other hand, small property investors, as long as they follow prudent rules, rarely go bust.

Higher reward, higher risk. Trading options potentially makes money faster than investing in IPs. How many people actually succeed?
Alex

 

[Aceyducey]

I think it probably does from a return on capital point of view.

Eg a small business like a milkbar, butcher or cafe might support a couple or family. But look at the capital used.

.....

But when the work effort is added and fully costed then such high yields look much less compelling (ie effectively buying yourself a job). That is unless you can do something clever like build up the business and sell it for a high price or make it a franchise and sell these.

Hi Spiderman,

It's relatively easy to establish a much more profitable (based on ROI) business. The main trick is to work on the business, rather than in the business.

You get together a group of smart people who work in the business for you, then focus on the main value-add approaches.

I think it's very much a mindset thing. People who have a 'work for a living' mindset look for businesses where they can create themselves a job.

Whereas entrepreneurs look for business ideas and partners that enable them to build a sustainable lifestyle.

The businesses I prefer to build are basically the 'build them up, hand them on' type where I (and the others who found or initially invest) reap ongoing rewards for an initial outlay of cash or sweat....rather than the ongoing jobs you see in most small businesses.


Oh, and Alex, it's worth looking closer at the stats for business failures compared to the relative success of property investing. Most small-time property investors (more than 85%) buy one investment property. That isn't really doing much more than providing a bit of spending money alongside their pension after they finish work at 65. I'd also like to see the figures on how many people sell-up their investment properties for a small or non-existant profit, or hold them for ten years with little capital growth...sure they may lose little, but they gain little as well.

Most entrepreneurs have several business failures under their belts before they hit on a formula that works. A business failure can cause financial stress, however it rarely 'knocks out' the business owner or forces them into the same position as a burnt small-time property investor.

Most successful businesspeople qualify as 'overnight successes' - with 'overnight' defined as years of work, dedication and commitment, with a little insight and luck thrown in. In fact most of them don't have a clear consistent vision of where they're going to end up or necessarily a long-term strategy - but they are flexible, ready to adjust their business when the climate changes. roll with the punches and self-motivate in the hard times.

Cheers,

Aceyducey

 

[wish-ga]

One's annual income has little bearing on one's wealth.

Really? Then how is it that cashflow dictates servicability?

Seems a lot of time is spent discussing servicability by a whole lotta forumites...I mustn't be the only one preoccupied with it. Wrestling might be a better adjective.

Dazzling even if I had the equity today I do not know that I could service another loan... nor face the laughter if I even tried!

MichaelWhyte on 01-09-2006 @ 03:20 PM.... gave me a laugh. Thanks!

 

[MichaelW]

That is unless you wanted to move to a third world country.

But having raised that, just as guest workers from 3rd world countries migrate to first world countries, I wonder if it is possible to build or buy property developments in 3rd world countries at a price low enough to allow first world residents (either bored with their job or retirees with not enough super) to migrate there & retire on their current assets, living a cheaper lifestyle?

Peter,

Shhhh.... Don't tell everyone. That's my super secret master plan! Well, to implement that strategy for myself, not necessarily get wealthy by doing it for others.

Once I've made a nice little packet here in 1st world Aus, I intend to buy up in the 3rd world and build a nice big house and go sloooooowww for a while. Currently I'm thinking somewhere in the South Island of New Zealand.

Cheers,
Michael.

 

[alexlee]

Plenty of people do it already. Japanese people, for example, move to Thailand or Hawaii, even the Gold Coast. Americans move to Mexico or Costa Rica.

I'm seeing the headlines: 'Aussie superrich buy South Island of New Zealand to create billionaires' playground'.
Alex

 

[lowb]

This automatically creates an image in my mind:

I see big fishy eating smaller fishy.

Its all relative- suppose say the average american is rich in mexico, but then the average mexican would be rich to lebanese, and the average lebanese would be rich to someone from malawi...

 

[Dazz]

Seems a lot of time is spent discussing servicability by a whole lotta forumites...I mustn't be the only one preoccupied with it. Wrestling might be a better adjective.

I suppose my comment was directly related to the subject at hand....that is, jump on this 'wealth calculator', type in your annual income, and it'll spit out how wealthy you are whilst ranking everyone else. It didn't make sense to me. The little old lady drawing a pension, but owning via trusts half of the Brisbane CBD is grossly under-represented.

The young IT whizz who owns not a jot, but pulls in a whopping salary is very much over-represented.

That was the thrust of my comment.


Now when you pop your savvy RIP investor hat on, borrowing to the hilt against negative cashflow assets, yes, the comment looks a little skewed.

Dazzling even if I had the equity today I do not know that I could service another loan... nor face the laughter if I even tried!

Quite so, although I am unaware of your particular details. Perhaps a re-think on the types of assets you are investing your money in is in order, if this is indeed a concern of yours.

 

[geoffw]

Its all relative- suppose say the average american is rich in mexico

There are some rich people in Mexico- the world's third richest man is Mexican.

But there are huge extremes- the most obvious one I saw was a huge mansion on top of a hill (in an area famous for drug smugglers)- where underneath were caves being used as houses.

 

[Sultan of Swing]

The little old lady drawing a pension, but owning via trusts half of the Brisbane CBD is grossly under-represented.

The young IT whizz who owns not a jot, but pulls in a whopping salary is very much over-represented.

I don't think the calculator was ever designed to be 100% accurate and as some here have pointed out, it's far from it.

The idea of it is to put into perspective just how lucky (blessed) we are. As a nation we gripe and complain about how hard we have it but there are billions of people that don't even know where their next meal is coming from, and more often than not through no fault of their own. At the same time we're wanting more and more material possessions, be it assets or doodads and forget how good we have it.

I'm not having a go at anyone in particular, I'm as guilty of it as anyone else.

Just my 2 cents