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What
Should Be a Definition for a Millionaire?
Ivan
Simic
Millionaires,
millionaires, day after day we watch and read about millionaires, actor's
millionaires, singer's millionaires, heiress millionaires and others.
Every day number of millionaires in the world is rising with incredible
speed. This "millionaire" phenomenon became very important in
global society, in fact, sometimes millionaires and billionaires are front
news before domestic or global issues. In relation, large number of
companies, news papers and TV stations are conducting detailed researches
on their treasured assets.
But,
are they all really millionaires?
A
Millionaire, according to encyclopedia is an individual who resides in a
household whose net worth or wealth exceeds one million units of any
currency. However, it can also be a person who owns one million units of
any currency in cash, bank account or savings account.
The
world faced rapid development of global economy from 19th century to
today. It came to the point when being a millionaire is not prestige like
it was before. Now, there are plenty of millionaires and billionaires
around the globe, and because of that they needed a new expression for
themselves in order to make a distinction between each others.
As
a result, today we have: multimillionaires (net worth of two or more
millions), hectomillionaires (net worth of hundred and more millions) and
billionaires (net worth of one or more billions). In the past ten years
with enormous growth of hectomillionaires and billionaires, millionaires
or multimillionaires who have few millions are considered middle-class
millionaires; in the contemporary word; they are just not super-rich.
Looking
at this report, the World Wealth Report 2007 (the report on individuals
with a net worth of at least US$1 million in all assets except their
primary residence) - Annual World Wealth Report from Merrill Lynch
compiled by Capgemini, we can see that the World's High Net Worth (HNW)
population grew to 9.5 million with their assets raised to US$37.2
trillion". Also, Merrill Lynch reports that there are 9.5 million (HNWI)
millionaires worldwide, and 95.000 multimillionaires (UHNWI with over
US$30 million). In 2007, Forbes Magazine reported that there are 946
billionaires in the world with total accumulated wealth of US$3.5
trillion.
Looking
at the private banking, a High Net Worth Individual (HNWI) is a person
with a high net worth of US$1 million and plus in in vestible assets (not
including primary assets). An Ultra High Net Worth Individual or
Individuals (UHNWI) refers to individuals or families who have at least
US$30 million in investible assets.
Therefore,
according to definition a millionaire is an individual who owns one
million units of any currency. According to private banking a millionaire
is a person who owns one million of the US Dollars. However, individuals
who have EU€800,000.00 are not counted as millionaires in their country,
nobody, including beneficiary bank does not recognize these individuals as
millionaires, but if we exchange this amount for the US Dollars, these
individuals are becoming millionaires.
So,
can this report on the number of the world's millionaires be true?
There
is no definition or internationally recognized model for the US Dollar
being currency for identifying (counting) the world's or individuals
wealth. Yes, the United States Dollar (USD) has been "de facto"
world currency since 20th century, and as of 2007 dollar still has the
largest share at 63.3% of foreign reserve holdings; the Euro has some
26.5%.
However,
since the year 2000, the Dollar share is falling and the Euro share is
rising. As of December 2006, the Euro surpassed the Dollar in the combined
value of cash in circulation. The value of the Euro notes in circulation
has risen to more than EU€610 billion, equivalent to US$800 billion;
therefore, the Euro became the currency with the highest combined value of
cash in circulation in the world.
One
million of the US Dollars exchanged in other currencies do not always make
millionaires. For example: the US$1million on 23 May 2008 at the exchange
rate is equivalent to: EU€634,698.99 (Euros), UK £505,114.98 (Pounds),
KWD265,450.01 (Kuwait Dinar).
Looking
at the above example we can see that a Kuwait Dinar (KWD) is the strongest
currency unit, in fact the KWD is the world's highest valued currency
unit, and from May 20, 2007 the KWD was re-pegged to a basket of
currencies. Yet, a Kuwaiti dinar is not so called "hard
currency", is not of very much use outside Kuwait, and is bound to
the economy of that country.
On
the other hand, the UK Pound and the EU Euro are hard currencies. They are
reserve currencies, and currencies with a good buying power which are
widely accepted as a reliable store of value. But, we don't see them as a
model for counting world wealth.
The
US Dollar (USD) is not strongest currency unit, especially not now; even
the Cuban Convertible Paso (CUC) and the Azerbaijan Manat (AZN) are
stronger than the USD. Therefore, using the USD as the currency unit or a
model for identifying millionaires is giving the wrong picture of who is
being a millionaire in the world.
It
is very simple: companies, that conduct researches and others, should
conduct their researches based upon highest valued currency, if not the
KWD, then the EU Euro or the UK Pound , still the higher currencies are
the higher ones.
Consequently,
what should be a definition for a millionaire?
Perhaps:
A millionaire is an individual whose net worth of wealth exceeds a
sufficient amount of units of any currency when exchanged worth one
million units of the world's highest valued currency unit, or the world's
highest anchor currency unit. It can also be a person who owns enough
units of any currency when exchanged worth one million units of the
world's highest valued currency unit, or the world's highest anchor
currency unit in cash, bank accounts and savings.
If
one person has enough currencies to buy one million of the world's highest
valued currency unit, or the world's highest anchor currency unit, than
that person should be counted as a millionaire. This way we will only have
around hundred billionaires and much less millionaires, and that will make
some sense and bring back original meaning of being a millionaire and a
billionaire.
Ivan Simic
Belgrade, Serbia
Address:
Paloticeva 12, 11000 Belgrade, Serbia Tel: +381637508500
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