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Millionaire ‘frugality fatigue’?

By Judy Martel · Bankrate.com
Wednesday, June 23, 2010
Posted: 9 am ET

It appears the millionaire population has returned to pre-recession levels, and is feeling the itch to spend.

Boston Consulting Group's latest study says that global wealth staged a "remarkable comeback" in 2009, increasing by 11.5 percent to $111.5 trillion, just shy of the number at year-end 2007, before the recession. What's more, North America posted the largest absolute gain in wealth at 15 percent, to $4.6 trillion. However, we still haven't surpassed Europe as the wealthiest region, which houses a third of the world's wealth. Nor were we the fastest-growing. That distinction belongs to the Asia-Pacific region (not including Japan) where wealth increased by 22 percent, or $3.1 trillion.

Millionaire households own approximately 38 percent of the world's wealth, up from 36 percent in 2008. The U.S. has the most millionaire households, with 4.7 million.

Not that all the newfound monetary gains are making the wealthy feel secure. With the roller-coaster stock market recovery, the rich are nervous about the next dip in the ride. Yet the latest Gallup research shows they're spending again, much more so than the rest of Americans, who are jogging in place. So what gives? Gallup theorizes that the wealthy are fighting "frugality fatigue," meaning they are simply tired of cutting back, and are pulling out the greenbacks again.

Gallup's numbers reveal that among the middle and lower class, spending hasn't changed much. In January 2009 that group spent an average of $58 per day, increasing to $59 per day in May 2010. Among the rich, however, average spending increased from $110 a day in January 2009 to $145 a day in May 2010.

But the wealthy kept a tight grip on their money until very recently. Although middle- and lower-class spending stayed flat from April to May, at $59, it increased among the wealthy from $109 in April to $145 in May.

Tell us: Why do you think the wealthy are spending again, and do you plan to increase your own personal spending, or are you still nervous about the economic recovery?

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1 Comment
June 23, 2010 at 4:53 pm

What is the definition of "wealth" in this article? North America's combined net worth is closer to $65T than $4.6T.