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What is the world’s richest city?

06092018_richest city

What is the world’s richest city?

A recent Wealth-X report gave some updated statistics on the world’s richest city, measured by the number of ultrawealthy people. The result might surprise you, but perhaps even more shocking is the number of individuals in that city that fall into this “ultrawealthy”category.

While cities such as London or New York City might jump out as likely candidates for securing the title of richest city, the answer lies elsewhere on the world map. The winner was actually Hong Kong, having leapfrogged New York City in 2017. Hong Kong is home to a larger number of ultra-rich than any other city, measured by individual residents that control at least $30 million.

If you had to guess the number of Hong Kong residents that control over $30 million, what would the number be? 50? 100? 500?

It’s actually much higher. There are 10,000 residents in Hong Kong who control at least $30 million, a staggering number, and a 31 per cent jump compared to the prior year. In comparison, New York City has 9,000 residents who fall in the same category (although the U.S. still has 80,000 “ultrawealthy”residents, more than mainland China and Hong Kong combined).

What would it take to get to this coveted $30 million category, if one were a diligent saver and prudent investor? Let’s assume that an investor starts with $500k in capital and adds $25k to that capital base at the start of each year. The entirety of this capital base is invested in shares, and the investor is able to eke out a (very consistent) 10 per cent annual return on her stock investments. It would be in the 39thyear that she hits $30 million. For the impatient, this might seem like an eternity.

What if the investor instead wants to hit this $30 million mark within 15 years? What rate of return would she need to achieve on her portfolio of stocks? If everything else remains the same, she would need to earn a very high 30 per cent return each year (an extremely difficult proposition).

The path each of the 10,000 Hong Kongers took to build their wealth would vary, but for enterprising investors looking to build a nest egg, what matters is the size of your starting capital base, how much you can save and add to your capital, your investment returns, and your investment time horizon. The formula for building wealth might be simple, but it’s not easy. Warren Buffett once said “Do not save what is left after spending; instead spend what is left after saving”. If you are able to internalise this mantra and combine this conscientious saving with strong investment returns, you will be on the path to building your own little fortune.

A recent Wealth-X report gave some updated statistics on the world’s richest city. Which city do you think it is? Click To Tweet

George joined MGIM in September 2015 as a Research Analyst. Prior to joining MGIM, George was an investment analyst at Private Portfolio Managers where he covered global equities across various industries, using a value investing framework. George’s prior experiences include equities research and investment banking roles at both Citi and Greenhill & Co.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. I often read the kind of article you and other people write about and how much you could accumulate over certain periods but you have to pick the right stocks managed funds or what ever your investments are to get to these numbers year after year you guys at Montgomery are doing a great job with your investments but as we all know it don’t come easy .

  2. Hi George
    Thank you for your article.
    Be interesting to see what the answer is for David’s question.
    Starting with $500k
    15 year time frame
    Total returns of 10%

    Look forward to the answer

  3. $25k savings per year is not much for a wealthy person.

    Rather than consider an annual return of an unrealistic 30%. It would be interesting to know how much more you need to save each year to reach the target in 15 years.

    A 10% annual return over a long term is already quite high

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