Billionaires Inherit More Wealth Than They Make

They just don’t make billionaires like they used to.

On Thursday, UBS published its Billionaire Ambitions Report, and for the first time in the report’s nine-year history, newly minted billionaires got more of their money from inheritance than, well, making money. The bank said this shows that the dragon-like hoards of wealth held by Baby Boomer billionaires are starting to work their way down the generations.

Boomer Billionaire Babies

UBS’ report dovetails with the idea of the “Great Wealth Transfer.” The New York Times reported in May that US family wealth has tripled in real terms since 1989 and that the Baby Boomer generation (people born between 1946 and 1964) holds 50% of that wealth. Not everyone is convinced that the collective Boomer pot o’ gold will trickle down to their descendants: finance writer Ann C. Logue argued that accumulated wealth for most Boomers will get eaten away by healthcare, housing, and end-of-life care costs.

For the billionaire class, though, there should be a few shekels to spare after sorting out a nice care home. According to UBS, a total of 137 new billionaires sprang onto this scene this year. The majority of those are what UBS terms “self-made,” i.e. they didn’t inherit their billions. However, in terms of total wealth and average net worth, the inheritance billies had the edge:

• The amassed wealth of new inheritance billionaires added up to $150.8 billion, whereas self-made billionaires locked in at a mere $140.7 billion.
• The average wealth of an individual dynastic billionaire was $2.8 billion, while a self-made billionaire had an average vault worth just $1.7 billion.

A Flash in The Gold-Plated Pan? To be totally fair to this new cohort, it hasn’t been the easiest year for wealth generation. High-interest rates and general economic wibbly-wobbliness haven’t made super fertile ground for entrepreneurship. Nonetheless, UBS sees the emergence of multi-generational billionaires as a long-term trend. That’s a theme we expect to see more of over the next 20 to 30 years, as more than 1,000 billionaires pass an estimated $5.2tn to their children,” Benjamin Cavalli, UBS’ head of global wealth management strategic clients said in the report.