The wealthiest individuals on the planet are seeing their fortunes climb higher, with an influx of new billions joining their ranks. Many of these newcomers to the billionaire club have inherited their riches instead of earning them through their own hustle. Luxury items, like luxury watches, champagne, and high-end cars, are flying off shelves following the pandemic, leading to substantial gains in the cosmetics and luxury goods industries.
Bernard Arnault, head of LVMH, responsible for over 75 luxury and cosmetics brands including Louis Vuitton, Dom Pérignon, and Bulgari, is at the helm of this surge in wealth. Following the pandemic, Arnault's net worth skyrocketed to an estimated 200 billion dollars, securing him the title of the world's wealthiest man.
According to research published by UBS, the collective wealth of the world's 2,500 wealthiest individuals now stands at a staggering 12 trillion dollars. In fact, the rate of inheritance-driven billionaires surpassed those who built their fortunes independently last year. An impressive 53 heirs raked in around 150 billion dollars, while 84 self-made billionaires only managed to accumulate around 140 billion dollars.
Germany is no exception to this inheritance trend. Economist Johannes König from the Socio-Economic Panel at the German Institute for Economic Research, points out that among the top 1%, approximately 48% have inherited something. This contrasts with the bottom 90%, which has a 20% inheritance rate.
As aging billionaires transfer their assets, the next generation of super-rich inherit a significant chunk of the total wealth created over the past few decades. A study predicts that over 1000 billionaire entrepreneurs will pass on over 5 trillion dollars to their heirs in the upcoming decades.
But inheriting wealth is no guarantee of long-term success. Economist König highlights that using the inherited wealth responsibly, while actively contributing to the business or investments, is crucial. A quarter of the next generation of billionaires who inherit companies or substantial assets and remain active in their businesses have a better chance of maintaining their wealth, according to König.
Heirs, however, are not obligated to keep working within the family business. Over half of them choose to go their own way instead. For many young billionaires, the desire for self-expression and international experiences drive them away from their inherited legacies.
Two-thirds of these heirs prefer to forge their own paths, contributing to the siloing of wealth among the ultra-rich. This dichotomy between inherited wealth and individual ambitions presents a challenging balance for the intergenerational transfer of these immense fortunes.
The global count of billionaires indeed shows a significant growth trend. The United States, United Arab Emirates, United Kingdom, Italy, and Germany are among the countries witnessing the largest increases. In Germany, the number of billionaires has grown from 94 to 109 within a year.
BMW heirs Susanne Klatten and Stefan Quandt currently command the top of Germany's wealthy rankings, with a combined fortune of around 40.5 billion euros. Merck KGaA, Aldi, Porsche, Henkel, and Otto are other prominent German families that accumulated wealth through both inheritance and business.
However, the presence of immense wealth has also stirred controversy. For instance, the Boehringer Ingelheim pharmaceutical family, estimated to be worth at least 50 billions dollars, took legal action against media outlets publishing their net worth.
Johannes König, an economist and expert on wealth dynamics, concludes that inheritance is not a dead-end but rather represents an opportunity for the next generation to build on legacy wealth with their efforts. While self-made billionaires may still exist, the chances of climbing the income and wealth distribution hierarchy without an inheritance are relatively slim.
