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Billionaires Inherited More Wealth Than They Made in 2023 for the First Time in 9 Years: UBS Report

In 1987, the count of billionaires was only 140, but that number has reached a whopping 2,640 in 2024.
PUBLISHED JAN 31, 2024
Representative Image | Getty Images | Photo by Chung Sung-Jun
Representative Image | Getty Images | Photo by Chung Sung-Jun

The United States has the largest number of billionaires as of 2023. As per Forbes, there were 735 billionaires as of June 2023 in the country followed by 562 billionaires in China, and 169 in India. The most common sources of wealth for billionaires have been the finance and investment industry so far. However, according to a UBS report, billionaires accrued more wealth through inheritance in 2023 compared to entrepreneurship. This is the first time in nine years of research that the bank has found this to be the case. 

Elon Musk attends the 2015 Vanity Fair Oscar Party hosted by Graydon Carter at Wallis Annenberg Center | Getty Images | Photo by Pascal Le Segretain
Elon Musk  | Getty Images | Photo by Pascal Le Segretain

Françoise Bettencourt Meyers, the successor of the French beauty brand L’Oréal, saw the value of her stake in the company go up during the rush of cosmetics and luxury fashion spending. In 1987, the count of billionaires was only 140, but that number has reached a whopping 2,640 in 2024. "This is how wealth dynasties are formed," says Chuck Collins, director of the Program on Inequality and the Common Good at the left-leaning think tank Institute for Policy Studies.

The heirs of super-rich families must remain rich for the rest of their lives. There is a proverb called the "third generation curse" which is when the grandchildren fritter away the majority of the family's fortune. However, the truth remains that nobody can separate them from their riches. Inheriting is also one of the quickest ways one can become super rich. MacKenzie Scott, wife of Amazon founder Jeff Bezos, inherited close to $41 billion after their marriage. 

Francoise Bettencourt-Meyers at the Giorgio Armani Prive Haute-Couture show | Getty Images | Photo by Pascal Le Segretain
Francoise Bettencourt-Meyers at the Giorgio Armani Prive Haute-Couture show | Getty Images | Photo by Pascal Le Segretain

Another noteworthy insight from the UBS report is that heirs tend to be less interested in philanthropy as compared to first-gen billionaires. The first generation has some confidence in their ability to create wealth while the second generation doesn’t. "We know that the second generation, third generation are more concerned about protecting wealth than creating it," Collins continues.

"They invest a lot in wealth defense; they invest a lot in lobbying.” That means opposing any wealth tax or income tax hikes on the rich or fighting regulations that would close loopholes that have long allowed billionaires to minimize what they owe to the government. It’s a sign that “the tax system on wealth has become more optional,” Collins adds. 

Pixabay | nattanan23
Pixabay | nattanan23

The billionaires are passing down their money earlier out of fear. The rich are rushing with their wealth transfer. Some ultrarich are “fearful of what the next generation will do with it,” says Michael Kosnitzky co-chair of the law firm Pillsbury Winthrop Shaw Pittman’s Private Client & Family Office practice group.

"There have always been differences in how older and younger generations view wealth. But I believe that today there are very profound differences in how the next generation thinks about wealth and money. And the older generation believes that there is a need to get ahead of that now," he adds. 

He also talks about how many trusts are designed to stop these heirs from overspending. However, it's important to note that inheriting billions of dollars is still a rarity in the county to date. As per Federal Reserve data, only about a fifth of American households had ever received an inheritance.

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