Inheritance Fuels Billionaire Wealth Over Self-Made Fortunes in Ongoing 'Great Wealth Transfer'

The landscape of billionaire wealth is undergoing a significant transformation as more billionaires now accumulate their wealth through inheritance rather than entrepreneurship, marking a pivotal moment in the 'great wealth transfer'. A UBS report highlights the shifting sources of wealth among the world's ultra-rich.

Billionaires and Inheritance

According to the Billionaire Ambitions Report 2023, the past year has seen a noticeable change in how the super-rich obtain their wealth. The report underscores that 53 heirs amassed a staggering $150.8 billion through inheritance, surpassing the wealth creation by 84 self-made billionaires, which amounted to $140.7 billion. This is the first instance of such a phenomenon since UBS began reporting in 2015.

These figures only scratch the surface, as projections suggest that an estimated $5.2 trillion could change hands from one generation to the next within the next two to three decades.

Recovering Billionaire Wealth

Billionaire wealth has seen a rebound, with a 7% increase in the billionaire count over 12 months leading up to April 2023. The total number of billionaires reached 2,544, with their combined wealth climbing by 9% to approximately $12 trillion.

The Generational Challenge

Despite this massive intergenerational shift in wealth, the process is not without its challenges. UBS surveyed billionaire clients and discovered that while a majority aim to build on their predecessors' achievements, there are also distinct differences in how various generations handle wealth and business.

New generations are eager to adapt and innovate, taking into account technological advancements and global crises such as the COVID-19 pandemic, climate change, and wars.

Investment strategies vary between the generations, with the founders of wealth often preferring more traditional investments like debt and fixed-income, while later generations lean towards private equity ventures.

Attitudes towards philanthropy also differ. While older billionaires focus on impactful philanthropy, their successors are more inclined to engage in impact investing and integrate environmental and social considerations into business practices.

Moreover, a majority of the heirs are choosing not to participate directly in family businesses, with many forging their own entrepreneurial paths.

wealth, inheritance, entrepreneurship