walkitout (walkitout) wrote,

The importance of definitions: BI writer Portia Crowe

I'm a bit concerned that BI is going to fix this, so I'm gonna just copy the way it is right now:

Title: Here's where the world's ultra-rich are moving — and where they are coming from

Read more: http://www.businessinsider.com/which-countries-the-ultra-rich-move-to-2015-3

"The world's ultra-rich are on the move.

In its 2015 Wealth Report, real estate consultancy Knight Frank took a look at the migration flows of the world's so-called high-net-worth-individuals (HNWIs) from 2003 to 2013.

As a destination, the UK far outpaced every other country, with more than 114,000 HNWIs migrating there during the 10-year period. (HNWIs are defined as having at least $30 million in assets.)

The US came in third place with 42,000 ultra-rich immigrants.

Note, the total number of HNWIs in the US (4 million in 2013) is still higher than the total in the UK (815,000 in 2013).

So where did the majority of those people come from?

Asia, mostly. About 76,000 HNWIs left China throughout the decade, while more than 43,000 took left India. According to the report, Singapore has been a popular destination for many of those emigrants."

What has happened here is pretty simple: Crowe has confused the UHNWI, of which there are only a few tens of thousands in the world [ETA: under 200K would probably be a more fair way to characterize this group. It's more than a "few tens of thousands". My bad.], with the HNWI, of which there are millions. She is using the _wealth minimum_ for UHNWI and the _total population_ of HNWI. This is actually pretty fucking awesome in so many ways, but mostly because it is practically designed to induce feelings of inadequacy (at the very least) and potentially a nervous breakdown (probably not) in the typical BI reader, who, judging by the articles anyway, is obsessively trying to figure out how to get richer, trying to understand who the super-rich are, and ranking themselves accordingly.

You can tell that there is _some_ sort of confusion, otherwise, the conclusion would be that there are as many people in the US with more than $30 million in assets as there are babies born every year. Another way to think about 4 million HNWI where HNWI = $30 million (<-- remember, this is a mistake! HNWI is only a million; UHNWI are $30 million) is that in order to be in the top 1% by wealth in the United States, you have to have _more than_ $30 million dollars. And we know that all of that is just kinda loony tunes. (Altho if it _were_ true, then soaking the top 1% for tax revenue would actually fix all of our problems. But it ain't true! Gosh durn it all.)

Her source is here:


"The global population of ultra-high-net-worth individuals, grew by almost 5,200 last year, according to data prepared exclusively for The Wealth Report by the analyst firm WealthInsight.

This latest increase means 65,000 people have joined the ranks of the ultra-wealthy over the past decade – arise of 61%. In total, there are now 172,850 individuals in this cohort who hold wealth totalling $20.8tr, an increase of $700bn during 2014."

If my math is correct (and it probably isn't), those 172K individuals average 120 million. Which means precisely nothing.

I'm still digging around in the underlying research trying to figure out how this particular error happened in the first place.

Update 1: More about the error!


The main article here has it right, but on the bottom right there is a little section that has the same error (HNWI defined as $30 million, which is of course the UHNWI definition).

"The Wealth Report is Knight Frank’s annual publication covering wealth creation, the spending habits of HNWIs (defined as those with net assets of over $30m), prime property markets around the globe, the world’s most important cities, and the attitudes of the wealthy towards investment and their homes .

This year’s Report includes contributions from Wealth-X, Ledbury Research, The Economist Intelligence Unit and Real Capital Analytics, as well as Knight Frank’s research teams.


Update 2:

Even Knight Frank can't keep it straight!!!


"The global number of High-Net-Worth Individuals (HNWIs is defined as someone with $30 million or more in net assets) increased by almost 8,700, or 5%, in 2012"

Update 3:

I explored the possibility that Knight Frank redefined HNWI. I think they did not.


I would think it would be easier than this to keep straight the difference between $1 million in assets and $30 million in assets. It is not difficult to tell the difference between a penny and a quarter plus a nickel. It is not difficult to tell a $1 from a twenty and a ten. It is not difficult to tell three c-notes from a ten dollar bill. Etc. It is _even_ possible to notice the difference between a million dollar home and a thirty million dollar ... something or other. I know, a single letter difference introduces copy editing errors. But copy editing errors doesn't seem to be what we have going on, at least not by the time it got to BI.
Tags: economy
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