We had recently reported that India has now become world’s 6 wealthiest nation, as wealth creation of Indians has now beaten even developed nations.
This is a great news.
But, where exactly are the super rich, billionaires of India spending their money on?
A recent report by Kotak Wealth Management throws some interesting insights into the expenses of these ultra-rich Indians, and from where they are coming.
Leisure Becomes Top Expense For India’s Ultra-Rich!
Ultra-high-net-worth individuals (UHNIs) are those who have more than Rs 25 crore net assets, and this exclusive list contains traditional wealthy persons who have inherited money as well as entrepreneurs and professionals.
Besides, the report also studied ultra-high-net-worth households (UHNHs). These are those households which have net worth of more than Rs 25 crore.
As per Kotak’s report, leisure and ad hoc expenses have become the top purpose of the spendings made by the UHNI as higher consumer confidence and growing equity markets are enabling them to spend more on such expenses.
16% of the income generated by UNHI’s are spent on leisure and ad hoc expenses.
However, rising cost of living and fuel prices have affected them as well. 22% of the yearly income of ultra rich Indians are spent on maintaining their lifestyle and household expenditures. Inflation, rising cost of fuel, and expensive housing have been attributed to this.
India’s Rich Are Getting Younger!
Meanwhile, another very interesting insight have been shared: The average age of the ultra rich Indians are becoming lesser, every year.
While 47% of the UHNIs were under 40 years in 2016, in 2018 this number has increased to 60%. Maybe this is the reason that professional UHNIs are spending more on leisure, compared to entrepreneurs and those with inherited wealth.
The report said,
“These younger ultra HNIs are at the vanguard of changes in consumption patterns. A robust economy, soaring markets, and strong consumption have contributed to rising disposable incomes, reflected in higher allocation towards leisure and allied activities,”
Some highlights from the report:
- UHNHs in India will double to 330,400 by 2022, as their total net worth will increase to Rs 352 trillion
- UHNH’s increased by 10% in 2017 to reach by 160,600
- 97% of all UHNHs lived in top-20 cities of India
- 18% of all UHNHs are from these 6 cities: Bengaluru, Ahmedabad, Pune, Hyderabad, Nagpur and Ludhiana
- The 4-metros have 56% of all UHNHs
- 13% of income by UHNIs were invested in growing their wealth, which was mainly stock market. Investments in gold decreased by 17% in 2017
- 25% of all ultra rich interviewed said that they will increase their spending on charity related work
The report by Kotak Wealth Management was formed after interviewing ultra rich Indians from 12 cities, and the market research by conducted by an agency hired by Ernst & Young.