As of today, India has record number of Billionaires, second only to India U.S and China according to the Forbes India Rich List – 2011. And the combined wealth of these 55 Indian stands at a whooping USD 246.5 Billion (that is close to 11 Lakh Crore rupees….did I get that calculation right?).
Now, the question is what do they really do with so much of money? Indian Billionaires are not really not known for their philanthropic activities – So whether do these Ultra rich Indians spend their monies?
Crisil Research and Kotak’s Wealth Management arm launched a new report – Top of the Pyramid – that gives you a fair bit of idea on what India’s Rich do with their money.
Overview of India’s Rich
India’s Rich list is rapidly bulging – India is currently estimated to have 62000 households who have net worth of over Rs. 250 Million (25 crore rupees) and these wealthy households are expected to rise to 219,000 in next 5 years!
Wealthy Indian Households by 2015-16
Compared to the wealthy households, the ultra wealthy (the Billionaire club) ones will grow even faster – Their collective wealth will move from 45 trillion rupees currently to over 235 trillion rupees, a big 5-fold jump!
Spending Habits of India’s Rich
If you thought, India’s rich splurge their money on Fancy Ferrari’s & Lamborghini’s, you are wrong – According to the report, the biggest spend that India’s rich do are for customized exclusive vacations – and this is common thing for all (100% of) the Ultra wealthy Indians. The next item which is splurged by most (98%) is expensive watches and third being the jewellery & precious stones (90%).
Surprisingly, very few Indians splurge on expensive cars and automobiles !
Here is another interesting nugget from the report – Many of the rich fear buying goods, or even booking flights and holidays online because of potential credit card fraud. So, many of them tend to use their corporate credit cards rather than their own personal cards.
Investments of India’s Rich
India’s wealthy like Real Estate – Over 37% of all their investments are in Real Estate, while equity makes up for about 33%.
The report also mentions that about 1/5th of the their income goes into increasing their personal wealth, while 28.4% is put back in their business as investment!
Only 6.3% of their wealth goes for Charity or Philanthropic causes!