The best way to make a lot of money is to work for the mint. 😄 But even if you don’t, chances are your finances have been improving. About 25,000 Canadians became millionaires in the past year according to a report released last week by Credit Suisse. The bank claims that there are currently 1,117,000 individual adults with net assets exceeding US $1,000,000. 😀 We normally see studies of Canadian millionaires based in $CAD, but this study uses $USD to define millionaire status. These kinds of wealth studies are telling, but they tend to underestimate real net worth because participants may forget, or choose not to disclose particular assets such as their precious metals, art, collectables, jewelry, etc. Many of these items such as gold can be acquired anonymously with no paper trail. I think the real number of millionaires is quite a bit higher.
Based on its forecasts in the growth of Canada’s GDP and equity market capitalization, Credit Suisse expects the number of millionaires to increase by 50% to 1,680,000 in 2021. I hope one of those new entrants will be me. 🙂
But 2021 is still five years away and a lot can happen since then. I believe low interest rates are the main cause of asset price inflation which has resulted in so many new millionaires in recent years. But a pull back could be right around the corner. Let’s take a look at history.
Between 1988 and 1990 much of the world was in recession with riots breaking out in the UK. 10 years later between 1998 and 2000 we had the Asian financial crisis and the dot-com crash. 10 years after that between 2008 and 2010 we had the great recession with the Lehman and AIG panic, and European banking crisis. They say history doesn’t repeat itself, but it rhymes. And I am certainly seeing a pattern here. 🙂
I just want to point out that as we near the beginning of 2017, stock markets are at record highs. I think investors should consider the possibility that we could face another major market event between 2018 to 2020. No one knows exactly what’s going to happen in the next bear market. So it’s important to be prepared, be diversified, and have some liquid funds or credit available to meet any emergency requirements. Of course the timing isn’t guaranteed. Maybe 2018 to 2020 will be similar to the last few years and the financial markets will continue to remain stable or grow to new record highs. But eventually we will see a correction. My theory is that 2018 is most likely when it will begin based on past events.
Random Useless Fact:
Once established, a freelance food stylist or food photographer can earn between $500 to $800 per day.