In October 2013, the world’s first trillionaire appeared. Reggie Theus had never featured on rich lists, nor was he a powerful entrepreneur or heir to a large family fortune.
The modest restaurant manager from Texas was thus somewhat perplexed to discover $4,040,404,040,404.04 in his bank account that month, and gallantly offered to give it all away and pay off the US national debt. But unfortunately for the people of the US, the bank that had mistakenly credited his account with the fortune soon noticed its error and fixed the glitch.
His temporary trillionaire status may have been a red herring, but economists predict that this new class of hyper-HNW — perhaps outlandish even to current UHNWs — will emerge in the coming decades. This year’s Sunday Times Rich List revealed that the UK is now home to 104 billionaires — 74 of whom reside in London — and has the most billionaires per capita of any G8 nation. This is over three times more than a decade ago, when 30 were recorded.
It’s hardly surprising, then, that late last year Credit Suisse released a report claiming that in two generations — around 60 years — there could be as many as eleven trillionaires ‘walking among us’ (which makes them sound a little like zombies).
But who will be the world’s first trillionaire (possessing a thousand billion dollars), and when will this happen? Recently British newspapers were speculating that the world’s first trillionaire was likely to be Bill Gates, who is currently worth $72 billion. He has regained his position as the world’s richest man from Mexican telecoms giant Carlos Slim, who held the title from 2010-13.
However, Oliver Williams, an analyst at wealth research firm WealthInsight, believes it’s unlikely the Microsoft mogul will reach that landmark. ‘If you think about inflation and rises in GDP, there will be a trillionaire soon,’ he says. ‘But I think it’s unlikely to be Bill Gates — I don’t think it’ll happen within the next 50 years, so he probably won’t live long enough.’ That is, unless he invests his fortune in anti-ageing technology.
Another reason why Gates — or indeed any socially responsible HNW — won’t reach trillionairedom is because extremely wealthy people tend not to hold on to all their cash. This is particularly true of Gates, who, along with his wife Melinda and Warren Buffett, founded the Giving Pledge, which encourages the world’s wealthiest to donate most of their money to philanthropic causes.
This noble scheme could well thwart the arrival of a trillionaire. Plum Lomax, senior consultant at philanthropic consultancy NPC, says that a person’s philanthropic contributions may prevent the development of a trillionaire. She is even doubtful about whether it will ever happen. ‘Looking back at the wealthiest historical figures, such as the Carnegies and Tsar Nicholas II, estimates say they would be worth around $300 billion if they were around today. That is already several times more than what any individual has today,’ she says. ‘To get up to a trillion is quite a lot more, so I wonder whether it will really ever be amassed by just one person.’
Another possibility, she adds, is that we may in fact never know of a trillionaire’s existence. ‘If it happens in a country like Russia or Saudi Arabia, it’s often hidden away so it may never be disclosed.’
Given how long it is likely to take for trillionaires to emerge, it is hard to guess who might get there first. So an easier question is which sector or country is likely to produce the first.
The consensus is that it is likely to be a figure from the technology sector. ‘Rather than only focusing on the individual, the question should be what is driving the growth of wealth — so new technology, disruptive technology and sustainable innovation,’ says David Poole, head of Citi Private Bank, UK. ‘A lot of the new wealth that’s being created is as a result of extraordinary developments in software, and in particular digital and media software.’ Think Apple, Microsoft and the Facebook phenomenon.
Duncan MacIntyre, head of Coutts Private Office, agrees that the world’s first trillionaire may come from the tech sector and also believes that it’s likely they could hail from Asia — in particular China — where wealth is growing at a much faster rate than in the more developed Western markets. ‘I spend a lot of time in Asia and it is extraordinary to see the wealth generation that’s going on there,’ he says. ‘Its sheer population leads to enormous opportunity — you wonder why entrepreneurs would even want to move out of that market.’
Oliver Williams, however, takes the view that since it may not happen for another half-century, technology may no longer be centre-stage.
‘The tech sector is running high at the moment, but Silicon Valley will hit saturation point and something else will come along. Once you have every app under the sun, things move on,’ he says. Williams reckons a trillionaire could spring from the agricultural sector, as water and food will become key due to shortages predicted over the next few decades. ‘The rules of economy, supply and demand, will see those prices go up.’
First among unequals
When and if the first individual does attain trillionaire status, how will this phenomenon affect society as a whole? It could be a positive development, says Plum Lomax, so long as the person hails from a society where philanthropy is encouraged. ‘Some regions of the world such as Russia or the Middle East have a different culture when it comes to giving, so I’m not sure that it would make a big impact. But if it were someone like Mark Zuckerberg who has a strong philanthropic leaning, it will benefit others,’ she says.
Wealth disparity is in fact not beneficial even to those at the higher end of the earning spectrum on a long-term social and health basis, according to Richard Wilkinson, a researcher in social inequalities and co-author of The Spirit Level: Why Equality Is Better forEveryone, since the larger the wealth gap, the lower the quality of life overall. ‘In a more equal society, you might live a little bit longer, your kids would probably do better at school, you’d be less likely to be a victim of violence,’ he says. ‘Inequality damages the whole of the social fabric — it’s not just something that happens to the poor. For example, America, the most unequal of the rich, developed countries, has among the worst life expectancies in the developed world and the highest rates of violence, obesity and teenage birth, plus the highest prison population and worst levels of mental illness.’
What’s more, it seems that widening inequality is not only damaging on a social and health-related level — it could also have a negative impact economically, according to the International Monetary Fund, which recently warned that the growing divide between the haves and have-nots is leading to slower global growth. So while the world’s first trillionaire may appear to suggest financial progress, it could perversely herald global economic stagnation and social unrest.