If you believe what some recent reports are saying, it’s pretty difficult to gauge exactly how the recession has affected the wealth and spending and savings habits of people around the world. A lot can depend on where you live and who is doing the polling.
For example, south of the border, American consumers say they have significantly changed their spending and savings habits as a result of the recession, a Citigroup survey says.
In China, however, the list of that country’s rich and super rich has grown despite the economic recession.
The latest Hurun report on China’s wealthy shows that, next to the United States, China now has more billionaires than any other country. Despite the recession, the number of billionaires in the country has risen to 130, up from 101 in 2008 and none in 2003.
Here at home, some polls suggest Canadians have been saving less during the recession while others say they are spending less and reducing their debt.
An Ipsos Reid poll conducted for RBC Financial found that one third of respondents said they were saving less than they have in the past and only 19 per cent reported that they were putting away more for a rainy day.
A poll by Sun Life Financial found that 60 per cent of people said they had reduced their debt and 59 per cent said they were spending less.
About 63 per cent of Americans polled said the way they spend and save money has changed forever due to the economic downturn. Only 29 per cent would return to their previous spending and saving habits.
Across all income levels, 62 per cent of people reported they had cut back on credit card purchases. More than half said they already have reduced their debt levels and 63 per cent said they planned to do so in the future.
In China, the average age of people with wealth of 100 million yuan (US$15 million) was 43 and some 825,000 Chinese individuals had personal wealth of more than 10 million yuan (US$1.5 million).
Rupert Hoogewerf, the British accountant who produces the Hurun report, estimates there could be another 100 billionaires in China who have chosen to remain off the report.
“This list definitely puts the rich in a spotlight, as China is now only second to the U.S. in terms of known U.S. dollar billionaires,” he said.
Canadians, it seems, are finding it more difficult to save during these tough economic times.
“While we all intuitively understand the importance of a nest egg, especially given recent economic uncertainty, the survey results tell us that saving money is a challenge for Canadians, regardless of age, income bracket or region,” said Ashif Ratanshi, head of branch investments, depositing and direct investing with RBC.
Canadians generally are in a cautiously optimistic mood. A survey by Maritz Research Canada found that while 60 per cent of Canadian investors lost money during the past year, most feel the economy is rebounding and they plan to invest more in the future, although they tend to be moving away from mutual funds.
“Canadians are not shying away from investing because of the rough year that we’ve had,” said Rob Daniel, Maritz Canada’s managing director. “However, they are rethinking their strategies in the market. We predict a continued flight to safety among Canadian investors, which bodes well for banks, credit unions and others who traditionally attract more risk-averse clients.”
Where Canadians decide to put their money will depend more on how satisfied they are with their financial institution or adviser than with their portfolio’s performance.
“Clients don’t want to be satisfied, they want to be delighted,” Daniel said. “Firms must be vigilant about monitoring the behaviours and attitudes of their best clients, understanding that many are loyal through inertia rather than from positive attitudes and experiences that will keep them from looking into other options.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contacted at firstname.lastname@example.org.