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Aussies getting even richer - and faster

THE number of millionaires in Australia jumped last year to 134,000, with more than 17,000 joining the ranks of the "high net worth individual" - and that's in US dollars.

And not only has Australia moved up two spots to claim the No. 4 position in the league table of wealthy nations behind Singapore, South Africa and Hong Kong (the US is eighth), at 14 per cent, Australia has one of the fastest wealth growth rates in the world.

This is thanks to robust economic growth, a stellar sharemarket fun last year, and a final spurt by the property sector.

The World Wealth Report, compiled by investment bank Merrill Lynch and technology consultants Capgemini, found that the average wealth of a high net worth Australian was $US3.2 million at the end of 2004, compared with the global average of $US3.7 million.

"Strong GDP growth and healthy consumer confidence contributed towards Australia's continued strong performance in 2004," Merrill Lynch's head of global private client group in Australia, Tom Alexy, said.

After weathering the 1997-98 Asian crisis, Australian investors benefited from a higher degree of diversification compared with other investors, he said.

The report examines 68 countries that account for 98 per cent of world gross domestic product and 99 per cent of sharemarket capitalisation. It found that global wealth grew 8.2 per cent last year to $US30.8 trillion.

There are now 8.3 million people on the planet who own more than $US1 million in stocks, bonds, property and other financial assets, it said.

Millionaires' wealth is likely to expand further, albeit at a slower pace. The report, which didn't count family homes, predicted global assets would grow at a rate of 6.5 per cent in each of the next five years, reaching $42.2 trillion by 2009.

The report also found that between 2003 and 2004, millionaires made only minor adjustments to their asset allocations, with 34 per cent in equities, 27 per cent fixed income, 12 per cent cash, 13 per cent real estate and 14 per cent alternatives.

The wealthy are divided into three categories: the "ultra rich" worth more than $US30 million, the "mid-tier millionaire" with $US5-$US30 million, and the "millionaire next door" with $US1-$US5 million, which is the category growing in Australia.