More millionaires in Malaysia but they may not necessarily be feeling rich
Besides the rising number of successful business owners, many high-salaried people are already millionaires based on the value of their assets and properties.
RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said the term could also apply to those in the middle-class who could have earned the amount but had spent it on necessities such as on costly children’s education and high property prices.
He said although a millionaire was measured by his or her disposable income, those who have made their million would not have the same purchasing power compared to a decade ago, citing inflation as the main reason.
Dr Yeah said many in business had made their millions as a result of savvy investments and the growth of the industries that they were involved in, adding that overall, the rising affluence was due to sustained economic growth.
“We have seen a strong growth in certain sectors, including plantation, oil and gas and property, which have elevated entrepreneurs into the millionaire class,” he said.
Billionaires, however, remain rare. Malaysia now has 30 billionaires, just three more from the 27 on the list last year.
The Wall Street Journal (WSJ) reported last year that Malaysia’s millionaires almost doubled over the previous 18 months.
Citing a report by international financial firm Credit Suisse Group, it said Malaysia added 19,000 new millionaires since early 2010, bringing the total to 39,000 as of October.
The WSJ report attributed the rise to the weakening US dollar and careful spending.
Dr Yeah said those who invested their money wisely had benefited the most.
“In a free market and capitalist economy like Malaysia, people who have capital can generate millions,” he said, noting that many in the upper-income bracket had accumulated wealth past the million-ringgit mark.
Personal financial consultant Carol Yip said the rising cost of living had lessened the feeling of being rich.
“Today, even a small apartment can cost half a million,” she said.
She said careful spending was not a factor for the increase in the numbers of millionaires.
“If we are spending less, we won’t be seeing so many luxury cars on the road,” she said.
She said the rise in millionaires was also due to property prices which have shot up exponentially, adding that the definition should not include the value of the house that one was living in.
“If you still have a million in hand after you convert the value of your other properties, investments and have paid of all your debts, then you are a millionaire,” she added.
Financial adviser Fred Wong said making a million was not a problem these days as long as people were willing to work hard but being self-employed and investing wisely was the better route to riches.
– The Star