Wealthy individuals move in specific circles, whether it is their professional circle with business partners and colleagues or their social network with friends and family.
A recent study by Wealth-X digs deep into the social network of the world’s wealthy and reveals that the typical wealthy individual is connected to 7 other ultra high net worth (UHNW) individuals, one of whom is a billionaire. On average, these seven individuals are worth a total of US$6.5 billion.
The study also reveals that more than 90% of these individuals are married and through their spouse, have an extra connection to five other adult UHNW individuals. These personal connections constitute a person’s social graph, which Wealth-X regards as the most important and effective method for businesses to generate qualified client
referrals.
Looking at the connections of the average billionaire, UHNW and high net worth (HNW) individual reveals a few interesting differences in the composition of their social graphs.
HNW individuals worth at least US$1 million hold more connections in their social graph compared to UHNW individuals worth at least US$30 million (5.8 compared to 4.5). HNW individuals also seem to network with individuals who are significantly wealthier than themselves: they are on average connected to someone who is 36.9 times wealthier, and collectively their social graphs are 214 times more valuable than their own net worth.
“What does this all mean? Does this suggest that HNWIs are more networking savvy compared to UHNWIs, or does it suggest that if you’re lower on the wealth totem pole then more human capital is required in order to reach the higher tiers of wealth? The data doesn’t provide an answer to these questions,” commented Wealth-X.
Billionaires, on the other hand, have almost twice as many connections as HNWIs at 11.1. Naturally, the value of their social graph is significantly higher (US$16.1 billion vs US$2.7 billion) and the average net worth of a connection (US$1.45 billion vs US$0.47 billion) is three times of that found in HNWIs. Though HNWIs may be punching above their weight in their social graph, billionaires may be underachieving: the value of their social graph is a modest 4.6 times the value of their net worth and the average net worth of a connection is only 0.4 times that of their net worth.
Perhaps as a byproduct of their proven success in accumulating wealth, billionaires are on average connected to individuals who represent smaller wealth-generating opportunities. Nonetheless, their average of 11.1 connections worth $16.18 billion offers business development opportunities that are unparalleled by any other wealth cohort, adds Wealth-X.
