Ireland’s personal riches revealed

Ireland’s personal riches are worth a staggering €1,336.8bn in total, up €131.7bn on a year earlier to a new record high.

The increase of 11% has mainly driven by spiralling property prices.

The wealthiest were worth more than five times those in the bottom half of the riches league table, the Central Bank report released yesterday also shows.

It means that for a population of nearly 5.5 million in the Republic, the figures equate to almost €250,000 each for every man, woman and child in the State.

But it’s certainly not distributed like that.

The figures are revealed in the Central Bank’s latest report on Household Wealth, which shows that “net wealth was driven by a rise in housing wealth, which increased by €31.1 bn”.

Property accounts for more than two-thirds – 67.7% – of total net wealth and more than 60% of the total assets of Irish households.

However, despite the riches of the wealthiest, Ireland is actually one of the most equitable countries in the world, on a par with Sweden, Poland and Finland and ahead of Britain and Germany.

Responding to the findings, personal finance expert Brendan Burgess, of askaboutmoney.com, said: “I do not resent the Collison brothers making billions.

“We could have a much more equal society if they stayed at home and ran the farm and earned a few thousand euros a year.

“You could bring the percentage right down, but is that something you want to do? I don’t think that would benefit anybody. What they’ve done is fantastic.”

John and Patrick Collison, from Limerick, are among the world’s wealthiest self-made entrepreneurs and made a joint estimated fortune of €12bn from developing online payments system Stripe.

The wealth of the poorest half of households increased by 3.9% or €4.8bn, totalling €128.2bn, or almost 9% of the national total, mainly due to rising property values.

By the end of October last year, the richest 10% of Irish households had more than five times the amount held by households in the bottom half of the wealth league.

Households in the “middle” part of the distribution owned €604.1bn overall, or almost 42% of total net wealth in the country at the end of September, the report shows.

The richest 10% held their wealth across a “diversified portfolio”, the report found.

“In particular, other financial assets (ie debt securities, listed shares, investment fund shares, and life insurance and annuity entitlements) featured prominently, accounting for 26.2% of total assets,” it stated.

“Conversely, poorer households held the largest part of their financial wealth in deposits (19.2% of their total assets) and were significantly more leveraged (25.9%).

“For all household groups, housing assets represent the main component of their wealth.”

Credit Union Development Association chief Helen Carbery said the report showed wealth inequality is high.

She pointed out that the wealthiest 10% are worth €709.3bn, or almost half – 49.2% – of the total household net wealth in the country.

Keith Butler, chief of financial advice provider askacorn.com, warned that leaving thousands of euro in low- or no-interest accounts was a “mistake”.

“Rising costs of everyday essentials mean households have less disposable income to save, while the purchasing power of money in low-interest accounts is steadily reduced,” he said.

He added: “Ultimately, cash protects liquidity – not purchasing power.”

* This article was originally published on BusinessPlus.ie.