So this report came out where the 'richness' of nations was examined. There are approximately one million millionaires in Germany today. Considering there are barely eighty million residents.....that's a big achievement. The growth? At least ten percent since 2011 when they did the last such survey. That puts Germany near the top on this millionaire business.
Some people would look at this statistic and immediately say that some wealth distribution effort needs to be implemented. Then they'd say in public that the rich are getting richer....off the backs of working class. It's a nifty quick reaction statement....without thinking much about German reality.
Let's talk German society and culture.....and how they got rich.
First, Germans are not the type that jump up and fall into a fake get-rich-quick scheme. They ask too many questions, and then usually go to their local banker to their opinion. It would take weeks and months of effort to get a couple of people to hand off vast amounts of their fortune to some new investment scheme that suddenly appears. Germans tend to calculate, and avoid risks.....it's always been that way.
Second, Germans put a fair amount of their wealth into their property, their house, or their real estate. Go and examine any house in the 'burbs' of Wiesbaden or Stuttgart. Every year....some enhancement is done.....a new landscaping project....a new patio....a new security camera....better drainage....more lighting around the outside....new windows....etc. A house that might have been worth 200,000 Euro back in the early 1990s.....is probably worth 400,000 Euro today. It's not just the neighborhood going up in value....the home is improved and modernized.
Third, pop-up companies like Facebook in Germany? It's a tough sell. The vast majority of Germans just aren't the type to go and toss money into the stock market or buy up IPO shares. The new company has to have something of tangible sense. It has to be physical products that attract attention. Just selling something digital will not be a draw for investment.
Fourth, the investment mania that you tend to see in the US....isn't a common occurrence in Germany. In a village of 300 residences in Germany....it's hard to find people who actively do day-trading, week-trading, month-trading, or even year-trading. If you find some local German guy who does trade on the DAX or common market....he's likely a member of some local investment club or been to seminars to get smart. The typical average German isn't that well-versed in stock trading. You could stop a subway car in Frankfurt with eighty people on it, and I doubt if you could find more than ten people who have ever traded in their life with stock.
Fifth, Germans already tax the heck out of people. Yet the German millionaire rates continue. The money taken? It floats into infrastructure situations....from bridges to roads. An American could arrive and spend two weeks driving around the country....shocked at the quality of roads, streets, drainage, cell-phone coverage, airports, and cleanliness. The average rich German can depend on quality police coverage, safe streets to walk upon, low crime across the country, limited corruption, and general trust with political figures.
Sixth, when you sit and examine the hobbies of most German millionaires....you tend to find that they collect things. A successful butcher, who has moved from working-class to wealth and has amassed five or six million Euro.....will likely have some coin collection, or a garage of antique cars, or private hunting property in Bavaria, or gun collection. It's almost a sure bet that ten percent of his wealth is tied up in a collection and is part of the way that he measures to being a millionaire today.
Seventh, Germans are probably more accepting than most societies to simply look for good decent dividends....that are dependable each and every year. They would question any company that suddenly started paying out a seven-to-ten-percent dividend. A stable economic environment is probably more of a concern to the typical German....than a booming market. Rocking the boat....isn't going to be a motto that a wealthy German would use.
Finally, as a business-smart German builds on his or her empire....they are concerned over operations, stability, public image, and taking success step by step. In their circle of friends (the people they use the term "du" with).....they would prefer to avoid scandal or embarrassment. It takes years for Germans to build onto the "du" side of friendship....so losing that moment of respect actually does matter to a German.
The trend? I'd be willing to bet that the growth simply continues. The millionaires might get into an austerity period, and push that new Porsche purchase back six months....but it's going to happen anyway. A sudden down turn on the German economy? Unlikely. A German walking around in 1946....would be shocked to view their culture and society today. Recovery is absolute.