“South Africa’s millionaires haven’t got rich on their own, they are corporate climbers”.
That is a remarkable observation made in a press statement announcing findings of a survey that claims to dip into South Africa’s top earning class.
Titled TopEnd 2013 Survey, the study was done under the direction of a firm called RamsayMedia Research Solutions (RMRS).
For some reason surveys of this kind prove to be a marvel within the South African media and marketing forums. That is probably because South Africa has an intriguing poser of a transforming economy which makes for shifting sand under the feet of established merchants. As such mainstream commercial establishments tend to drool in the face of promises to capture trends of the apparently shifting high income consumer patterns.
Remember the “Black Diamond” theory which became a hit, a miss for many, after making pronouncement which equaled a claim to have discovered a massive class of black big spenders. With due respect, dear reader, most of these studies tend to represent an ambitious venture by marketers into the field of “social science” and more often than not, they get lost in cold financial numbers and miss critical nuances in being. That is not to pass a judgment the RMRS study whose finer details are yet to emerge.
The RMRS press release said its survey was conducted in partnership with Caxton, Edcon, DStv, Pick n Pay, Nandos, YFM, Toyota, Lexus and Sanlam. “Their combined customer base allowed RMRS to reach a record 49 000 respondents, making TopEnd 2013 the biggest, most in-depth survey ever conducted into the habits, attitudes and behaviour of the SA’s most affluent consumers”. According to the release the focus area represents the top 11% of economically active South Africans who account for almost 50% of the spending. It is “a very powerful and exceptionally elusive group to reach”.
The release said the study tapped into 1,6 million top-earning households. This refers to households with a monthly household income of at least R30 000. “Of these, the researchers identified the five percent at the very tip of the wealth pyramid, some 80 000 individuals with a monthly household income in excess of R100 000”.
The release declared there were some surprising results. “Among these: the total TopEnd group shows a leaning towards entrepreneurial activity, but when it comes to the űber-rich, a remarkable 73% are employed in a company,with only 20% ticking the self-employed box. And then came the remarkable statement “SA’s millionaires haven’t got rich on their own, they are corporate climbers”.
The release said the survey reveals that South Africa’s super-rich are not just wealthy but they are far wealthier than previously assumed. “Almost 10% of these ‘economic astronauts’ have a household income of R500000 or more a month, while 36% earn in excess of R200 000 a month”.
“Their level of income has allowed them to accumulate substantial assets: the average value of their fixed property is R6,2 million, 42% own more than one residential property (3% own six or more) and their average share portfolio is worth R2,6 million”.
The release quotes RMRS partner Alan Todd saying “As time passes, we can expect to see a few things happen to this segment, notably a slow and steady shift in the 76:11 ratio of white to black millionaires.
Added Todd “But it’s important to remember, that will represent an expansion of the segment rather than one group diminishing – once you’re in orbit, you really have to mess up spectacularly to come back down to earth”
“In that respect, the fact that 70% of millionaires feel they are much better off now than they were five years ago speaks volumes for the onward and upward march of South Africa’s most affluent consumers.”
RMRS concludes that financial wisdom is key to this segment of the market. Up to 40% have some kind of sideline income in addition to their corporate jobs, with 59% earning monthly income from their investments.
The release said the research results are contained in The Millionaire’s Report, the first of five reports to be released by RMRS. Others will focus on TopEnd housewives – the people who actually spend most of the household income; TopEnd black South Africans – those with a personal monthly income of more than R25 000 a month; TopEnd entrepreneurs – self-employed risk-takers; and TopEnd technology and online activities.