The wealthier are getting more and more wealthy

Millionaires are expected to control nearly half of the world's personal wealth by 2019, according to a new study, suggesting that the wealth gap will continue to widen.

The Global Wealth report from Boston Consulting Group (BCG) said the number of millionaires in the world grew to 17 million in 2014, up from 15 million in 2013. The world's millionaires now control 41 percent of the $164 trillion in global private wealth, up from 40 percent in 2013. The report said millionaires are expected to control 46 percent of the world's wealth in 2019.

The growing fortunes of the wealthy are owed largely to rising stock markets and asset prices around the world. According to BCG, 73 percent of the gains in global private wealth last year came from market performance on existing assets rather than newly created wealth or businesses.

"The wealthier are getting more and more wealthy," said Anna Zakrzewski, a BCG partner and managing director. "They have a much larger share of their wealth invested in equity markets and last year was a good year for market performance."

By far, the U.S. still has the largest number of millionaires. That segment of the population grew by 4.7 percent last year to 6.9 million. (BCG defines millionaires as households with $1 million in easily monetized wealth—cash, stock and securities, pension funds and other financial assets. Their wealth measurement doesn't include real estate, business ownership and collectible and consumer goods).

China ranked second in millionaire population but had the largest number of new millionaires in 2014. Its millionaire population grew to 3.6 million from 2.4 million in 2014, meaning the world's second largest economy added more than half of the world's 2 million new millionaires last year.

Ranking third was Japan, with 1.1 million millionaires, up 4.7 percent from 2013.

Switzerland had the highest concentration of millionaires, or millionaires per capita. Fully 13.5 percent of Switzerland's population are millionaires. Bahrain ranked second, with 12.3 percent, followed by Qatar with 11.6 percent.

The report also highlighted a growing divide between the rich and the super rich, as billionaires and those with hundreds of millions of dollars enjoy stronger wealth gains than mere millionaires.

The number of ultra-high-net-worth households—which is defined as $100 million and up—is expected to grow by 19 percent globally and 12 percent in North America by 2019. 

In contrast, the number of "lower high-net worth" households, or those with $1 million to $20 million, is expected to grow by only 6.9 percent.

Thank you for reading Money Executive.

US Fed’s rate hike pricing

No surprises from FOMC minutes with suggestion that a June rate hike is off the table. Current market pricing of US Fed interest rate hike is Jun 6%, Sep 40%, Oct 63%, Dec 94%.

The question now is whether the USD bid this week is a correction of the USD sell off past two months or a continuation of the broader USD rally past year.

The market will continue to be data dependent and news driven.  Tonight, we have ECB minutes, USD existing home sales, Philly Fed Manufacturing and ECB President Draghi speaking amongst other events. The Greece saga continues with a deal deadline at the end of the month.  

Trading Quote of the Day: “There is nothing wrong with changing a plan when the situation has changed.” –Seneca

Green lines are resistance, Red lines are support

EURUSD

Likely scenario: Short positions below 1.1165 with targets @ 1.106 & 1.1015 in extension.

Alternative scenario: Above 1.1165 look for further upside with 1.1215 & 1.128 as targets.

Comment: The pair stands below its resistance.

GBPUSD

Likely scenario: Long positions above 1.5445 with targets @ 1.563 & 1.567 in extension.

Alternative scenario: Below 1.5445 look for further downside with 1.539 & 1.535 as targets.

Comment: The RSI is well directed.

AUDUSD

Likely scenario: Short positions below 0.795 with targets @ 0.7855 & 0.783 in extension.

Alternative scenario: Above 0.795 look for further upside with 0.798 & 0.803 as targets.

Comment: As long as the resistance at 0.795 is not surpassed, the risk of the break below 0.7855 remains

NZDUSD

Likely scenario: Short positions below 0.7375 with targets @ 0.727 & 0.723 in extension.

Alternative scenario: Above 0.7375 look for further upside with 0.741 & 0.745 as targets.

Comment: As long as 0.7375 is resistance, likely decline to 0.727.

USDJPY

Likely scenario: Long positions above 120.7 with targets @ 121.5 & 122 in extension.

Alternative scenario: Below 120.7 look for further downside with 120.3 & 120.1 as targets.

Comment: The RSI lacks downward momentum.

USDCHF
Likely scenario: Long positions above 0.933 with targets @ 0.941 & 0.945 in extension.
Alternative scenario: Below 0.933 look for further downside with 0.927 & 0.9215 as targets.
Comment: The RSI is mixed and calls for caution.

USDCAD

Likely scenario: Short positions below 1.226 with targets @ 1.2155 & 1.211 in extension.

Alternative scenario: Above 1.226 look for further upside with 1.2305 & 1.2355 as targets.

Comment: As long as the resistance at 1.226 is not surpassed, the risk of the break below 1.2155 remains high.

GOLD

Likely scenario: Short positions below 1213.75 with targets @ 1200 & 1191 in extension.

Alternative scenario: Above 1213.75 look for further upside with 1224 & 1232 as targets.

Comment: As long as 1213.75 is resistance, likely decline to 1200.

OIL
Likely scenario: Short positions below 59.3 with targets @ 57.9 & 57.5 in extension.
Alternative scenario: Above 59.3 look for further upside with 60 & 60.8 as targets.
Comment: As long as 59.3 is resistance, likely decline to 57.9.

DAX
Likely scenario: Long positions above 11635 with targets @ 11900 & 12085 in extension.
Alternative scenario: Below 11635 look for further downside with 11415 & 11225 as targets.
Comment: The RSI is mixed.

We hope you will make wise investment decisions basing on the information given.

Here comes the Memorial Weekend

Drivers are likely to pay a few more cents per gallon for gasoline this Memorial Day weekend, which might be the highest prices of the year, experts say.

Tom Kloza, global analyst at Oil Price Information Service said he doesnt think we're going to see this huge crazy drop in gas prices. He thinks we saw one in 2012 in June, but he thinks the big drop comes after Labor Day.

Absent a major refining incident, hurricane or other disrupting factor, unleaded gasoline prices should peak for 2015 at about $2.75 per gallon in the next several days. 

Gasoline at the pump was averaging $2.72 a gallon  on Wednesday, 6 cents higher than last week and 33 cents more than a month ago, according to AAA. Kloza said he expects summer prices to hover around $2.50 nationally before dropping closer to $2-$2.25 in the fall.

"This weekend will be peak, and we'll see slight declines as we go through the summer," said Andrew Lipow, president of Lipow Oil Associates. "There's still a lot of crude oil out there that's going to temper any rises at all. But having said that, the demand for gasoline this summer is going to be very good, due to the lower prices."

Gasoline is expected to peak at about a dollar a gallon less nationally this year than last year, when the high was $3.71. Kloza said he thinks the futures market signaled the peak on May 6, when gasoline futures hit a high of $2.09 per gallon.

Memorial Day is viewed as the start of the summer driving season.

"It's a dress rehearsal for July and August. ...We're about six weeks away from the typical demand peak week which is in late July," said Kloza. "If you look at gasoline futures, there's a drop of about 30 cents that's perceived between now and December, but I think it will go down more than that."

One factor elevating the price this year is the outage at the Torrance, Calif. Exxon Mobil refinery, which produces about 10 percent of the gasoline for California, Lipow said. Californians were paying an average $3.80 per gallon of unleaded on Wednesday, according to AAA. 

"If you throw out California, the national average is about 10 cents lower," Kloza said. "I think we're going to see a substantial give back of some of the price strength in California because the wholesale prices have dropped as ... gasoline has arrived from Korea, Canada and the U.S. Gulf Coast."

Kloza said the Torrance refinery is not expected to reopen soon enough to affect summer driving, but it has caused price dislocations on the West Coast. For instance, gasoline was trading recently in the spot market at more than $120 a barrel, double crude prices. "In the rest of the country, gasoline trades for $10 to $15 over the price of crude. California really became untethered," Kloza said.

U.S. refineries were running at 92.4 percent of capacity last week, and gasoline production decreased slightly, according to the Energy Information Administration. Gasoline supplies declined by 2.8 million barrels, while distillates, including diesel fuel, fell by 500,000 barrels.

The EIA also pointed out that refining margins are at multiyear highs. For instance, the "crack spread," or difference between wholesale prices and crude oil, was the highest in New York Harbor since 2007, and in California it is dramatically higher.

"Refiners are doing splendidly," said Kloza. "The irony is that we had all the light shale crude in the U.S. The big worry among refiners was we're running this light sweet crude, and we're going to make too much gasoline." He said what's happened is that prices rose, and the refiners are making more profits.

Thank you for reading this blog. We look forward to seeing you soonest.

Becoming Financially Independent

One of the goals that we all have in common is that we all want to be financially independent. We all want to have enough money so that we never have to worry about money again. We want to build a financial fortress around ourselves. We want to make a high income, get out of debt, put money in the bank and have the ability to do the things we want without being worried about the costs. The only question is, “are we going to do it or not?”

The good news is that there are more people achieving financial independence faster today than ever before. There are currently almost four million millionaires, most of them self-made, first generation. Somewhere, somehow, someone becomes a self-made millionaire at the rate of one every four and a half minutes, 365 days a year. And for every person who becomes a self-made millionaire, there are many, many more who are achieving a net worth in the hundreds of thousands of dollars through different wealth creation strategies such as developing a millionaire mindset, developing habits of wealthy people among others..

By setting financial accumulation and financial independence as your career goals, and then by making a plan on the one hand to get better and better at what you do while on the other hand saving more and more of what you earn, you will become financially independent, if not a self-made millionaire in the years ahead.

Most great fortunes are built slowly. They are based on the principle of compound interest, what Albert Einstein called, “The greatest power in the universe.” In full 99% of cases where people become wealthy, it is over a long period of time, and it is based on slow, incremental growth as the result of compound interest.

Every dollar that you save, properly invested and protected, has the ability to grow 5% – 10% each year. As your money grows, it compounds on itself, and grows even more. According to Stanley and Danko, it takes the average millionaire 22 years to accumulate a million dollars from the time he gets serious about his financial life. Most wealthy people get rich slowly, by gradually increasing their earning ability, saving more and more from their income, and investing it carefully and intelligently so that it grows and compounds over the years. You must do the same.

Thank you for reading and lets look forward to creating sustainable wealth.

WEALTH CREATION

Over the years I have heard people say that you cant create wealth over night. Well, to me I think it depends how you look at the issue. In the sort run you could create temporary wealth overnight, and it depends on how you use that wealth you have got. If well invested, you could create long lasting wealth, but it is also so easy to lose it all.

I have met many people fronting different theories about wealth creation, but I have come to conclude that wealth creation is a gradual process. It takes a lot of discipline, sacrifice and patience coupled with research. If you started small and watched your wealth grow from a $1 per day to 5$ per day and before you know it you are making hundreds of dollars per day.

With this you can now say that you have succeeded in the wealth creation process.

Making money through on-line surveys?

https://www.surveysavvy.com/?m=6613081

The spillover effect of Oil price crash bankrupting small oil companies

Sherri McDaniel is already feeling the sting of the drop in crude oil prices from more than $115 per barrel in June to less than $50 in early January. She is president of ATEK Access Technologies, a small Minneapolis firm that owns TankScan, a wireless monitoring system that keeps track of fluid levels in oil tanks. Oil companies that use the system are starting to postpone orders, as they take a cautious approach to spending.

"In the oil fields, they are starting to pull back pretty heavily," McDaniel said. "They are literally taking tanks and laying them down on their sides." As a result, she explained, "we have a number of big orders that are temporarily on hold."

ATEK Access Technologies is one of many small and midsize firms that are already feeling the effects of lower oil prices. The causes of the decline are complicated, but they are an outgrowth of the domestic shale oil boom and a decision by OPEC, the cartel of oil-producing countries, not to rein in its own oil production in response. The result has been a price war.

Some big oil firms are already cutting capital budgets and jobs in response to lower oil prices, but it is smaller players in the industry that are feeling the pain most acutely.

More than 20,000 small and midsize firms drive the "hydrocarbon revolution" in the U.S. that has helped the oil and gas industry thrive in recent years, and they produce more than 75 percent of the nation's oil and gas output, according to the Manhattan Institute for Policy Research's February 2014 Power & Growth Initiative Report. The Manhattan Institute is a conservative think tank in New York City.

A sustained decline in prices could lead to layoffs at these firms, say experts. "The energy industry has been one of the job-growth areas leading us out of the recession," said Chad Mabry, a Houston-based analyst in the energy and natural resources research department of boutique investment bank MLV & Co. in New York City. "In 2015, that changes in this price environment," he said. "We're probably going to see some job losses on a fairy significant scale if this keeps up."

Growth of jobs in the oil and gas industry greatly outpaced the private sector from 2007 to 2012, according to the U.S. Bureau of Labor Statistics. There was 40 percent growth in jobs in oil and gas, with 162,000 new jobs created, compared to 1 percent job growth in the private sector. By November 2014, 215,200 people worked in oil and gas extraction alone. And with job-related fields such as mining and quarrying factored in, employment in the industry hit 869,000, the BLS found.

Many of the new jobs are well-paying. Average hourly earnings in oil and gas extraction were $31.62 for non-supervisory workers in October and $40.79 for all workers.

McDaniel said ATEK Access Technologies has the staying power to withstand the drop in oil prices. Her firm owns three brands that have combined revenues of $50 million and collectively provide jobs for 200 employees. However, she believes many owners are in a weaker position to wait it out.

Companies on the brink

The small firms that are hurting range from exploration ventures to consultancies.

Last week a small central Texas oil producer, WBH Energy Partners, filed for Chapter 11 bankruptcy protection. The financial troubles reportedly began in September when Minnesota debt investor Castlelake declined to provide more funds under a credit facility. The 3-year-old company had more than $30 million in liabilities and more than $10 million in assets. It had about 2,600 net acres of oil and gas land in North Texas Barnett shale combo play, a region rich in shale that overlaps with oil formations. The filing demonstrates how small oil producers are feeling the squeeze on two fronts—falling oil prices and spooked investors.

Many industry experts say the struggles small players are facing are a harbinger of things to come, since there are many overextended producers who have not hedged their production well enough—a task that has gotten harder since big banks have exited the physical commodities business.

Under pressure from an activist investor who wanted liquidity, Trevor Spagrud, president and CEO of Hyperion Exploration, a publicly traded junior light oil and gas company in Calgary, Canada, was preparing in December for the sale of the roughly 4-year-old company to a Chinese firm, Tri-Win International Investment Group.

With drilling each well costing $3 million to $4 million when it used horizontal multi-stage fracking techniques, Hyperion was under capitalized to deliver a "highly repeatable rate of return" in the immediate future, Spagrud said. Hyperion's team, about 16 people at its peak, had shrunk to eight as the company prepared for the sale.

"We could have tried to raise equity," he said. "When an activist investor gets involved, they quickly want full liquidity. We were somewhat hamstrung by that mandate. We have entered into a transaction to do that."

Spagrud, an engineer, is planning to start another venture in the industry once the deal is completed. "It's been frustrating for so long, you just want to move on," he said.

At ClearHedging, a 2.5-year-old firm that provides risk-management hedging advice to oil and gas producers, Chicago-based executive director Brad Carmody said that while current clients are still using its services, new business is "definitely quiet." With prices so low, he explained, "there's no interest in hedging at all."

He and partner A.J. McNally, based in the Greater New York City area, are now figuring out how to pivot in a new direction. "At the time we got into the business, the industry was booming. The price of oil was high," Carmody said. Now they're looking at "How do we apply our skill set outside of oil and gas?"

Small vendors—ranging from those who lease out oil rigs to teams that assist in drilling and completing wells—are particularly vulnerable. Many operators who might need their services have been doing their capital budgeting for 2015, said MLV's Mabry, adding, "We've seen a pretty traumatic response. There are hundreds of millions in capital that won't be spent."

Industry's downward slide

For small and mid-cap firms in the industry, MLV was projecting a 10 percent to 15 percent growth in capital spending before prices plunged. It is now expecting a 20 percent to 25 percent decline, he said.

"Everyone is on edge," Mabry said. "The companies we talked to said they haven't even gone back to their drilling contractors. Their vendors have come to them and said, `I know things are getting tight next year. We're willing to negotiate on rates and work with you in this environment.'"

Some firms that serve the oil and gas industry are finding the lower prices have an upside. TempoIQ, a 14-employee start-up in Chicago, is among them. It offers a cloud-based software system that helps clients interpret data that come from sensors. Oil companies—comprising about 15 percent to 20 percent of its customer base—have used its technology to track data such as pressure readings from sensors on oil pipelines, said Justin DeLay, co-founder and chief marketing officer.

DeLay believes sensors—and the technology to interpret the data they gather—will likely become more important as oil companies look for efficiencies in their operations to offset lower fuel prices. "There is a big push for preventative maintenance," he said. "They are looking for early warning signs something is about to break."

In the meantime, clients in other industries have more money to invest in technology now that their fuel costs have decreased, he said. "What we've been hearing is, `Hey, we've wanted to do a sensor project like this for a while but hadn't had the ability to do it because we haven't had enough money to do it,'" said DeLay.