Where the world's richest live

For a lucky few, it's still good to be rich.

The world's wealthiest took a financial hit last year, but they're on the road to recovery, according to the 2009 World Wealth Report, released June 24 by financial management firm Merrill Lynch in partnership with consulting company Capgemini. The report outlines 2008 spending and investment habits of the world's richest people. Capgemini and Merrill Lynch define high net-worth individuals (HNWI) as those with at least US$1 million in financial assets, excluding collectibles, consumables, consumer durables and primary residences. Ultra-high net-worth individuals (U-HNWI) hold at least US$30 million in financial assets, excluding the same variables.

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By the end of 2008, the number of global HNWIs had decreased by 14.9% to 8.6 million, with a 19.5% drop in wealth to $32.8 trillion. However, Dan Sontag, president of the global wealth management group at Merrill Lynch, now part of Bank of America (nyse: BAC), said in a press conference that the downturn is slowing and that the affluent are starting to spend yet again.

Sontag, along with Bertrand Lavayssière—managing director of global financial services at Capgemini—also suggested that the market will fully recover by 2013, using the post-dot-com crash in the early part of this decade as a model.

However, where in the world that wealth comes from will change. Currently, the U.S. leads with 2.5 million HNWIs, but Asian countries like Japan and China are nipping at its heels. By 2013, the report suggests that the Pacific Rim region will boast more millionaires than North America. According to Sontag, 55 people in China become millionaires each day.

U.S. affluents are still deeply concerned about their net worth, according to Ron Kurtz, who is with the Alpharetta, Ga.-based market-research firm American Affluence Research Center. A survey conducted by the AARC in April showed that affluent Americans—the wealthiest 10% of U.S. households, as determined by the Federal Reserve Board—were even more negative than last fall regarding the possible growth of their personal income over the next twelve months. "These people aren't going to start spending again until they see a substantial recovery of their net worth," says Kurtz.

This year, the U.S. lost 18.5% of its HNWIs, while Japan lost just 10%. China shed 11.9%; its HNWI population of 364,000 surpassed the U.K. this year, which saw its number decrease from 491,000 to 362,000.

These numbers correlate with sales figures from many of the world's biggest luxury companies, which continue to see growth in emerging markets as mature ones struggle. While first-quarter 2009 sales at billionaire Bernard Arnault's conglomerate Moët Hennessy Louis Vuitton (otc: LVMUY.PK) decreased by 15% in the U.S. and 6% in Europe, but increased by 6% in Asia. Fashion and leather goods sales of HNWI-beloved brands like Louis Vuitton, Givenchy and Marc Jacobs were up 24% in Asia.

While emerging markets like Brazil—with 131,000 HNWIs—and the rest of Latin America are "poised to grow again," according to the report, another promising market—India—experienced the second-largest drop in millionaires, decreasing by 31.6% to just 84,000 after an increase of 22.7% in 2007. That plunge is attributed to the country's still-shaky economy, which saw a 64.1% decrease in market capitalization over 2008. Russia—known for its pack of lavish spenders whose bounties are intimately connected to equity markets as well as demand for oil and gas—saw a decline of 26.5% to 97,000 HNWIs.

All in all, the world's richest might be down. But they're not out. As the global economy improves, the wealthy will stand on the shoulders of others, first to see the light.

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In Pictures: Where The World's Richest Live