Most Asians are missing out of possibly lucrative investment opportunities because they do not know how much money they are really making, a recent survey by Fidelity Worldwide Investment shows. 

"Asians are confused about where they sit on the income spectrum and this is likely affecting spending, saving and investment decision making," commented Betty Ng, director of investment communications for Fidelity Asia-Pacific.

The report says that some 86 per cent of Asians cannot accurately guess which bracket their household incomes fall, with 66 per cent are falling short on estimates and 20 per cent are going over. Only 14 per cent of those polled had correctly appraised their income levels. In fact, 66 per cent had classified themselves as middle-class, although they had difficulty quantifying what that meant. 

Those who earn most tend to underestimate their ranking, the survey said, while those who earn least are likely to overestimate. Residents of Singapore, Sydney and Hong Kong, for instance, were found to have the least accurate idea of their income rank, while those living in Taipei, Tokyo and Seoul tend to go over. 

The study also found that most Asians (76 per cent) expect income disparity to worsen over the next ten years. Respondents in Seoul and Taipei were the most pessimistic about income inequality, while those who live in Mumbai and Sydney were the least pessimistic.

According to Ng, the rise in income disparity could lead many governments to adopt policies that would reduce inequality. These policies may affect returns across investment products and sectors and translate to more event-driven markets. Another concern would be tradition. China, for one, has a long history of being a poor country, so some people carry a very conservative stance toward money and are very protective of their wealth.

The income gap has increased across Asia over the past decade, with the Gini coefficient rising from 0.33 in 1990 to 0.46 in 2010. The Gini coefficient is a measure of wealth inequality.

The Fidelity Worldwide Investment study was conducted in March 2012 on 5,186 respondents across Beijing, Shanghai, Mumbai and New Delhi, Hong Kong, Taipei, Singapore, Seoul, Sydney and Tokyo.