Shock bank balance you now need to be ‘rich’
Aussies have revealed the amount in savings, plus super, equity and investments, they think you need to be considered wealthy – and it’s not what you’d expect.
Aussies have revealed the magic number they believe one needs in earnings, super and bank balance to be considered “affluent” – and it’s probably not what you’d think.
A Finder survey revealed the average Aussie thought they’d need an income of at least $307,000 a year to feel rich, coupled with plenty more in assets.
Aussies said they’d feel affluent if they had savings of at least $450,000.
The average national salary is about $98,000 a year, according to the ABS.
Finder noted that the average Australian reported having about $36,300 in the bank, while about 40 per cent of the population had less than $1000 in savings.
Survey respondents indicated they’d need substantially more in super, general investments and home equity to be considered “rich”.
A super balance of $1.4m was considered the mark of someone wealthy, while a “rich” property owner was viewed as someone with an equity position over $1.3m.
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When it came to shares, crypto currencies and other general investments, a portfolio value of $1.5m was considered the point at which someone could be thought of as “rich”, the survey showed.
The data showed the average person with investments has a balance of $59,714.
Finder money expert Rebecca Pike said high property prices may have influenced how much Aussies felt they needed to be wealthy.
Many people needed to be “realistic” about how much money was really required to live a comfortable life, Ms Pike added.
“Aussies have set the bar pretty high in terms of what constitutes being rich,” she said.
“However with the median house price in Sydney now sitting at over $1.6 million, it’s not surprising that our standards are so high.
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“In the age of social media, it’s easy to get caught up in other people’s highlight reels, but try to avoid using others as a benchmark for success.
“Remember only a fraction of the population earns anywhere near $300,000 per year.”
Perceptions of what it took to be wealthy varied by generation. Gen Z respondents thought they needed to earn the least amount of money to be rich at $281,450 and were most in line with Baby Boomers who signalled $290,000 earnings as the mark of wealth.
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Gen X’s idea of “rich” earnings was the highest at $331,197, followed by millennials at $311,000.
“Baby Boomers are typically more set up and financially stable compared to younger Australians and so their ideas of wealth may be lower than those who are still trying to save and pay off their home loans,” Ms Pike said.
“Everything from the cost of everyday items to property prices and energy bills has risen so much over the years that if you’re not deep into paying those costs, you may not realise just how expensive it is and how much more you may need.
“This is also true of gen Z, of which many are still living at home or are living in share houses where the costs are sometimes lower.
“For millennials and gen X however, they are fighting the increasing cost of living, rising mortgage rates and rents, and wage growth that isn’t picking up in line with their costs.
“These generation brackets are also the most likely to have children, which obviously adds on extra costs.
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“It will also come down to people’s idea of wealth, depending on the environments they’ve grown up in.”
Finder indicated that the average Aussie was saving $695 on average per month, down from $724 on average per month in July 2022.
“We know Australians are really feeling the pinch. The cost of almost everything has gone up, and people are saving less on average than they were two years ago.
“Money that once went into savings is now being chipped away at in order to pay for necessary costs like higher rents and mortgage repayments, higher energy bills and rising grocery costs.”
Ms Pike encouraged Australians to sharpen their financial skills.
“The best investment you can make is in your own financial education,” she said. “Learning the basics – like how to set up a budget and how to grow your money – can put you in a great position. Small but simple habits make all the difference.”
Originally published as Shock bank balance you now need to be ‘rich’