Who wants to be a millionaire? You should read this first

According to a new global financial report, Australians are now the second-richest people in the world based on median wealth. As a nation with a preternatural obsession with winning things, good for us. And if you’re someone who’s always dreamed of being a millionaire – without having to go on TV to do so – you’re in for some interesting news.

Our second-place ranking came as part of the 2024 UBS Global Wealth Report, which analysed financial data from 56 countries and defined a person’s net worth by combining their financial assets (like cash in the bank and stocks) with real assets (tangible things such as property), minus any debts.

Do you want to be a millionaire? Or do you want to stop and smell the roses?Credit: Dionne Gain

First place for median wealth was taken out by the tiny European country of Luxembourg, where its 653,000 residents enjoy a median wealth of $550,610, while Australia’s second-place ranking saw us enjoy a median wealth of $387,176. Belgium, Hong Kong and New Zealand followed closely behind.

While we slipped to fifth place when it came to average wealth – behind Switzerland, Luxembourg, Hong Kong and the US – the amount itself increased significantly to $807,862.

Despite all of this, though, personal wealth in this country is predicted to boom in the coming years, with the number of Australians joining the millionaire club set to skyrocket.

According to UBS, there are 1.9 million US-dollar millionaires in Australia, which translates to about 7.3 per cent of the population. That might not sound that significant or unexpected at first glance, but stay with me.

What does being a millionaire mean if so many other people are becoming one?

Over the next four years alone, that figure is set to grow by 21 per cent, a faster rate of growth than Switzerland, France, and the US – all countries with, historically, a higher concentration of affluent and super-rich citizens than Australia.

Unsurprisingly, property and superannuation make up the bulk of wealth for the majority of us, with the total value of our national housing stock at the end of 2023 coming to $10.4 trillion, while super accounts for an additional $3.9 trillion.

In my mind, the question then becomes: what does being a millionaire mean if so many other people are becoming one?

Don’t get me wrong, I’d be first in line with everyone else to put my hand up to be given $1 million if the option was presented, but in a country where owning a house outright in a major capital city gets you most of – if not all of – the way there, it’s worth considering what this means and what it says about the way we set financial goals and view financial success.

Having a single figure as a goal can be extremely useful when you’re first getting the hang of managing your personal finances, but the risk in putting all of your effort into a numerical goal – particularly one as large as a million dollars – rather than something tangible, is how often the economic goal posts can change in a way that might leave you exposed to risk.

Say, for example, your goal is to be a millionaire by the time you’re 30 – a wildly popular ambition promoted by unqualified influencers giving out financial advice on social media to young people. With relatively little time on your side, you’re more likely to engage in high-risk investments and take on high levels of debt to get there quickly.

While not all debt is bad, the amount you have and its exposure to risk can be. And it’s here that the UBS report revealed another significant finding.

Despite being ultra-wealthy on paper, the report also noted that since 2008, countries in the APAC region have seen a 192.2 per cent growth in the debt rate.

As the report notes: “Asia-Pacific’s exceptional growth in both financial and non-financial wealth has, notably, been accompanied by a significant spike in debt. Total debt in this region has grown … more than 20 times than in EMEA [Europe, Middle East and Africa] and more than four times than in the Americas.”

As it stands, Australians carry some of the highest rates of household debt in the world, and the rate at which we take on that debt has been growing faster than the US, UK, Canada, Japan and a host of European nations, according to the International Monetary Fund.

Again, not all debt is bad. But when each average Australian household carries so much of it, reassessing your goals and asking yourself what you want and why is useful. Because for every millionaire, there are countless more who have had it momentarily and lost it (hi, crypto bros).

Rather than saying, “I want to be a millionaire because that’s a traditional marker of financial success”, a financial goal should be framed as what that money would bring into your life and afford you.

For example, “I want to have a roof over my head that I know cannot be taken away from me” or “I want to provide for myself and my children in the long term”. Maybe the ambition is to work hard for a few years and then never have to look at your phone during your kid’s weekend sports match, or perhaps it’s taking a year-long road trip around Australia and not having to work.

Just like those who have made and lost millions, there are plenty of people out there who will tell you, irrespective of how cringe and overused the phrase is, that money doesn’t automatically buy you happiness – and that sometimes it worsens it.

So while being in a growing cohort of millionaires might be nice, having enough to be happy, secure, and buying you time to stop and smell the roses is also just as valid.

Victoria Devine is an award-winning retired financial adviser, best-selling author and host of Australia’s No.1 finance podcast, She’s on the Money. Victoria is also the founder and director of Zella Money.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.

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