Some Facts - Where most Australians are Financially......

I thought ABS was clear enough, no error here. Half of Australian households have > 450K in net assets, which puts Australia in the top 3 wealthiest nation on earth.

Sure, there's the PPOR in there. Still a very decent number, much higher than other developed countries.

Remember this is across all ages and includes those in their 20/30s just starting in life with very little investible asset. If you look at those retiring for whom investible assets mean something the numbers are much higher. And if you use 2016 numbers rather than 2014 they're even higher.

We're a very enviable lot by world standards.

 

It's interesting what is considered financially rich these days.
I wonder what % of Australians were worth 1mil in say 1980.
Is there any way to find this out?
I'll have a very rough guess and say it was about 1.4% at the time, equivalent to 5mil on the 2013/14 table.

 

The majority of the Australian households with a net worth less than 100k would be renters so property rises wouldn't have a positive impact on their wealth.

 

Makes you appreciate where you are on the ladder

 

And a decent percentage would be under 30 as well. I know that was me at 24, so I'm sure a lot of people are in the same boat.

 

I understand this but I am still surprised that a household with mum, dad and a couple of kids or a household with say 6 Uni students couldn't get over the $100K threshold.

The ABS definition of Household Net Worth is "the value of a household's assets less the value of its liabilities". I just thought (incorrectly, obviously) that when one looks at a household and adds up the value of all the cars, furniture, electrical goods, mobile phones, iPads, tablets, computers, books, etc meant the total would exceed $100k for most households, even those who are renting. Obviously for more than 20% of our households it doesn't.

Maybe, all those years where I didn't drink (at least to excess), didn't smoke, didn't go out, didn't go to the footy. didn't keep up with the latest fashion, didn't go on holidays, ... did mount up to something.

 

I have one child just over 30 and the other just under 30. I am proud to say that both of their households (they are both married and one has a child) would have a net worth that exceeds $100K.

But then, both already own one property (and looking to buy another, probably this year), both couples have good jobs, both couples work hard at saving (both set budgets and saving targets), both households have second jobs that they work on after-hours or weekends, ...

 

i wonder if this really is net ...perhaps gross instead?

 

The ABS definition of Household Net Worth is "the value of a household's assets less the value of its liabilities"

 

Given the debt - no debt argy-bargy in this (somewhat elongated, given the subject matter..) thread I propose that all those in any kind of hock call up their creditor and offer a debt for equity swap.

Then any poster who is in the "no debt" camp call up their bank and borrow a bunch of coin for some new investments and see where that leads them.

And all then report back here in due course.

Oh, and it looks like a golf-clap may be in order for Biz, who I inadvertently noticed had just notched his 1000th post.

 

Thanks for this post.

It really contributed to the discussion on this thread and added so much value.

 

Happy 1000th @Biz!

 

This is one of the worst piece of advise to build wealth IMHO. Trading is speculating and I don't know anyone who has done this successfully over very long period of time. If there was someone they would have easily accumulated billions of dollars in wealth considering the size of the financial markets. Their name would be there as richest person on Earth in fortune magazine instead of Bill Gates.

If someone asked me how can I build wealth I would tell them to go read the book "The richest man in babylon". The concepts of building wealth outlined there are as true today as they were hundreds of years ago.

1) Spend less than you earn.
2) Invest (not speculate) your savings
3) Keep doing this for a long time you are guaranteed to build decent wealth. The size will depend on amount you can save and invest and returns you achieve on those investments.

Some people boost those return figures by using debt but that still doesn't change the concept of building wealth mentioned in the above points.

Cheers,
Oracle.

 

Does the name George Soros mean anything?

 

Yes he is a poster boy for taking highly leveraged positions. Interesting that you would use him to prove your point when you have been advocating no debt. By your earlier description he would be considered poor.

 

I have heard of people using him as an example. What rank is he among the richest?

I haven't followed him but whenever I have come across his news his comments were mostly macro economic and so were his bets. Does that classify as trading in the same sense as you were advocating in your earlier posts?

Cheers
Oracle.

 

I am not sure it is??

4-5% is low and resi, I am sure there will some investors that make 10%+ dependent on asset class etc.

 

I know a fair few rich people. They're interesting. Some act rich and throw around money, some don't. None of them have traditional day jobs, which is about the only similarity between them.

I live with someone far more average though. He's almost 25, got his first job last year on around the median income. One of the first things he did when he got the job was get a (in my eyes) high balance credit card and max it on new furniture and things for his room. 6 months later he still hasn't paid it off, and all his money each fortnight just seems to go on ... stuff. He's currently bracing for his health insurance and some other costs his parents currently pay to explode when he turns 25. He's sort of my apprentice so I'm currently trying to figure out how to get him into some slightly healthier financial habits.

I have another friend around my age (40) on a higher than median income. His money seems to go entirely on travel and travel related things and his lack of assets reflects this nomadic lifestyle. He regularly picks on me for being a scrooge. Will be interesting to see how he goes in a few years.

Myself, I'm aiming to semi-retire in 3 years. It'll be fun. If I had a paid off house of my own to live in as opposed to rent to pay I could do it now, so that's my current priority.

 

You definitely touched a raw nerve, don't have a problem with your opinion, mine differs that's all.

I have lots of debt but my cash flow services the debt and generates income.

From experience If debt is not managed then it can seriously work against you, goodbye nice lifestyle today.

Seems many investors are addicted to accumulating property, increasing debt with no clear strategy other than property doubles every 10 years.

For me debt is good but without a clear strategy and management of debt it can also be a disaster just my opinion

MTR

 

There needs to be an internal change before any long lasting external change can happen.

The biggest difference I have observed from financially 'rich' people compared to others, is that they think completely in a different way.

My 2 cents only.