Australians need $5.3 million to feel rich
Being a millionaire no longer means having $1 million in the bank, but five times that amount.
In the past, if someone told you they had $1 million in the bank, you may have considered them to be rich. Not anymore. Australians now believe you need $5.3 million to qualify as rich, according to new research by finder.com.au.
This figure is more than seven times the average Australian household wealth of $740,000. Although, even this is mostly tied up in property rather than sitting around readily available in cash.
Australian men say they wouldn’t feel rich unless they had at least $5.9 million in the bank, while women say they’d need $4.8 million.
Interestingly, West Australians have a higher definition of wealth than anywhere else in Australia with $5.6 million being the average necessary to consider themselves rich. This is despite significantly lower property prices in the Western state compared to Sydney and Melbourne in the east.
So why do we need such a large, practically unattainable sum of money to feel rich? It isn’t necessarily because we, as a nation, are becoming greedier and want more and more.
In fact, research by RaboDirect released in March this year revealed that Australians only need to earn between $80,000 and $100,000 to feel truly happy. This is only slightly higher than the average Australian salary of $79,721.
Instead, we feel we need millions of dollars to keep up with the ever increasing cost of living. Rising property prices mixed with flat wage growth and inflation is making the cost of living more expensive than ever before, which is why we feel we need $5.3 million to keep up.
However, saving this kind of money is more a dream than reality for most Australians. For someone earning the average Australian salary and managing to save half their net income, it would take over 60 years to save $5.3 million.
If you’re looking to kick-start your savings, a high interest savings account is a great place to start. Check out our ultimate guide to savings accounts and make your money work harder for you.