Aussies are wealthy compared with the rest of the world, but when will you be a millionaire?
- Australia has second-richest population: Credit Suisse report
- Over 1 million Australians in the ‘millionaire’s club’ (by US dollars) – 7.35% of all adults
- However, average Aussie will take 97 years to hit $1 million: finder.com.au Millionaire Calculator
October 29, 2014, Sydney – Are you rolling in pineapples in a silk robe across your zebra-skin rug? Or sitting on your gold-plated throne while watching the game on an LCD screen mounted above your gas fireplace in your ensuite that overlooks the harbour? These could be the images of how people in other countries think we live, although many Australians might not feel so well off, following research compiled by one of Australia’s biggest comparison websites finder.com.au.
A Global Wealth Report from Credit Suisse showed Australia has 1.25 million US-dollar millionaires, including real estate and financial holdings. To put that into perspective, this is 7.35 percent of all adults.
The median Australian adult was worth more than US$225,000 (A$256,211) in June 2012, the highest in the world for the fifth consecutive year, according to the report. This was well ahead of the second wealthiest population on the list – Belgium on US$173,000 (A$195,258).
Michelle Hutchison, Money Expert at finder.com.au, said despite these surprising figures, other statistics show a bleaker situation for many Australians.
“Many Australians are growing richer and it’s great to see that we rank high compared to many other nations.
“For instance, the net wealth of the average Australian adult has more than quadrupled since 2000 – from US$103,151 (A$116,305) to US$431,000 (A$485,947). That makes Australians the second-richest population on the list, behind the Swiss at US$581,000.
“Only 6 percent of Australians have wealth below US$10,000 (A$11,284), compared with 29 percent of people in the United States and 70 percent for the world as a whole, according to the report.
“However there are a lot of Australians who would struggle to reach the ‘millionaire’s club’, with the wealthiest 20 percent of households in Australia accounting for almost two-thirds (61 percent) of total household net worth – an average net worth of A$2.2 million per household.
“The average Australian adult earns $1,516.90 per week and saves just 9.4 percent, which is worth an average of $142.60 in savings per week.”
Australians have a record $675.1 billion of personal savings in banks, worth an average of $37,544 per adult. According to the finder.com.au Millionaire Calculator, which estimates the time it will take to hit $1 million in savings based on savings patterns and interest earned, a 30 year-old with the average savings of $37,544, who saves about $142.60 per week, and the average savings interest rate of about 3 percent, it would take them over 97 years to become a millionaire.
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Not surprisingly, baby boomers are the wealthiest of the nation. The age group holding the highest average net worth of $1.1 million in 2011-12 was households aged between 55 and 59 years. Many of these people are nearing the end of their time in the labour force or have recently retired.
Those who live in a capital city are likely to save 21 percent more than those living outside capital cities.
“If you’re dreaming of one day becoming a millionaire, use this calculator to find out how long it will take before you hit the big time. You might be surprised by the difference it can make to add a little extra into your savings or finding a better savings account.
“For instance, if you are 25 years-old and have $10,000 sitting in your transaction account earning next to no interest (0.1 percent), and you save $1000 per month, it will take you about 79 years to reach millionaire status. However, if you had your savings in an average savings account with 3 percent interest (using the same scenario), you would be a millionaire in 41 years – that's about half the time compared to saving with no interest earned.
"So it's important to make the most of your savings and consider using a high interest savings account or add it to your home loan. For savings accounts, make sure you keep track of how much interest you earn because it can make a serious difference to your millionaire potential,” said Mrs Hutchison.
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The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
finder.com.au is Australia's most visited comparison website and has helped over 4.8 million Australians find better credit cards, home loans, life insurance, shopping deals and more since 2006. finder.com.au compares over 250 credit and debit cards from 31 brands, over 300 home loan products, and information from 13 life insurance providers as well as online shopping promo codes, mobile phone plans, travel insurance and more. One Australian every five minutes is using finder.com.au to find better (Source: Google Analytics).