Insights

This is how much the average Aussie needs to feel ‘rich’

Instead of saving and investing, a new survey finds Australians want massive yearly salaries to become rich.
The post This is how much the average Aussie needs to feel ‘rich’ appeared first on The Motley Fool Australia. –

Key points

Australians don’t seem to realise earning $50,000 a year puts them in the richer half
Younger generations are overspending to keep up with a social media-driven lifestyle
You don’t need a $300,000 salary to build your wealth

A new survey has revealed greed is rife among Australians, who don’t realise they’re already in the wealthier half if they earn the median wage.

A quarter of Aussies would not consider themselves rich until they were earning at least $500,000 per year, according to new research from comparison site Finder.

This is 10 times the median personal income of $49,805.

A person receiving the median income means they are earning more money than half of the population.

Australians, on average, wanted a $326,900 salary each year to start counting themselves as wealthy.

That’s still almost 7 times the median wage.

As a comparison, in 2020 the base salary for a federal politician was $211,250. The prime minister earned $549,250 in total.

Finder personal finance expert Kate Browne said constantly wanting more money was dangerous, taking the focus off saving and investing.

“The reality is that the typical middle-class Australian is actually earning a $50,000 salary,” she said.

“If you are already fortunate enough to earn more than the median wage it’s a good reminder that you are already ahead. It can be tempting to keep striving for more, but it’s also important to truly enjoy your work.”

Keeping up with a social media lifestyle

Generation
Income to feel rich

Baby boomers
$313,031

Generation X
$354,100

Generation Y
$329,290

Generation Z
$286,964

Source: Finder; Table created by author

The study also found generation X set the highest bar to achieve ‘rich’ status, wanting an annual income of $354,100.

US figures from Credit Karma showed almost half of millennials spent beyond their means to keep up the appearance of a certain lifestyle.

“Remember, social media is a highlight reel. And while it can seem like everyone around you is hustling their way to the top, appearances can be deceiving,” said Browne. 

“There’s nothing wrong with striving to be financially comfortable, but endeavouring to compete with others is exhausting, expensive, and you’ll never be satisfied with what you already have.”

That survey showed food (47%), clothes (41%) and travel (33%) were the biggest items millennials were overspending on.

How to become rich without a $300,000 salary

Browne pointed out that building wealth did not require a $300,000 yearly income.

“Working on habits like cutting back on spending where you can and saving a regular portion of what you earn is a great start,” she said.

“Aim to put at least 20% of your income every month into a savings account and let this grow.”

Finder recommended a 50-30-20 budget, where 50% of your income is spent on needs, 30% is spent on wants and 20% of it is saved.

With interest rates currently at historic lows, investing outside of bank deposits was also an idea, added Browne.

The post This is how much the average Aussie needs to feel ‘rich’ appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

5 things to watch on the ASX 200 on Tuesday

Here are the top 10 ASX shares today

These 3 ASX 200 shares are topping the volume charts on Monday

ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise

5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info