Ever felt asset rich but cash poor? If you have then you’re not alone, and I’m hearing you!
This week, I looked at the value of my property assets and discovered they’re sitting at just over $2 million. Nice, I’m a millionairess – woohoo!
Apparently this is nothing to celebrate… okay that’s a bit far, but as far as money in the bank goes, well, I’m cash poor.
In fact you need at least $5.3 million in the bank to qualify as rich in Australia, according to comparison website finder.com.au.
The survey of 2,005 Australians asked respondents to identify the amount they’d need to consider themselves wealthy and found a bank balance of at least $5.3 million, on average, is what’s required.
The research found women would need $4.8 million on average to feel rich, while men needed at least $5.9 million in the bank.
This is a huge amount when you consider the average Australian household has a wealth of $740,000, and that this is mostly tied up in assets such as property.
“Gone are the days where being a millionaire was the benchmark of wealth,” says Bessie Hassan spokesperson at finder.com.au.
“Inflation coupled with the rising cost of childcare and education fees may be contributing to our new take on what it means to be rich,” she says.
Ms Hassan says those Australians with a high earning capacity may still struggle financially.
“Once you account for mortgage repayments or rent, household bills, travel, and the cost of having a family, there’s not a whole lot left over in savings. You can be earning a six figure income and still be clutching at straws.”
For the average Australian earning a $79,721 salary and saving half their net income, it would take 60 years and 5 months to have $5.3 million saved in the bank.
- West Australians have a higher definition of wealth than anywhere else in Australia, with $5.6 million being the average amount needed to be rich.
- Those in New South Wales believe you need around $5.5 million in the bank to be considered rich, putting them in second place.
- Generation Y believe those with $5.4 million in savings are rich, while Baby Boomers put the figure at $5.2 million.
- For Generation X, $5.3 million is the amount needed to consider themselves rich.
Interestingly, parents with young children claim that $3.7 million in the bank qualifies someone as rich, compared to parents with kids aged 10 to 18 who believe the required bank balance is $8.2 million.