You need a fortune of at least $5.3 million in the bank to qualify as “legitimately rich” in Australia these days, according to a survey of more than 2,000 Australians by comparison site Finder1.
If you’re thinking there’s no way you’ll ever have that kind of dosh just lying around, don’t worry, you’re probably not alone2.
After all, $5.3 million represents more than seven times the average household’s wealth in Australia ($740,000)—and that money is usually tied up in assets and not sitting in a bank account3.
What the stats say
The research by Finder found men wouldn’t feel rich without a minimum of $5.9 million in the bank, while women said they’d need around $4.8 million4.
Interestingly, parents with younger children said $3.7 million in the bank would qualify someone as rich, while those with kids aged 10 to 18 believed a bank balance closer to $8.2 million was required5.
How things have changed
Bessie Hassan, Money Expert at Finder, said the idea of wealth had shifted dramatically over the years6.
“Gone are the days where being a millionaire was the benchmark of wealth. Now, you need to be a multi-millionaire to be considered rich in Australia, and this is just in savings alone,” Hassan said7.
She added that even those with high-earning capacity could still struggle financially, emphasising that inflation, coupled with the rising cost of childcare and education fees, probably contributed to how people viewed financial wealth8.
The rose-coloured glasses effect
Hassan said once people accounted for rent or mortgage repayments, household bills, travel and the cost of having a family, there was not a whole lot left over in savings9.
“For many people across Australia, $5 million is an inconceivable sum,” she said, adding that saving that sort of money would be comparable to winning the lottery10.
According to Finder, for the average Aussie (who earns a salary of just under $80,000), it’d take more than 60 years to have $5.3 million saved in the bank, even if they pocketed half their net income11.
Tips to boost your savings
Hassan said drawing up a household budget and being smart with your money could go some way in helping you make the most of your savings12.
She pointed to asking for a discount on your bills or trying to convince your bank to give you a higher interest rate on your savings account13.
Looking for assistance?
Whatever you might be saving for, our savings calculator can help you plan and manage your goals.
You may also want to check out the AMP Bett3r Account, which can make managing your money easier, as it allows you to divide your money into pay, save and spend subaccounts.
For further assistance, call your adviser and, if you don’t have one, call us on 131 267 or use our find an adviser tool to locate one nearby.
Meanwhile, here are some other articles that might provide some food for thought:
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