Aussie perceptions of wealth are changing.
Ever wondered what the mark of a rich person is these days? It’s probably not what you’d think.
A new study has confirmed what many have long suspected: the days of a six-figure income being a yardstick for high earnings are truly over and the modern concept of a good income is way higher.
The Finder research revealed Australians wouldn’t “feel rich” unless they earned a minimum amount close to $400,000 a year – although views of a good pay packet varied by generation.
Expectations also varied by gender and location, with men in bigger cities tending to have higher figures in mind when thinking of what constituted good pay, the nationally representative survey showed.
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Part of the reason for higher pay expectations in general was a recent explosion in the cost of living – especially from home prices and rents.
These higher costs have meant simply paying for essentials requires much more than before, raising the bar for what kind of income could be considered “rich”.
Finder noted the exact amount the average Australian said they would need to feel rich was $389,118 per year, which was seven times larger than the national median personal income of $55,062 a year.
Finder’s research found Gen Y needs the most money to feel rich by a long shot ($470,881), compared to $416,067 for Gen X.
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Personal finance expert Sarah Megginson said Aussies would do well not to compare themselves to others. Picture: Michelle Swan.
Baby Boomers need the least of the generations to feel wealthy ($273,648), compared to $351,793 for Gen Z.
Finder personal finance expert Sarah Megginson said these gaps in generational perception were influenced by the different needs of each age group.
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“Millennials and Gen X … are buying homes, raising kids, paying for education and they’re doing it all with one eye on retirement, while chasing home ownership,” Ms Megginson said.
“These age groups are not as likely to be quarantined with existing wealth and assets like many baby boomers, nor are they young enough to kick the can down the road and worry about it in the future like many Gen Z.”
Rising home prices have meant Aussies need more money to feel they are getting ahead. Picture: Rohan Kelly
Baby Boomers’ lower expectations reflected their cheaper lifestyles, she added.
“Baby Boomers are generally more set-up and financially secure compared to younger Aussies, so their definition of wealth tends to be more modest compared to those still juggling mortgages or trying to crack into the property market.
“Gen Z are more likely to still be living in the family home, or in shared housing, which can mean lower day-to-day costs, so their expectations aren’t as high.”
Men ($393,438) would need to earn $9,000 more than women ($384,424) in personal income to consider themselves affluent, according to the polling.
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Women and men’s ideas of wealth are starting to align after previously being somewhat different.
This gender gap is narrower than it used to be, with the same survey in 2022 revealing a $20,000 gap in what men ($336,516) and women ($326,929) thought of as the mark of someone rich.
Ms Megginson said constant longing for more money can come at a cost.
“Remember only a small percentage of the population earns anywhere near $400K,” she said. “It’s easy to compare yourself to others – social media reels can make you feel like a nobody.
“True wealth isn’t just about money. Richness can mean feeling content and fulfilled in more than your bank balance.
“That said, Australians are still dealing with expensive energy bills and groceries and rising insurance premiums that never seem to stop.”
BANK BALANCES REVEALED
Finder polling data from July shows the average Aussie is saving $984 per month and has $47,624 in cash savings.
The average was somewhat skewered by individuals with very high balances as 43 per cent of Aussies reported having less than $1,000 in savings.
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Just under half of Aussies said they had no savings.
Ms Megginson said it was important to have realistic financial goals.
“Growing wealth doesn’t have to mean earning the biggest paycheck – the best thing you can do is develop great money management skills.
“Look at how much you earn and what your everyday bills and expenses are so you know how much you can afford to spend on luxuries such as eating out and shopping.”
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