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It’s official – the 2018 Credit Suisse Global Wealth Report found that Australians have overtaken the Swiss to be number one in the world when it comes to highest median wealth.
According to the report, which analyses the wealth held by 5.0 billion adults across the globe from the least affluent to the wealthiest individuals, the median or “middle” level of wealth (assets minus debts) held by Australian adults is $US191,453.
Switzerland has a higher “average wealth” than us as because of a few ultra-high nett worth individuals who skew the figures.
The report shows that collectively Australians have amassed “net worth” of almost $10.4 trillion.
This includes assets worth $12.8 trillion, minus liabilities worth $2.4 trillion.
Now I know that many Australians whose wages have not gone up for a number of years and who are battling with rising energy costs and record high petrol prices are saying “that’s not me — that’s the 1%.”
However what they forget is that compared to the rest of the world — they are the 1%!
Yet currently our consumer confidence is at very low levels – we’re suffering a crisis of confidence because of the barrage of scary headlines the media keeps throwing our way.
It’s much the same with property
Currently many home buyers and property investors are worried.
Last year they were worried that they would miss out on the rising property prices (F.O.M.O.)
Today it’s F.O.B.E. – fear of buying early, worrying that prices will drop further.
Too many investors are making their decisions based on the media – not on the fundamentals.
They forget that:
- Our economy is chugging along nicely and is the envy of most developed nations
- Our interest rates are at historically low levels and unlikely to go up any time soon
- We’re creating more jobs than ever for our fast growing population.
- We’re not building enough dwellings to accommodate all the new households and, other than in Perth and Sydney, vacancy rates are at all time lows.
Yes, investors are making 30 year decisions based on the last 30 minutes of news.
They forget all the good news and how we are the wealthiest nation in the world.
A lot of our wealth has to do with super and property
According to the Credit Suisse report, the average wealth per adult in Australia has increased to USD $411,060, mainly courtesy of growth of property prices and superannuation balances.
In fact, since 2000, the average growth rate of wealth per Australian adult was 12 per cent per annum.
Plus, about 60 per cent of our median wealth is due to property ownership, with the remainder generally reflective of our mandatory superannuation system that generates strong pension wealth and is the envy of other Western residents.
While some Australians might not feel wealthy, on a global comparison rate, this report proves that they are.
The report also found that wealth is more evenly distributed in Australia than other comparable countries with only six per cent of our adult population having a net worth below USD $10,000.
On the other hand, in the UK, that figure is 18 per cent and in the US, it is 28 per cent.
The proportion of Australians with wealth above USD$100,000, at 67 per cent, is the fourth-highest of any country, and about seven times the world average.
Also we have nearly 1.6 million people in the top one per cent of global wealth holders, which represents 3.2 per cent, even though Australia is home to only 0.4 per cent of the world’s adult population.
What does it all mean?
If you ask me this research is just further proof that we’re The Lucky Country.
Not only do we have one of the highest proportions of home ownership in the world, we also have an ethos that supports anyone prepared to “have a go”.
Over the course of my property investment journey, I have been delighted to see the increasing numbers of Australians who are also keen to improve their financial futures.
No longer are they satisfied with simply paying off the mortgage on their home or naively hoping that they will be happy to merely survive on the pension when they retire.
Rather, they are opting to take charge of their finances today.
You see…before the start of the 21st Century, property investment was not a wealth creation tool that many people thought about.
Most of our population was committed to the concept of the Great Australian Dream, but few considered doing anything different than what their parents and their grandparents did.
Over the past three decades, I have been proud to help thousands of ordinary Australians improve their financial futures.
Some have opted to simply buy one or two investment properties, while others have grown their portfolios by many more.
Whichever number of properties they have opted to buy, the one thing they had in common is they took action.
Those that have done the best often took action when everyone else was sitting on their hands worrying about all the bad news.
Like 10 years ago during the Global Financial Crisis, during the Tech Wreck of the early 2000’s, the Asian Financial Crisis of 1997 or the recession we had to have in the early 1990’s.
They recognised that life on the pension in their twilight years is not the type of retirement they have ever dreamed about.
In fact, it is the stuff of nightmares.
Instead, by working with an expert team, they have become active, rather than passive, in their own wealth creation efforts.
I have no doubt that is one of the reasons why Australia is now punching well above its weight on the world wealth stage.
And I have no doubt that we will continue to do so in the years ahead because Aussies are not afraid of hard work and we’re not afraid to forge our own paths to create lives far from ordinary.
And those that take action now, while others sit back worrying about the continuous conveyer belt of negative press, will look back at these times and appreciate the opportunities they are delivering.
WHAT CAN YOU DO TO STAY AHEAD?
As signs point to softer growth conditions for Australian property over the coming months, independent professional advice and careful consideration will be as important as ever in navigating Australia’s varied market conditions.
If you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.
Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.
Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.
Please click here to organise a time for a chat. Or call us on 1300 20 30 30.
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