Does $1 million in the bank mean you’re rich? Fifty-nine per cent of Australians believe that being worth $1,000,000 doesn’t mean you’re rich in Australia any more, according to new research from IPSOS & MLC, the Australia today report.
Further, almost half of us believe you need a household income of more than $150,000 to live ‘comfortably’ in Australia today.
The poor millionaire
Not long ago Australians believed that if you hit the million-dollar mark in net worth, you’d hit the ‘big time’. We watched shows such as Who wants to be a millionaire? and we imagined how glittering our life would be with a million big ones.
But if a million dollars doesn’t make you rich any more, what’s changed?
The research shows that our expectations of an ‘average’ lifestyle have evolved in recent decades to include luxuries such as overseas travel, eating out regularly and having the latest technology. And we all think the average Australian should have overseas holidays yearly, be able to afford private schools as well as a decent house and car.
These extras all add up, while at the same time, house prices have risen sharply and wages growth has remained relatively flat. It’s a pressurised environment with more on the expenses side of the equation, and less on the income side.
Simply put, $1 million just doesn’t stretch as far as it did, even one decade ago.
Our average net worth is staggeringly high
So how many of us are millionaires today? In reality, most home owners or mortgaged households aren’t far off the $1 million net wealth mark. ABS figures report the average net worth for all Australian households was $809,900 in 2013–14. There’s a lot of equity out there, but according to the research, the majority of us aren’t feeling ‘rich.’