Envy can be a dangerous thing and comparing salaries and income usually lead to at least a twinge of envy – for most people at least.
The December quarter cost-of-living figures will be released next week – and no doubt explain why our dollars aren’t stretching as far as they did this time last year – and the twice-yearly review of Age Pension payments will be known in late March and will take effect from April.
The current rate of a full Age Pension, including Pension Supplement and the Energy Supplement (formerly known as the Clean Energy Supplement), is $967.50 per fortnight for singles ($25,155 per year) and $729.30 per fortnight for each eligible member of a couple ($37,923 per year per couple).
But once needs are met, what does the average Australian believe you must earn before you can be considered ‘rich’?
Read: Where in Australia do retirees have the most disposable income?
A recent survey has produced some interesting – perhaps we should say shocking – results. It seems most believe money can buy happiness, and we don’t necessarily disagree.
The Finder research – based on a nationally representative survey of 1013 respondents – reveals the average Australian believes he or she needs to earn $330,000 a year to feel rich.
Women ($333,010) report wanting slightly more than men ($318,952) to feel wealthy.
What’s more, the survey revealed one in four wouldn’t consider themselves affluent until they were earning at least $500,000.
Let’s take a step back.
The median personal income in Australia is $51,389, according to the Australian Bureau of Statistics (ABS). It describes median income as “the level of income which divides the units in a group into two equal parts, one half having incomes above the median and the other half having incomes below the median”. Essentially, that means someone receiving a median income is earning more money than half of the population.
So one in four Aussies believe they need 10 times the median income to consider themselves rich!
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Delving further into the research, the desired amount varies considerably between generations. To feel rich, baby boomers want $313,031 per annum, generation X $354,100, generation Y (millennials) $329,290 and generation Z $286,964.
In 2020, the Australian prime minister earned $549,250 in total and a federal politician’s base salary was $211,250.
Prime Minister Scott Morrison is in the top five among global counterparts when it comes to pay, according to AAP Fact Check. As of 1 July 2021, Mr Morrison’s base salary was $211,250, plus an additional salary of $338,000, making for a gross $549,250, or $1505 a day. But he’s way short of top place, which is occupied by Singapore prime minister Lee Hsien Loong, who earns $2.29 million, including bonuses.
Finder personal finance expert Kate Browne says the survey showed a disturbing level of greed, and that constantly wanting more money is dangerous.
“The reality is that the typical middle-class Australian is actually earning a $50,000 salary,” she says.
“If you are already fortunate enough to earn more than the median wage, it’s a good reminder that you are already ahead. It can be tempting to keep striving for more, but it’s also important to truly enjoy your work.”
While generation X set the highest bar to achieve ‘rich’ status, wanting an annual income of $354,100, US figures from Credit Karma showed almost half of millennials spent beyond their means to keep up the appearance of a certain lifestyle.
“Remember, social media is a highlight reel,” says Ms Browne. “And while it can seem like everyone around you is hustling their way to the top, appearances can be deceiving.
“There’s nothing wrong with striving to be financially comfortable, but endeavouring to compete with others is exhausting, expensive, and you’ll never be satisfied with what you already have.”
That survey showed that millennials’ biggest spending items were food (47 per cent), clothes (41 per cent) and travel (33 per cent).
Read: Concessions help wealthiest Australians avoid tax with super
The Australian Tax Office defines a “high wealth individual” as “Australian resident individuals who, together with their associates, control wealth of more than $50 million.”
Keystone Private says wealthy Australians are “generally deemed to be those with net investible assets over $1 million (or net of over $2.5 million including the family home) and earning more than $250,000 per annum”.
Ms Browne says building wealth does not require a $300,000 yearly income.
“Working on habits like cutting back on spending where you can and saving a regular portion of what you earn is a great start.
“Aim to put at least 20 per cent of your income every month into a savings account and let this grow.”
What is your view on ‘wealth’? When is enough enough? Should wealth be measures in something other than dollars? Why not share your views in the comments section below?
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