Once, being a millionaire made you wealthy. But the goal posts have shifted, and a two-storey house with in-ground pool doesn’t really cut it any more.
Towards the end of the last century, being a millionaire made you rich in Australia . But today, if you own – and have paid off –
Finance research house Investment Trends has also crunched the numbers on what rich looks like in Australia today. It defines a HNW Australian as someone who has more than $1 million in net assets, excluding the family home, the value of their business and their superannuation . Dr Irene Guiamatsia, head of research at Investment Trends, says the number of Australians classified as rich in 2023 was the same as in 2021, after a small decline of 10,000 in 2022. But the real action took place between 2020 and 2021 when there were 150,000 newly minted HNW individuals, the vast majority of them joining the emerging affluent category. “We pin that down to the sort of bubble of everything that we saw during the pandemic.
They most commonly work as business executives, engineers, doctors, accountants, IT specialists and financial advisers, although among the established affluents and UHNW cohorts, more than half own their own business.
He says the rich favour a long-term strategy of retaining quality assets by buying and holding, rather than trading assets, focusing on building a diversified portfolio and managing debt well, differentiating between good and bad debt. “Good debt is related to investment assets and has deductible interest, whereas bad debt is non-deductible personal asset debt. If you overcommit yourself to bad debt, it makes it very difficult to build wealth.
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