Amid rising interest rates, surging inflation pushing increasing cost of living pressures, and a housing affordability crisis, Aussies are pessimistic that they’ll ever be wealthy. YouGov study commissioned by crypto wealth platform Dacxi has found that only 27% of Aussies believe they will ever meet their own definition of ‘wealthy’ in their lifetime if they remain in Australia.
Men are almost twice as likely as women to believe that they’ll be wealthy in their lifetimes, while women are significantly more pessimistic about the state of their finances. Of course, how Australians define what “being wealthy” means differs greatly.
What strategies do Aussies believe help to grow wealth?
Two in five (40%) Australian adults defined it as earning over $150,000 per year after tax, while over one in three (36%) define wealthy as having a net worth over $1 million. Meanwhile, nearly a quarter (23%) categorised it as owning a home outright.
The pessimism shown is tied to how people perceive the best ways of growing wealth, with two of the three best indicators being out of reach for many. The best indicator of ability to grow wealth was found to be family wealth and inheritances, with 24% of Aussies agreeing.
This was followed by having a high performing investment strategy (23%) and outright property ownership (18%). Not surprisingly, those who defined ‘wealthy’ as outright home ownership (22%) are more likely to say the best indicator of Aussies ability to grow their wealth is property ownership. Down the lower end of the spectrum, a lowly 5% of Aussiess believe that having a financial planner is the best indicator of ability to grow wealth.
Dacxi CEO, Ian Lowe, commented: “It would be unfair to say Aussies have given up entirely on being wealthy, but many are having to readjust expectations for what their retirements might look like based on how previous generations have lived past the age of 65.”
“What’s clear is that the impact of generational wealth is becoming more stark, and that Australians who aren’t waiting for an inheritance and who aren’t already in the property market don’t have a lot of hope of attaining wealth in their lifetime,” Ian further said.
How do males fare against women in investment?
Overall women are also more pessimistic than men according to a multitude of metrics to come out of the study. One in two workers expect a pay raise in the next 12 months, but only 44% of women do. 92% of Australians are concerned about high inflation, but women are more likely to be concerned about high inflation than men (95% compared to 88%).
The survey found that men take more risks with their asset choices too, and are more likely than women to invest in Australian stocks/shares (38% compared to 28%), precious metals (19% compared to 14%), International stocks/shares (19% compared to 12%) and cryptocurrency (15% compared to 10%). Lowe continued: “The best performing assets of the last decade have been the more volatile ones, like cryptocurrency and stocks/shares.”
“With Aussie men more likely to choose these assets over women, we can explain a lot of the gap in confidence to become wealthy between men and women in their asset choices.”
“With interest rate hikes and inflation ahead, perhaps this trend will reverse and in ten years we’ll be talking about why women have done well with their more conservative investment strategies. The advantage younger generations have is that they can buy tokenised versions of physical assets like gold and silver as easily as they can a crypto. Over the long term, diversified portfolios fair best, and it’s never been cheaper to buy and manage one yourself.”
What are Aussies’ thoughts on superannuation?
As debate continues to rage around use of and access to superannuation, there is significant concern around the ability of super in Australia to allow for a comfortable retirement.
Only 29% of Aussies under 65 say they would retire comfortably on their superannuation by the age of 65, while 54% believe they will never be able to rely on their superannuation. The Association of Superannuation Funds of Australia (ASFA)’s estimate of annual expenses for a couple retiring comfortably at 65 is $64,771 a year (if you own your own home).
66% of Aussie adults are aware of how much money is in their superannuation fund. 12% admit they do not know how much they have and don’t check regularly, while 22% of Australians say they do not currently have a superannuation fund that they are aware of.
Gen Z’s with a superannuation fund (29%) are more likely to not check their superannuation regularly and be unaware of how much they have, compared to Millennials (18%), Gen X (10%) and Baby Boomers (6%) with a super. Despite all of this, superannuation firms seem to be doing a good job with their PR. Among Australians with a superannuation fund, seven in ten (68%) are happy with their fund’s performance, with one in five (20%) very happy.
Australians who believe they will be wealthy in their lifetime are most likely to be happy with their super fund’s performance than those who do not believe so (86% compared to 58%).
28% of Australians said that, if they had $10k to passively hold for the next 10 years, they’d invest it in their super or a term deposit respectively. 33% claim they would invest $10K in Australian stocks/shares, one in four (25%) who said they would look to invest in property (e.g., REIT), and over one in six (17%) would invest in precious metals (e.g., Gold/Silver).
Lowe said: “Australians are rightly concerned about the ability of their superannuation to deliver a comfortable retirement, by the age of 65. There is also a trend of detachment with superannuation, particularly among younger Aussies, but also across the board – as people look for alternative options for long term investing to deliver on returns for their retirement.”