Credit Suisse, in their fifth annual wealth report, say that thanks to owning our homes, Australian’s have the highest median wealth in the world – at around $225,000USD for each adult in June 2014.
The nearest rival to us, strangely, is Belgium which measures in at $173,000USD. The Italians, French & British were all around $110,000USD. Our average wealth per household is $319,700USD – with about 60% of that being the house itself! Far from feeling wealthy, I look at these statistics and I get very concerned.
These figures, though respectable by world standards, lead me to believe that most Australian’s will be happily, or perhaps unhappily living on the pension pittance when they reach the end of their working lives. $350,000 AUD of household wealth, 60% in the house itself which can’t earn you an income, leaves just $140,000 on average with which to earn a passive income. At a 5% return, that is just $7,000 per year. We simply are not doing enough now to ensure a comfortable life after work. We have to find ways to invest that may be simpler than trying to save up and then then borrow hundreds of thousands of dollars to buy an investment home. I have written extensively on this in my new book “The Next Generation of Real Estate Investing – How we will invest now and in the future” due out in a few months.
Here is a little excerpt on this topic.
This is the future of investing and its here now. And it won’t be the same as in the past – too much has changed. William Drayton said “change starts when someone sees the next step.” Having spent more than half my life deeply involved in real estate investing, I can see the next step – and for now I will call it “Cooperative Investing.” It will allow ordinary people to access extraordinary investments. Cooperative Investing means people will have the opportunity to be involved in high return type projects, even if they don’t have a lot of time, little knowledge and not much money to start with – and without taking on all the risks of trying to do it by yourself. You will be investing small amounts of your money in to deals and projects you choose, along with the rest of the crowd. With the Australian aged pension set at 25% of the average income, or about $19,900 per year (as at March 2014) – and only an estimated 25% of eligible aged population qualifying for this support by 2050, you know it’s past time to take action. In the USA, this figure is about $15,000 per year. Not much to look forward to after a lifetime of work? Today more than ever, we must be acutely aware of the need to build wealth for a better lifestyle and to grow enough wealth to support ourselves through the living years beyond our working lives. And beyond the need, become ever more urgent the need to take real and persistent action – today, right now – to grow that wealth. – [end excerpt]
A last thought for you -