The surprisingly simple route to riches for many of Australia’s millionaires – and it’s NOT down to hard work
Very few Australian millionaires say hard work has made them rich, and even more say their best investment is marrying someone rich – or watching their spending.
One in eight Australians are now millionaires thanks to the property price boom, and this number is expected to grow rapidly in the coming years.
But when it comes to getting rich, despite popular belief, very few investors say it’s mainly because of hard work or because they come from a wealthy family.
Finder’s Wealth Building Report 2024 surveyed more than 1,000 active investors who owned shares in publicly traded companies, investment properties or other assets such as government bonds, cryptocurrency or a stake in a private company.
For these investors, careful austerity and austerity were the most important factor for prosperity; 38 percent said this was the main reason for getting rich.
“Managing money responsibly means investors can maximize the money used to build their wealth,” the Finder report said.
“For non-investors, developing responsible money habits, such as saving more, spending less and paying off bad debts, can free up funds to create wealth.
“The majority of Australian investors have a frugal habit that underpins their investment behavior.
Very few Australian millionaires say hard work has made them rich, while more and more of them credit marrying someone rich or watching their spending very carefully (pictured is a stock photo)
“The savings from a few frugal habits can result in much greater returns.”
More than half of frugal investors surveyed said they bought groceries at a discount, while 44 percent of them said they rarely dined out, compared to a third who switched accounts regularly or drove a cheap car.
Finder calculated that an average full-time worker with an income of $100,000 could save an extra $581 per month if he saved 23 percent of his income instead of just 14 percent of it, after taxes.
Additional savings allow a person to put the money in a term deposit account that earns interest, or invest it in the stock market or in real estate.
Budgeting was followed by frequent investing, with one in eight citing this as their main source of wealth, followed by paying off debt at nine percent.
The research also highlighted the myth that hard work is the key to success, with only three percent citing toil as the main way to get rich.
More than twice as many nominees married a rich man, making one in fourteen investors rich, they admitted.
This was seen as even more important than property investing, with just six per cent citing brick and mortar as their best investment.
Finder’s Wealth Building Report 2024 surveyed more than 1,000 active investors who owned shares in listed companies, investment properties or other assets such as government bonds, cryptocurrency or a stake in a private company (pictured is the Australian Securities Exchange in Sydney)
Only 1 percent cited income from rental properties as their main source of wealth, while only 3 percent attributed an inheritance.
Although few heritage respondents cited inheritance as the key to wealth, coming from a family with money doesn’t hurt. The research also found that 44 percent of Australians with investments received financial help from their parents, compared to just 29 percent. without investments.
Those who own property were also more likely to have parental assistance; 16 percent of investors received help financing a mortgage deposit, compared to just 8 percent who did not invest any money.
The Australian share market outperformed the property market last year, but Graham Cooke, head of consumer research at Finder, said ‘time in the market’ rather than ‘timing the market’ was the key to benefiting from shares.
“This long-term investing approach ensures returns become stronger and more reliable over time,” he said.
The benchmark S&P/ASX200 rose 7.6 percent in 2024 after hitting a record high in early December.
By comparison, house and unit prices rose 4.9 per cent, but there were double-digit increases in Brisbane, Perth and Adelaide, CoreLogic data showed.
Bank savings accounts generally paid only 4 percent interest over the year.
But pensions did even better: SuperRatings showed that balanced options aimed at growth increased by 11.5 percent in 2024.