A new report shows more Australians now view wealth as having the financial freedom to pursue passions and support people they care about.
This is in contrast to the previous generation’s view of wealth as a singular pursuit of home ownership.
The report by AMP and leading demographer Bernard Salt draws on a range of demographic data and analyses key societal developments over the past 50+ years.
AMP’s CEO, Alexis George says, “The report shines new light on our nation’s attitudes to wealth, what we value and how we manage our finances, which has shifted significantly over the past 50 years.”
“No longer anchored just to home ownership, the concept of wealth is now defined by a financial ability to pursue unique passions and goals, which often includes helping those close to us,” says George.
For the first time, research examining home ownership census data back to 1911 shows that ownership rates in Australia peaked at 73 per cent in 1966 and have declined to around 63 per cent today.
Salt says, “Our singular focus on home ownership in the middle of the 20th century delivered a sense of security to returning diggers whose childhood was spent navigating the travails of the Great Depression.”
“Whereas current day Australians have a range of objectives which includes home ownership, it also includes the pursuit of options like how and where we work, in how and when we form relationships and in how we choose to live our lives. Many of these things have changed dramatically since the 1960s.”
“What has not changed is the value of health, of personal relationships, of family, of the ideal of provisioning for children, of helping grandchildren. These things are eternal. They are human. This is the reason why we pursue security through wealth and why we have pursued these things in the past,” says Salt.
Exploring what it means to be wealthy in modern Australia and how attitudes have changed, this report finds that while homes are still a key wealth asset for many, more Australians are focused on being ‘wealthy’ in order to live the lifestyle they want.
They might seek this kind of financial freedom through liquid forms of wealth, including savings, equities and other managed investments.
Researchers say many factors have led to Australians having more ‘alone time’ which ultimately leads to holding a more individualised view of wealth– people are marrying and having children later, having higher rates of divorce and increased life expectancy.
Other contributing factors to changing attitudes towards wealth include greater workforce participation by women, the superannuation guarantee, the rise of apartment living, globalisation delivering greater prosperity and the effects of the Covid-19 pandemic.
“Modern day wealth requires us to consider what our goals are and to put a financial plan in place,” says George. “The earlier we do this, the more likely we are to achieve those goals.”
For this reason, George adds that it’s important to work on improving financial literacy, offering greater financial advice, retirement and other investment solutions for Australians.
“The challenge is that despite Australia having one of the world’s highest GDPs, a resilient economy and a strong education system, we know that financial literacy is poor, and financial advice remains out of reach for many,” says Gegorge.
Understanding finances is all the more critical for everyday Australians as Salt says, “Wealth, however grand or modest, enables us to live the lives we want to live, to benefit those we love, to support those we care about, both now and into the future. That is what it means to be ‘wealthy’.”