We know true wealth is much more than how much money you’ve got in the bank or how many properties you own, but this year’s Credit Suisse’s annual global wealth report shows that once again Australians have the highest median wealth in the world, and we have a very low percentage of poor people.
The report shows that since 2000, the net wealth of the average adult Australian has more than quadrupled, and over the past 12 months average adult wealth has grown 5%.
In fact 7.35% of all adults (1.25 million of us) are US-dollar millionaires if you include real estate and financial assets into the equation.
But what is exceptional about Australia is our staggering growth in wealth considering we’re a developed nation, as emerging markets mainly drove the global growth in wealth.
So how wealthy are we?
Australia’s average wealth per adult is $US430,777 ($A544,000), which is the second-highest in the world after Switzerland.
However, Australia’s median wealth (the wealth of the middle wealthiest person in Australia) is the highest in the world, at $US225,000 ($A258,000).
Median is the better measure as it shows the spread of our wealth and is not skewed by the very wealthy.
Let me explain…
Imagine you’re at a crowded bar and Jamie Packer walks in. The average wealth of the crowd soars but the median stays much the same. Packer’s presence drags up the average wealth but does little to change the median – that is the wealth of the middle person if you lined up everyone in the bar from richest to poorest.
In other words, our high median shows that wealth is spread more evenly than in other countries. When it comes to wealth distribution, most Australians (62.6%) had wealth between $US100,000 and $US1 million.
Having said that, the proportion of those with wealth above $US100,000 is the highest of any country – eight times the world average. With 1,762,000 people in the top 1% of global wealth holders, Australia accounts for 3.8% of this wealthy group, despite having just 0.4% of the world’s adult population.
Only 6% of Australians had a net worth of under $10,000 – a very low proportion by global standards (29% in the USA and 70% for the world as a whole.)
Here’s some more interesting numbers…
- If you have $US3650 net, including the value of your home, you’re among the wealthiest half of the people in the world.
- The average person is worth $US56,000
- Global wealth grew by 8.3% over the last year, its fastest rate ever.
- Over the past 12 months, the world got $20.1 trillion richer to $263 trillion.
- The top 10% of people (membership requirement is $US77,000) hold 87% of the world’s wealth.
- You need $US798,000 to make it into the top percentile of the world’s wealthiest. This select group accounts for almost half – 48.2% – of global assets.
- Taken together, the bottom half of the global population own less than 1% of total wealth.
- By 2019, global wealth is expected to be 40% higher.
- In five years, the number of millionaires will have increased by half, from 35 million to 53 million.
- Mean worth per adult: $US430,000
- Median worth per adult: $US225,337
- Total wealth $7.2 trillion
- Dollar millionaires: 1,252,000
- Top 10% of global wealth holders: 12,650,000
- Top 1% of global wealth holders: 1,783,000
- The top 1% of wealthy people in Australia owned 21% of assets and the top 5% owned 39%. (By comparison, the world average is that the top 1% per cent own around 50% of the assets.)
Source: Credit Suisse
And a lot has to do with property…
The Credit Suisse Wealth Report showed that Australia’s wealth is heavily skewed towards ‘real assets’ (in other words property) as opposed to financial ones.
Australians on average have 60% of their assets in property, versus the world average of 46%, and the USA at 30%.
The bottom line…
We live in a lucky country and it’s important not to forget it.
And the good news is that things are unlikely to change, with the report predicting Australia will keep its top spot on the wealth chart until at least the end of this decade.
Even better news…
Australians can also expect to live longer than almost everyone else. The most recent UN data shows life expectancy at birth in Australia has reached 82.5 years – the fourth longest in the world behind Japan (83.6), Hong Kong (83.4) and Switzerland (82.6).
But these achievements haven’t made us the world’s happiest place. The latest United Nations World Happiness Report ranked Australia 10th.
Michael Yardney is a director of Metropole Property Strategists – creating wealth for their clients through independent, unbiased property advice and advocacy.