How much money is enough?

How will you know when you are rich? How much money is enough?

When I was young I wanted to be a millionaire by the age of 30; $1 million was a lot of money then.

Sadly, I didn’t make it. I wasn’t a millionaire by 30, but I did own a significant multimillion-dollar property portfolio by the time I was 40.

However, $1 million today isn’t what it was back in my youth.

Show me the money

Can you guess what magic number most Aussies would consider themselves to be rich? It’s a lot more than $1 million!

According to a survey by, men need an average of $5.9 million to feel rich, while women were a bit more conservative and believed that $4.8 million would do the job nicely.

Those figures are in stark contrast to about 30 or 40 years ago when being a “millionaire” was considered to be the epitome of wealth.

Why the big difference?

Obviously inflation has had an impact, with prices of everything increasing each year which means we need more money to live an above average existence.

Rising house prices have also played their part with the median house price in Sydney reaching over $1.15 million in the March quarter and Melbourne is not far behind.

An interesting result in the survey was parents of children under the age of 10 dreamed about having $3.7 million in the bank, while those with teenagers said that they’d need about $8.2 million to be considered rich!

Should I stay… or should I stay?

Why was there such a big discrepancy between parents of small children and parents of teenagers?

The truth of the matter is more young people are staying at home for longer and eating into their parents’ future wealth prospects.

In fact, the 2016 Census found that about a quarter of the millennial generation (those born between 1982 and 1999) still lived in the parental household, according to The Australian

It’s not surprising that almost three quarters of 18-year-olds still live with their parents but it may surprise you just under 8% of 30 year olds still live in the family home.

I guess that’s why demographer Bernard Salt calls them ‘kippers’ — Kids In Parent’s Pockets Eroding Retirement Savings.

Back in my day, we generally moved out of home as soon as we could to make the most of all of the wonderful freedom that beckoned.

Of course, house prices were cheaper then, but they seemed expensive for us and the banks used to make you jump through hoops to get a loan – much the same as they do today.

Wealth creates reality

The fact of the matter is you will probably need much more money than you can ever save to have a comfortable retirement.

If your savings are eroded for an extra 10 years or more because children are staying at home longer, how do you think your retirement will look? Probably not overly pretty!

The question then becomes: how can you ensure you’ll have enough money when your twilight years come calling to make sure you can live out your life in comfort?

The answer is you’ll need to build a cash machine of assets during your working life that will see you through your golden years. The best way I know how to do that is to build a substantial portfolio of investment grade properties throughout your working life to prepare for a lucrative retirement rather than a lacklustre one.

Most of the money you will have when you retire will not be money you have saved, nor the money you earned or even the funds that you invested. It will be the capital growth of your assets — plain and simple. Becoming wealthy happens slowly for the vast majority of people.

In fact, financial success is about getting rich slow. So, whether you want to have $3 million or $8 million in the bank when you stop working, you have to start investing today to give yourself the very best chance of achieving that goal.

Time is of the essence in successful property investment. That means investing for tomorrow today – with or without children still under your roof.
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