Very few of Australia’s millionaires say hard work made them rich, and many more say their best investment was marrying someone rich or controlling their spending.
One in eight Australians is now a millionaire thanks to booming property prices, and this figure is expected to grow rapidly in the coming years.
But when it comes to getting rich, despite popular belief, very few investors said it was primarily due to hard work or coming from a wealthy family.
Finder’s 2024 Wealth Creation Report surveyed more than 1,000 active investors who owned shares in publicly traded companies, an investment property, or other assets such as government bonds, cryptocurrencies, or a stake in a private company.
For these investors, careful budgeting and reducing spending was the number one factor for wealth, and 38 percent said it was their main reason for getting rich.
“Managing money responsibly means investors can maximize the cash used to build their wealth,” Finder’s report says.
‘For non-investors, establishing responsible financial habits, such as saving more, spending less, and paying off bad debt, can unlock funds to start building wealth.
‘Most Australian investors have a frugal habit that supports their investment behaviours.
Very few of Australia’s millionaires say hard work made them rich and many of them credit marrying someone rich or controlling their spending very carefully (pictured is a stock image).
“The savings from just a few frugal habits can yield much bigger benefits.”
More than half of the frugal investors surveyed said they bought discounted groceries, while 44 percent of them said they rarely ate out, compared with a third who regularly changed bills or drove a cheap car.
Finder calculated that an average full-time worker on $100,000 could save an additional $581 a month if they saved 23 percent of their income instead of just 14 percent, after taxes.
Additional savings allow someone to put the money into an interest-bearing time deposit bank account or invest it in the share market or property.
Budgeting was followed by frequent investing, with one in eight highlighting it as their top wealth creator, followed by paying off debt at nine per cent.
The survey also highlighted the myth that hard work was the key to success and only three percent named hard work as their main way to get rich.
More than twice as many of them nominated marrying someone rich, making one in fourteen investors rich, they admitted.
This was considered even more important than investing in real estate, with only six percent nominating brick and mortar as their best investment.
Finder’s 2024 Wealth Creation Report surveyed more than 1,000 active investors who owned shares in publicly traded companies, an investment property, or other assets such as government bonds, cryptocurrencies, or a stake in a private company (pictured, the Australian Stock Exchange in Sydney).
Only 1 percent named income from rental properties as their main driver of wealth, while just 3 percent credited an inheritance.
While few respondents cited hereditary wealth as the key to getting rich, coming from a family with money doesn’t hurt, and the survey also found that 44 per cent 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 had help from their parents: 16 per cent of investors received help funding a mortgage deposit compared to just 8 per cent who were not investing money.
Australia’s share market outperformed the housing market last year, but Finder head of consumer research Graham Cooke said “timing in the market” rather than “timing the market” was the key to benefiting. of the actions.
“This long-term investment approach helps make returns stronger and more reliable over time,” he said.
The S&P/ASX200 benchmark index is up 7.6 per cent in 2024, after hitting an all-time high in early December.
In 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 typically paid only 4 percent interest during the year.
But retirement fared even better: SuperRatings revealed that balanced growth-oriented options saw an increase of 11.5 percent in 2024.