Australians; the Richest People in the World?

Australia is the richest nation on earth, with adults having an average net worth of 411 thousand dollars and the median person having a net worth of 191 thousand dollars. Even during the global financial crisis of 2008, Australia has avoided recessions for more than 27 years. The distribution of this wealth is pretty equitable, with the average Australian possessing a net worth over three times that of the average US resident.

 

Since Australia has enormous reserves of iron ore, coal, natural gas, and other important minerals on its continent, the mining sector there contributes significantly to this wealth. Due to its advantageous geographic position, Australia is a natural trading partner for Asian economies; it exports the majority of its raw materials to South Korea, Japan, China, and India. Australia shipped more than 270 billion dollars’ worth of raw materials to these Asian countries in 2018, supporting their economic expansion.

 

In Australia, mining offers workers the chance to earn big wages as well; professional tradespeople and engineers are paid generously, while unskilled labors might make up to $150,000 USD. However, with only 3% of the workforce employed in mining, Australia’s economy is not greatly impacted by this industry.

 

Mining accounts for only 7% of Australia’s GDP overall, lagging behind more significant sectors such as services, construction, finance, and education. Australia boasts a clean, safe environment, first-rate hospitals, schools, and opportunities, all of which have contributed to its rich history. Wealthy immigrants are drawn to the nation’s major cities, such as Sydney and Melbourne, by the open immigration laws that welcome skilled workers, such as engineers and medical professionals. at addition, international students enrolled at Australian universities can apply for a student visa through the Australian government.

 

However, the nation’s negative gearing policy, which makes real estate investment tax-efficient, has caused the demand for houses to soar. Due to investors choosing to invest in rental homes over the stock market, Australia now has one of the most expensive real estate markets globally. Within the recent year, a typical Sydney metropolitan area family home with four bedrooms sold for more over two million dollars. Younger generations have been impacted by this since the high prices have kept them out of the real estate market.

 

To profit from this real estate boom, dishonest builders have also constructed inexpensive apartment complexes. The typical Australian would have a net worth of at least a million dollars today if they had bought a house within the last forty years, paid off their mortgage, and made no additional investments. The true key to these Australians’ hidden riches, despite skyrocketing real estate prices and an economy that has been in the right place at the right time for the past 27 years, is their retirement savings.

 

The Australian government adopted a new law in 1991 called the superannuation gap, which required workers to contribute a specific portion of their income to a retirement savings account. This tax-efficient contribution is made prior to taxes in order to save money for retirement. Since this arrangement has no effect on their pay, the majority of Australians are satisfied with it. Currently required to contribute 9.5% of an employee’s pay, the amount will soon rise to 15%.

 

Additionally, in order to benefit from these tax advantages, employees can increase their contributions to their superannuation accounts. An average Australian worker, for instance, makes $82,436 AUD on average per year, of which $7,831 USD is contributed tax-free to retirement accounts annually. This investment would have grown to a value of 1.7 million dollars at retirement age over a 40-year track record. That said, this would only be worth approximately $1 million Australian dollars when taking inflation into consideration.

 

Many people consider the superannuation guarantee to be an excellent piece of national policy. But it has also drawn dishonest business practices; as a result, a Royal Commission has been placed over the whole superannuation sector. Until they get closer to retirement age, the majority of Australians don’t give their superannuation accounts much thought, which causes overcharging and enriches corporations.

 

Australians in their middle age find it difficult to access their net worth until they turn 60 because super accounts are locked away from them until they turn 60. Notwithstanding these reservations, Australia has established itself as the fortunate nation for the world’s wealthiest citizens because of sensible legislation that compels them to heed financial guidance.