Wealth becomes more ‘individualised’

Oksana Patron

1 March 2023

Australians have changed the way how they currently define wealth, with a falling role of the singular pursuit of home ownership and a growing focus on the financial freedom, according to a new report by AMP and demographer, Barnard Salt.

With a steadily declining home ownership rate, the ‘great Australian dream’ of owning a home has been gradually replaced by a new concept of wealth which is more about having financial freedom to live the lifestyle of individual choice and more liquid form of wealth such as savings, equities and other managed investments.

According to Salt, increasing life expectancy, greater workforce participation by women, the superannuation guarantee, the rise of apartment living and globalisation delivered greater prosperity and, more recently, the COVID-19 pandemic, also contributed to the changing views of what it means to be wealthy.

The demographer also stressed that marrying and having children later, higher rates of divorce, and increased life expectancy, have culminated in more ‘alone time’ for many Australians, leading to a more individualised view of how we think about wealth.

“Whereas current day Australians have a range of objectives which include home ownership, it also include 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,” he noted.

However, modern day wealth also requires to consider what the goals are for each individual and how to put a financial plan in place and the earlier it is done, the more likey teh goals will be achieved.

“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,” AMP chief executive, Alexis George, added.

“Improving financial literacy, offering greater access to financial advice, retirement and other investment solutions are key ways financial services organisations like AMP can help Australians engage more with their finances, so that they can achieve the wealth they want.”