The faster pathway to building wealth is no longer how much you earn, investors believe
A new survey reveals almost half Australian investors think the route to achieving their financial goals is not through wages
2 min
Almost one in two Australian investors believe what they own is more important than how hard they work and the income they earn for building wealth, according to a survey of more than 2,000 investors conducted by online trading platform Stake. This attitude reflects the fact that house prices have risen faster than wages for many years, according to Stake CEO, Jon Howie.
“In Australia, over the past 30 years, house prices have risen by an average of 8 percent per annum, compared to around 3 percent for wages, and it’s a similar story in New Zealand,” Mr Howie said.“Given the property market’s increasing barriers to entry, people are looking for other routes to building wealth. Rather than simply waiting for things to get better, they are upskilling, delaying gratification and engaging with financial markets to supplement their hard work.”
Investors cited slow wage growth as among the three biggest barriers to achieving their financial goals. Almost one in four investors expect no increase to their salary this year, or even a decrease, amid early signs that the labour market is loosening. While the overall unemployment rate remains low at 4 percent, Australian Bureau of Statistics figures released this week show there are 1.9 million people who would like to work but can’t find a job and 1.7 million workers who would like more hours.
Mr Howie said the survey results demonstrated a longer-term shift in our economy and the mindset of investors. “… the traditional blueprint to achieving financial security – namely getting a ‘good job’ and buying property – is not as accessible or reliable as it once was,” he said.
Rapidly rising house prices have made property ownership unattainable for some investors, with only 11 percent of survey respondents ranking real estate as the most accessible asset class for building wealth.
While investors are cutting back on discretionary spending to cope with today’s higher costs of living, about 75 percent are still putting some of their income into investments. The most common amount was 1 to 5 percent of their salary. Younger people have been the most active over the past six months, with 85 percent of 18 to 24-year-olds buying assets during this period. One in five investors said they intended to spend their stage three tax cut savings buying shares.
The survey revealed the five biggest motivations for Australian investors, starting with retiring and living off their investments; and supplementing their wage or salary with investment income. The next biggest motivations were funding holidays and travel, cutting back on hours and buying a home.
Australian investors have various definitions of financial success. More than 85 percent said being debt-free and owning their own home were the two most important financial achievements. Other definitions included being able to live in the neighbourhood they want (77 percent) and having the capacity to help family members (75 percent).
Australian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market. The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index. …
Continue reading “ASX falls 0.7 per cent as miners and property stocks retreat”
Borrowers cannot control the Reserve Bank, but they can control how exposed their household budget is to its next decision. The RBA meets on 29 September with inflation concerns still elevated and major-bank economists increasingly bringing forward their rate-rise calls. Fixed mortgage rates have also been moving, reducing the value of waiting for perfect certainty. …
Continue reading “What mortgage holders should do before the next RBA decision”
A five-bedroom Palo Alto home designed by Steven Ehrlich is listed for $44 million, making it the city’s most expensive listing. Built around a dramatic concrete spine, the home features four courtyards and a pool.
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For years, tech entrepreneur Asher Waldfogel and his wife, Helyn MacLean, dreamed of building a modern house in Palo Alto, Calif.
The couple, however, worried about clashing with the Mediterranean-style architecture typically associated with their neighborhood of Old Palo Alto.
So they tapped architect Steven Ehrlich to create a design that paid homage to its surroundings with stucco, mahogany and titanium zinc cladding. They spent $20 million over several years building the house, completed in 2005.
Now looking to be closer to their adult daughter on the East Coast, they are putting the five-bedroom home on the market for $44 million—the most expensive listing in Palo Alto.
Waldfogel is an angel investor who co-founded Redback Networks, a telecommunications-equipment company. MacLean previously had a career in fundraising.
The couple purchased the roughly 0.4-acre site for $7.1 million in 2000 and demolished a circa-1930s Spanish Colonial home. The house they built pinwheels around a central staircase. It has 7,900 square feet of livable space, with four distinct courtyards and a pool.
A key feature of the home is a cast-in-place concrete wall, or spine, that is two stories high and about 80 feet long. “There’s a little bit of controlled chaos in what comes out of the form,” unlike a perfectly uniform surface, Waldfogel said. “If you want that, you do it in plastic.”
Waldfogel said he and his wife are thinking about the next phase of life now that their daughter is grown, although they have not decided where they will move. They also have a home in Sun Valley, Idaho.
“Right now we’re just trying to emotionally let go and decide what to do next,” he said.
Palo Alto, an epicenter of venture capital and tech startups in Silicon Valley, is home to some of the country’s biggest tech titans. Sales volume and prices are rising, with a median sale price of $3.5 million for the three months ending in August, up 5.8% year-over-year, according to real-estate brokerage Redfin.
Arthur Sharif of Sotheby’s International Realty—San Francisco Brokerage has the listing.
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All three vehicles will form part of a broader charitable initiative benefiting Big Brothers Big Sisters of America, the American Red Cross and Starlight Children’s Foundation
