The exclusive club more Australians are joining
A new report reveals wealthy Australians employ similar strategies when it comes to managing their money
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Australia has one of the highest proportions of millionaires in the world, new research has found. Finder’s Wealth Building Report 2024 has shown that one in 8 or 2.8 million Australians are members of the millionaires club, mostly thanks to growing home values. That figure more than halves to 1.1 million Australian when their principal place of residence is removed from net worth calculations.
The report delved into ways Australians are building wealth and discovered many were using similar strategies to get ahead. The top methods were:
- Budgeting (38 percent of respondents)
- Investing frequently (12 percent)
- Paying off debt (9 percent)
Those with more than $1 million in net wealth were also more likely to have at least one passive income source.
Personal finance expert at Finder, Sarah Megginson, said most of the strategies were practical at any economic level.
“A lot of the habits and tactics of the rich are very practical things that can be implemented no matter how much you earn,” she said.
Ms Megginson suggested options such as investing in low cost options such as ETFs or salary sacrificing to pre tax make superannuation contributions as effective ways to build wealth over time.
“Reaching that coveted millionaire status might feel out of reach, but many investors started with nothing,” she said.
“Building wealth is a marathon, not a sprint. The sooner you cross the starting line, the better off you will be later in the race.”
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For self-employed Australians, navigating the mortgage market can be complex—especially when income documentation doesn’t fit the standard mould. In this guide, Stephen Andrianakos, Director of Red Door Financial Group, outlines eight flexible loan structures designed to support business owners, freelancers, and entrepreneurs.
1. Full-Doc Loan
A full-doc loan is the most straightforward and competitive option for self-employed borrowers with up-to-date tax returns and financials. Lenders assess two years of tax returns, assessment notices, and business financials. This type of loan offers high borrowing capacity, access to features like offset accounts and redraw facilities, and fixed and variable rate choices.
2. Low-Doc Loan
Low-doc loans are designed for borrowers who can’t provide the usual financial documentation, such as those in start-up mode or recently expanded businesses. Instead of full tax returns, lenders accept alternatives like profit and loss statements or accountant’s declarations. While rates may be slightly higher, these loans make finance accessible where banks might otherwise decline.
3. Standard Variable Rate Loan
A standard variable loan moves with the market and offers flexibility in repayments, extra contributions, and redraw options. It’s ideal for borrowers who want to manage repayments actively or pay off their loans faster when income permits. With access to over 40 lenders, brokers can help match borrowers with a variable product suited to their financial strategy.
4. Fixed Rate Loan
A fixed-rate loan offers repayment certainty over a set term—typically one to five years. It’s popular with borrowers seeking predictability, especially in volatile rate environments. While fixed loans offer fewer flexible features, their stability can be valuable for budgeting and cash flow planning.
5. Split Loan
A split loan combines fixed and variable portions, giving borrowers the security of a fixed rate on part of the loan and the flexibility of a variable rate on the other. This structure benefits self-employed clients with irregular income, allowing them to lock in part of their repayment while keeping some funds accessible.
6. Construction Loan
Construction loans release funds in stages aligned with the building process, from the initial slab to completion. These loans suit clients building a new home or undertaking major renovations. Most lenders offer interest-only repayments during construction, switching to principal-and-interest after the build. Managing timelines and approvals is key to a smooth experience.
7. Interest-Only Loan
Interest-only loans allow borrowers to pay just the interest portion of the loan for a set period, preserving cash flow. This structure is often used during growth phases in business or for investment purposes. After the interest-only period, the loan typically converts to principal-and-interest repayments.
8. Offset Home Loan
An offset home loan links your savings account to your mortgage, reducing the interest charged on the loan. For self-employed borrowers with fluctuating income, it’s a valuable tool for managing cash flow while still reducing interest and accelerating loan repayment. The funds remain accessible, offering both flexibility and efficiency.
Red Door Financial Group is a Melbourne-based brokerage firm that offers personalised financial solutions for residential, commercial, and business lending.
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