Image source: Getty Images
Key points
- Australians don't seem to realise earning $50,000 a year puts them in the richer half
- Younger generations are overspending to keep up with a social media-driven lifestyle
- You don't need a $300,000 salary to build your wealth
A new survey has revealed greed is rife among Australians, who don't realise they're already in the wealthier half if they earn the median wage.
A quarter of Aussies would not consider themselves rich until they were earning at least $500,000 per year, according to new research from comparison site Finder.
This is 10 times the median personal income of $49,805.
A person receiving the median income means they are earning more money than half of the population.
Australians, on average, wanted a $326,900 salary each year to start counting themselves as wealthy.
That's still almost 7 times the median wage.
As a comparison, in 2020 the base salary for a federal politician was $211,250. The prime minister earned $549,250 in total.
Finder personal finance expert Kate Browne said constantly wanting more money was dangerous, taking the focus off saving and investing.
"The reality is that the typical middle-class Australian is actually earning a $50,000 salary," she said.
"If you are already fortunate enough to earn more than the median wage it's a good reminder that you are already ahead. It can be tempting to keep striving for more, but it's also important to truly enjoy your work."
Keeping up with a social media lifestyle
| Generation | Income to feel rich |
| Baby boomers | $313,031 |
| Generation X | $354,100 |
| Generation Y | $329,290 |
| Generation Z | $286,964 |
| Source: Finder; Table created by author |
The study also found generation X set the highest bar to achieve 'rich' status, wanting an annual income of $354,100.
US figures from Credit Karma showed almost half of millennials spent beyond their means to keep up the appearance of a certain lifestyle.
"Remember, social media is a highlight reel. And while it can seem like everyone around you is hustling their way to the top, appearances can be deceiving," said Browne.
"There's nothing wrong with striving to be financially comfortable, but endeavouring to compete with others is exhausting, expensive, and you'll never be satisfied with what you already have."
That survey showed food (47%), clothes (41%) and travel (33%) were the biggest items millennials were overspending on.
How to become rich without a $300,000 salary
Browne pointed out that building wealth did not require a $300,000 yearly income.
"Working on habits like cutting back on spending where you can and saving a regular portion of what you earn is a great start," she said.
"Aim to put at least 20% of your income every month into a savings account and let this grow."
Finder recommended a 50-30-20 budget, where 50% of your income is spent on needs, 30% is spent on wants and 20% of it is saved.
With interest rates currently at historic lows, investing outside of bank deposits was also an idea, added Browne.
