You should be feeling 20 per cent richer today, according to the federal Treasury department. "Australia's new private sector wealth jumped by 19 per cent in the 2006 financial year-or 15 per cent taking inflation into account," reports news.com.au. "At current prices, total wealth in the private sector was about $7,464 billion-or $366,100 per Australian... Real net wealth has risen by more than $150,000 since June 2001 alone, the data shows."
Is it true? We're new to Australia, so we couldn't say. We sometimes feel twenty percent richer, but that could be because we're paid in American dollars. All over Australia property prices have corrected, without crashing. The share market is on a four-year tear. People certainly dress, look, and sound 20 per cent richer. You get a certain bounce in your step when your net worth jumps by a fifth in twelve months.
But here is the problem as we see it, assets change in value, liabilities do not (not including massive inflation, which erodes the value of debts but at the cost of eroding purchasing power too.) So why don't you let us know yourself. Do you feel richer? Are you better off now than you were two years ago? Let us know by leaving a comment.
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
Comment by Alex Fiedler on 5 February 2007:
Have not had a pay rise in over 4 years, so no I don't feel richer. The company I work for (not solarhome) prefers to pay large bonuses when the company makes a profit. Sounds like a great idea, and quite fair. For the first two years, there was a profit and we were paid bonuses. No longer though. The IT industry in the manufacturing sector, has been feast and famine. More famine than feast, if truth be known. And yes of course I feel that my purchasing power has eroded these last 4 years.
Comment by Steve on 17 August 2007:
Over this period my "pay rises" have been in line with a 3 to 4 % CPI. My non-discretionary expenses ie. mortgage, fuel, food, utilities etc. have been going up by between 7 and 15% per year.
Life is still good, but I am feeling the effects of the higher cost of living.
I am fortunate in not having credit card debt - I put off buying the "nice to have's" until I have the money to pay for them.