And it’s a Happy Friday from me again this week! Been a massive week so far, hope you all have had a great week too! Started for me in a conference, one of my favourite, on mindset and personal growth, all hinged around growth and success.
Strategy and skills are all important but the third leg of that stool (so you don’t keel over!) is mindset. It’s as important or possibly more important to work on that as the other.
Changing tack slightly, today I want to discuss strategy in a way. I was reading recently about the widening gap in Australia between the wealthy and the poor – the “have’s” and the “have not’s” essentially. Now we see this in a large way in the US, it’s one of the driving forces we need to be careful of when investing in the US, but we haven’t, until relatively recently, seen such a gap in Australia per se. This is not just a problem for Australia or the US, it’s happening all over the world now unfortunately.
Some stats, from the Australia Bureau of Statistics (ABS):
- Australia’s richest 10% now hold more than 50% of the nation’s wealth (a share that is also increasing quickly)
- The top 1% hold 16.2% of the nation’s wealth
- The lowest 40% own just 3% of the wealth while the lowest 20%, less than 1%
To give you an idea of where we sit, the median (read, typical) net worth of all Aussie households was $558,900. The average net worth of the top 20% of households is $3.2 million. Bear in mind this is also 2018 statistics, so could be more now.
Hmm…note to self, need to get this stat for the US too..
Now, I guess to some degree, although we may not have known the actual figures, this data belongs in the “thank you Captain Obvious” bucket. But then again, we also want to be extremely careful of creating “poverty traps”. We certainly don’t want that. I have committed myself to helping Aussies invest in real estate to help avoid this, but it’s probably me throwing a glass of water into the ocean to stop receding water levels…
Looking at this we may ask, why is this happening. When I ask this at the events I run, the resounding response is that the rich buy/have real estate. While this is true to a degree, I am not sure they the rich got wealthy through simply owning real estate. I think it’s more just a great vehicle to park wealth and allow that wealth to grow more.
Property certainly is a brilliant way to get wealthy too, don’t get me wrong… but my point though, is that a lot of people look at the “wealthy” and see them buying real estate and thinking, that is what you must do to get wealthy. Reality is, that to “get” wealthy you cannot just park money in real estate, you have to be IN it, creating deals, making stuff happen, be ACTIVE in the real estate game.
This is how anyone can make money in real estate, but unlike the already wealthy, we cannot sit back idly sipping our cognac and watching the money grow… we need to be in the trenches, be active and make deals work. There is no room for free-riders here on the way to wealth, you need to make things happen!
Happy Investing all! And have a great weekend!!