- Australians believe they need $830,000 in order to be financially free.
- Where you live, how much you earn, your gender, and your relationship status all have an impact on how much you think you will need to reach that point.
- Most Australians said they would use financial freedom to pay off debts, save, or to help their families.
“I’m free, to do what I want, any old time.”
Scottish rock band the Soup Dragons made the claim way back in the early 1990s. However, what the song didn’t answer was how to break the shackles.
The good news is we now know what the answer is, as long as you’re Australian and talking about financial freedom.
$830,000, to be exact.
“Many Australians dream of a major financial windfall to change their lives, but it turns out we don’t need a mega-million dollar jackpot to feel financially free,” says Alan Oster, chief economist at the National Australia Bank (NAB).
“For some, being ‘financially free’ means being able to pay off all their debts, for others it could be no longer having to earn a salary, or it might just be not being stressed about money.”
While, as an average, Australians deem $830,000 to be the amount required to reach financial freedom, the NAB found that where you live, how much you earn, your gender, and your relationship status all have an impact on how much you think you will need to reach that point.
In particular, if you’re middle aged, male, a high income earner and living in one of Australia’s most expensive capital cities, you’re more likely than not to want a lot more than the national average.
By gender, the NAB found that men need $899,000 on average to reach financial freedom, significantly more than the $759,000 average level required by women.
There was an even wider divergence by geographic location, with those surveyed in New South Wales indicating that they need $1 million to reach financial freedom, nearly $200,000 above second-placed South Australia at $809,000.
Respondents in other states indicated that they would need between $788,000 (Victoria) to $337,000 in Tasmania to be financial free.
Similar results were reported by those living in capital cities where respondents indicated that they need $950,000, well above the $615,000 required by those living in regional cities and the $574,000 level indicated from those in rural towns.
By income, the NAB found that the less you currently earn, the smaller amount was required to be financial free.
For those earning between $35,000 to $50,000 per annum, $590,000 was deemed enough, well below the $978,000 indicated by those earning over $100,000 per year.
While the results aren’t all that surprising, clearly influenced by current location, income and lifestyle status, the NAB found that very few people would use their financial windfall to retire, work less or blow on luxury items.
“Most said they would pay off debts (36%), save, or use it to help their families (32%), while others said they would take holidays and travel (28%), use it to invest (20%), or keep it for emergencies (19%),” said Oster, noting that the survey allowed respondents to include multiple answers.
“Very few Australians, in fact just 1%, would spend it on luxury personal items, while only 4% said they would work less or retire.”
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