Saturday, 18 November 2017

Wealth of Ages

More older, naturally richer, Australians pull net wealth figures 5-10% higher.

I've covered this before under the title 'Live Long and Prosper' but now have a spare moment to update figures, derive some data points*, and illustrate the divergence in a chart:





Good news: Everybody got richer, at least on a nominal basis (not accounting for inflation) over 2004-2016. Even the smallest wealth increase, for 25-34s, was 55%.

Not-so-good news: Older cohorts are pulling ahead. The wealth increase for the 65-74 range over the same period was 110%.

When it comes to the aggregate net wealth statistic increasing over time, the larger gains flowing to older households is compounded by their increasing presence.

There is no guarantee that younger households will enjoy the same wealth acceleration as they age.

*'Weighted' means the sum of age range averages by proportion of households sampled.

2 comments:

  1. The net wealth of stock market investors was massive in the year 2000, just before the tech bubble burst.

    Australia has close-to, if not the largest housing bubble on Earth when measured relative to its economy. A large amount of that so-called 'wealth' is tied up in overpriced, illiquid real-estate.

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    1. Totally agree. Just wanted to add that a property downturn may not have an equalising effect, in that the hardest hit will already be the least well off. Over-65s have more of their net wealth in property. And under-44s have relatively larger property loans.

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