The Real Reason Why We Travel So Much........

[Renato1]

............we are rich.

In case you ever wondered why you seemingly come across a high proportion of Australians when travelling overseas - compared to other nations - the answer is pretty simple when one reads the Credit Suisse Global Wealth Report 2017, of which I've attached the two parts.

It says that Australians adults are the second wealthiest people in the world on an Average and Median basis. The Median wealth of Australian adults is US$195,417 in sharp contrast to that of adults in the UK and USA where the Median is US $102,641 and US$55,876 respectively. It also states "Only 5% of Australians have net worth below USD 10,000. This compares to 19% in he UK and 29% in the USA."

Thus, even our poorer people are significantly richer than large numbers of people in the UK and USA, and can probably afford a cheap vacation.

The Median average is the most relevant figure, as half the adults in the country are below that amount, and half are above that amount. The Average average (Australia- US$402,603 UK- $278038 USA - US$388,585) is nice to know, but not all that useful, as it spreads the wealth of multi-billionaires among all the people.

Unfortunately, about six years ago, Australia was in first place - when our dollar was at parity with the US dollar. But with the appreciating Franc and depreciating Aussie dollar, the Swiss have overtaken us in first place.
Regards,
Renato

P.S. Given these figures, I don't mind tipping when in the USA - they really don't have much money.

 

[debgow]

Very interesting

 

[darktiger]

Great read. Thanks OP

 

[Renato1]

We're in Stockholm at the moment.
So far in our hotel, I've met eight people from Sydney and two from Tasmania. And one of the ladies from Sydney, when I told her I was from Melbourne, exclaimed that she had so only met heaps of Aussies from Melbourne so far at the hotel.

That's a hell of a lot of Aussies in just one hotel.
Regards,
Renato

 

[Deleted member 29185]

Interesting observations. I was surprised that AU was 2nd top.

 

[Renato1]

Interesting observations. I was surprised that AU was 2nd top.

You'll see other measures of wealoth around like GDP per person or Average Wealth per person, where Australia comes in below second place. But those figures average in the wealth of multi-billionaires, and don't really reflect what the wealth of typical people within the country is..

But using Median Wealth, one knows that there are exactly as many adult Australians who own more than US$195,417, as there are who own less than US$195,417.
Regards,
Renato

 

[Renato1]

UPDATE: The Credit Suisse Global Wealth Report 2018 has Australins back at the No 1 spot as the richest people on the planet.

Our wealth didn't alter much compared to the previous year, but the Swiss who were ahead of us last year took a huge tumble in their median wealth figure.

Regards,
Renato

 

[Deleted member 29185]

Is this available on-line? If so, any link? EDIT, found it here.

That world map on P7 is pretty sobering.

(I'd better not show +1 or she may up her spending!)

 

[Pushka]

UPDATE: The Credit Suisse Global Wealth Report 2018 has Australins back at the No 1 spot as the richest people on the planet.

Our wealth didn't alter much compared to the previous year, but the Swiss who were ahead of us last year took a huge tumble in their median wealth figure.

Regards,
Renato

Does this report take into account cost of living? SA for example has the highest power costs in the world.

 

[Deleted member 29185]

Not being a financial wiz, I'm not sure how much value that report is. They seem to place an unduly amount of weight against number of millionaires and predicted number of millionaires into the future, but a millionaire 50 years ago was a much rarer beast than one today. Is the number of millionaires really of much use at all?

 

[Renato1]

Does this report take into account cost of living? SA for example has the highest power costs in the world.

No, it's just wealth.

But at the end of the day, one can technically convert the wealth to dollars and apply to move to a really cheap country and live like the very well to do (and fly home if one gets sick). So it is real wealth, not notional wealth.
Regards,
Renato

 

[Pushka]

No, it's just wealth.

But at the end of the day, one can technically convert the wealth to dollars and apply to move to a really cheap country and live like the very well to do (and fly home if one gets sick). So it is real wealth, not notional wealth.
Regards,
Renato

Not really if that wealth is generated from income.

I think not taking into account cost of living is like comparing apples and oranges and not an indication for comparison across different countries.

 

[Renato1]

Not being a financial wiz, I'm not sure how much value that report is. They seem to place an unduly amount of weight against number of millionaires and predicted number of millionaires into the future, but a millionaire 50 years ago was a much rarer beast than one today. Is the number of millionaires really of much use at all?

I think the report is highly respected.
The number of Millionaires is irrelevant to the Median Wealth figure per adult. They and the number of Billionaires help raise the Average wealth figure per adult, which is nice to know but not particularly relevant for most people in the country.

There was a Canadian writer (who's name escapes me) who visited Australia and gave a very interesting talk about his book on the ABC about 10 or 15 years ago. He pointed out that most societies have a pyramid structure for the wealth in their countries - the small number of rich at the top of the pyramid, and the large numbers of poorer people forming the bottom of the pyramid.

But that in sharp contrast, the founding fathers of Canada and Australia - by design - set out to make a diamond structure for wealth distribution in their respective countries - rich on top, vast amount of wealth in the middle, and small amount of poor at the bottom.

The result was unambiguous success in their design - and as a result, the even more real reason why fly around so much.

The writer was warning about attempts to make the free market operate unfettered within the two countries (i.e. labour deregulation) - yes it would make the country richer, but it would also destroy the diamond shape. We'd have to start tipping our workers here too.
Regards,
Renato

 

[dajop]

Probably one reason why Australia is relatively high on the median wealth score, is that much of this wealth is reflected in the value of our homes (which some suggest are over valued) and saving held in superannuation. This isn't necessarily accessible wealth (at least until retirement). But it does seem our "poor" are wealthier than the corresponding "poor" in some other notable western economies.

 

[Blinky]

Interesting. Our wealth is also becoming intergenerational (as is poverty I suppose). My parents had little (I’m 67) and their parents had less. Baby boomers have done well, as have generations after. Yes housing prices cause problems, but 5 of my 7 kids have houses and all can manage an overseas holiday every year, as have record numbers of Australians. When I was in my 20s the only overseas holiday considered was a honeymoon to Fiji or New Zealand, and that was it!

So, yes. We fly because we are rich.

 

[Renato1]

Not really if that wealth is generated from income.

I think not taking into account cost of living is like comparing apples and oranges and not an indication for comparison across different countries.

Look at it this way.

You get the income, you subtract the expenses (including those power bills) and what's left is wealth that you add to your existing wealth. Do that on the same basis all around the world, and its apples and apples, not apples and oranges.

And from most of those countries, they subtract a bit of that wealth and for pretty much the same price they expend that protion of their wealth for a 10 day stay in the same five star resort in Bali. It's still apples and apples (unless they get a better deal on Luxury Escapes).
Regards,
Renato

 

[Renato1]

Probably one reason why Australia is relatively high on the median wealth score, is that much of this wealth is reflected in the value of our homes (which some suggest are over valued) and saving held in superannuation. This isn't necessarily accessible wealth (at least until retirement). But it does seem our "poor" are wealthier than the corresponding "poor" in some other notable western economies.

Both are of what you state are relevant factors, but I'd argue the main factor is wage regulation - our award and minimum wage system. Since federation, this has been what caused employers and the rich to split their earnings with their employees, which led to them being able to buy the homes in the first place. The employer paid superannuation is just a later manifestation of the same overall design behind wealth distribution.

Our poor are certainly better off than the poor in the USA.
Regards,
Renato

 

[Renato1]

Interesting. Our wealth is also becoming intergenerational (as is poverty I suppose). My parents had little (I’m 67) and their parents had less. Baby boomers have done well, as have generations after. Yes housing prices cause problems, but 5 of my 7 kids have houses and all can manage an overseas holiday every year, as have record numbers of Australians. When I was in my 20s the only overseas holiday considered was a honeymoon to Fiji or New Zealand, and that was it!

So, yes. We fly because we are rich.

They are doing well!
And as we baby boomers die off in the next twenty or so years, there will be a massive transfer of wealth to the next generation.

As well as a huge transfer of wealth to the federal government, as capital gains tax becomes payable on properties other than the family home.

Might solve both the housing affordability and the budget deficit problems.
Regards,
Renato

 

[lovetravellingoz]

They are doing well!
And as we baby boomers die off in the next twenty or so years, there will be a massive transfer of wealth to the next generation.

The flaw in that though is that with people living longer that when the 80/90 year olds die off that that transfer then goes to their 50/70 year kids. Maybe some sprinkled to the grandkids.

So the kids will have already lived a huge chunk of their life before the inheritance kicks in.


However on your OP I have long believed that our median wealth was a big factor in why so many Aussies travel. Though there are other factors. ie Many in the USA are poor, but equally many in the USA have very little knowledge or curiosity on things outside of the USA. So education and social/cultural issues are all at play too.

Australians too I believe have an attitude on wanting to enjoy life., and travel is part of that.

 

[Renato1]

The flaw in that though is that with people living longer that the 80/90 year dying off that that transfer then goes to their 50/70 year kids. Maybe some sprinkled to the grandkids.

So the kids will have already lived a huge chunk of their life before the inheritance kicks in.


However on your OP I have long believed that our median wealth was a big factor in why so many Aussies travel. Though there are other factors. ie Many n the USA are poor, but equally those on the USA have very little knowledge or curiosity on things outside of the USA. So education and social/cultural issues are all at play too.

Australians too I believe have an attitude on wanting to enjoy life., and travel is part of that.

Good point - I can therefore envision a complete boom in travel aimed at 50/70 year olds in th future.

Or of the kids of Baby Boomers strongly lobbying government to introduce free cigarettes for the elderly.

You are right about the insularity of Americans, and it's not just their poor and middle classes. I watch a lot of US political commentary programs and what strikes me is how they all - lefties and conservatives - keep mouthing off that the USA is the most prosperous and greatest country on earth. When plainly the figures show that for the average citizen that is unambiguosly not the case by a long shot. They even discuss how Trump came to power by latching on to the discontent of the impoverished and forgotten middle and working classes - and then still go on to say that America is the most prosperous place on earth (without noticing that something has to be wrong in their respective analysis).

And, just a digression - but still on the topic of insularity, those same TV programs keep going on and on about their First Amendment rights with its guarantee of Freedom of Speech, and how great America is for having it. Except that the guarantee only applies to freedom of speech being protected from interference by the government, whereas their employers can happily sack you if they don't like you or what you say. Something which is totally abhorrent and illegal in Australia - in practical terms, we have much more freedom of speech than they have in the land of the free.
Regards,
Renato