Is it is easy to become wealthy?
By Rob McGregor
Director, Holman McGregor Financial Services
Noosa News, 30 August 2006
Many things in life are straightforward, but not necessarily easy.
Take losing weight for instance. Most people would agree the process is fairly
straightforward. Eat less and exercise more and weight loss should follow.
Straightforward – yes. Easy – not really. Growing obesity levels in western
countries would indicate that it is far from easy in practice.
Take a look at bookstores and you will see dozens of books on losing weight,
with many of them offering quick fixes and “easy” solutions. But despite all
these great books, weight levels continue to increase. In the modern world
today there are many distractions, short term temptations and the offers of
quick fixes later on, so many tend to put off doing something about it, and as
we put it off, it becomes harder to do.
Why am I talking about weight loss in an article about becoming wealthy? I
believe many of the same concepts are valid.
Is the process of becoming wealthy straightforward? I think so. Spend less
than you earn, invest the difference in a variety of good quality assets on a
regular basis and give yourself plenty of time and avoid big mistakes. Result –
wealth. Sounds straightforward, but is it easy? If the statistics are anything to
go by, definitely not.
Real statistics on wealth are hard to find, but a 2001 study from the National
Centre for Social and Economic Modelling (NATSEM) at the University of
Canberra had some interesting figures. They found that the average wealth in
the age group about to retire (60 year old women and 64 year old men) was
$216,000. This included home equity, so would we consider this average
person wealthy? Not really.
The “wealthiest” 10% of the population had average assets of $553,000 and
owned 85% of shares and other investments, 72% of rental properties and
60% of business assets.
So why aren’t more people wealthy? I believe it is for very simil