This is a social experiment. :)
Please vote for your relevant yearly income bracket!
Edit: Voting Results for 4/8/2013
[SURVEY] Are there more rich people looking for a bargain than poor people?
MasterNoob on 31/07/2013 - 21:49
Last edited 04/08/2013 - 21:23 by 1 other user
Last edited 04/08/2013 - 21:23 by 1 other user
Poll Options
- 67$200 000 and above
- 27$150 000 to $199 999
- 86$100 000 to $149 999
- 85$80 000 to $99 999
- 126$60 000 to $79 999
- 331$59 999 and below
Comments
- 1
- 2
if everyone knew the difference between mean and median the world woupd be a much better place
According to the Central Limit Theorem in Econometrics 101, the mean and median tend towards the same mathematical value for any substantial population size (over 32, IIRC)…
You just failed statistics.
The central limit theorem has a number of variants. In its common form, the random variables must be identically distributed. In variants, convergence of the mean to the normal distribution also occurs for non-identical distributions, given that they comply with certain conditions.
This system does NOT meet these requirements and will NEVER be normally distributed as it is asymmetrical by nature. You can't get less that 0 but there is not real upper limit.
What's the average income when you factor in all those seeking or without work?
Should have put a $20k and $40k bracket.
The first bracket is wayy too high. I would not see myself earning 60k even after the first 6 years of my hospitality career — it's a field that does not pay very well and will at most max at at around 70k, if not less given the competitive nature of the job market.
Social experiment? or market research and your trying to tag everyones account with how much they earn.
Well the definition of rich is quite subjective isn't it?
I'm calling bullshit on all the people who think they deserve what they have. I do well, I didn't inherit money and I have worked moderately hard to get where I am. But I'm not self deluded enough to think I deserve what I have, and by corollary that other people deserve to do without. that view is a simple mind trick to let people sleep at night. I had the good fortune that I don't suffer disease or mental illness, my home life was stable, and I had the freedom to take advantage of opportunities. I know plenty of people cleverer than me that don't do well. It's a simple fact that our world is a zero sum game - for each person that wins, a whole bunch of people have to lose. That doesn't mean the winner deserves what they get out that the losers deserve what they get. That's why we have social infrastructure and taxes.
Oh, and I'm cheap. Probably because I'm pretty sure I don't deserve my money and someone will take it off me at some point. :-)
I agree apart from the zero sum part. Our world doesn't really work like that, we product more than our needs and one person eating doesn't mean that someone else doesn't.
In theory we could have a situation where everyone is better off, but theory and practice are not the same, and the tradgedy of the commons is hard to avoid.
here comes the socialism vs capitalism debate
I too think of the world in zero sum terms. Resources and wealth on this planet are limited, so in order to become rich you have to take money away from other people. If you open a business in an area with a static population, you can only make money by taking business away from other local companies.
Capitalism = the rich robbing from the poor (in the old days this was called feudalism, nobles exploiting cheap serf labour).
Socialism = the state stealing from the rich and redistributing their money to the poor.Capitalist advocates claim that everyone can be rich and it is only sloth & stupidity that hold's people back, but in reality only a small number of people can be 'upper class' with personal yachts, luxury cars, and multiple large homes. Many Australian cannot ever afford one modest home, but there are people in our country who have 10, 20, 30 rental properties. Unfair?
Life is an unending struggle for limited resources. If people have ever watched animal documentaries they will understand what I mean. This is what prevents population explosions since most animals are incredible fertile. If the population climbs above the land's capacity to provide, animals starve to death until drop the population back down. Zero-sum.
Sorry, but almost all economic theory disagrees with you. Try reading this:
The world is not a zero sum game.
Resources and wealth on this planet are limited, so in order to become rich you have to take money away from other people. If you open a business in an area with a static population, you can only make money by taking business away from other local companies.
Consider your business in a static area. Assume currently, consumers amount X off existing businesses each year. You come in with a brand new product - assume it is not a substitute for what existing businesses sell. Consumers buy amount Y off you, existing businesses don't lose out everyone wins.
Now assume you are offering a substitute to existing shop products. In order for you to succeed, you have to be innovative. You have to offer a product more attractive to consumers than what they can currently buy. If you do this, consumers will buy amount Y off you, where Y > X. Consumers are happier because they've bought more products from you. Existing businesses will lose sales, but overall trade and output will increase, GDP will increase, GDP per capita will increase (all else equal), and overall standard of living increases.
In a utilitarian world, that is not a zero-sum game. Someone may have to lose for you to succeed, but overall output is higher. Consider: VCR industry died when DVDs were invented. DVDs are better technology. So, VCR producer loses, DVD producer wins, but overall consumer population wins too. When win > lose, world is not zero-sum.
Socialism = the state stealing from the rich and redistributing their money to the poor.
The failure with socialism is the lack of individual incentive which leads to, as Bruce mentions, the tragedy of the commons. Individuals are rational, thereby selfish. Why would you bother trying hard and innovating when the profits from your hard work will be redistributed to those who muck around? Why would Steve Jobs even invent the Mac, or the iPhone, if he knew the profits would simply be taken and given back to the community? Would we still have the technology that we have today? Would we still develop as a country?
Capitalism = the rich robbing from the poor (in the old days this was called feudalism, nobles exploiting cheap serf labour).
Capitalism: no one is robbing anyone. Entrepreneurs set up businesses and make a lot of money, because they're come up with innovative ideas, work hard and achieve their goals. No one is forced to be a serf, no one is forced to give money to the rich (we have an income tax redistribution system, welfare generally goes to the poor, no?), at least not in developed capitalist countries like Australia.
Why do you think the majority of successful developed countries run capitalist economies? Why do you think China for example, had to open its markets and pull back from its Communist position in order to begin prospering as a global economic superpower?
tl;dr: the world is not a zero-sum game
there is no nation/state that is capitalism or socialism.
capitalism and socialism are theoretical models.
we only have impure versions of them.
Capitalist economies - let's call market economies
every nation/state is a blend of the 2. it is just the difference in the balance that varies.
China has always had strong internal trade. it is the fallacy (and self-righteousness) of the east to believe that China "moved away" from communism due "market forces" and "capitalism"
"our world is a zero sum game" <—— complete and total nonsense.
Humans started out as cavemen. To suggest that the average wealth of human beings now, is no different to that in caveman times, is beyond insane.
I can see the point of people who say the world is a zero sum game- the Earth is limited, and what we produce is (although increasing) still divvied up among 'winners' and 'losers'.
But on the other hand, the world is also very big. Even considering all the people you interact with in your life, you touch only a small portion of a vast population. You don't have to treat anyone as a zero sum object because not both of you have to be losers.
In my experience, zero sum games (or any life theory) only becomes zero sum if one of you chooses to play that way. In business or even relationships, it's almost always better for both parties to be working for a win/win. Not always, because if your partner isn't doing it, then it's a no-go. But always playing with a zero sum mentality will prevent you from experiencing the wonderful productivity when you do meet others who are working for a mutual benefit.
The fact that you consider 'poor people' being anyone earning less that $60,000 per year makes this a poor experiment.
Next time maybe do $10k blocks from sub 40k through to 100k+
We come into lowest income group but we're not poor. We have a million in assets and zero debt, but as self funded early retirees (retired at 55 in 2009) we're living on investment income and dipping into our savings. Neither my wife or me has ever been in a big earning situation, certainly never more than 100k combined and no inheritances to speak of. We've always made a point of buying cash or interest free, always paid cards in full and on time. Foregone flashy cars, TV's or meals out. We love a bargain and have paytv and every 8-10 years buy a new manual car for cash. We do all the usual money saving things and apart from big ticket items and overseas travel we basically eke out on ~ $500 p/w. As my wife tells people we don't have everything we want but we do have everything we need. In our opinion most people are unable to contain their spending and now we have a Government that openly spruiks that it's okay to borrow money whenever income drops so you can continue spending at the same level. We always bulk buy when we see things we normally buy anyway. We switch of lights and have appliances on timers. When we sold our home on the Gold Coast for 500k to retire in country NSW in a similar size house 350k, that released 5 years of living, friends told us we couldn't live on so little and no state welfare, we've proved them wrong and it beats getting up on dark mornings to go to work and we've raised 3 kids who are all in relationships living elsewhere :o)
Just curious. Have you considered that you may live to over 100 and that, as you are reducing your capital yearly, you may run out of money when you are very vulnerable? Not having a go, just wondering. I would not think $1m would be enough for two to retire on at 55 yo
Based on their current spending it should last. If you have 1000000 today and spend $30000 per annum with the capital of $1M invested at 4% it will last over 50 years. Given that philart states assets of $1M and their house worth $350K, give another $50K for other assets their money should last over 30 years without any government assistance. It's the living off $30K a year I would have trouble with.
When we're 60 we have 220k in our super to draw on tax free. When I'm 65 a private plan matures with a min 250k in that pot. When we're 75 we won't worry about only having the state pension, heck we live on less than that now, we'll be enjoying life and spending the savings/investments while we still can. Then our will be by then middle-aged Kids can share the proceeds of the family home, if we're spent out. In the right hands a million goes a long way. Good investments mean that we're better placed now 4 years later than we had budgeted to be :o)
Good stuff, but things have changed in the big cities and as a result of the mining boom. Housing costs are diabolical in some areas, but overall we are mostly still financially better off than we were a few decades ago.
Have to take issue with your comment about borrowing. Governments borrow for entirely different reasons to private citizens and if you can show me where any Australian government has encouraged citizens to borrow beyond their means I'll be interested to see it. If on the other hand your comment is a swipe at government deficits then you have a lot to learn about national economics. And, there isn't a citizen in this country who hasn't been the beneficiary of state welfare at some time in their lives either as a child or adult or both - in health, super concessions, and tax rebates etc etc.
This is quite a project you have on your hands, because the data from this survey won't tell you much. You'll probably have to look up census data to find the distribution of salaries in Australia and compare that distribution to see if the shape is similar to the results of the survey, if they are, then wealthy/poor are about the same in hunting bargains, if negatively skewed, wealthy are more keen, if positively skewed, poor are more keen…etc.
the more you earn the more you value money - as a business owner, the tighter you become but you still spend more because you can afford to
as an employee - the more you earn the more you spend,
I personally fall into the third bracket and as a household we comfortably earn more than $200,000 p.a. but I'm an avid OzBargainer. My reasoning is that I grew up dirt poor and you form spending/life habits when you're young that tend to stick with you for life (my better half would probably advise tightarse but I prefer the term frugal).
Pretty sure these 200k earners would have given anything to reach where they are now 10 years ago. Don't worry, even if you reached 1 million, you would wish for 2 the next year.
"Nothing will fill the stomach of a human, except the dirt of the grave"
I'm on the same boat.
Once you've tasted 6 figures, you don't want to go back to 5 figures either and treat 100k, 150k, 200k etc as the next frontier to drive yourself nuts chasing the dollar sign.
So is it gross individual income?
There was a really interesting article written by a journalist who conducted interviews about money across the rich/poor spectrum in the USA. I can't seem to find it, but he started with a minimum wage kitchen hand and worked his way up, asking questions about how money is spent and what they would do if they had more money.
It's not much to go off, but does any one know which article i'm looking for?
I have a pretty good idea what the results would be. If an extra million was plunked in front of me, I would just invest it. I might pull forward the purchase of my next car, but it would still be a slightly used model, unless the new market gets so tanked that the financial advantage to a used car was sufficiently negated.
Everyone looks for bargains. Of course, rich people do, in a much bigger scale. They look for bargains in real estate, shares/companies, other assets worth investing etc… (e.g. Warren Buffett)
The poll does not present a correct picture. Not every income range has the same number of people. You cannot clearly tell the % of people in that bracket being a registered OZB user. It is like plotting a graph with non linear scale but present it like a linear graph. Still fun to see the poll result though.
Yup, I totally agree with you. These results are skewed due to the different population count in each sample.
I'm sure it's a mixed bag, OZB improves your effective salary, it doesn't really matter what your base salary is. :)
As someone who is fortunate enough to make more than several times the top income category per year I will try to share my thoughts on this topic. Personally I love bargains and although I don't post on this site I check in at least once a day. As some have stated making 200k+ a year doesn't make you 'rich' by any means. The more you make the more you buy investments to gear to reduce tax, the more goes to mortgages etc and your left with the same amount in the bank at the end of the day. Obviously standard of lic
TIL Investments worth >200k does not make me 'rich' by any means
I hope you realize more than 1,000,000,000 [1billion] live on less than $1.25 a day; 2,700,000,000 [2.7billion] live on less than $2 a day, and 6,000,000 children die every year from 100% preventable causes such as malaria, diarrhea and pneumonia.
It makes me sick when you say that amount of money 'does not by any means make you rich'. Physically sick.
In that case someone on the Dole would be considered 'rich' by you right?
They live on > $2 / Day.
They live sans malaria, diarrhea and pneumonia.
They must be rich.
If you are so easily sickened, perhaps seek a medical professional?
Relative to the world, yes they are rich. We are a fortunate enough country to even have a dole.
So you're not sickened by this; you must be a man's man.
Death from malaria rests squarely on the greenies' shoulders. They are the ones who outlawed DDT.
We know.. the only person that can change this is themselves. Just Look at Australia (from nomadic huts) and Hong Kong (from paddy fields). Just a few hundred years from rag to riches if the people are willing to put in the effort. If they don't want to put in the effort then there not much we can do for them.
By that logic everyone fortunate enough to live in australia is rich, even those who rely solely on government benefits. . 200k+ let's you live comfortably but it that doesn't necessarily equate to business class travel, exotic cars and holiday homes. I don't think many people on that income would consider themselves financially rich. It's all relative though. We all have it pretty good in this country and in the scheme of things on a world scale most of us have incredible wealth
90K+ = well off
120K+ = wealthy
200K+ = rich
1M+ = super richI think that even rich people still enjoy a bargain.
I've always wondered though, do billionaires still get a thrill out of gambling? "Yay I won a million dollars, yawn"
I've always wondered though, do billionaires still get a thrill out of gambling? "Yay I won a million dollars, yawn"
Absolutely. This is pretty much a casino's business model.
pretend you are going to the local RSL to play pokies and have 50 to blow. think about how excited you would be if you won 200 bucks, that's pretty much their mindset
To be honest I don't think too many people on 120k would consider themselves wealthy unless they are a high asset individual. You might like this article:
http://m.theage.com.au/federal-politics/political-news/if-yo…
people get paid to do this crap??
He is reseaching for a book… I don't understand the comment.
don't understand your point, doesn't that link just back up Josh81's comment? Though it defines 200K is 'ultra-rich' so presumably it puts just 'rich' as even lower.
Also people on 120K are well into the top 10% (140K is top 5%).
Its definitely about the bargains. A person on 50K can just a well afford a $15 lunch as much as a person on 200K. It might not be expensive and unaffordable… just overpriced.. Thats what coupons are for.
what do u have to do to earn 200 k +…any easy answers?
Hard work? As a lawyer earning less than $40k gross… I can say I need to work harder :)
Or charge clients more.
It's really easy, study hard in year 12 then work smart and hard in your chosen field. There's an element of being at the right place at the right time for some people.
i think luck must be the factor then. the number of people i know who did very well at secondary and tertiary school and who work extremely hard doing things most people would be unable to do is staggering. they mainly earn well under the 100k mark
Luck appeals to those who think they will get rich from lotto tickets.
The minority are lucky but those who succeed work damn hard.
Be good at helping richer people get even richer!! I would happily pay you $200K p.a. if you were going to generate $1M p.a. for my business! Easy answer = Sales, specifically complicated solution sales!
If it's easy, don't you think everyone will be on 200k by now? Then the goal post will be reset to something else like half a mil etc…
One person's pathway to 200k will be different to another. What worked for one person doesn't necessary work for another due to timing, amount of things that you're willing to sacrifice, luck and drive/determination to get there.
For those whose answer to 200k is "work harder", well that is just not helpful. Working harder isn't the way to getting more money, just more work. Working on a fixed salary, usually the one that works hardest ends up doing the most cause the slack ones get away with doing less…And when it comes to promotions.. guess who is the one that gets it… That's right, the slack ones cause they are usually more social with the ones doing the promoting.
I think you'll find that the 200+ probably all come down to a few select specialised fields.
I work in IT and I promise you working hard isn't going to get me to 200+
However doing this might..- "Easy answer = Sales, specifically complicated solution sales!"Unfortunately IT is pretty broad and your specialty (or lack of) dictates your earning potential.
Danield you solved your own problem. Work hard at being more social.
Climbing the coporate ladder & salary ranges is more than just slaving away at your job.
Those in higher positions want to deal with humans not unsocial robots.
Has anyone noticed that Masternoob has not commented even once since he started the thread?
Where are you, Masternoob? I'm sure you have some intelligent and insightful things to say after gathering so much information from the poll.
Who here is a retail business owner, and what are they making (for their own income)?
Say, like a Brumby's bakery, a fashion boutique in a shopping mall, a Gloria Jeans, a home wares store.
I earn under 30k a year (self employed / not very good at the business aspects of my business, working hard to improve though) and I can assure you I'm not poor. I support my partner and more recently our child. We take holidays, have a good house in a decent suburb on a quarter acre block, eat extremely well, have a dog and have all the latest gadgets, have an inground spa and associated costs to heat it all the time and I have an obsession with expensive alcohol.
Apparently our family is poor but I don't see it - I feel very rich indeed and am very thankful for what I have. I really don't think this rich/poor thing is about income at all. You can't tell someone whether they are rich or poor because you are likely to insult them. You either feel rich or you feel poor.
One thing that really makes my blood boil is the culture of entitlement that seems to have creeped into australia in recent times (I personally blame john howard). People think they have a right to private health insurance, private schools, yearly overseas holidays and massive houses and blocks plus the latest big flat screen TV and meat for every meal. This is shown time and time again when people whinge to no end when middle class welfare is wound back and often refer to paying tax as "the government stealing my money".
I don't sympathise with anyone earning over $60k at all. The people that need the most help that politicians seem to completely forget are single parents, unemployed and the homeless and we can't ever seem to get the clear air to have a debate about that because everyone is too worried about their own hip pockets. I'm sorry but if you are earning at least the full time minimum wage you should shut the hell up and think about someone else less fortunate for a change.
What's the rest of the story? You don't get all that on an income of $30K.
The only relevant information I can think of that i've left out is that we were each fortunate enough to get money from each of our parents for the deposit on the house - if we didn't get that on my income and living in a share house we would've been able to save it fairly quickly and also would've probably bought a cheaper house initially.
My point about being able to live very well off 30k was down to month by month and not startup costs - we can easily service our averagely size mortgage and live a good life. I'm not going to say we don't make sacrifices and spend less than most in many areas but generally these are easy decisions to make for us.
Some of the ways we save money:
- we have a lot of redraw available on the mortgage so we somewhat self insure and only buy insurance that is absolutely necessary (building insurance / third party property on the car)
- have invested in solar which has very nearly paid for itself already and not only gives us a credit but also pays our gas bill).
- Don't go to movies / don't buy snacks when out (although we do go out to restaurants a fair bit - but a fair bit here is obviously highly subjective)
- Do my own servicing on our car.
- Fix things myself around the house when they break.
- My partner shops at op shops and I don't generally buy that many new clothes
- We eat meat for about 1/2 of our meals but keep serving sizes of meat to a minimum (we don't see this as a sacrifice though)
- By all our fruit/vegies from a cheap green grocer and not coles/woolworths
- Stockpile stuff when it's on special and buy out of date bread and freeze it.
I'm sure there's probably more things but it's all I can think of that the moment.
I acknowledge that it would be very difficult for someone on 30k to get a home loan (I'm not going to go into how we got our loan but it helped having a business) and I think that's extremely unfair because how much you earn does not directly indicate your capacity to pay back a loan. I think unfortunately there are lots of people who have the financial savvy to pay off a mortgage but can't get it because the bank tells them they can't.
the cost of putting a roof over your head is a big expense.
In 2011, the average Australian household with a mortgage paid $1800 a month in mortgage repayments.
There goes 21.6K of your <30K salary.
That may be the average but it's not what we're paying. In 2011 we were probably paying $1400-$1500 and now we're paying about $1200. It's certainly achievable having 50% of your income going onto your mortgage even though some will say that 30% is pressure.
I think if you are on a low income you tend to be far more efficient at spending - easily identifying waste and eliminating it.
I have single friends living in share houses earning 60k a year who have no money left to save and they can't possibly believe that we are able to pay off a mortgage on 30k
Sounds good. The deposit gift was considerable I'm guessing?
Rich or Poor isn't determined by the amount of money you have, but rather by what you are content with in life.
There are many people around the world who earn $300/month or next to nothing but live a happy life because they don't allow consumerism/materialism to enter their hearts. They are spiritually rich, something money will never be able to buy.
Id rather have money.
True, but there are many many more people who have no choice but to be "content" with their lot. Given a choice we know here most of them would be - not necessarily in the material driven world we're part of but certainly out of the slums, with opportunities for their children.
why didn't you assort it according to tax brackets? that would have been a better breakdown
Dunno. Some people have high income but don't have high taxable income…
yes, you're right. I just think the poll is a little more skewed towards the high end.
According to this the median wage was $48,684 so really the middle option should be around 50k
That would probably make more sense. It didn't vote because I'm pretty sure I fall right in the middle of one of the options (my incomes varies per year). Tax would pull me down to the lower one.
But if we had a taxed poll, the amount of people possibly accusing or discussing tax fraud would depress me.
“When a man tells you that he got rich through hard work, ask him: 'Whose?”
― Don MarquisSome people are so poor, all they have is money…
- 1
- 2
http://lmgtfy.com/?q=australia+income+median
BTW the first result here:
http://mattcowgill.wordpress.com/2013/05/13/what-is-the-typi…
Has a very good break down of the difference.
To make it even easier:
"Among full-time workers, the average wage is $72 800 per year. But remember – the average (ie. the mean) gives a misleading impression about what the typical worker earns. It is pushed upwards by the large salaries of a small number of very high income earners.
The median gives a more accurate sense of the typical worker’s wages. If you earn the median salary, your wage is in the middle of the distribution – it’s higher than 50% of workers and lower than the other 50%. Among full-time workers, the median was $57 400 in August 2011, which is the most recent figure.
Even this figure, though, is a little higher than the typical worker’s wage. That’s because it doesn’t include the 3.5 million people who work part time. When you bring them into the fold, the average wage drops to $56 300, and the median drops to $46 900."