Middle Income? (Australia)

[deborah]

For those who think that they know where they stand on the income range in Australia, the ABC has put out this where you can calculate where you (personally) stand.

https://www.abc.net.au/news/2019-05-21/income-scale-australia/9301378

You will note the middle income in Australia is $33,800 to $41,599 per year before tax.

[Bloop Bloop]

Bit disingenuous because that figure includes everyone in society. If you are someone of working age who has a job, you would rather look at stats for people of working age who have a job. If you are someone who works full-time in a demanding occupation for which you went to school for 18 years, you would want to measure yourself against your peers.

I mean, the average savings rate in Australia is about 8% the last I checked. Very few of us would be happy to be average in that sense.

So the 'middle income' data, I suggest to you, also is of limited use other than as a statistical curiosity.

[marty998]

I too found the numbers a little... low.

I don't believe for a second I am in the top 5% of earners. Not when you have half the finance industry, doctors, lawyers, dentists, engineers, sportspeople, entertainers and many many many small business owners out there.

Would be useful to understand the inputs into how this was derived.... as we all know, tax return data is not meaningful when you've got people earning hundreds of thousands in super which does not form part of taxable income...

[Bloop Bloop]

Taxable incomes also include people on pensions, and people working very few hours, who have or nil true income, and who push the average down.

As the site itself says:

"Another thing we can see is that the top income bracket typically works longer hours than any other, with 42 per cent working 49 hours or more a week, compared to the average of 10 per cent.

And 62 per cent of top income earners have at least a bachelor degree or above, compared with the average of 25 per cent."

So if you're working long hours and have the ability/patience to earn a uni degree, of what relevance is the average income for those who haven't?

It's sort of like talking about how the average person in Australia is about 15kg overweight (this is true) - it's a statistical curiosity but not something to anchor one's expectations.

[HomewardBound]

Taking a snapshot in readiness for my return to Australia.  My FIRE dividends (including expected dividends that will come from my UK pension due in a bit less than 8 years) plus expected imputation credits on my Australia shares minus expected taxes I end up with circa $942 per week (or $569 per week before the pension dividends turn up ).  Plugging those numbers into the calculator and 27% earn more with 63% earning less (57% earn more and 34% earn less before the pension).

Doing the same for my better half and I end up with $422.  Plugging that in results in 66% earning more and 24% earning less.

In reality comparing at this point means very little though.  To demonstrate:
- we'll build ourselves ourselves a Passive Design home including PV panels and water tank for toilet/laundry/garden which will be paid for outright with separate cash savings so home costs should be lower than average; then
- allowing for all expected long term "non-fun" costs so including depreciation on a few year old second car, 1% of the home build cost for long term maintenance and even considering some strata fees which could pop up I'm at $377 per week of spending all in; so
- even before the pension turns up we'll have "fun" money of circa $614 per week pre-pension and $987 per week post-pension.  I honestly don't know how we'll spend that much money given here in the UK we currently spend closer to $250 per week (been tracking expenses for years so it's accurate) on "fun" including holidays; so
- according to these figures between the two of us we're middle earners yet in reality we'll be living like kings.

[middo]

I found some of the conclusions interesting - the assumption that higher incomes leads to more stable relationships.  Maybe more stable relationships allow people to earn more?  Cause and effect?

I also found the graphics to be difficult to really understand.  And I'm a maths teacher.  There was a lot of "where are you" but a couple of nice histograms showing the overall spread of earnings in Australia would've been nice.

I also note that we are not really told what the data is based on.  Everyone's earnings, or those who are recorded as working? 

Interesting, but not necessarily helpful.

[Fresh Bread]

I thought the map was super interesting (Geography background here). Ashburton, eh? Be a good location to set up a high end service business.

[Bloop Bloop]

I found some of the conclusions interesting - the assumption that higher incomes leads to more stable relationships.  Maybe more stable relationships allow people to earn more?  Cause and effect?

It sort of puts the lie to the theory that the rich must have higher divorce rates. Likewise the stats about working hours tend to suggest that maybe there is, in fact, a correlation between hard work and high earnings!

I would love for there to be more epidemiological and sociological studies that look at these correlations but I feel that some questions are thought best not answered.

[middo]

I thought the map was super interesting (Geography background here). Ashburton, eh? Be a good location to set up a high end service business.

Ashburton is very anomalous.  A shire with mining areas of high wealth, and devastating poverty in some other populations.  I had a friend who worked in Tom Price as a teacher for a few years.  High income, high costs and those not on high incomes suffer.  There were also a surprising large number of boats for a shire a long way from the coast.

[Fresh Bread]

I thought the map was super interesting (Geography background here). Ashburton, eh? Be a good location to set up a high end service business.

Ashburton is very anomalous.  A shire with mining areas of high wealth, and devastating poverty in some other populations.  I had a friend who worked in Tom Price as a teacher for a few years.  High income, high costs and those not on high incomes suffer.  There were also a surprising large number of boats for a shire a long way from the coast.

That's really interesting to have some info from the shire, thanks Middo.

The best two days of owning a boat are the day you buy it and the day you sell it, but maybe if you keep it on a trailer inland 360 days of the year there's little maintenance? They may be on to something ;)

[deborah]

The boats end up very red.

[middo]

Better
Outlay
Another
Thousand

[Bloop Bloop]

What's the easiest way to end up a multi-millionaire?

Start off as a billionaire, and buy a boat!