Have the rules for building wealth in Australia changed?
Property, super, retirement and what the changing Australian economy means for your future. I sit down with economist Saul Eslake to unpack it all.
When we reach our 50s and 60s, we start looking at the world a little differently.
We wonder if we’ll have enough. We wonder what role our home should play in our future. We wonder when we’ll be able to stop working. And increasingly, I think many of us are wondering whether the economic rules we’ve lived by for the last 30 or 40 years are still the right ones to rely on.
So, this week on Prime Time, I’ve brought in one of Australia’s best-known economists, Saul Eslake, to help us make sense of it all.
It’s a fascinating conversation about just how much the financial landscape has shifted in our lifetime, and again in recent times.
Saul explains why Australians who bought property decades ago can find themselves in a very different position today from those who didn’t, and why reaching retirement without a paid-off home could become one of the biggest challenges facing Australians over the coming decades.
We also take a good look at our relationship with property. For years, we’ve treated the family home as much more than somewhere to live. It’s become a wealth-building strategy and, for many people, an unofficial retirement plan.
But Saul questions whether we can continue to expect property to play that role, and makes a really interesting point about the value of your own home. If you’re selling and buying in the same market, rising house prices don’t necessarily make you as much richer as you might think.
We also get into super, tax, inheritance, financial literacy and what all of this means for those of us trying to plan the second half of our lives.
There are some challenging ideas in this conversation, and you may not agree with all of them. But I think Saul gives us a really useful way of looking at how Australia is changing and what that could mean for the decisions we’re making today.
LISTEN TO THIS EPISODE OF THE PODCAST HERE:
Highlights of the conversation:
Are Australians actually worse off? Saul explains why Australians are better off than 20–25 years ago on average but not necessarily compared with five years ago - and why averages hide some very different experiences.
The growing divide between homeowners and everyone else: We look at how property wealth has changed the financial position of today’s 50- and 60-somethings, and the challenges facing those approaching retirement without a home of their own.
Have we asked too much of the family home? Saul and I unpack how housing went from being primarily about shelter and security to one of Australia’s favourite ways of accumulating wealth.
Why a more valuable home doesn’t necessarily make you richer: If you’re selling and buying in the same market, Saul explains why much of the increase in the value of your family home can effectively be “paper wealth”.
How should you think about your home as you approach retirement? We discuss staying put, downsizing, freeing up capital and thinking ahead about the kind of life and care you may want later on.
Could the great Australian property wealth strategy be changing? Saul doesn’t expect house prices to keep rising relative to incomes indefinitely and argues we may need to plan more carefully rather than assuming property alone will deliver a comfortable future.
Are we worrying too much about AI? Saul gives a surprisingly optimistic take on technological change, arguing that while AI will eliminate some jobs, history suggests new jobs and opportunities will emerge that we can’t yet imagine.
From Bec’s Desk
Hello Primetimers!
Well this was a really interesting conversation. Or I thought so - and that’s because I’m really open to and interested in the different ways of interpreting what’s going on in our economy right now - and what might be important next to all of us in our 50s, 60s and beyond. It feels like the ground is moving, and the right answers to many of the old questions are changing. And I think we need to be open to thinking about things differently, progressively, and not just through our old lenses. Saul certainly widened my views. I’d love to hear yours in the comments too.
In other things, I’m excited. Today is the kickoff for the Spring edition of the How to Have an Epic Retirement Flagship Course. We’ve got our biggest cohort ever kicking off on this program, hungrily consuming their lessons, chatting in the community conversations together already.
Our next course will run from late October to early December if you’re keen - you can register your interest here.
In the meantime - enjoy the show.
Bec Xx
