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How rich is the average Australian? A millionaire apparently

Do you consider yourself to be an average Australian?

Well, the Australian Bureau of Statistics (ABS) has released its latest issue of the Household Income and Wealth report of Australians in the 2017-18 year.

According to the latest stats the average Australian household is now worth over $1 million! Do you feel like a millionaire? Well, if you have owned a property in Sydney or Melbourne for a while you may well be a millionaire by now.

There are many positives and negatives about so much of a household’s net worth being tied to their home – but it has certainly boosted the average Australian wealth and helped Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) make a ton of profit.

However, averages can be skewed by the rich. For example, out of 10 households there might be several middle class households but one household could be worth $20 million. The median number tells us what the middle person is worth. The median Australian net worth was $558,900 for the 2017-18 year, which is still very good.

Looking at the income side of things, the mean weekly gross household income was $2,242 or $116,584 a year and the median weekly gross household income was $1,701 a week or $88,452 a year.

The ABS is thorough enough to also display the changes compared to a decade ago in the 2007-2008 year. In that time, the average mean weekly gross household income has grown by 8.8% and the median weekly gross household income has grown by 5.5% – so the rich end of households have seen their income grow quicker than the rest of the country.

In what might show some of the malaise the country is facing, the median weekly equivalised disposable household income has only grown by 4.5% to $899 over the decade.

Foolish takeaway

These numbers certainly tell the story of the last decade. Strong house price growth but little wage growth has seen the economy stagnate on a per-person basis.

I’m not expecting discretionary spending businesses to turn around any time soon.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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