New research shows the No. 1 reason Australians invest is to achieve a financially secure retirement in which they can live off the passive income or capital gains generated by their investment assets.
A survey conducted by online trading platform Stake reveals the top 10 motivations for investment among more than 2,000 Australians who currently hold ASX shares or overseas stocks.
A stress-free retirement funded by solid investment returns is at the top of the list.
If you are interested in achieving this via ASX shares and dividend investing, check out this article by my colleague, Sebastian: How much cash do you need to quit work and live off ASX dividend income?
Let's find out the other motivations for investment.
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Retirement comes first. What are the other motivations to invest?
The second biggest motivator to invest is to supplement personal income with investment income.
This reflects another survey finding: 46% of investors believe asset ownership is more important than how hard they work in their jobs.
This was a particularly common view among younger respondents aged 18 to 34 years.
The third biggest motivator for investment is funding a holiday or extended travel. This reflects Australians' ongoing love of exploring the world at various stages of life.
Next on the list of motivations is cutting down working hours, followed by buying a home.
CEO of investment platform Pearler, Nick Nicolaides, reckons investing is a new necessity for young aspiring first homeowners trying to save the 20% deposit that most lenders require to grant a home loan.
Nicolaides said (courtesy Weekend Australian):
[Young Australians] understand that if they're going to eventually get into property, if that's what they want, then being an investor in shares is part of the ladder.
It just has to be these days, when it's taking 10 years or more to build a deposit.
One reason it takes so long to save a deposit is that Australian property values typically rise faster than wages.
On top of that, even the most frugal spender would find it difficult to save at the same pace as recent home price growth.
For example, in FY24, the median home value rose by $59,000, according to CoreLogic data.
What else is motivating Aussies to invest?
A secure retirement may be a big long-term aspiration, but some investors have shorter-term goals, too.
The Stake survey shows some Australians see investment as a way of supporting their physical and mental health. That was the sixth most important motivation for investment.
The No. 7 motivator was gathering enough money to start and support a family. This indicates investors may not consider their salaries enough to enable them to start a family at a time of their choosing.
This is an important insight given Australia's falling fertility rate, which has a direct impact on the health of our economy. In 2022, the fertility rate was 1.63 births per woman, according to the latest figures from the Australian Bureau of Statistics (ABS). That's well below the replacement rate of 2.1 babies per woman.
The ABS says women in Australia are tending to have babies later in life and are having fewer of them.
The eighth biggest motivator for investment is upgrading or renovating a home. This is followed by the opportunity to fully pursue a hobby or passion; and buying more consumer goods.
The survey also found that the two most popular definitions of financial success among investors are being debt-free (86% of respondents) and homeownership (85% of respondents).
Both goals are considered essential for a happy and financially secure retirement.
