The Financial Freedom Index, developed by Insignia Financial and social researcher McCrindle, has found shifting aspirations among Australians towards achieving financial freedom over traditional markers of wealth such as home ownership. The research, which echoes findings from a similar study conducted by AMP earlier this year, shows an increasing preference for life goals like work-life balance, travel, and financial independence over owning a home.
Generation Z (13- to 27-year-olds) were found to be the only age group prioritizing home ownership as their main aspiration, while 54 per cent of Millennials (28–42-year-olds) named work/life balance as their main goal. Interestingly, overall, 60 per cent of Australians were found to be more willing to pursue their dream life, as opposed to 40 per cent that would prefer to own their own home.
Mark McCrindle, founder of McCrindle, attributes this shift in perspective to the Covid-19 pandemic, suggesting that Australians have reevaluated their priorities, seeking greater flexibility in their work and personal lives. This shift also underlines the changing role of financial advisors, who must now develop wealth strategies to suit these evolving goals and aspirations.
Additionally, the study revealed gender disparities, with 55 per cent of women reported as being “extremely motivated” or “very motivated” to achieve their financial goals compared to 44 per cent of men. This reflects the differing experiences women have in relation to money and emphasizes the need for more tailored financial advice to effectively serve them.
Another noteworthy finding is that three in ten Australians received no financial education during their childhood, which highlights the pressing need for more widespread financial literacy education. In response to this, Insignia has partnered with charity The Smith Family to help provide essential money management skills to up to 500 students.
Insignia CEO Renato Mota stressed the importance of holistic financial advice and financial literacy in helping individuals understand and work towards their own financial goals. He commented on the shift in priorities, stating that the current focus on alternative wealth creation vehicles and achieving a ‘dream life’ over a ‘dream home’ represents a significant structural shift in Australian society.
A finance geek with over 20 years of experience, Joseph Bancroft, known as Joe, is the Chief Editor at Money News Biz. He's an acclaimed author, blogger, speaker, and mentor, with a knack for forecasting economic trends and identifying investment opportunities. Joe blends professional acumen with a quirky charm, making him a respected and engaging figure in the finance industry.