Australia Markets closed

10 things we can learn from Australia's richest people

It seems like Australia’s billionaires are getting richer while the rest of us struggle with record-low wage growth.

The recently released AFR Rich 200 list gives us some insight into what’s happening to the fortunes of Australia’s wealthiest individuals, and it seems that life is good for them.

Also read: Is the Aussie economy on the rocks?

This year there were 19 women on the Rich List with mining magnate Gina Reinhart coming in at number 3.

There were 76 billionaires in the list (up from 60 last year) and the average wealth per person was $1.41Billion, but this was skewed by a number of very high nett worth individuals.

Also read: How to earn $100k in your sleep

The entry level into this year’s list was a paltry $387 million.

While the Rich List was topped for the second year in a row by cardboard and recycling magnate Anthony Pratt, over a quarter (51) of the Rich List made their money in property, with Meriton’s founder Harry Triguboff coming in a close second with a personal fortune of $12.77 billion.

The 51 property rich listers, who are worth a combined $86.2 billion, are punching above their weight since they collectively are worth 30 percent of the total wealth on the list.

With our wealth gap widening, what can we learn from Australia’s richest individuals?

  1. PROPERTY IS STILL THE NUMBER ONE SOURCE OF WEALTH

While fortunes of our industrialists, IT wizards and mining billionaires waxes and wanes, looking back over the years no matter how the Australian economy changes, the Rich 200 has always been dominated by property entrepreneurs.

You’ll find that many of those who made their money in other sectors stored it in real estate.

Remember, there’s nothing wrong with seeing what other successful people do and applying those principles to your own life.

Also read: The cities where one night in hospital costs more than a luxury hotel

  1. ANYONE CAN BECOME RICH IN AUSTRALIA.

Rich parents do make a difference.

Anthony Pratt, Australia’s richest person, inherited much of his fortune, but many on the Rich List were self-made successes, some coming from working class backgrounds and others having no tertiary qualifications.

Harry Triguboff is the Chinese born son of Russian immigrants, who studied and started working in the textile industry and only got involved in his first property deal in his late 20’s.

Other rich listers also proved that attending a private school or having an elite education is not a prerequisite to joining Australia’s wealthy.

Also read: Top 10 billionaire cities revealed

  1. THE MARKETS MOVE IN CYCLES.

I’ve been following the Rich List (originally called the BRW Rich List) since its inception 35 years ago and it’s been fascinating to follow the fortune of Australia’s tycoons.

It has also been instructive to watch how our markets cycle from boom to bust, with each cycle heralding a new wave of industries and entrepreneurs.

The late Kerry Packer headed the list in the early years, in the mid 80’s the new breed of West Australian businessmen, Alan Bond (of America’s Cup fame) and Robert Holmes a Court built and lost their fortunes, casualties of the 1987 stock market crash.

Others lost their fortune in the recession we had to have in the early 90’s as well as the Global Financial Crisis of a decade ago.

However successful business people and investors think long term, taking advantage of the market cycles and the opportunity to buy assets when they were on special, knowing each downturn sets up the opportunities for the next boom.

Remember Warren Buffet’s famous quote: “Be fearful when others are greedy and be greedy when others are fearful.”

Also read: 4 ways to profit from a falling market

  1. THE RICH WORK HARD FOR THEIR MONEY.

You’ll find plenty of people on the list who are still working hard and making money at an age when most Australians are looking forward to retirement.

You see…it takes time to become uber wealthy – unless you’re left a handsome inheritance.

Harry Triguboff has been in every BRW Rich list since its inception 35 years ago, slowly working his way up to the top.

Like all those on the Rich List, Harry still works hard at the age of 85, because he’s passionate about his work and isn’t interested in stopping.

  1. THEY MAKE THEIR MILLIONS AND THEN REINVEST RATHER THAN SPEND THEIR MONEY.

While many rich listers took big risks to get their enterprises going, these successful business people then preserved their wealth by cautiously investing rather than taking further risks.

They understand the power of compounding to grow their asset base,

  1. STICK TO THE KNITTING.

One core trait that successful entrepreneurs share is the ability to take a good idea and repeat it over and over again.

You become an expert by doing one thing one hundred times, rather than doing one hundred things once.

Look through the Rich List and you’ll see so many entrepreneurs stick to the same concept for years and just expand in different locations – particularly overseas.

The Lowy’s who took their Westfield shopping centres overseas or Anthony Pratt who is opening multiple packaging plants in the USA are great examples of this trend.

In fact, one quarter of the Australian billionaires on this list live offshore.

  1. GO FOR GROWTH.

Sure, cash flow is important but to become really rich you need a large asset base.

While the average Australian tries to increase their cash flow, the wealthy are obsessed with building their asset base.

Much the same as those on the BRW Rich 200 list who concentrate on building their balance sheets even more than they do on their profit and loss accounts.

  1. SURROUND YOURSELF WITH A GOOD TEAM.

Harry Triguboff is known for saying that he is paying good money to his team, so he should listen to them otherwise he is stupid.

The lesson: surround yourself with a good team because if you are the smartest person in the room you are in trouble.

  1. TAKE ACTION.

All the people who made it onto this year’s BRW Rich 200 list started with a dream.

They had a vision – created a plan to achieve it and then took action.

  1. YOU’RE NEVER TOO YOUNG AND YOU’RE NEVER TOO OLD.

The average age of this year’s Rich List is 66. This tells us that growing wealth takes time, so don’t compare your chapter one with someone else’s chapter 30.

Stan Perron aged 95, is the oldest member of the list coming in at #15 and is showing no signs of slowing down. He has a vast business empire underpinned by a $3.5 billion property portfolio.

At the other end of the spectrum, Ruslan Kogan aged 35 is back on the list after a 3 year break.

SO YOU DIDN’T MAKE IT ON THE LIST THIS YEAR…

Remember, there’s nothing wrong with seeing what other successful people do and applying those principles to your own life.

I would recommend, like many of the Rich 200 list members, building your asset base, by buying high-growth properties and adding value to them.

The Rich List includes men and women, young and old, those who inherited wealth and self-made millionaires, those born with a silver spoon in their mouth and immigrants, those with a college education and those who didn’t finish school.

The lesson is that becoming rich can be a reality for anyone in Australia. It doesn’t matter where you were born or how much money your parents had.

What matters is that you invest your money into wealth-producing assets, have a long-term plan, and never lose sight of where you want to end up.

Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.