With the cost of living being so high and the economic uncertainty of the job market extremely volatile, it is more important than ever to manage your finances wisely.
One possible way to do this is via debt reduction, such as overpaying on a mortgage or paying off car loans and credit cards as quickly as possible.
However, debt reduction has a limited function – namely, it reduces the amount you owe on any given product or service. For some individuals, it may be worth focusing some efforts on investment and wealth creation as well
During the last few years, the way many Australians invest has evolved, and that is set to continue in 2024. Economists predict this could happen in any one of several ways.
Here are some of the most popular financial shifts they have forecasted
- Greater investment in Cryptocurrency
According to Statista, Australia has the highest adoption rate for cryptocurrency among major developed nations. It’s 23% makes it 8th globally and compares to the USA’s 16% and UK’s 12%.
At present, around 4.5 million Aussies own some form of crypto, with Bitcoin, Ethereum, Cardano, Dogecoin and Binance Coin being the most popular. This has increased from 4.2 million the previous year and 3.4 million in 2021.
Overall, some 32.4% of Australians either currently possess or have previously possessed digital assets. Thanks to apps and easy investment platforms, there has also been a significant surge in millennials and females owning cryptocurrency, with the former rising from 35.6% to 40.7% and the latter increasing from 11.9% to 16.1% in the last 12 months.
Given these trends, you can expect even more Aussies to compare the value of their aud to eth price on a regular basis in 2024.
- More People will make personal contributions to their Superannuation
Total superannuation assets sat at $3.7 trillion by 31st December 2023, which signified an increase of 3.8% over the previous quarter. For this reason, more people are expected to make personal contributions to their superannuation account in 2024.
At present, you can make up to $27,500 of personal contributions to your superannuation tax-free. You can do this through a managed or self-managed superfund.
Moreover, with the federal government’s Super Guarantee increasing to 11.5% on the 1st July 2024 and 12% on the same date in 2025, and AustralianSuper predicted to top $500 billion by 2029, you can expect many Australians to see this as an attractive way to grow their nest egg.
- Real Estate Investment will steadily grow
Property has always been a safe bet for investors, and that trend is set to continue between now and 2028, as the real estate market in Australia is predicted to grow by about 3.57% to US$8.70 trillion.
Since March 2020 rent values have increased by 28.8% in Melbourne and Sydney, while Perth experienced an increase of 12.9% for house rents and 16.5% for units in 2023 alone. At the same time, with Australia’s national house price median falls reaching $758,000, many properties in the country’s two biggest cities have started to fall.
According to the ATO, just under 2.1 million Australians own one or more properties, and over 3 million are currently renting.
Given these housing market trends, many more Aussies might make a financial shift to purchasing an investment property.
- Uptake of investment in stocks and shares may increase
It is very difficult to predict what the stocks and share market will do tomorrow, let alone over the course of 12 months. However, the early signs for the Australian stock market are encouraging.
In the first three months of 2024, the ASX has increased by 2.3%, in the process reaching a new all-time high at one point. For the 7.7 million Australians who have ASX-traded investments this is very good news.
Currently, 58% of these investors are men and 42% women. Between them, 58% have direct ownership of ASX Shares, while 20% own ETFs (exchange-traded funds)
Thanks to Apps like Comsec, eToro, Raiz and Nabtrade, you can now make investments directly from your smartphone.
If the success of the ASX continues throughout the year, you might see an increasing number of ‘ordinary Australians’, particularly millennials, shifting their focus towards building a portfolio of stocks and shares throughout 2024.
