This post is based on an interview we conducted with Ben in December 2018.

Real Money Talk is our series where we interview Australians from all walks of life about their personal finances. The views expressed are those of the interviewees, based on their experiences with money, and as such are not necessarily representative of Spaceship's views.

We have changed the name of the interviewee for their privacy.

Ben is a 30-year-old who is currently studying his second degree (in Engineering).

He says the minute he finished his first degree in business he realised he had made a terrible mistake, spent two years trying to work in a bank before admitting he just liked figuring out how things worked. (Things that weren’t financial products, it seems).

Ben recently inherited a large sum of money - around $5 million - from his grandfather in Perth. His great-grandpa built one of the early gold businesses there and some of the money has trickled down to Ben.

We talk to Ben about how he views money and what he’s done with the sudden influx of money he, in his own words, “totally didn’t deserve or earn”.

Over to Ben:

How old are you?

30 years old.

Do you have kids?

No. I’m flat out looking after myself.

Where do you live?

I live in the eastern suburbs of Sydney.

The first two things I did when I got the inheritance money was to buy a house and get some flying lessons.

I live here with two friends and I charge them cheap-ish rent and we Airbnb the granny flat out the back. They know I bought the house.

What is your current net worth?

My current net worth is around $6.1 million.

Broken down it looks like:

Assets: ($6.1million)

● Cash: $35,000

● Investments: $2.56 million

● Superannuation balances: $2 million

● House value: $1.5 million

Liabilities: ($40,000)

● HELP debt.

I haven’t paid off the Uni debt because it doesn’t really accrue that much interest.

Earning

What is your job?

I work part time as an electrical engineer at a firm in the city. But most of the time I’m studying.

What is your annual income?

From the engineering firm it’s around $35,000.

I earn about $2,000 a week from the Airbnb and renters.

I’m one of the guys slowly learning about share investing. And in total opposite to my grandpa or dad for instance, I can’t wait for a huge market correction in the hopes I can buy in at a good price.

What advice do you have for people who want to earn more money?

I am absolutely, definitely not the person to ask about this. I inherited a lot of money out of work my grandpa and his dad did 50 years ago.

I feel a large responsibility now, not to totally piss it up against a wall. I don’t feel guilty exactly, but I do feel lucky.

Tell us a bit about the inheritance process.

My grandpa died about two years ago and he and my grandma were the major shareholders in some old gold mines. They also ran some cattle stations.

The gold mines originally belonged to Grandpa’s dad and a fair bit of land around them has been in our family for a long time. Grandpa is my mum’s dad and she became a teacher instead of going into the family business.

Grandpa was unwell for quite a while, so we had a lot of time to make sure things were worked out how he liked them. That’s not to say there wasn’t a heap of family drama though; it was uncomfortable to find out that some members of the family - even though they had really high paying jobs - were in a lot of debt and believed they needed the inheritance money to get them out of trouble. They were kind of banking on it.

I think Grandpa actually knew that and that was reflected in the will. In the generation above us, the money wasn’t evenly split.

I’m one of seven grandchildren and we all got an even inheritance. Because I was 28 at the time, I was able to access mine immediately. But most of them were locked in trusts that couldn’t be accessed until they are 25. That’s a pretty good idea, I think. I know that if I had got five million bucks at 21 I would have been a total dickhead with it.

What we did straight away was get an accountant who handled all of the transactional stuff according to our instructions. I say “we” because my parents and my brother and I are all in this together.

I can remember us all sitting at this pub on the outskirts of Perth, looking at each other over these beers and I said; “So, I’m a millionaire now. I should probably start drinking something better than Tooheys New.”

And my mum smacked me on the back of the head and told me I still needed to finish my degree and get a job, and my dad smacked me too and said there was nothing wrong with Toohey’s New.

What does the accountant do?

The accountant we used specialises in managing inheritances. I didn’t actually know there are no inheritance taxes in Australia. You have to sort out a tax return for the person who died, but money passing through hands doesn’t.

The accountant also helped me set up my share investments, including a set of ETFs, both in Australia and internationally.

How much have you spent of the inheritance?

Well, I bought a house for around $1.5 million. That’s obviously the biggest thing.

Naturally, there are hundreds of news stories around now of the Sydney property market falling. So that’s great.

I also went to Europe and travelled around for a bit. It was kind of weird doing that without necessarily trying to find the cheapest hostel in a place.

And then - you are going to laugh at this - then I kind of got heavily into crypto and bought and sold a lot of totally shit coins about 12 months ago. I still have some of them and even though I hope they will go up again, I think they are so so dead.

My thinking at the time was “I’m learning about trading” but really, it felt like I was gambling.

Not to say cryptocurrencies aren’t an interesting thing blah blah, but man, the change in cryptocurrency prices was kind of crazy.

How much did you spend on cryptocurrencies?

I’m not saying. More than $10,000.

How much do you spend per week?

I probably live off $500 a week. That includes food and subscriptions, and petrol and things.

Do you have a budget?

Not really. I try not to spend more than $500 a week.

I basically just use the part time money that comes from the engineering firm as my weekly money.

What is your savings rate?

Well, it’s kind of $0.

What is your favourite thing to spend money on?

Probably good food and tech gadgets. I game pretty hard so I update my computer a lot and get new consoles when they come out and are good.

Investing

How do you invest?

I have two accounts: a boring one and one for me.

The boring one has a collection of ETFs and the blue chips, both in Australia and in the US.

I’m really into technology companies. They are businesses I seem to understand.

So I’ve got individual holdings in the FAANG stocks and also have a pretty big holding in the S&P500 Index.

In my personal account, I’m trying out different things. I have an interest in biotechnology stocks but the science behind them is really complicated. I also really like cannabis as a growth industry.

I also put a heap of money in superannuation, mostly because the tax rate is generally lower than other investments and also, it means I can’t touch it for ages!

What has been your best investment?

I bought Netflix when it first listed which I think has done so well.

What has been your worst investment?

Every single cryptocurrency asset I own.

What’s been your overall return?

I don’t really know. I think the solid share account is up around 12% since 2016 and my personal account is up around 15% since 2016. I’m kind of waiting for it all to crash though.

How often do you look at your investments and returns?

I go through phases where I check a lot. That’s generally just after I’ve bought something.

And then I go through phases where I don’t check at all.

When I first got the inheritance I looked at the number all the time because it was so unexpected and unbelievable.

But now I’ve managed to train myself not to fiddle or spend it. My parents keep an eye on my brother and I to make sure we’re not just buying stupid stuff.

Wealth

How are you building wealth?

Investing in the share market. Hopefully the house will appreciate in value. Maybe I’ll do renovations on it at some point.

I also hope to get a sweet job once I finish this degree.

What are your main roadblocks? And how are you addressing them?

Spending money.

And also the idea that I don’t need to work. I can see that’s kind of messing my brother around a bit. I think he’s a bit directionless.

Do you have a target net worth you want?

No.

What mistakes have you made along the way that others can learn from?

If you inherit, don’t spend it all. Get an accountant or financial adviser to help you.

Also, judging by some of the drama in my family, don’t bank on getting an inheritance. In my opinion, it makes you desperate and ugly.

Read more of our Real Money Talk series here!

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