This post is based on an interview we conducted with Ally in January 2022.
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.
Overview
Name: Ally
Age: 42
Where do you live? Byron Bay
Please tell us a bit about yourself.
I'm 42, I'm a CEO/Founder and Consultant/Founder (of two companies), nerd, Mum/Step-Mum to 4 kids, I've always been good with money and I spend far too much time on Domain.com.au.
What's your current net worth?
~$3 million excluding companies.
How does it break down?
- Properties 75%
- Crypto 10%
- Shares 5%
- Super 5%
- Other 5%
Do you have any debts?
No.
How did you build your net worth?
I bought my first property at age 21 with a friend in Redfern, Sydney, after reading a property book and learning it's all about time in the market. Sadly that was 20 years ago and I acknowledge far from a possibility for younger people. But buying with friends can work!
Earn
Tell us a bit about your career.
I've largely worked for myself for my own career as I like to be in control of my time, and am not very good at working for other people haha.
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
I run two companies, these are my primary income sources. Additional income from investment properties is put into paying them off faster.
What advice do you have for other people who want to earn more money?
It's not about what you earn, it's about what you spend and making your money work for you. Focus on your savings rate first, and then look at increasing your income. If you can buy property early it's likely to provide a salary equivalent amount in capital gains... you just can't access it for a long time!
Save
What's your savings rate? How has it changed over time?
Around 30% but it depends on whether you count mortgage repayments as savings, which they are of sorts!
It’s changed a lot as our kids move into being teens – they eat so much, they grow out of shoes and clothes at a rate of knots. They have mobile plans and subscriptions and so on. Often finance talk around children looks at the costs of babies!
Do you have a budget?
Yes.
How much do you spend per year?
Over $100,000 for a family of six. The main expenses are mortgage(s), child-related expenses (including child support), and food & bills.
Do you make purchase decisions carefully, or are you loose with your money?
I'd say I'm fairly conscious most of the time, peppered with splurges of cocktails and good eating. I'm not overly consumerist and try to avoid buying too many products, and if I do I always look for second-hand options!
How is your work-life balance?
It's been decades in the making but it's really very good right now. I work approx 3-4 days a week with a lot of flexibility.
What's your favourite thing to spend money on?
Plants, books and beer.
Invest
How do you invest?
Property. Got into crypto quite early. Now moving into shares and impact investing, due to the ridiculous nature of the property market!
What's been your best investment?
Whilst my first property in Redfern was not the best, it introduced me to property buying early on. I've bought and sold about eight properties by now.. I spend far too much time trawling Domain.
What's been your worst investment?
Recent stock market buys... but I just have to be patient with those!
What’s been your overall return?
Over twenty years I couldn't say!
How are you building wealth?
Property. Crypto & shares. Impact investing. Owning businesses.
What are your main roadblocks to building wealth? How are you addressing them?
Needing a large house to fit six of us – but considering downsizing as part of a life experiment for all involved :).
Do you have a target net worth you want?
No but I'm interested in the FI/RE movement so I'm interested in income-producing assets.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
I paid attention to what was going on around me. I asked older people for advice when I was very young – multiple people told me to buy property. TIME in the market will do your heavy lifting. Investing is boringly simple. Start early, keep investing small amounts for a long time.
If you could start again, what would you do differently? What advice would you give your younger self?
Divorce is expensive, but half of people will experience it. So as you build your wealth, consider that you might split your net worth at some point, rarely evenly.
What mistakes have you made along the way that others can learn from?
Don't get caught up in consumerism. Read Frugal Hedonism. The younger you are, the better! Also read Your Money or Your Life and The Psychology of Money. Never get a credit card and avoid BNPL!
Do you have any worries about retirement? If so, how are you planning to address them?
I'd like it to start sooner ;).
How are you learning about building wealth?
I have read A LOT of finance/property books and even now am in a finance book club (yes total nerd).
Do you give to charity? If so, what percentage of your time/money do you give?
Yes. Through my businesses I donate 1.5% of revenue which is $25,000+ per year.
We want to hear your Real Money Talk
At Spaceship we’re big believers in sharing our money stories. We want to hear yours, too. In our ongoing Real Money Talk series, members of our community share what they’ve learned about managing money. We’d love you to take part. Here’s a link to our Real Money Talk survey where you can share your story.
