This post is based on an interview we conducted with Cliff in April 2021.
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.
Name: Cliff
Age: 23
Where do you live: Sydney, Australia.
Please tell us a bit about yourself.
I am a uni student who works part-time in retail. I live at home in a family of four. I am very passionate about health and fitness, it’s almost like an obsession. I own pet chickens.
What is your current net worth?
$180,000
How does it break down?
- Spaceship: $90,000
- US shares: $25,000
- ASX shares: $35,000
- Super: $10,000
- College fund: $30,000
- Cash: $5,000
Any debts? (including HELP from Uni)
HECS: $30,000
How did you accumulate your net worth?
I started working part-time in retail when I was 18 with the sole purpose of saving enough for my first home deposit.
My original goal was to have $200,000 in cash, but as I’ve learnt more about growing my wealth I’ve discovered platforms such as Spaceship, which have taught me the value of investing money into the market.
Eventually, I found other platforms to invest my assets in, with the goal of making my money work for me, instead of working for my money.
I also have my parents willing to pay off my HECS debt which helps as well, but either way my mindset and goals for savings and net-worth don’t change.
Earn
Tell us a bit about your career:
I’ve just finished my undergraduate degree in psychology, and have a graduate role lined up.
As part of studying psychology, I’ve sought out many different opportunities to volunteer and gain practical experience. (I want to be a clinical psychologist one day!)
Other than that, while studying I’ve worked in retail for five years now. It’s hard work and it pays very little, but having a goal and persevering through tiring shifts has taught me much about work ethic and how to work efficiently. Hopefully the customer service and leadership experience I have will help me find a job!
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
No.
I have lots of different hobbies, but sadly I’m not skilled enough to turn any of them into money-making opportunities.
I did receive a scholarship (around $3,000) during my studies, but that was part of a government incentive to encourage students to go abroad for placement. In the end, that money was spent and put to good use.
What advice do you have for people who want to earn more money?
The best advice I could give to most people would just be understanding your own finances and educating yourself on what tools you have at your disposal to grow your net worth.
Saving isn’t necessarily for everyone, and neither is investing. Everyone has their personal set of circumstances they live by.
I believe that if you understand your own circumstances and situation surrounding your money, and you have the knowledge of what options are out there for you, when it comes to growing your wealth, you will arrive at a conclusion that best suits you!
Save
What is your savings rate? And how has it changed over time?
For five years my savings rate was more than 90% of my income.
Currently my goals have shifted towards enjoying life a little more and making memories etc. So I save $2,000 a month from my income (to avoid bank service fees) and I allow myself to spend whatever I have left.
Do you have a budget?
Not really, I guess I work within my means of 10% of my income.
I am also lucky enough to live in my parents’ house rent-free, which has most living necessities provided for.
How much do you spend per year?
I honestly don’t know, as little as possible.
Do you make purchase decisions carefully, or are you loose with your money?
My strategy when it comes to purchases is to minimise opportunities you have to spend your money. If you constantly want new clothes, just stay at home and don’t go out which makes buying new clothes irrelevant.
Living this way is quite boring and bland so I wouldn’t encourage others to do the same things I have.
How is your work-life balance?
My routine goes uni-work-gym in whatever order depending on the day. I will try to fit a social life between everything here and there, but it gets quite difficult. So I try to make friends with people at work to feel less lonely.
What is your favourite thing to spend money on?
Food.
Invest
How do you invest?
Mainly in stocks through various apps on my phone.
What has been your best investment?
Spaceship has done really well for me this year. (I am not affiliated with them – it’s just the truth?)
I believe putting a lot of effort into realising your dream is a type of investment in it itself. So looking back I am really glad I “invested” myself into saving and creating that mindset for myself.
What has been your worst investment?
Bad friendships.
What's been your overall return?
- Spaceship: $30,000
- US Stocks: $10,000
- ASX: $2,000
How are you building wealth?
First saving, then investing. All while working.
Do you have a target net worth you want?
I just want my own home and to be financially free.
When did you make your first significant behavioural shift towards wealth building?
My attitude towards money came from seeing my family and my parents struggle with it when I was young. Most of their arguments stemmed from the fact that we were not financially free. I want to build my own life without those restrictions.
Therefore, most decisions I make have some financial consideration in place. Small efforts every day accumulate eventually!
If you could start again, what would you do differently?
I would have told my younger self to study harder in high school to get scholarships/cadetships in uni. Sadly, I did not know about these opportunities.
Leverage your skills into money making opportunities. Skill-based work (such as tutoring, DJ-ing, photography, design) is much more valuable than unskilled work (such as in retail).
What mistakes have you made along the way that others can learn from?
To build a large amount of wealth, at a young age, meant I’ve had to sacrifice a lot of opportunities. Things such as travel, going out, and buying a car are just some of the things that I never thought about doing until now.
Although financial awareness and stability is important, so is making the most out of your life and out of your youngest years.
Memories are worth more than money so I would give advice to others on knowing how to balance the two better for a more enjoyable life.
Do you have any worries about retirement? If so, how are you planning to address them?
I’m just worried about retiring alone and still being single when I’m 70.
I’ve got no plans on how to address this sadly, I just know how to work on myself and be the best version of myself. Hopefully someone will come along and appreciate that.
How are you learning about building wealth?
Friends and self-learning from lots of reading.
Do you give to charity? If you do, what percent of time/money do you give?
I want to start my own charity someday. I’m not too sure about the cause I would support but that’s definitely an end goal of mine.
