This post is based on an interview we conducted with Mike in July 2019.
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: Mike
Age: 27
Where do you live? Coogee, Sydney.
Please tell us a bit about yourself.
I’m a musician. I like having beers with my mates, surfing, and jamming.
What is your current net worth?
Savings: $8,000
Super: $6,000
Assets: About $3,500 worth of musical equipment, amps, etc.
Any debts?
I’ve got $400 on my credit card, and I know I have some student debt, but I haven’t checked it in ages. Maybe $15,000?
How did you accumulate your net worth?
Just doing music and putting a bit aside when I can.
Earn
Tell us a bit about your career:
I’m a session musician (so people hire me when they need a particular instrument or for studio recordings or concerts) and I’m in a band. We’re releasing an EP soon and we’ve already played at some festivals here and there. I also teach music on the side.
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
I think all those things I mentioned probably fall under the same ‘musician’ job. My income varies a lot, but my music teaching is pretty regular. I’d say I can count on making $400 a week, with bigger chunks coming in from sporadic gigs once or twice a month, so I do okay.
What advice do you have for people who want to earn more money?
It’s not always about earning money. I could earn more money in an office job I’m sure, but I’m doing something I really love and that’s worth more than money.
Save
What is your savings rate? And how has it changed over time?
I put aside whatever I’ve got left at the end of every week.
Do you have a budget?
Not really. I pay $240 a week in rent. My food budget varies a lot because sometimes I’ll cook at home more, sometimes I’ll eat out more. One of the good things about being a muso is you usually get free drinks when you play at a bar or an event so I don’t spend much on that, but I still have a good time.
How much do you spend per year?
No idea!
Do you make purchase decisions carefully, or are you loose with your money?
If I have the money, I figure I’m allowed to spend it. I try to live within my means, and if I have to dip into my savings for something, I’ll be more careful for a few weeks to build it back up.
How is your work-life balance?
Great. My work involves a lot of socialising so I get to do both at the same time.
What is your favourite thing to spend money on?
Food, probably.
Invest
How do you invest?
I don’t.
What has been your best investment?
Investing in good amps and sound equipment. It’s gotten me gigs where venues didn’t have the equipment, and for smaller shows and festivals sometimes we BYO.
How are you building wealth?
Working on my music and building my reputation, I guess. I’m not sure.
What are your main roadblocks? And how are you addressing them?
I don’t have a regular income. But it’s also not as important to me. I know that I can live on very little money if I need to. I’d rather be free. Networks and skills are more important than money. If you have those you can always get by.
Do you have a target net worth you want?
No.
If you could start again, what would you do differently?
I would have started working on my social media and posting on SoundCloud earlier. It’s not everything, but don't underestimate the value of social clout and online presence when you’re a muso.
What mistakes have you made along the way that others can learn from?
Make sure your equipment is always stored and protected properly. And if you travel, take out proper insurance on your musical instruments. Airlines can be pretty careless.
Do you have any worries about retirement? If so, how are you planning to address them?
I do sometimes. When I get fretful, I put a bit of money into my super. But at the moment it’s not really on my mind.
How are you learning about building wealth?
I learned from my family that there are lots of things more important than money, and that lateral thinking and problem solving will get you further than cash. Cash is the easy way out. Friendship, family, creativity, and mental peace. Obviously, you need enough to live in the society we live in, but you don’t need as much as you think you do.
Do you give to charity? If you do, what percent of time/money do you give?
If I have cash and I see a homeless person, I’ll try to give something, especially if they have a pet. Or buy them a feed if they want.
