Ryan’s a 27-year-old financial advisor who’s working toward an optional early retirement.
This post is based on an interview we conducted with Ryan in July 2023.
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: Ryan
Age: 27
Where do you live? Sydney
Please tell us a bit about yourself.
I am a 27-year-old licensed financial advisor with a passion for learning and helping people financially.
What's your current net worth?
About $361,000.
How does it break down?
- PPR: $900,000
- Cash at Bank: $32,000
- Share Portfolio: $3,000
- Spaceship Universe Portfolio: $21,000
- Superannuation: $35,000
Do you have any debts?
- HELP debt: $15,000.
- Home Loan: $615,000
How did you build your net worth?
Building good habits through saving and investing as well as investing in my education.
Earn
Tell us a bit about your career.
Financial advisor
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
No other income sources.
I have always seen career progression and investing in education and learning as a greater long term investment to increase total income.
I have assessed the opportunity cost of doing this and for me it is more worth investing in myself as opposed to working a 'side hustle' but everyone is different.
What’s been important for you to learn about money?
Ask yourself if you can do anything outside of your normal work hours to increase the earning potential in your current role.
If the answer is yes, invest in self education and pursuing more money in your current job.
If the answer is no, explore a side hustle or upskill and look at a different career.
Just remember your time is money and always make a fact-based, informed decision when deciding to pursue one option over the other as your time is important and it is one thing you can never get back.
Save
What's your savings rate? How has it changed over time?
10% is saved to holidays, another 10% is invested into Spaceship Voyager while the remainder is absorbed in lifestyle expenses and mortgage repayments.
Do you have a budget?
Yes
How much do you spend per year?
80% of income (including mortgage repayments).
Do you make purchase decisions carefully, or are you loose with your money?
It depends. If it is a need in my eyes, loosely. If it is a want, I ask myself and my wife the question and often sleep on it if the purchase is > $100.
How is your work-life balance?
Very good. My workplace does not encourage working overtime and provides everyone the option to decide their work hours. I work full time hours in a nine day fortnight and get a three day long weekend every fortnight.
What's your favourite thing to spend money on?
Eating out! It's a killer but I see value in it so it doesn't bother me if I see value in the price of the food that I'm paying for!
Invest
How do you invest?
$200 per fortnight into Spaceship Voyager without fail.
What's been your best investment?
Probably myself (via further education) and the regular Spaceship investment.
What’s been your worst investment?
A medicinal marijuana company a few years back. Impatience and letting my own behavioural biases cloud my judgement.
What’s been your overall return?
Positive
How are you building wealth?
Regularly investing with a purpose.
Working out my goals with my wife and finding the endpoint of our wealth journey and reverse engineering what we need to do each and every fortnight.
This includes regular Spaceship Voyager investments and salary sacrificing.
What are your main roadblocks to building wealth? How are you addressing them?
Like everyone, probably the rising cost of living and assessing what we value in life from a spending standpoint.
My wife and I have regular discussions to work out what in our budget is a 'non-negotiable' given it evolves with the changing costs of living a life in Australia.
Do you have a target net worth you want?
Not a target net worth as such. We want the ability to derive an income from investments (outside Super) of $1,500 per week plus $15,000 annual holidays from age 50-60 (assuming we are debt free at 50).
From age 60 onwards, have enough inside Super and outside Super to continue to derive this income and have the complete option of working or not at age 50.
I don't envision myself stopping work completely but the option to taper back is what we are working towards.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
In my early 20s, in my first job after completing my finance degree I was getting paid alright but found myself not getting ahead as quickly.
I made the conscious decision to sit down with my wife and work towards a goal.
After reading the saying; 'any how is possible if you know the why', this really flipped my money mindset and shifted it to building wealth with the end in mind.
If you could start again, what would you do differently?
From a career perspective, I would've told my younger self to get some work experience during my uni years in my late teens. From a money perspective, emphasising the need to have money goals.
What are some mistakes you’ve made along the way?
I have sold shares prematurely due to overconfidence and anchoring bias.
Knowing, understanding and writing down the behavioural biases that affect you.
For me, I found dollar cost averaging a great strategy to curb some of my behavioural biases and remove any emotional feelings I have when markers are down or up.
We are all humans and we can't help how we feel at certain times but I believe it is important to understand why we feel that way and working out a plan to 'save you from yourself'.
Do you have any worries about retirement? If so, how are you planning to address them?
No worries to be honest.
With the rising employer super guarantee rate each FY til it hits 12%, this should make retirement at age 60 achievable.
Funding the retirement gap between age 50 to age 60 before I can access super is what I am working on through regular investments and exploring new opportunities.
How are you learning about building wealth?
My mentor at work.
I am also very lucky to work in financial planning and meet so many amazing people from different backgrounds and at different ages to see what has worked and what hasn't.
I have also been lucky to learn what not to do which is arguably more important than what to do in building wealth.
Do you give to charity? If so, what percentage of your time/money do you give?
Very minimally on an ad hoc basis when I see causes I am passionate about but it is a goal of mine to dedicate time to working with charities.
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.
