This post is based on an interview we conducted with Sam in February 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: Sam
Age: 34
Where do you live? Sydney
Please tell us a bit about yourself.
My lifetime career is hospitality and tourism, now transitioning into running my own business in the health & wellness industry.
I was never good with money, never really saved up anything. Once I filled up some money into my piggy bank as a teenager, I bought myself a dreamed-of electric guitar.
All the various jobs I had never really served me with a lot of income, but rather with food, places and experiences.
I got completely broke – twice and it hurt. The first time I said to myself not to go out and to party less so I don't waste most of my money on nights out. The second time it happened, I told myself, wait – something is terribly wrong. I didn’t waste my money on going out anymore and still didn’t have control of my money.
Then I started to think more about where money comes from, what's its value and how to make more of it and save it. Reading and researching a lot online, I came to forex trading which didn't turn out to be my thing and then, finally to investing, which is something that I really love and want to stick to for the rest of my life.
What's your current net worth?
$142,000
How does it break down?
- Super - $24,000
- Shares - $56,000
- Micro investing apps - $32,000 (Micro :-D)
- Cash and equity around - $30,000
Do you have any debts?
Zero, I hate debt from the bottom of my heart.
How did you build your net worth?
With very small steps, one at a time. I bought my first shares of a tech company for a mere $1,000 (just above $3 per share).
After about five months I sold them all with a loss as I urgently needed money. I didn't know what an emergency fund was back then and thought it was a good idea to liquidate my only stock.
If only I had today's brain and knew that I should only invest money that I don't need / can afford to lose, and guess what - it turned out to be a big winner which reached $40 per share in 4 years time.
This was my lesson in the stock market and believe me this is my biggest regret. Since then, I started with a more organised approach to finances, doing more research and being confident about the companies I buy, bit by bit, dollar by dollar.
Earn
Tell us a bit about your career.
I am a European born and raised boy. I have studied and successfully graduated from the hospitality and travel industry. I went through multiple companies and countries, working in any role you can name – from a baker to waiter to receptionist to travel guide to bell-boy to valet driver and everything in between.
When I moved to Australia in 2012, I started expanding my career a little bit further – being in events, operations, logistics, maintenance and management positions. That was life changing.
After all those enriching experiences around the world, travelling and so much food and human interaction, I decided to pursue a new sector of my interest, that matters to me the most – health. Studying relationships between humans and our careers, food and environment, started aligning with my wellness coaching business.
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
Oh, believe me, I had been looking for ways to make money from different sources than a job for past 10 years, however outside of my simple jobs, I'm only getting some dividends paid to my investment accounts.
I am still amazed by how the financial market works and can bring us money while we sleep.
I believe this is a long haul game, and I'm working on an income generating investment portfolio that will eventually deliver a proper paycheck, aside from my business. And I know that patience is my new friend.
Save
What's your savings rate? How has it changed over time?
I read a lot about saving money tips to learn from people who are good at it. It helped me categorise my income into different accounts, create an emergency fund and short-term savings too.
My understanding of savings started to arise around five years ago. I'm getting better at it every year.
Do you have a budget?
I don't limit my spending by a certain amount, as I have already learned how to manage my money wisely. However I love my budgeting spreadsheets, where I very methodically keep every cent in the ring and I can't wait till the last day of each month to jump onto the numbers!
It helps me understand my earning and spending patterns which is very valuable to me in order to make future improvements. It may not be the #1 most exciting thing for most people, but once you fill a few months worth of columns, it starts making a lot more sense.
How much do you spend per year?
About AU$40,000.
Do you make purchase decisions carefully, or are you loose with your money?
Very carefully.
I give myself days, or even weeks before I decide to buy something more valuable. Buying small items like coffee and pastries is a reward to me, I take them as occasional treats, mini celebrations of life, because every $1.00 of micro splurging could potentially make a $5.00 difference in your future investment portfolio. I am very grateful for these decisions as they helped me invest more money than I would otherwise spend elsewhere on consumables.
How is your work-life balance?
I work and study more than I chill. Sometimes I wish it was the other way around but maybe I am just a workaholic?
What's your favourite thing to spend money on?
Healthy food.
Invest
How do you invest?
Through multiple Australian and American micro-investing apps and stock exchange platforms. With some financial advisory subscriptions and a lot of my own passionate homework.
What's been your best investment?
Two fintech companies.
What's been your worst investment?
Forex trading (not for everyone) and some of the stock that was recommended to me, but I didn't trust my gut feel and bought it. Now I only buy into a stock that I understand and resonate with.
What’s been your overall return?
Since the very beginning, it's over 30%.
How are you building wealth?
Mainly by investing in high quality companies with slower but surer growth and dividend payments. Long-term holding. Topping up my super. Also buying into some more speculative and volatile IPOs and trading.
What are your main roadblocks to building wealth? How are you addressing them?
I want higher pay checks. Then I could invest a bigger portion of my income. I am constantly working on more sustainable and innovative forms of income.
Do you have a target net worth you want?
Yes. One million by the age of 40.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
In 2016/17 when I started attending investing seminars, meetings and webinars and bought my first ASX stock.
If you could start again, what would you do differently?
OMG - my favourite question! I'd get some financial literacy. RIGHT AWAY. Start buying ETFs as soon as I was eligible for a bank account. I wish I was educated by someone, my parents, my friends or teachers... Unfortunately information about why and how to start investing is not commonly visible in the space, it's more complex and time consuming to understand it.
What's been important for you to learn about money?
To never buy any stock until I have my emergency fund and ample savings to invest. Start small. I think bloody $20 a week or month into Spaceship would've been an amazing start. More value in life than a couple of beers at the bar. And to automate the transfers straight after I get paid.
Do you have any worries about retirement? If so, how are you planning to address them?
No worries at all. My super dashboard shows me some of the percentage of savings I need for a comfortable retirement. I take it as a good guide, but I plan to retire at 50 with a well running business and valuable investments that compound over time, so there should be no stress relying only on the super fund in the future.
How are you learning about building wealth?
My inner passion gets me to various websites, blogs, businesses, podcasts, books and also real people. And also, the market itself is a great teacher. I learned a lot about my own psychology from doing the real thing, not just from demo accounts or reading... It's worth mentioning that good advice doesn't always come cheap in my opinion. I value some subscription services which teach me and help me make the right decisions. I believe investing in education is always worth it.
Do you give to charity? If so, what percentage of your time/money do you give?
No. I don't believe in charities as yet. However it is an interesting fact that I'd love to know more about - if the money really goes to it's sole purpose?
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.
