This post is based on an interview we conducted with Sam in October 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.
Overview
Name: Sam
Age: 19
Where do you live? Perth
Please tell us a bit about yourself.
Hello! I'm a 19 year old university student from Perth majoring in psychology! My main source of income is private tutoring for primary and high school students, but on the side I also commission drawings and attend art conventions yearly.
What's your current net worth?
$37,200.
How does it break down?
- Savings - $20,000
- Spaceship Voyager - $9,000
- Raiz - $4,200
- Other shares - $2000
- Car - $10,000
Do you have any debts?
HELP debt of $8,000.
How did you build your net worth?
I built it bit by bit! I saved the Chinese New Year red pockets I'd receive from my family each year (about $300 per year) and then did chores here and there until I got a proper job as a tutor.
I'm also an artist on the side, so doing commissions regularly has also helped! In my view, a consistent saving habit is what has helped me the most.
Earn
Tell us a bit about your career.
I've worked as a tutor for primary and high school students for two years now, and have drawn for six years but only started selling art in the past year.
Since I just graduated from high school recently, my knowledge of school is pretty fresh, and I've been able to help many of my students jump grades and get into their desired high schools. I find it to be a very rewarding job, especially with all the friendships I've made with my students!
On average, I work about 10 hours a week for tutoring and will focus on my art for about two hours. When artist conventions are near, then I might work 10 hours on my art.
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
Shares, shares, shares! Investing in ETFs is one of my passions, especially since I don't need to worry so much about building my own portfolio as it's done all for me. Each year, I'd say my return is about $500-700.
On top of that, I build IKEA furniture for my family and have been getting paid around $200 per piece, so that's also a big win :)
What advice do you have for other people who want to earn more money?
Know your worth, and your time! I think choosing a high paying, flexible job was by far the best choice I've ever made. With tutoring, my hours are flexible and I can squeeze in a two hour lesson every day of the week, which builds up over time, even with my busy uni schedule.
I've seen a lot of other friends who have skills and talents but end up in a minimum wage retail job, when they could have charged higher for a unique skill they have! Knowing my worth really helped me choose a job that suited me.
And also don't fall into the trap of online shopping!
Save
What's your savings rate? How has it changed over time?
60%. It's definitely changed since I got into uni, as I've been trying to save more frugally so that I can pay off my uni debt!
Do you have a budget?
Yes, my dad taught me how to budget when I was 16. Currently I use a personal finance app and track all my expenses and income there. Every month I budget $400 total, which includes food, fuel, fun, gifts and transport.
How much do you spend per year?
Last year I spent $13,000, which excludes paying off my car. A lot of that money went into a new laptop, new iPad, and heaps of food!
Do you make purchase decisions carefully, or are you loose with your money?
I go through my ups and downs, just like everyone else. During uni, when I don't have much time to go shopping, my savings rate can go up to about 75%, but then on holidays when I'm bored with friends and my girlfriend, I'll go over budget and reward myself for hard work during the semester. I'm cool with that, because overall it balances out :).
How is your work-life balance?
Probably 70% work and 30% play. Especially with uni, I study about five hours a day outside of classes, then tutor two hours, which leaves very little time for myself or socialising. Nevertheless, the holidays are approaching soon, so during them I'll be able to go anywhere and do anything that I wish to!
What's your favourite thing to spend money on?
Probably edgy clothes and makeup – nothing special! However I've become more aware of the carbon footprint that online shopping has and I've really reduced the amount of shopping I do. I used to go crazy when I was about 16 years old.
I also love spending on art supplies! But I mostly used to buy these in Japan. Since COVID, I haven't been able to go there anymore, though.
Invest
How do you invest?
Using platforms like Spaceship, Raiz, and Commsec Pocket have been the easiest forms of investing for me.
What's been your overall return?
Overall, about $2,000.
How are you building wealth?
I think the best way that I've been building wealth is by putting the money I receive somewhere as soon as I get it so that I'm not tempted to spend it. You can't build wealth if your money is slipping out here and there on regular bubble teas or expensive meals without you really realising!
What are your main roadblocks to building wealth? How are you addressing them?
Regular expenses like a sneaky drink or snack while I'm going out really add up over time. Sometimes I'll look back at my monthly budget and think - wow, did I really just spend $200 on dessert and drinks? I think I could reduce my spending on those.
Do you have a target net worth you want?
$100k by 25! I've been planning carefully to reach this point, and I think I'm on track!
Behaviour
When did you make your first significant behavioural shift towards wealth building?
My dad actually inspired me to get into finance. He said that when he was in uni, he read as many finance books as he could to learn more about money. He's always encouraged budgets, saving and spending carefully.
If you could start again, what would you do differently? What advice would you give your younger self?
Not shop so much on fast fashion and cosmetics! I used up $2,500 in one holiday to Japan when I was about 14... Now all that money is gone, and I barely remember what I even spent that on!
What mistakes have you made along the way that others can learn from?
I'm still pretty young, so I wouldn't say I have made any big mistakes just yet. However, my dad bought an expensive Porsche once and completely regretted it, since it was hard to drive and the fuel price was ridiculous. He sold it a year later in perfect condition (since he rarely drove it), but sold it at 75% of what he bought it for.
Do you have any worries about retirement? If so, how are you planning to address them?
As a private tutor, I don't have super, so I haven't really thought about retirement yet. However, once I do get a job as a psychologist, I definitely will be salary sacrificing and trying to build my super as much as I can.
How are you learning about building wealth?
Mostly articles online, and definitely my dad. I'm really lucky to have someone I can talk to freely about money.
Do you give to charity? If so, what percentage of your time/money do you give?
Sometimes I give cash to the homeless on the street. It's really hard not to want to give them everything I have. I think everyone deserves a second chance.
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.
