This post is based on an interview we conducted with Sophie in January 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.
Sophie is an events manager at a non-profit organisation. She likes small daily luxury and convenience but balances it out with an awareness of her future.
Age: 28
Where do you live: Maroubra, Sydney
What is your current net worth? -$17,000
How does it break down? (shares, real estate, businesses, home, superannuation, etc)
Assets:
Cash: $20,000
Investments: -
Superannuation: $30,000
Car: $50,000
Any debts? (including HELP from Uni)
Credit card: $5,000
Car repayments: $30,000
HELP: $80,000
Government repayments: $2,000
How did you accumulate your net worth?
Pretty much always working and putting money aside. Buying things here and there.
Earn
Tell us a bit about your career?
I’m an events manager at a not-for-profit organisation.
Do you have income sources outside of your job?
I work on occasion at my old job as a waitress - usually on weekends or over the Christmas holidays. I also swap social media management for services - right now I have a free gym membership and personal training for my social media skills.
What advice do you have for people who want to earn more money?
Work hard, work weekends, and always see which of your skills you can leverage to get more. Cash is good. Barter is also good.
What is your savings rate? And how has it changed over time?
I save about 10% of my salary each week
Do you have a budget?
No
How much do you spend per year?
Too much! I live with my parents so I could potentially save a lot but I travel too often and play polo which is a money pit.
Do you make purchase decisions carefully, or are you loose with your money?
I try to be careful but I like convenience too much. I eat out every day, buy too many clothes and spend when I’m out.
How is your work-life balance?
Very good! I have a really cool job that I don’t “take home” with me so my hours outside of work are my own, it doesn’t feel like a chore to come back at work on Monday (usually).
What is your favourite thing to spend money on?
Flight tickets, fancy hotels & horses.
Invest
How do you invest?
I haven’t yet but I would like to buy an investment property one day. You could say I invest in myself - in small daily luxuries and bigger experiences I’ll always remember.
What has been your best investment?
In my happiness. They say money can’t buy happiness but it can facilitate experiences. Tickets to my favourite bands, time spent abroad. Money can also buy safety. I recently travelled to South America alone and hired a driver for part of the trip - it was expensive but you can’t put a price on safety.
What has been your worst investment?
Clothes
How are you building wealth?
Staying living at home so I can save more and also trying to constantly upskill myself so I can always be useful and find better and higher paying jobs.
What are your main roadblocks? And how are you addressing them?
I heard to make real money you need to make money while you sleep. So far I’m only earning by the hour so I need to find opportunities for my money to grow while I sleep.
Do you have a target net worth you want?
Filthy Rich.
When did you make your first significant behavioural shift towards wealth building?
I started saving properly when I got my first full-time job in 2015.
If you could start again, what would you do differently? (Advice for younger self)
Stop spending so much money on food, cheap clothes that lose their quality and see the dentist more often so I wouldn’t have to pay thousands on fillings.
What mistakes have you made along the way that others can learn from?
I always do things at the last minute and don’t set budgets so some of my overseas trips have really hurt my bank account, I think if you can stay informed, look for deals, find better ways to spend your money on the same items you can save a lot.
Do you have any worries about retirement? If so, how are you planning to address them?
I changed my super account from balanced to high growth (and high risk) but I think in the long term it should gain me better wealth for my retirement. I’m going to keep working hard and saving and I hope my future kids will take care of me!
How are you learning about building wealth? Is it from family, books, forced to learn as wealth grew, etc.?
I worked in a members-only yacht club while I was studying, the customers gave me a lot of advice about how to set myself up well for the future. I also studied finance so I think it gives a solid background. Just asking questions to rich people helps a lot!
Do you give to charity? If you do, what per cent of time/money do you give?
My family is religious so we grew up with the idea that you have to give 10% of your income to charity. While I don’t give the whole 10% I try to give what I can and I donate a lot of my time.
*Sophie’s name has been changed on her request.
