This post is based on an interview we conducted with Simon in February 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.

Name: Simon

Age: 31

Where do you live: Sunny northern beaches of Sydney.

Please tell us a bit about yourself:

I landed in Australia in 2012 for a holiday; I never left! I’m a product designer in the fintech sector. I spend most of my free time surfing, making music, and drinking coffee.

What is your current net worth?

$170,000

How does it break down? (shares, real estate, businesses, home, superannuation, etc)

Emergency fund: $11,000
Spending account: $6,000
Super: $50,000
Shares/ETFs: $80,000
Assets: $23,000

Any debts? (including HELP from Uni)

$4,000 on a credit card, paid-off in full monthly for travel points

How did you accumulate your net worth?

I started from $0. My starting point was to open an account with Pocketbook to give me visibility of my spending and to set myself a budget. I stopped looking at how much money I had (pretty much nothing at the time) and started looking at how much money I was spending and how much was left in my monthly budget. I then got into micro-investing via roundups and weekly deposits using Raiz (Acorns at the time) using the money saved thanks to my budget. I’ve since got into shares and ETFs but still stick to a budget and still micro-invest.

Earn

Tell us a bit about your career:

I studied economics and marketing while developing my creative skills (graphic design, photography, videography) on the side. I was passionate about it and never really considered making a career out of it but soon realised that people liked what I was doing so I started freelancing. School taught me what an industry looks like and how to sell myself; I learnt the rest on the job.

When I arrived in Australia, I landed a job as a photographer which allowed me to travel, meet a lot of people and grow my professional network extensively. My network helped me transition back into the design world and that’s where I feel the most fulfilled now, getting paid to create beautiful experiences for all our users.

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 still freelance as a photographer/designer (websites, logos) from time to time. I recently got into pottery and people seem to like the stuff I make so I might start selling whatever I make that I don’t use

What advice do you have for people who want to earn more money?

It sounds very cliché but do something you love doing. If you’re passionate about something and pretty decent at it, people will pay for it, and growth/money will come naturally.

Save

What is your savings rate? And how has it changed over time?

I have $201 going to my ‘Savings’ account weekly. It’s an emergency fund more than a savings account; interest is peanuts these days.

Do you have a budget?

I do have a loose budget set through Pocketbook. I used to be very strict with it but now I use it more as a guide than anything. It’s like having someone telling you to have a look at your finances two weeks into the budget because you’ve spent more than usual. It doesn’t mean I don’t spend but without it, I wouldn’t look/be aware of where I’m at. Having a budget early on in my life was priceless. My income went up over the years but my budget more or less stayed the same. (I review it slightly after every pay-rise.)

How much do you spend per year?

I don’t know. All of it? I look at my year-on-year growth, not how much I spend.

Do you make purchase decisions carefully, or are you loose with your money?

It depends on what. Anything food/health related, I don’t necessarily think twice. Anything I put in the ‘toy’ category, I do think about it. I usually ask myself a set of questions: Do I really need it? Is it going to be an easy re-sell if I don’t use it? And then I sit on it for a week or two. If I still want it or can’t stop thinking about it in a week, it’s usually worth the money. I also don’t smoke and I barely drink anymore so that “loose” spending is pretty much gone.

How is your work-life balance?

Really good, I’d say; I’m very grateful for it. I work in a company and with a team that understands the concept of work-life balance.

What is your favourite thing to spend money on?

Currently, it’s music gear… and surfboards; there is always space for more surfboards/surf trips.

Invest

How do you invest?

I do automated daily deposit and roundups into Raiz. Automated weekly investments into Spaceship. When my emergency fund or Raiz gets to a certain monetary value, I move the money to Stake where I either consolidate some of my holdings or buy new ones. I also buy into some of the AU stocks maybe once a year but returns don’t compare to what’s available across the pond. I also purchased some crypto years ago that are probably worth something now and I get my work bonus paid in shares. I know it’s a lot of tools to get the job done but I’m young and I like to test and see what strategy works best. I’ll reconcile everything somewhere in the future. I track everything into a spreadsheet once a month.

What has been your best investment?

The 15 minutes I put aside years ago to set my first budget. Since then, probably anything in the renewable energy sector.

What has been your worst investment?

When I first got on Stake and saw the amount of stocks available to purchase, I got excited. For some reason I ended up with some stocks in the gambling industry. They slowly declined for months and I sold them with a 30% loss. I guess I had to put to practice the “only buy in things you believe in/understand” methodology.

What's been your overall return?

About +36% year on year.

How are you building wealth?

Slowly chipping at it every day. Slow and steady seem to be working really well.

What are your main roadblocks? And how are you addressing them?

I sometimes wish I could pay a mortgage where I live instead of renting, but I guess that’s Sydney for you. I address it by looking at my investment strategy, my year-on-year returns and my happiness/stress level. Life’s good!

Do you have a target net worth you want?

Not really. I want to have a stress-free life and not live pay-check to pay-check. Anything past that, it’s a bonus. Recently a friend of mine asked me if I wanted to go on a boat trip. Just to be able to have the freedom to say “sure, count me in” without having to worry about how much it’s going to cost, that was the dream when I set my first budget.

When did you make your first significant behavioural shift towards wealth building?

The day I stupidly had to buy another plane ticket because I misspelt my name on it. I didn’t have enough money to buy another ticket and couldn’t wait until they refunded me the first one.

If you could start again, what would you do differently?

I’d probably tell myself to learn about compound interest sooner. I’d also tell myself not to listen to the person who told me once that I couldn’t invest because I didn’t have enough capital to start with. All you really need is $1.

What mistakes have you made along the way that others can learn from?

Listening to people stuck in the past. Investing in industries I know nothing about/don’t believe in. Don’t misspell your name on your plane tickets.

Do you have any worries about retirement? If so, how are you planning to address them?

Not one bit.

How are you learning about building wealth?

Lots of reading. Newsletters and articles from the financial services I use (Spaceship probably has the best ones!). Business books and life stories from people at the head of big companies. (Richard Branson’s books are fantastic for that.) I get my business news from the AFR and Bloomberg. I don’t overdo it either; I just keep myself in tune with where the world is going.

Do you give to charity? If you do, what percent of time/money do you give?

I try to give more and more every year but I’m always a bit sceptical about where my money actually goes. I give a lot of my time during Movember where I participate in raising funds through running as part of a month-long initiative we have at work. I also like to give to strangers little things like a coffee, a ferry ticket etc. Anything that can help someone’s day.

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