This post is based on an interview we conducted with Amelia in April 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: Amelia
Age: 31
Where do you live? Outback NSW.
Please tell us a bit about yourself.
I’m living with my partner and our very cute dog, and I’m a bit of a workaholic.
What's your current net worth?
About $400,000.
How does it break down?
- Shares $150,000
- Super $100,000
- Savings $100,000
- Vehicles $50,000
Do you have any debts?
No.
How did you build your net worth?
Work, lots and lots of hard work – and being a tight arse.
Earn
Tell us a bit about your career
I’m a pilot, which is a hugely expensive undertaking at the start, with absolutely terrible pay for the first few years, but finally it’s been paying great dividends the past few years.
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
No.
What’s been important for you to learn about money?
Honestly, the great money is just a by-product of having a job that I absolutely love.
I’d still do this for far less money and be just as happy.
I always heard people say that once you’re earning around $100,000 or more p.a. then the money doesn’t make any difference. It turns out they were right.
I’m not an excessive spender by any means, I live a comfortable life and all the extra money just keeps piling up!
At times I don’t know what to do with it! But it sure is nice to be able to eat out every day if I choose to and not have to worry about how much is left in the account.
Save
What's your savings rate? How has it changed over time?
Well – pre tax I bring in about $250,000, the tax man takes half of that, so I’m left with $125,000. I probably save half of that. So 50% after tax roughly.
Do you have a budget?
Not anymore. In fact even when I was poor I never did, unless I had a big bill coming up I’d put some away each week for that, but I’m naturally frugal, never been one to impulse buy clothes, tech etc. I always tried to do everything as cheap as possible, but I never missed out on too much.
How much do you spend per year?
Must be around $60,000. I live in a very remote part of the country, groceries are expensive here, as is fuel, it’s a five hour drive to my nearest city, two hours to the nearest Maccas! I do tend to treat myself if I go into the city.
I work some crazy hours at times too, so I hire someone to mow my lawn and someone to occasionally make me healthy meals, I’m more than happy to pay people to do this for me as it makes my life easier and I like to support the local economy and share the wealth I’m so lucky to have.
Do you make purchase decisions carefully, or are you loose with your money?
Very carefully for most. In the past few years I’ve found myself loosening up a bit. I’m happy to shout friends dinner or make generous donations to charities etc.
I’ve still never purchased a brand new car even though I could easily afford it, I just don’t see the point in spending money on something that will depreciate so quick! I’d rather buy the second hand car and invest the rest.
How is your work-life balance?
Not great at this time, lots of work, no time for fun. But my work is based on the seasons, while we have wet La Nina years my work is crazy busy, however when the El Nino rolls around again I’ll be very quiet and bored!
What's your favourite thing to spend money on?
Trying fancy foods and going out and getting on the beers with pals.
Invest
How do you invest?
I tried a bit of picking shares by myself at the start which went so-so. I now have a financial adviser who helps a lot.
What's been your best investment?
My education. My pilots license cost a good $100,000 (I had to pay it up front, no HECS existed at the time). But it’s paying out wonderfully now.
What’s been your overall return?
I haven’t withdrawn any shares so no solid numbers here. But the $100,000 invested in my education has paid for my whole life for the past ten or so years.
How are you building wealth?
Mainly shares, but soon to look into property when I see what the interest rate starts to do. Might be some bargains getting about soon.
What are your main roadblocks to building wealth? How are you addressing them?
Probably COVID-19, the Ukraine war and house prices that are arguably in a bubble.
Do you have a target net worth you want?
No, enough to be comfortable in retirement.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
About 27 years old. It was the age I was when I finally started making some reasonable money.
If you could start again, what would you do differently?
I’m pretty happy with how I did it. The only advice I’d give my younger self is not related to money - it’s “No you don’t need that 7th slice of pizza, for the love of god go for a walk instead”.
What mistakes have you made along the way that you think others could learn from?
I bought a 4wd car at age 23. It was second hand but the cost of owning it wasn’t something I was prepared for, fuel, maintenance, tyres, all of it added up and I wasn’t prepared for it. I did have some good times in it and got to see parts of the country that I otherwise wouldn’t have.
But I see young people buying expensive, new cars when they can’t really afford them because they think it’s a status symbol. Looking back I shouldn’t have bought it till I had more disposable income.
Do you have any worries about retirement? If so, how are you planning to address them?
It’s still a while away. The bigger worry is losing my pilot medical certificate. If I lose that then everything I’ve worked for is gone.
I’ll be trying to start a brand new career from scratch. So saving up for that possibility is more of a priority.
Do you give to charity? If so, what percentage of your time/money do you give?
I’ve always got friends/family doing some charity fundraiser, I’ll usually donate anything from $50-$200 when I see one pop up on my social media pages. I donate a bit to my local footy club too. I met most of my friends through it when I moved here. I haven’t got time to give back in person. So I’m happy to donate the money instead.
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