Mike’s a 43-year-old who bought Meta shares early. He regrets selling when he did.
This post is based on an interview we conducted with Mike in February 2024.
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: Mike
Age: 43
Where do you live? Melbourne.
Please tell us a bit about yourself.
Born and brought up in Kuwait, higher education in India, lived and worked in the UK ‘til 2016 and then made the move Down Under and have been in Melbourne since 2017.
Avid investor since I was 15 thanks to my dad who used to fill in paper forms for shares back in the day.
What's your current net worth?
Current net worth of approx $1.3 million excluding our main home where we have an equity of about $500,000.
How does it break down?
- Common shares account with $250,000 (across IG, CMC, Commsec Pocket).
- My UK ISA account has about $250,000.
- Our UK pensions are in SIPPs and totals to $320,000.
- Our Australian Supers have about $210,000 in total.
- We have two investment properties, with about $200,000 equity across both.
- Cash and gold make up about $100,000.
Do you have any debts?
- Yes, we have a car on about $70,000 and a 5 year lease with a buyout option.
- And we have our home mortgage.
- No student loans or credit cards, never had any credit card debts ever.
How did you build your net worth?
All by myself and my interest in the investing world.
Starting out very early thanks to my dad, my first investment was in an Indian Mutual Fund back when I just started uni in 1999.
From there and when I started working, money was always kept aside every month to invest in the market.
Earn
Tell us a bit about your career.
Graduated as an Electrical and Electronics engineer but got into the Information Tech world after graduating.
Primarily worked in the Tech world on various roles such as Developer, Architect, Consultant before I finally settled into Project and Program management, which I have been enjoying for the last 10 years
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
The only other source of income is returns from the markets across our portfolios.
I actively manage everything and move in and out of shares as required.
I am not a day trader and invest for the long term only.
We also have rental income but that all goes to service the investment loans.
What’s been important for you to learn about money?
It pays to start early, even if it’s just $20 or $50 a month.
Regular investing is boring but such an easy way to build wealth over time.
It’s also important to live within my means. And any time I get a windfall (bonus, tax returns) that should go into my savings for the future.
Also, don’t chase big brands. Eat well and dress well but that doesn’t need big bucks or famous brands. Spend on my holidays but avoid spending on other frivolous things.
Save
What's your savings rate? How has it changed over time?
We’ve always aimed to save something every month, no matter what our salaries are.
When we started saving in 2006 (after we got married) we barely saved GBP 50 a month but that gradually increased.
Today we save about $3,000 a month excluding our supers.
Do you have a budget?
Yes, and that’s helped us manage our spending wisely.
I’d say in recent years we’ve been a bit lax but always have a run sheet of expenses and savings at hand.
How much do you spend per year?
All in living expenses including investment property payments are about $15,000 to $18,000 monthly. And holidays are about $15,000 a year.
Do you make purchase decisions carefully, or are you loose with your money?
Every big purchase is carefully looked at before we jump in.
How is your work-life balance?
Excellent really. I’ve learnt to manage time well early in my career. I love being the best at what I do but I am not career oriented, which has actually helped me enjoy work life and focus on our savings long term.
What's your favourite thing to spend money on?
A fantastic holiday deal that’s a rare find or purchasing a great company that’s heavily discounted or not in favour at the moment.
Invest
How do you invest?
Regularly through Commsec, but more random when we get tax refunds or bonuses. I rebalance my portfolios every few years going by what the markets are doing.
What's been your best investment?
The one that I still regret is Facebook/Meta. Invested years back and decided to take my principal out once the money doubled. Left about $10,000 to see what happens. Today, it’s grown to a 400% return. Wish I never sold any share ever.
What’s been your worst investment?
The 2008/09 financial crisis saw my fledgling portfolio crash by 80%. It was just two years into serious investing but didn’t let it phase me and I continued investing.
What’s been your overall return?
I’d probably say our portfolio returns over time is about 25% annually over 20 years or so. We’ve used our investments to purchase our first homes, pay for big ticket items etc.
How are you building wealth?
Continuing doing what we have always done. Regular investments, shares in good companies and don’t fear market movements because we are in for the long term.
What are your main roadblocks to building wealth? How are you addressing them?
None other than maybe spending a little more since getting our 40s!
Do you have a target net worth you want?
Not really. We want to be comfortable and be able to holiday internationally twice annually, with the ability to fly premium or business once a year. That’s the dream at the moment.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
As soon as I started working after graduating. Watching and learning from my dad at a young age made me realise I had an interest in simple investing and learning how to make my money grow and work for me 24/7.
If you could start again, what would you do differently?
Maybe not to sell out of the market too quickly.
What mistakes have you made along the way that others can learn from?
Don’t have FOMO and have the patience for the next dip.
Do you have any worries about retirement? If so, how are you planning to address them?
No, as I believe we are on track to be able to retire earlier than most people.
How are you learning about building wealth? Is it from family, books, being forced to learn as your wealth grew, etc.?
It’s a mix of everything but mainly hours and hours of research online, following investors, blog posts and these days even TikTok!
Do you give to charity? If so, what percentage of your time/money do you give?
Yes, we used to donate monthly to charity but not as much since Covid. We still find ways to donate and give to charity in our daily lives now.
We want to hear your Real Money Talk
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