This post is based on an interview we conducted with Quinn in July 2020.
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: Quinn
Age: 34
Where do you live: Melbourne.
Please tell us a bit about yourself.
I’m single with a 14-year-old German Shepherd. I Love to travel and have an artistic ability to draw and paint. I spent most of life helping my family financially, and I’m now looking to move out on my own and have financial freedom.
What is your current net worth?
$1,054,500
How does it break down?
Property: $1+ million
Savings: $112,000
Shares: $91,000
Investment apps: $21,500 (Spaceship/Raiz/Stockspot)
Superannuation: $150,000
Any debts? (including HELP from Uni)
Home loan: $280,000
Novated lease on car: $40,000
How did you accumulate your net worth?
Hard work: saving hard and investments. And a voluntary redundancy of $80,000.
Earn
Tell us a bit about your career:
I finished a bachelor degree in biomedical science and entered the workforce in the pharmaceutical industry. I have been in pharmaceutical drug manufacturing for 13 years in various roles and big pharma companies from operator to team leader and coordinator.
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
Rental property: $21,254 per year.
Homestay student accommodation: Varies how long the student stays, but can host up to three students at $310 per week, so potentially $48,360 per year.
Selling drawings and paintings.
What's been important to learn about making more money?
To find additional income streams and passive income ideas.
I started small and used garage sales, eBay, and Gumtree to sell unnecessary items. If I hadn't used it in a year, I got rid of it.
To bargain hunt for cheaper rates on everything; if I don't ask I don't get.
To get a good team of people to help me, such as a tax accountant, broker, and lawyer.
To use a 100% offset account on my mortgage.
To avoid credit cards and use a low fee if necessary, under $2,000. To pay it off in full every month to avoid interest. To consider linking to frequent flyer points and use those points for cheaper or free flights around Australia or upgraded seating.
To invest in the stock market consistently; do due diligence and hold. It is a long game.
To ask for a pay rise and have a career plan; not settle or be afraid to negotiate. To utilise shift loadings and overtime to increase income.
To salary sacrifice into super; it lowers my taxable income so I pay less tax and you will build super faster.
To rent out my spare bedrooms.
If I'm good at something, to not do it for free. I don't know how many times people have asked me to draw or paint something for them and then are shocked and offended when I ask for payment. My time is valuable, materials are expensive. The exception is doing something for free, but gaining exposure. For example, to hang my painting in a shop window on a busy road for free.
Save
What is your savings rate? And how has it changed over time?
After bills, the majority of wages go into savings and investments. I set it on autopilot.
Do you have a budget?
No, but I will leave a few hundred cash to live off for the fortnight and put the rest on my credit card.
How much do you spend per year?
I would say at least $30,000 just to exist, including bills, car, and living expenses.
Do you make purchase decisions carefully, or are you loose with your money?
Carefully. When I was younger, I probably wasted a bit on impulse buys, but if I want something I know I can afford it.
How is your work-life balance?
I’m trying to get it back to 'normal'. When I was coordinator, I was working six days, 50-60 hours a week, with no life. Spent a year on night shift and that didn't help my social life either. I’m now in a lower role on afternoon shift, but I have more time to myself, with weekends off, RDOs, and adequate sleep. No wife and kids, so I can sleep in! Grateful to be working in a crucial role during this pandemic.
What is your favourite thing to spend money on?
Travel; there is no price on experience. And KFC.
Invest
How do you invest?
Shares, usually in $2,000 limits. Set them to dividend reinvestment or use dividends to buy more shares.
I also use investment apps: Raiz and Stockspot. I have a Universe and Origin account with Spaceship. Invest $50 a week on autopilot.
What has been your best investment?
Building a house in the backyard. I subdivided mum's property and demolished the garage, filled in the pool and built a five-bedroom double storey.
What has been your worst investment?
AMP shares. They were worth $4,000 years ago; I sold them for $1,000 recently.
What's been your overall return?
Not sure. Everything is volatile at the moment until this COVID-19 pandemic goes away, but I expect things to pick up.
How are you building wealth?
I put everything in an offset, which helps with the mortgage repayments. I think savings on mortgage interest is better than the interest I would be earning in a term deposit or high interest savings account, and I don't pay tax on it.
What are your main roadblocks? And how are you addressing them?
Having a novated lease affects my borrowing capacity, as the banks have tightened lending criteria. I could pay it off in full, but that would affect my cash flow, so I will wait until the lease ends and put some money away to pay the residual in a year's time.
Do you have a target net worth you want?
No, but I would like to retire early and live off a passive income of at least $80,000 a year.
When did you make your first significant behavioural shift towards wealth building?
My mum had to raise three kids by herself, so as soon as I was 16 I started working to help her pay the bills.
It has been more about survival than wealth building, and it has been hard. But now I can focus on my own wealth building, because the bills will never stop.
If you could start again, what would you do differently?
All that money I spent on useless crap and alcohol… I would buy CSL shares instead and hold onto those Resmed shares.
I would probably skip uni and learn a trade and become a maintenance fitter or sparky.
And I wouldn’t be afraid to cut ties with people or travel alone.
Do you have any worries about retirement? If so, how are you planning to address them?
No, I am in a good position and have a good mind set when it comes to money.
How are you learning about building wealth?
I research online and read books. “Rich Dad Poor Dad” and “Barefoot Investor” are some good reads.
I also have an uncle I call for sound advice when I have another “get rich” scheme.
From a young age I was forced to learn what it means to not have money, and this drives me to never be in that situation.
Do you give to charity? If you do, what percent of time/money do you give?
At least $300 a year to the Red Cross and the Royal Children's Hospital, and I buy tickets for the occasional charity raffles outside supermarkets.
I donate blood often as I am Type O negative.
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.
