This post is based on an interview we conducted with Clare in October 2018.
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.
Clare was a ski-bunny for many years but has knuckled down to build her wealth.
Age?
31
Where do you live?
Canberra
What is your current net worth?
$40,000
How does it break down? (shares, real estate, businesses, home, superannuation, etc)
$14,000 shares, $20,000 superannuation, $6,000 cash
Any debts? (including HELP from Uni)
Yes, $3,500 credit card debt. But my parents paid for uni.
When did you first start thinking about money? What prompted you?
I was really late to it. For about five years after school I followed the snow around the world and any money I made went straight back into buying gear and travelling to new places.
I worked as a server and bartender during those years and sometimes as a lifty. They make pretty much no money. People say the tips are great working as a bartender, but I never found that. I made like $8-$13 an hour and then made probably about $60 tips on a really good night. It was basically impossible to save money, even though I paid a discounted staff resident rent.
It was only when I came back to Australia that I began to think about getting into the work force. I did an engineering degree at uni and began out at a boutique construction firm when I was about 26.
What was your first job?
Bartender in a staff bar in Big White, Canada. First "proper" job was at a boutique construction firm.
What was your starting salary and how did it grow from there?
My engineering starting salary was $55,000. I did a lot of research about what other people my age were getting paid and that was a pretty good starting salary. After one year though, I lobbied pretty hard for a solid pay jump and it actually went up to $75,000.
Because this firm is really small and I've managed to take on a lot of personal responsibility and run some successful, bigger projects, my pay packet has grown really fast. It's now at $110,000 which means I pay way more tax than I want to haha.
What knowledge and tools do you use in your job?
Logic and team management mostly. Understanding all the different parts that go into a project can be hard, but if you let everyone know what is happening all the time, that means any mistakes can get caught early.
My boss gave me The Checklist Manifesto: How to Get Things Right and that is all about how to manage different professions and skills all at once.
How do you learn new information for your job?
From other engineers. Ask smart questions and you'll get good answers.
Do you feel like you are compensated fairly?
Yes, compared to other women I know, definitely yes.
What would you change about your job, if you could?
I'm not crazy about living in Canberra.
Are you motivated by your own achievements or by what others think of your efforts?
My own achievements.
What would it take for you to deem your life a success?
Time to chill.
What would make you think your life was a failure?
No time to chill and no friends.
Do you make purchase decisions carefully, or are you loose with your money?
Kind of loose.
What advice do you have for people who want to earn more money?
Learn how to do more stuff. My dad always said, the more you learn the more you can earn.
How is your work-life balance?
It's pretty good. I go hiking a lot, which gives me perspective and means I don't have to sweat the small stuff.
Do you have income sources outside of your career? If so, how much do you earn from each and how did you develop them?
No, I don't really.
How much do you spend per year?
I probably spend about $50,000 a year.
Do you have a budget?
Not really. I've tried to use Pocket Book and a few apps, but I don't really have the discipline to keep them in check. When I get paid, I just split out all my money into the bills and places it needs to go and then I just have the rest as daily expenses.
What is your savings rate? And how has it changed over time?
I started out saving $250 a week. $1,000 a month is a pretty good way to build up a savings balance. But when I knuckle down because I want to go on a big trip or something, I can probably bump that up to $500 a week.
What is your favourite thing to spend money on?
It's still travelling and skiing. Although I'm way more into good food and wine than I was.
How do you invest?
I started buying shares when I was around 26, when I started being an engineer.
My parents gave me about $6,000 worth of shares (Telstra and CBA) when I finished high school. CBA has done pretty well but Telstra has sucked. I don't really know when to sell them, to be honest.
My own shares I've bought are basically Australian blue chips. I own Woolworths and BHP and Rio Tinto. They are just the shares my parents knew about.
I like the idea of getting an exposure to things like Spotify and Netflix. Since that's the stuff I know and use. I’m also getting my head around the network effect and why platform businesses can grow well.
But because I work in construction, I understand those bigger, more physical projects.
What has been your best investment?
Domino's Pizza has probably been my best investment.
What has been your worst investment?
I suppose Telstra, but I didn't actually pay for that.
What's been your overall return?
I don't know actually.
How are you building wealth?
Through the share market and saving for a house deposit. If I bought in Canberra it would be way cheaper but I don't know if it will appreciate as much as Sydney or Melbourne.
What are your main roadblocks? And how are you addressing them?
Because I have a good salary, I don't save as much as I probably should. I'm also not as careful as I should be. I could be much further ahead if I was more careful.
Do you have a target net worth you want?
$100,000 and a house would be good.
When did you make your first significant behavioural shift towards wealth building?
When I got this job as an engineer. A mentor of mine said the most valuable asset I have is my capacity to earn money; not actual shares or cash or property. The amount of money a good job gets me is so much more over time than other things.
That stuck in my mind so now I am pretty interested in upskilling and becoming more valuable.
If you could start again, what would you do differently? (Advice for younger self)
Travelling was definitely fantastic and formed a lot of how I see the world. I didn't make any money doing that but I wouldn't change it at all. I think everyone should travel.
What mistakes have you made along the way that others can learn from?
I bought a $20,000 car once and it took me ages to pay it off. I drove it all the time between Canberra and Sydney and Jindabyne and stuff but it didn't need to be that expensive. I sold it eventually for like $8,000.
If you had to give advice to Spaceship readers about how to build wealth, what would it be?
Slow and steady, and invest in shares.
What do you want to do in your retirement?
Live in the mountains.
Do you have any worries about retirement? If so, how are you planning to address them?
I sometimes worry that something will be invented that will make my kind of engineering obsolete, so I try and read a lot about my industry so I'm on top of things going on so can upskill if I need to.
How are you learning about building wealth? Is it from family, books, forced to learn as wealth grew, etc.?
Books mostly. Though my parents were pretty good at investing in shares so I talk about it with them a lot.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
No! But I would like to do that!
