This post is based on an interview we conducted with Maria in March 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.
Name: Maria
Age: 28
Where do you live? South-western Sydney.
Please tell us a bit about yourself.
I’m originally from Bangladesh (a tiny Muslim-majority country in south-east Asia). I moved abroad to study just after I turned 18. I’ve lived in Malaysia and the USA for a couple of years before permanently migrating to Australia in 2015. I’m a follower of the FIRE movement and I’ve been saving aggressively ever since I started earning.
What is your current net worth?
$101,000.
How does it break down? (shares, real estate, businesses, home, superannuation, etc)
In shares: $6,000
In fixed deposits: $32,000
In short term deposits: $20,000
In government bonds: $500
In gold: 400 grams valued around $30,000 (wedding jewellery and purchased personally with savings)
In superannuation: $10,000
In cash: $2,500
Any debts? (including HELP from Uni)
None. In our culture, most parents pay for their children’s education and wedding. The idea is that you’d pay it forward by paying for your own children’s education and wedding.
Earn
How did you accumulate your net worth?
From a very young age, I saved aggressively. Not having to pay for university also helped. My income isn’t that high but I save and have always saved around 60% of my income. I share all my expenses equally with my partner and I splurge on travel trips once a year.
Tell us a bit about your career:
I work in a customer service/operations role at a tech start up. The pay isn’t good but I enjoy the challenges of working at a tech start up. You get to learn something new everyday and your decisions make a real impact on the overall business!
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 started investing in shares more than a year ago; I get dividends from shares once in a while. I have also invested in some long-term fixed deposit schemes with high returns; that's a great source of extra income.
I also do some mystery shops like twice a week for a small boost to my income.
What advice do you have for people who want to earn more money?
My advice is to try and spend less and save more instead of trying to earn more money. As you earn more, if your expenses also rise proportionately, at the end you are not in a better off position. It’s more important to limit expenses or budget properly.
You can also try getting your feet into the gig economy. You can do some small remote tasks through apps like Airtasker or Snooper to boost your income.
Save
What is your savings rate? And how has it changed over time?
I currently save 60% of my income. As mentioned earlier, my yearly income is pretty low (between $50,000-60,000 annually). However, I have consistently saved 60% of my income for the last 3+ years.
When I first moved to Australia, I was working as a freelancer and I was able to save only about 20% of my income. As soon as I landed a full-time job, I started saving more aggressively.
Do you have a budget?
Yes, I have a budget and I track all expenses on an app. I have been doing this for the last five years or so. I don’t drink or smoke so that makes it much easier for me to stick to a budget.
How much do you spend per year?
I spend $20,000 per year. Nearly half of that goes towards rent and the rest for grocery, bills, etc. I also spend between $2,000-$3,000 per year on trips abroad.
Do you make purchase decisions carefully, or are you loose with your money?
I make larger purchase decisions very carefully. However, for cheap items like stationery or drugstore makeup items, I don’t really think much.
How is your work-life balance?
I think it’s pretty good. I get 2.5 days off per week and I make sure that I enjoy my full annual leave. I take month-long vacations every year. I love travelling!
What is your favourite thing to spend money on?
Travel and makeup.
Invest
How do you invest?
I have invested in high return fixed deposits and in shares.
What has been your best investment?
Kogan shares. I love using Kogan products (mobile plans, home broadband, etc.) and it was one of the first shares that I bought. It’s value has increased by over 40% over the past year!
What has been your worst investment?
I don’t think any investment is bad as long as you are learning from your mistakes.
What's been your overall return?
A couple of weeks ago, it was 39% perfect. Now, it’s down to 9%. In general, I aim for a 20% return.
How are you building wealth?
By investing early and saving aggressively.
What are your main roadblocks? And how are you addressing them?
My main roadblock is my fixed income, which is quite low. I am pretty confident of being able to boost my annual salary by changing jobs but I feel like this is not the right time.
Do you have a target net worth you want?
My goal is to save $300,000 before I turn 30.
When did you make your first significant behavioural shift towards wealth building?
In 2012, I went on a Work and Travel USA program and I was working at the Yellowstone National Parks. It was my first job and it was hard-work; that’s when I started to budget and save money and move to a positive wealth-building mindset.
If you could start again, what would you do differently?
I am happy with most of the financial decisions that I’ve taken. I wish I travelled a bit more when I was younger, but I didn’t have enough money. Now I have enough money but I don’t have enough time to travel.
What mistakes have you made along the way that others can learn from?
Never put all of your eggs in one basket. Always try different investment methods: buy shares, buy gold or something from the commodity market, and buy foreign exchange. Try different things and see what works best for you!
Do you have any worries about retirement? If so, how are you planning to address them?
None for now. Maybe after I turn 30 or 35?
How are you learning about building wealth?
I read a lot of blogs on wealth building and wealth management. I also love reading this Spaceship blog! If there is a free seminar on the stock exchange or budgeting or anything along those lines, I always attend.
Do you give to charity? If you do, what percent of time/money do you give?
Due to religious beliefs, I am obliged to donate 2.5% of my net worth every year. I am not a religious person but this is something that I enjoy doing as well. Every year, I donate about $2,500 to educational not-for-profits and also directly to people facing financial problems (back in my home country).
