This post is based on an interview we conducted with Winnie in July 2021.

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: Winnie
Age: 22
Where do you live? Sydney

Please tell us a bit about yourself.
I’m currently in my final year studying Engineering and Computer Science at UNSW. I really enjoy playing volleyball and OzTag when I’m not studying. 😬

What's your current net worth?
Around $22,000 if you don’t include HELP debt.

How does it break down?

Shares and ETFs: $4,000
Crypto: $1,000
Savings: $5,000
Spaceship: $2,000
Super: $10,000

Do you have any debts?
Yes, roughly $50,000 yikes.

How did you build your net worth?
I built my net worth mainly from savings from all the part-time jobs and internships that I have completed over the years. When I only had a casual job at Woolies, I was on youth allowance and living with my parents helped me save.

Earn

Tell us a bit about your career.

My career started when I was 14 umpiring netball for my local netball club. After that I worked at Maccas for a year during high school before moving to my local Woolworths. I worked there casually for almost four years now. During the summer break, I took on some engineering summer internships and worked full time for those. As of now I work part time at a start-up 3 days a week remotely which I hope they decide to take me on full time when I graduate 😅.

Do you have any income sources outside your job? How much do you earn from each and how did you develop them?

I get dividends from my shares which isn’t much. But I’m currently working on trying to build my portfolio. I would like to start building side projects which may turn into income sources… but procrastination gets the better of me.

What’s been important to learn about earning more money?

I guess since I am still early in my career, I would say to learn as many useful skills as possible which will allow me to go for jobs that require higher skills. I’ve worked in retail or fast food in high school and university. I think it really taught me communication skills and dealing with people.

Save

What's your savings rate? How has it changed over time?

Roughly 30%. When I used to work in high school I had almost 0 savings. I would spend my money on clothes, food and movies with my friends, I had no concept of saving. Over time at uni, I slowly started increasing my savings rate.

Do you have a budget?

Not really, the moment I get paid, I set aside money to pay my phone bills, sport fees, gym membership, rent to help out my mum and savings. From there whatever I’m left with, that’s my “budget” for the week. I set like a budget of spending $600 a fortnight which I stick to maybe 50% of the time?

How much do you spend per year?
Roughly $30,000

Do you make purchase decisions carefully, or are you loose with your money?

Usually with food and drinks, I’ll buy it without thinking too much about the cost. If it’s a big purchase like electronics, I’ll watch reviews of the item and consciously decide whether I truly need it or not.

How is your work-life balance?

I think it’s pretty decent at the moment. During my second year of uni, I had this problem of wanting to always do everything aka FOMO. At some point, I was doing about 3-4 extracurricular activities, while balancing part-time work and full time uni. The year after, I was able to prioritise my time and I like to think I’m getting better at it.

What's your favourite thing to spend money on?

Travel!!! I’m currently saving up to go on a New Zealand and hopefully a Japan trip but I love spending money on travel. In my spare time, I like browsing through nice places on Airbnb and looking at travel destinations. Travel and buying cheesecake.

Invest

How do you invest?

I started in May 2020 when I was in lockdown and to be honest in the beginning I didn’t really know what I was doing. I put money into the big banks because their stock prices went down and from online research and from my friends, I thought banks were a safe option. I’m really glad I started then because almost everything I invested in went up to some degree.

For Spaceship Voyager, I started putting in $50 just to see what would happen for 3 weeks. The return was pretty good so then I started putting in auto investments of $10, then $20 a week and now I have $2,000.

(Spaceship note: This is Winnie’s experience from July 2021. Since then, the Spaceship Voyager portfolios have both risen and dropped in value. Markets go up and down, and so too can the value of your investments. Past performance is not a guide to, or reliable indicator of, future performance.)

What's been your best investment?

My best investment has been putting money into the banks. But considering I only put in $500 per share, I would say my next best investment would be Spaceship because of the rate of return over time.

What's been your worst investment?

A particular ASX stock. I put money in on a gut feeling. Lesson learnt: don’t do that, I’m just holding and hopefully it increases over time.

What’s been your overall return?

I think about 15% given the losses and gains.

How are you building wealth?

I automate my savings into Spaceship Voyager and set aside money into my CommSec account. When I see a specific share on my watch list at a discount (a list of companies that I’ve researched and think they will do well), I’ll consider investing.

What are your main roadblocks toward building wealth?

I guess my major roadblocks in building wealth is not having enough income to invest to make a decent return. My next steps would be finding a full time graduate job that pays higher than what I currently earn.

I think right now my roadblocks are not knowing what I don’t know. I’ve been reading self help and wealth building books.

Do you have a target net worth you want?

I don’t have an exact target (the sky’s the limit!) but at uni I learnt how to calculate the amount you need to be financially independent. With the current savings I have now, and estimating an annual spending of $70,000 per year, I think I would need roughly $1.9 million.

Behaviour

When did you make your first significant behavioural shift towards wealth building?

Almost all the money I earned in high school, I had to spend. I don’t think I ever made enough in high school or the first two years of University to build wealth. Sometimes I would have to help out my parents with paying the bills, paying for my tutoring in High school or emergencies would arise (but I only ever had a $1,000 emergency fund) so it would go from $1,000 back to 0. Now that I think about it, there were a couple of times I had a negative savings account.

I think during high school, seeing my parents struggle with money and also have bad money habits made me curious and driven into a passion for building wealth for myself. As I got my first internship, my supervisor gave me the Barefoot Investor book for Christmas because I was always asking him questions about finance. From there, having worked two jobs at the time, and implementing habits from the barefoot investor I was able to grow my emergency savings fund.

If you could start again, what would you do differently?

I wish I started building better money habits earlier and developing skills like coding a lot earlier.

What mistakes have you made along the way that others could learn from?

During high school I spent a lot of money on clothes, stationery and random items that ended up becoming clutter in my room. I think it was a mistake, but a necessary mistake so that I could learn what not to do.

When I was younger, I had a lot of people asking me for money. Even though I didn’t have much, I empathised with them and would give it to them. The problem was, the people I cared about would keep coming for more. Eventually I had to cut them off, and learnt the hard way.

Do you have any worries about retirement? If so, how are you planning to address them?

Not really, I think I’ll keep setting aside self contributions to my super. I want to build another stream of income, but at the moment it’s a lot of learning. If I am able to achieve the target net worth decades before I retire then I would just live off the returns of the $1.9 million.
How are you learning about building wealth?
I read wealth ebooks. I also watch a lot of YouTube videos.

Do you give to charity? If so, what percentage of your time/money do you give?

I usually make one time donations to Red Cross or the Salvation Army when asked. I’ve been doing a lot of cleaning around the house and plan to donate my clothes to charity.

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.

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