This post is based on an interview we conducted with Danny in June 2019.
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.
Overview
Name: Danny
Age: 30
Where do you live: Sydney.
Please tell us a bit about yourself.
I’m married and have two boys: Christian (aged 2) and Jordan (aged 4 months) whom I love very dearly. I am studying to become a life coach and recently established my business. I really enjoy personal development and personal finance. I was diagnosed with Crohn’s disease in 2001 when I was aged 12.
What is your current net worth?
$120,000
How does it break down?
Savings (cash), superannuation, shares.
Any debts?
Mortgage.
How did you accumulate your net worth?
My wife and I bought our house whilst we were engaged in 2013, just before the Sydney market was about to boom. We rented out the property for a few years and lived with my parents, saving as much money as we could.
Earn
Tell us a bit about your career.
I am a police officer and have been for 10 years, I really enjoy my job.
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
Not currently, but I am studying to become a life coach, and this will become my second job. I’m hoping to invest a portion of this income into income producing assets.
What advice do you have for people who want to earn more money?
Start investing from a young age; compounding interest is great! Even if you’re only investing a small amount of money initially, over time that money will continue to grow.
Save
What is your savings rate? And how has it changed over time?
No real savings rate as all our income goes into our offset account.
Do you have a budget?
Yes. I have an app that tracks our spending and categorises the transaction. I can then monitor if I have gone over budget for that category.
How much do you spend per year?
It is hard to say as our expenses have increased with our second child.
Do you make purchase decisions carefully, or are you loose with your money?
I definitely make decisions carefully as we can be very impulsive with our purchases. Whilst my wife is off on maternity leave, we don’t purchase anything that is unnecessary, but in saying that we still treat ourselves.
How is your work-life balance?
My work-life balance is really good. I have a day off during the week and every weekend off unless duty calls. This gives me plenty of time with my family.
What is your favourite thing to spend money on?
Well, I have two things! Optimus Prime figurines/collectables and personal development/finance books.
Invest
How do you invest?
I invest my money by leaving a portion of it in my offset account to reduce the interest payable on our home loan, but then I also invest a portion of my income into Spaceship Voyager.
What has been your best investment?
Purchasing our home.
What has been your worst investment?
Definitely purchasing a brand-new Holden SS-V Redline (V8) which cost around $50,000! I loved and really enjoyed the car, but at the time it was an unnecessary purchase that really set me behind, especially when I was in a good position financially.
What's been your overall return?
I only recently started investing with Spaceship Voyager so my return so far is only $24.72.
How are you building wealth?
I am building wealth by saving money into my offset account and investing money.
What are your main roadblocks? And how are you addressing them?
Our main roadblocks would have to be our substantial mortgage and my wife being off work. We are hoping that she will be in a position to return to work full-time, so [we have] extra income.
Do you have a target net worth you want?
Not really a target net worth but I would love to have my mortgage paid off ASAP so I could use our income for income-producing assets.
When did you make your first significant behavioural shift towards wealth building?
It would have to be in 2009 when I graduated from the police academy. I immediately started saving for a house.
If you could start again, what would you do differently?
Definitely don’t buy a car brand new, and if you need a car, don’t spend too much money.
What mistakes have you made along the way that others can learn from?
Purchasing a brand-new car when I did not need to or spending a lot of money on it. But definitely something others can learn from, and something I do, is to contact all your providers — from your lenders, telcos, insurance companies, etc. — and ask for a better deal. They are not going to approach you and say, “Hey, would you like a better deal on your home loan?”
Do you have any worries about retirement? If so, how are you planning to address them?
No, I don’t. Once my mortgage is paid off, I will invest some money into my super.
How are you learning about building wealth?
Definitely from books and doing my own research.
Do you give to charity? If you do, what percent of time/money do you give?
No.
