This post is based on an interview we conducted with Leo on 19 February 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: Leo
Age: 27
Where do you live: Newcastle
Please tell us a bit about yourself: I’m a chiropractor.
What is your current net worth?
-$67,000
How does it break down? (shares, real estate, businesses, home, superannuation, etc.)
I have about $3,000 in super, $18,000 in a liquid bank account, $2,000 in stuff I could probably sell on Gumtree.
Any debts? (including HELP from Uni)
Approximately $90,000 or so in combined debt — HELP debt and other.
How did you accumulate your net worth?
Currently it’s primarily a combination of familial support and work as a new chiropractor.
Earn
Tell us a bit about your career:
I have always enjoyed making my life as intensely varied as possible. The highlight of this variance was working six jobs simultaneously. I worked as a landscaper once a week, taught parkour between once and twice a week, worked as both a waiter and a kitchen hand in a waterfront restaurant, all while working in my own little niche chiropractic sports clinic twice a week and working for a colleague as a locum in his clinic.
I have always felt that the spectrum of working roles I fulfilled all fed into one another and helped me to develop my career as a chiropractor. This particular point was after an unsatisfying year of little pay and little self-development. Something had to change, or I would just sink into a quagmire. After this fruitful celebration of workaholism, I spent nine months travelling across Europe training parkour and meeting unique individuals and athletes from all levels and cultures.
I spoke to them, was invited to run workshops, spoke to people about their injuries and pains, and treated people wherever I went, exposing my ever growing skill-set to an interesting and rarely treated demographic of people. I eventually returned to Australia with enough money in my bank account for a couple of dozen McDonalds family meals and sought to find a workplace in which I could find more answers to all the questions I had discovered I needed answering while abroad.
I finally found my current employer in Newcastle where I currently work.
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
It has been a rough few years with either an unstable income from many sources or an unstable income from just one, but either way there has not been a good time to create a source of income outside of my own labour.
When I did finally have enough to do so, I used it on a very long trip to which I owe my current skills and experiences, so it was a worthwhile investment, albeit not one where the dividends are cashed into my account directly.
What advice do you have for people who want to earn more money?
To be honest, I’m not necessarily the person to ask about earning money. It’s too early in my career to feel that I can guarantee my advice will show results, but I do have other advice.
For one, spending money on a trip or travel does not have to be as expensive as people often make it and it is a trove of potential learning. Make these trips, if you choose to make one, as rich an investment in your soft skills as you can. Meet people, discuss things, talk to them about their lives, seek answers to questions you have and find new questions to ask yourself and others.
These are often pieces of information which I’ve found have made me far better at my job than before and often make me stand out among my peers or give me many avenues of similarities to discuss with patients or clients that another may just never have.
My other word of advice is to keep constant details of your spending. Don’t fluff facts and figures because you are only lying to yourself and no one wants to be lied to.
Feel bad about poor decisions but learn from them and feel pleasure at a future mistake you didn’t make when it comes by. The abundance of free cloud-based spreadsheets leaves little in the way of excuses. The spreadsheets don’t have to be very sophisticated either, but they will give you invaluable details about the money you simply didn’t need to spend, and that will pay dividends at no cost to anything but a small bit of your time.
Save
What is your savings rate? And how has it changed over time?
With my somewhat extreme hiatus it’s a bit hard to say but I’ve generally managed to save around four of five hundred a week or more. It’s always fluctuated because of dramatic costs that sporadically but frequently appear such as insurances for vehicles, indemnity insurance etc., but I always try to save at a solid portion of what I’m earning, and rope in my spending to as small a fraction as I can manage, depending on the earnings of the week or two before.
Do you have a budget?
Not currently. I have a very rough budget but I’m still collecting a 12-month spread of income and outgoings. It’s a year where I have not experienced many of these costs and I’ve made a great many changes, so I don’t quite trust my current estimates to be accurate.
How much do you spend per year?
My current estimate is around $18,000 in spending with a margin of error of a few thousand depending on if there are any unpredicted purchases (I really really really want to buy a new bicycle).
Do you make purchase decisions carefully, or are you loose with your money?
I set aside a portion of money I can be loose with. I use this money to make social events go smoothly, shout beers, patch mistakes (missing the last train) and then I meticulously assess my spending on larger items. I am the most focused on the sneaky subscription spending and am constantly checking the costs and possible alternatives, and reassessing to see if I need them.
As far as I’m concerned, if one is to buy a beer with an arbitrary “joy” value of five, there is no point in feeling bad about the $6 you spent on it because that will reduce the joy value. Better get the maximum non-money return on your purchase by enjoying the shit out of that overpriced beer you bought in the harbour and enjoy the view. Then make a note not to go there again.
How is your work-life balance?
It’s currently a high work-flavoured week with an intense “weekend” picked out of my Sundays and Mondays. It’s not how I intend to keep it and it isn’t currently worth the money I’m being paid, but I want to continue to take advantage of all the opportunities that might be lurking throughout the week. I intend to revise my work-life balance at the end of the month which will mark my 12 months of moving to this job.
What is your favourite thing to spend money on?
My guilty pleasure is buying people food or drinks they have never had and would likely not have known about. I really like buying people their first Negroni or some excellent chocolate when they are feeling down in the dumps. When spending on myself, I really enjoy spending money on some well-researched solution I’ve deemed a good idea. It’s surprisingly hard to do because I find most products are just not needed, so when I can convince myself something is a good idea through and through, I feel very pleased.
Invest
How do you invest?
I don’t.
What has been your best investment?
In myself, my travels.
What's been your overall return?
Intangible.
How are you building wealth?
N/A
What are your main roadblocks? And how are you addressing them?
Main roadblocks are certainly that my job and all the jobs I’ve done in the past simply don’t pay enough. Living in Sydney was certainly an obstacle which has been overcome, sadly, by just leaving it. But honestly, it is simply that the pay that is available to me is not enough compared to the tax rates and cost of living.
When did you make your first significant behavioural shift towards wealth building?
When I was 17. I decided that family will prove to be one of the most important things in my future both socially, emotionally and financially. A strong sibling relationship would mean trusted friends and a potential source of wealth multiplication as well as an honest soundboard. I started trying harder to have a stronger relationship with my siblings then, and though it has not made a significant difference to my own wealth yet, it is still an invaluable aspect of my life. Not having people to talk to and trust and turn to is hard.
If you could start again, what would you do differently? (Advice for younger self)
I would have taken on TAFE courses during high school that would give me access to skills that cost a lot in time and money afterwards. I would also have taken not one gap year but perhaps two or even three, and just worked in every sector I could, before deciding what to study at uni.
What mistakes have you made along the way that others can learn from?
I certainly made the mistake of going to university a little too early. I dedicated half a decade to learning a ton of great and valuable information, but I didn’t come in with much experience in the varied workforces around, and I was unable to entertain the myriad interesting career paths I didn’t know I might enjoy.
Do you have any worries about retirement? If so, how are you planning to address them?
Retirement is currently not even something I can think about. As a contractor, I am not paid super and I don’t earn enough to put any away myself. I find it a tough situation and one I hope changes soon.
How are you learning about building wealth? Is it from family, books, forced to learn as wealth grew, etc.?
It’s been a self-taught work by trying to disassemble an issue and create a brief the way an engineer might. Then reassess the things I thought I knew about my wealth, like making my own independent decisions about health insurance, modes of transport etc.
Do you give to charity? If you do, what percent of time/money do you give?
I do give to charity, though I rarely give to large commercial ones. I will sometimes give to specific causes where I know my dollar will be of a larger help. I hope the percentage I give increases with my income.
