This post is based on an interview we conducted with Stephen in September 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.
We have changed the name of the interviewee for their privacy.
Overview
Name: Stephen
Age: 25
Where do you live? Koo Wee Rup, Victoria.
Please tell us a bit about yourself.
I am a gym owner and coach. I love reading One Piece and other manga, not to mention I love business. It is a massive passion of mine, as I have seen how much business can change other people’s lives.
I love learning and love spending time with my partner of four years, soon to be fiancé. (She just doesn’t know it yet.)
I grew up in the south-east suburbs of Melbourne, with parents who always complained about money. I learnt to do the opposite of what my parents did and now I love paying bills upfront, it gives me satisfaction in knowing I did not have to worry about it, it gives me a sense of freedom.
I also love talking about myself, so I will stop there before I go too far.
What is your current net worth?
Around $180,000.
How does it break down?
$1,200 in shares (in the Spaceship Origin Portfolio)
$5,000 in super
$50,000 in the form of shares of the gym I co-own
$120,000 in my first home (this is what we have paid off the house so far; the house is worth $510,000)
Any debts? (including HELP from Uni)
HELP debt of $3,500
How did you accumulate your net worth?
My partner and I have accumulated wealth through hard work, with many long hours and lots of self-education/failings/successes through business.
I started out as a mere personal trainer, earning absolutely nothing, seriously, I remember having -$7 in my bank account when I was 19 years old. So, over the last seven years I have gone from being a trainer, to running some network marketing start-ups, to managing gyms, being the head of sales and having a team under me, to finally opening up my own gym. Which, a few years later, has now been merged successfully into the gym I co-own currently.
Money has always been an interest of mine, which slowly grew into a passion, as I saw my parents split up and realised just how important personal wealth is and how it can affect lives, and especially can be super important for mental health.
My mother herself has suffered depression, as she pretty much had everything she knew ripped from her, mainly the prospect of her retirement and future, so I am looking to build as much wealth to make sure my parents and everyone close to me won’t need to go through that pain anymore.
Earn
Tell us a bit about your career:
I am an online strength and nutrition coach, as well as a gym owner. So far, my career has been quite successful, being able to empower hundreds of people to get healthy, strong and to feel amazing.
Like I said, I just started as a small time personal trainer, however I have been in the right place at the right time and done exactly what Peter Brock said: “Bite off more than you can chew and chew like hell!”
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
Currently I have a few different side projects.
I run a personal training business, which I earn an extra $700 per week from; this has been grown through street surveys, social media, referrals, word of mouth, and much more.
An online nutrition coaching business I have built up to supplement my personal training business. I’m currently earning an extra $600 per month from that.
And small group fitness sessions out of my community hall. I am moving to a new area, so this has not started just yet, however, I will be looking to make an extra $200-400 per week from this as well, based on interest and pre-sales.
What advice do you have for people who want to earn more money?
I say: find something that interests you and monetise it right now!
Stop putting it off, because then you risk the chance of not being able to do something you love, something you would do for absolutely free anyhow, and earning a hell of a lot of money from it.
Learn how to start a side project. It could be anything you love. Then ask as many people who have that same interest as you, ask them what they buy, what would make their life easier/more convenient, and start creating a product around that.
Save
What is your savings rate? And how has it changed over time?
Currently my savings rate is 20% of my monthly income. This is due to life expenses increasing with moving into our first house.
However, I used to save absolutely nothing; it was not until about four years ago that I really started saving.
So, it has gone from nothing, to saving maybe $50 per week, which would have been half my income at the time. When I was living with my parents, I was saving around 50-60% of my income, which really helped to save a deposit for my first home.
Do you have a budget?
Yes.
How much do you spend per year?
$25,000 roughly (not including mortgage repayments or bills).
Do you make purchase decisions carefully, or are you loose with your money?
Absolutely everything we purchase, we always think, do we need to purchase this new? Can we get it second hand, or get it on sale? Do we need it right now? If not, we can purchase it later.
How is your work-life balance?
I would say it is pretty great right now. I spend time with friends, family, and I have time to do the things I love as well. Plus, I am earning the most right now that I ever have in my life, and getting even better results for my clients because of it.
What is your favourite thing to spend money on?
My favourite thing to spend money on is books; my favourite pastime is reading. Just on the weekend, I spent $60 on four different books, but I saved $120!
Invest
How do you invest?
Super, Spaceship Origin Portfolio, real estate, and my business.
What has been your best investment?
Currently, I don’t have a best investment. I am investing for the long term, so results have been menial at best so far, mainly because I have not invested that much just yet.
If I had to pick, it would be my first home. There’s nothing like getting your own space.
What has been your worst investment?
My worst investment is probably my first ever business partnership, mainly because of the sheer hours I had to put in, to get not much return.
What's been your overall return?
Like I said, return has been pretty measly. It ranges between $1,000-2,000 at the moment.
How are you building wealth?
I am working on my personal brand and also working towards creating more businesses. I will be buying my first investment property, as well, in the next one to two years.
What are your main roadblocks? And how are you addressing them?
Main roadblocks comes down to my personal nature. When you run a business, the only thing stopping you from achieving great success is you. I am looking to probably hire a business/life coach in the next few months.
Do you have a target net worth you want?
My target net worth will be in the millions, based on property, as well as businesses acquired in the next 20 years.
When did you make your first significant behavioural shift towards wealth building?
It would have to be around the time I was 22 years old. When you decide you want to own your first home in a year or two and you have barely any savings, you sort of have to make a massive shift.
If you could start again, what would you do differently?
Start saving earlier and make your business investment choices more wisely. in saying that, you are young, so make as many mistakes as possible, so you can learn from them!
What mistakes have you made along the way that others can learn from?
I haven’t made any mistakes that I regret, as they have all been massive learning opportunities. I would say this though: don’t crash into two cars in the space of a few days and have to pay an excess of $5,000, when you have no money!
Do you have any worries about retirement? If so, how are you planning to address them?
None whatsoever. I am more worried for my parent’s retirement at the moment, and I am addressing them by speaking with them about their goals and working towards taking some small steps that will help them to achieve the life they want in retirement.
How are you learning about building wealth?
I am learning as I go really. I am talking to experts, such as accountants. I have invested a bit of money into the Barefoot Investor, which has been great to learn from and I read probably 10-15 articles a week on wealth. Plus, I have read at least 10 different wealth mastery books.
Do you give to charity? If you do, what percent of time/money do you give?
Yes, I give around about 1% of my yearly earnings at the moment. As I increase my own wealth, I would love to give more away and I would also love to give some of my own time to local charities as well.
