Do you find it annoying to hear “the first $100K’ is the hardest?
Because what use is that when you are trying to build that $100,000 at the time? “It gets easier” is the emotional equivalent of someone giving you a fist bump when you were going for a high five. Except it’s true and high five or not, while we all might take a different journey to get to $100,000 net worth – we all had to start from somewhere.
So hi, there.
I’m Aleks, of @brokegirlwealth.
My journey from $0 to $100K is by no means glamorous. You will likely feel quite frustrated by my endeavours but I was young and we’ve all got to start somewhere. So without further ado..
I come from a family of hard workers. My dad worked 12 hour shifts for 6 days a week to pay off our house and renovations, my mum ran her own business successfully for many years while managing a house and a full renovation (as owner builder!). While that work ethic rubbed off on me, I cannot say that I am naturally a thrifty person.
In 2011, I started working as a Christmas Casual at Lovisa. Actually, it’s better to categorise that exercise as “me working and being reimbursed in jewellery”. Almost all my salary was going to costume jewellery I would wear to work and would then promptly disintegrate. At 16, I thought this was “being an adult.”
Over that entire holiday period, not a single penny was saved.
I had no idea what budgeting meant beyond having enough money to make it to my next paycheck. Looking back, my bank statement looks like the printer was having a fit spitting out “Lovisa” over and over and over..
I took some time off to finish my HSC, got into uni and during the break got myself another job in retail. In the intervening year though, I hadn’t really developed any “money” skills. So, the cycle of working to fund purchases from work had resumed. I thought it was completely normal to feel “skint” between paychecks (and I was being paid weekly!) Now, I was fortunate enough to come into some birthday money in cash and on a stroll to deposit the money, I saw Commonwealth Bank was advertising a credit card.
I can’t remember the exact motivation but I’m fairly sure in my head, I thought this was a great idea.
“To build credit” Why?
“To be a real adult” Huh?
“To … shop?” Yup.
By the end of 2012, my net worth was…
I honestly could not tell you where that money went. But for someone earning $120 a week, being in $3K+ in debt was horrifying. It was such a shock to the system to have that card decline. I felt so much shame. So much embarrassment.
My parents are not financially illiterate. My mum in particular is a diligent and responsible user of credit cards. My grandmother is exceptionally spend thrift. I am a literate, intelligent young women and yet… literally zero restraint. When I say I wanted to vomit at the statement, I don’t exaggerate.
There is nothing more terrifying than a bank telling you you owe them money.
I don’t know why the micro-purchases adding up to that amount failed to have the same impact, but that statement with the cold hard “available credit: $0” literally turned my stomach.
I couldn’t tell my mum, I remember thinking she would be devastated. She had always told me to pay off my credit card statements each money. I was not the poster child for ‘not knowing any better’. I don’t deserve any sympathy. I did know better. I just didn’t know how to spend better. So I knew I had to get my money together.
I threw every cent I had at that debt – every single birthday gift, windfall (hello bank fee refunds!) and overtime payment – I was debt free by the beginning of 2014.
$0 – $50k (2014 – 2018)
From finishing uni, getting a full time job and generally having more money coming in than I could reasonably spend (or have the time to) I started to get a little better with my money.
I truly mean a little.
I frequently overspent on my credit card, I frequently tried to go on ‘starvation’ spending limits where I would prohibit all spending and then of course, fail and spend. But I did get better.
I say this because I feel like most people in the FI community are either “spenders” or “savers” when in reality – most people are probably a mixture of both. We all sit in the category of ‘human’ though and no one is perfect. Those that are exceptional savers regret missed opportunities with family or friends or trips overseas and those that are spenders regret missed opportunities with investments.
We cannot all have our cake and eat it to. Instead, I focused on the small wins as a natural spender. After getting out of debt:
- I found having a separate bank account for savings helped me with temptation;
- Lowered the limit on my credit card to $500;
- Set up sinking funds for annual expenses;
- Used credit cards responsibly;
- Started spending money in ways that aligned with my values (less cocktails, more travel)
I found investing with Raiz and Spaceship was both an exercise in restraint and also learning in a way that felt acceptable to my risk appetite at the time. I saved any money that came my way into a tidy $50K nest egg.
By 2019, I had kind of got my finances together but they had no direction. I wasn’t saving for something and with a few holidays overseas, significant HECs debt and 6 months on exchange, while I was making progress.. considering the time frame, I was by no means doing anything to write home about.
But on the surface, I had almost completed my law degree, I had a full time job with a ASX 20 company and life was pretty good. I got a job offer down in Canberra which led me down a bit of a rabbit hole into the property market. As a 2nd gen migrant, property investing is kind of pitched as the marker of success.
The stock market? Gambling. The property market in Australia? Essentially a guaranteed return.
Instead of sinking that money into the stock market – which terrified me – I decided to look into an investment property with the full understanding that given the job wasn’t a sure thing – I would find a place that would work well as a PPOR if I wanted to live there with a flatmate or even as an investment.
Canberra really turned up the goods and I found a place within a few months. I made an offer, got accepted, and settled a month after that.
How did my net worth rise despite the fact I’d bought a property? I was aggressively investing, paying down the loan and working full time. I had finished uni full time and became a lawyer,
With that, came a significant pay increase and considering how crazy juggling full time work and uni had been, the comparative mental load reduction was like being on a costless holiday.
It might surprise you to know this but I only started tracking my net worth in 2020. Prior to that, it was a lot of guess work, glaring at tax returns and crying.
I’m cheating a little here because I technically hit $100K and it is now at about $140K but it caps off the story nicely. After a decade of meandering and then getting mercilessly clear on what my goals were, that $140K is made up of:
- $50K in super
- $15K in micro-investments
- $32K in brokerage with pearler
- $4K in assorted crypto
- $40K in property equity
We’re eleven years into my money journey and here is what I learned:
No one has the perfect story
I don’t have a $0-$100K that might be all that inspiring given I’m 26 but I don’t care. What was important to me was building sustainable money habits. The way I manage my money today is stress free. I am not pursuing FIRE but coast FIRE / financial independence stage and realistically, all of those goals are not on auto-pilot for me. Instead, I am focusing on building the life and the community I want to see in the world. I have no intention to die with a huge amount of money and a pile of regrets.
Don’t try to be that frugal
This might be the antithesis of what you expect from someone so passionate about personal finance but.. don’t try to be Scrooge McDuck if that is not your natural inclination. For some people it comes really naturally, but if you are anything like me, a restriction diet only led to binging. Money is emotional, despite what we might think.
People associate money with shame, with status, with security and with happiness. Attempting to extricate those emotions from our relationship with money takes time. In that time, allocate yourself a splurge line item in the budget and give yourself the permission to spend it, and only it. Forgive yourself when you screw up. Move on. Life is too short.
Set clear goals
Those people that say ‘oh I don’t have goals’ well, I’m sorry. Those people don’t achieve the kinds of things that end up in textbooks. Dream big. Why not? I used to not have financial goals. Crazy. And yet, I noticed that for every single ambitious, crazy goal I set myself (work full time, study full time, become a lawyer, work in corporate law for an ASX 20, graduate with a 4.0, get straight HDs) I achieved the goals I set because I strived for them. For every area of my life that I thought I could coast by in (namely, money) – I did exactly that.
There’s likely something psychological to this but get a piece of paper and a pen and sit down with yourself. Put down what you want your life to look like in 2, 5, 10 years and work back from there.
If 5 years from now is “I want to be financially independent” then what kind of passive income producing or two-dimensional assets are you buying today? What kind of nest egg do you need to create between now and then to make that happen? This year, my goals (which you can find on my Instagram) were clear, simple. I have already achieved all the financial goals – even though I thought they were crazy ambitious. But with all this talk of “wins” and six figure net worths, I want to leave you with this:
Just do it.
Whether it is paying off debt or starting to invest, do not be discouraged by where other people are 5, 10 or 15 years into their journey because the truth is.. all of us were at some point where you are. And in 5 years time, you can either be 5 years older with those goals achieved or 5 years older still thinking about why you didn’t start 5 years ago.
- I had debt that was 13x what I was paid weekly.
- I couldn’t save to save my life.
- I didn’t know a dividend from a DRP.
But you can learn.
Take it a step at a time – you’re on your own $0-$100K at your own pace.