0 to 100k: In pursuit of the Australian dream by @jordaninvests
When I first started my journey to $100k, it seemed insurmountable & distant at the time. This journey began 5 years ago when I was 19.
Today, my net worth roughly sits at $350k.
Yes, the first $0 – $100k can be a b*tch, but trust me, it gets easier. You’ll learn to just let investments do their thing; that’s the course of building real wealth.
$0 | 2016
When I was 19, I was working at my Dad’s café whilst studying a Bachelor of Construction Management at Uni. The silly thing was that I was never really into construction. So, why did I do it in the first place? When I finished Year 12 & got a very average ATAR, I had no idea what I wanted to do & felt very lost. I spoke to a few family friends who were in the construction management industry, & they loved their jobs with a passion. Working on cool projects, building something you can stand back at & admire, & an awesome salary; what’s there not to like?
Well, the simple fact is that it wasn’t for me, despite its perks.
If we momentarily fast forward to 2021, I’m no longer working in construction, have pivoted to the finance industry, & run a social media account that’s based around investing content. Go figure.
$20,000 | 2017
Getting some traction
At 20 years old, I decided to leave my Dad’s café & get a job in the field my Uni degree would apply to; construction management. My job role was a Cadet, earning a minor salary as I was essentially getting paid to learn the job. At this stage, I knew nothing about investing. I was embarrassed one day in the office when my colleagues were talking about Warren Buffett, in which I added to the conversation, “Warren who?”.
Despite this, I always tended to be frugal in nature as my parents embedded great money habits into me as I was growing up, so I decided to put a lot of my salary aside into a savings bank account (this was when interest rates were half decent).
$52,000 | 2018
My first real investment
2018 was the most important year in my journey. Over the 2 years, I kept slaving away, day-by-day at my corporate role & saving a lot of cash. I was able to do this because, to be frank, I never had debt on liabilities such as a fancy car, I went out often but not every weekend, & was a sensible spender. By these characteristics alone, I knew I was saving more than most other 21-year-olds. When I had a considerable amount of dough saved up, I thought of buying a property (like every other Australian), because property has always done well for Aussies, right? My sister Lexi & I decided that we could participate in the property market far quicker if we combined our savings & went 50/50 on a property, instead of going solo. We did just that, & we put $50k each down as a deposit on a property, which left me with around $2k in the bank. I was comfortable with this as I had a solid job & I still lived at home, so I thought I didn’t really need an emergency fund at the time.
How did we achieve this?
- We recorded ALL of our costs including daily spending, bills, subscriptions etc.
- We inputted those costs into a budget sheet on Excel & updated it weekly.
- We knew that if we were both making X, & we only spent X throughout the year, then we could reach our goal of buying our first property; This kept us motivated as we could see how we were progressing towards our goal!
$80,000 | 2019
Hello stock market!
After my property purchase settled, & I had a feeling rush over me of finally becoming an ‘investor’; it was a liberating feeling. So, I started seeking other viable ways to invest my money I made from my 9-5 role, as it was not so easy just to go & ‘buy another property’ due to the huge barrier to entry given how expensive the Sydney property market is. I then came across this absolute gem of a book, & soon realised that I was heading to the stock market next (PS; don’t let the book title get to you, we’re all dummies when we start something new! Embrace it)
Throughout this book I learned how the stock market worked; like what the ASX was, how to buy & sell shares, & how to create a diversified portfolio. In late 2019, I nervously bought my first share through my Westpac online investing account. Any investment seems daunting when it’s your first time; I remember almost shaking pressing the ‘Buy’ order on my first $2k investment. At this point of my journey, including my deposit on my house, cash in bank & share market portfolio, my net worth was roughly at $80k.
$100,000 | 2020
The first century!
Given the strong growth in the property market since 2018, the house my sister & I had bought is worth a fair amount more than what we had paid. This increased our net worth’s significantly. Also, the stock market had recovered near the end of the year & a few companies in my share portfolio were COVID-19 beneficiaries, which as a result lifted my entire portfolio significantly. At this point, I hit the $100k net worth mark; meaning if I sold all my assets to pay off my debts, I would have $100k sitting in my bank account, which was an amazing feeling.
So how am I doing today?
If you’ve read this far, first off, thank you! But you’re probably thinking how I went from $100k to $350k in 1 year? My honest answer is that I have continuously been investing into my share market portfolio & have enjoyed the immense growth of the property market over the last year. In a macroeconomic sense, what is occurring right now is unforeseen given historic low interest rates & cash injection into the economy. This type of growth in such a short space of time is abnormal, & I acknowledge I am in a very fortunate situation because of it, but nonetheless, the main thing is I just got started.
Thanks to that early push in my journey, I am now reaping the benefits of my investments:
Net Worth: $743k – $395k = $348k
It’s funny. I was speaking to a very wealthy customer the other day; we discussed his property investments, share portfolio etc. To put it simply, he was sitting on a hefty-sized nest egg. I asked him what his story was, a ‘what was the secret to your success’ sort of question; he smirked & replied, “If I can do it, any Joe Blow can. I’m not much smarter than anybody else; I’m just a guy who was willing to take a crack & give it a go.”
I’m only just getting started in my journey, but I completely resonated with his explanation. I don’t think I’m smarter than anybody, but I’m really giving this investing thing a crack & so far has paid massive dividends (figuratively & literally). So I ask you, the reader, if you haven’t started investing yet, find out the root as to why you haven’t, & start there.
“If I can do it, any Joe Blow can. I’m not much smarter than anybody else; I’m just a guy who was willing to take a crack & give it a go.”
You don’t know where to start & concerned about the unknown?
I bet! But so was everybody else when they started. The book I referenced above is a great place to start.
You’re scared of a market crash?
I can’t tell you what will happen in the short term, shares are volatile by nature; however I will contextualise what investing can do for you over a 40 year period. Imagine in 1980 you invested $1,000.00 in a broad index fund like the S&P 500 (which is a fancy way of saying the top 500 largest companies in the US).
In 2021, do you know what that would be worth?
Try $50,000.00! (excluding dividends, based on an average annual return of 10%).
Let me remind you we have had several market crashes & drawdowns over the last 40 years, but when you zoom out & see the bigger picture, you’ll realise they’re nullified over the long term:
Now there is never a guarantee on what happens in the future; however you must understand why markets have gone up over time. In short, the largest companies in the world are making much more money than the largest companies decades ago, therefore they are worth more, hence they are more valuable. Since large companies are the main contributors to market movements, it’s no surprise why the stock market has risen in value with them over the long term.
To tie this altogether, I want to finish with the following statement; you can do this too.
Do your research, keep learning & most importantly, execute. Trust me you will never look back.
Happy investing, JP.