IN CONTROL AFTER A BIG CLEAN-UP
Eliot Hastie, 27, broadcast journalist
Eliot engaged an adviser to clean up his financial landscape.
“I had lots of accounts everywhere and credit card debt I wasn’t on top of,” he says. “My primary purpose was to fix it all up and feel like I actually had some direction with finance.”
Working as a journalist for a financial broadcast company, Eliot says he had not been making a lot of money, and it was tough living in Sydney, so his aims were to stay afloat and travel when he wanted. Travel is still on hold, but it hasn’t changed his mindset, he says.
Buying a house is not top of his mind. “I’m very against buying a house. I don’t see the value and the market is not positioned for me to enter it. There’s been a soar in prices with no explanation. Government is doing something for first home buyers but it’s not bringing down home prices.
“For me, it’s about investing to have that second income to supplement my current one – a passive income. I’ve been dabbling a little with apps (Superhero – I love it that it’s low risk, you can deposit a small amount in one day) but it’s good to learn more about the ASX and see what happens. I also use Spaceship, it’s a little bit more secure – not choosing individual stocks. I’ve also used Raiz in the past, and Coinspot for crypto investments.”
Getting things in order included looking at his income, breaking down expenses and starting to use the three-bucket system: saving, spending and investing. “Even things I don’t normally think about – I have to pay car registration, etc, which I usually think of a month ahead. It was breaking things like that into a monthly (that’s how I get paid) fixed-costs bucket, which includes rent, bills, car and insurances.
“At the beginning, when I was feeling underwater, it was a stress completely gone from my day to day. As time has moved on, it’s nice to know it’s all happening in the background and I don’t need as many check-ins. It’s not a weight on my mind anymore.”
Eliot is unusual for his age in that he has total disability and income protection. “I didn’t have that before a planner explained it to me and that’s why I ended up doing it and it does give you assurances.”
He pays his adviser a monthly fee, books in a regular Zoom call (it was face-to-face before Covid) and if something changes, such as a pay rise, which he received recently, then it will entail another meeting and a new spreadsheet with options for the extra funds.
to another. “I’ve started to get more leads on people in their 20s receiving inheritances – that’s definitely something new. Some of these kids are getting inheritances of $500,000 to $600,000.”
Investment platform provider Netwealth recently commissioned a report into Australia’s “emerging affluent market”, defined as those people most likely to seek financial advice (see “How Millennials Compare”, left).
The research agreed with James – as long as it was transparent, millennials were happy to pay for advice and didn’t mind how they did it. They might pay by monthly or annual subscriptions, a percentage of funds under advice, or even a performance management fee.
The research highlighted the affluent group as having personal income over $100,000, household income above $150,000, household investment portfolio over $250,000 or residential property equity of more than $650,000, and super greater than $100,000 if under 35 and over $245,000 if between 35 and 45.
It found that there are about 1.5 million “emerging affluent” in the under-45 age group controlling around $2.2 trillion of household wealth.
Typically its members are highly educated, often hold senior management positions, have a good income and are in the process of building their investment portfolios. They have good financial literacy, assess themselves to have a good understanding of investing, and are aware of current market themes and trends. They are also more likely to have life insurance, TPD cover, income protection and trauma cover, and health insurance,” says Heine.
“It is important to recognise that the oldest millennial is already 40. This means they are likely to be paying for their uni, buying a car, planning a wedding, starting a family, changing careers or starting a business, whilst still wanting to go on holidays and have a social life. They need to be saving, investing, taking out insurance, maximising their super contributions, setting up correct legal structures, managing debt and so on.
“Whether they know it or not, they have many financial challenges where good, solid advice could have lasting benefits.”