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Tuesday, 3 August 2021

DS1 seems to be on the path to financial success

DS1 finished his computer science degree (with Distinction) last year, and ended up with two good job offers, eventually taking a position at a local IT 'unicorn' company. He's recently passed his 6-month 'probation' period, and is working from home several days a week normally, or full-time WFH during 'lockdowns', so his income stream seems quite secure at the moment. Given his starting salary was similar to my current salary (!) plus he gets some stock options (which will probably be quite valuable when they 'vest' and if/when the company gets listed) and still lives at home rent free, he is able to save a large chunk of his income. His NW is already around $180K, which is pretty impressive for a 21 year old (it is partly due to the modest share portfolio and superannuation investments I made on his behalf during childhood).

He has a small amount of HELP debt (around $30K of accumulated university fees) which will slowly be repaid via an annual compulsory repayment. Repayments are required when your taxable income exceeds the threshold (currently $47,014), and the repayment rate depends on taxable income (for DS1 it will be around 7.5%). So, effectively DS1 will be paying off his $30K StudyAssist debt at the rate of around $7,500 pa for the next 4 years or so.

In the meantime he is saving as much as possible for a deposit on an investment property, which he'll probably purchase sometime this year (if he has enough deposit saved up and the current 'lockdown' ends). His living expenses are quite low, as he doesn't pay rent, makes use of the household groceries (although his does some of his own grocery shopping if he wants anything in particular), and I gave him my old car for his 21st birthday a few months ago (although it is still registered in my name and I have full insurance cover for when I want to 'borrow' his car). I'll probably buy myself a second hand S-type Jaguar soon, just so I don't have to 'borrow' DS1's car too much.

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