Hey everyone - my name is Imogen 👋 - a typical 20-something-year-old, attempting to get a grip on most adult things in life like getting 8 hours of sleep every night, saving for the future and making sure I eat five servings of veg a day.

At my own pace, I have come to understand and value finance as a tool to get me to a desired place in life. This does not involve owning an extravagant, fancy house or zooming around in a Range Rover, even though this does sound rather nice.

Instead, my financial savviness is a tool that will enable me to choose how I enjoy my time on this earth. This goal has brought me to where I am today - building on my financial wealth and passive income streams so that eventually, I will be able to live my life without the constraints of a pay check.

The journey to understanding this long-term financial goal has not been linear. Nor has it been easy or comfortable. But along the way, I have been so lucky to be supported by people who have become amazing sources of wisdom and guidance.

So I hope my own financial journey can in some small way help you on your own financial path.

Lessons from Dad

My earliest memory of finance was from my dad, a pilot from Vanuatu who never went to university. He simply applied all the practical financial lessons that he learned from books by Warren Buffet and others to build an amazing life for himself and our family. This is something that I now find incredibly inspiring but I often took for granted when I was younger. 

He was the one who helped me set up my first savings account for my tooth fairy money and pocket money from my weekly chores. He was the first person who explained to me what a stock was and the true power of compound interest. He shared his books with me on property investing, stock investing and passive income, which I must admit I found rather dry at the time. But for all of this I thank him, because it laid the foundations of where I am now - and where I am hopefully heading.

The world of finance

At the end of year 12 I chose to study a rather sensible commerce degree because I was fascinated by the world of business and entrepreneurship. In particular, I loved the stories of women who had started companies and truly “made it” in life. But once the realities of first-year uni kicked in (probably as a result of studying complex maths and sitting through rather dull lectures), I started to develop a strong distaste for the world of finance and investment banking. 

During this time, to be honest, I detoured a bit. I wasn’t a great saver, and most of my savings would be spent on travel or nights at the local watering hole. To be fair, I did fund some really amazing travel experiences, but it was only when I started my graduate role in marketing that I realised my lack of responsibility when it came to managing and planning my finances was going to hold me back from my goals in the long run. 

It’s time to save

Ever since earning my first pay check from my full-time grad job, I kicked into a self-imposed all systems go approach when it came to saving. I opened an excel spreadsheet and started to plan a monthly budget, in an attempt to maximise my savings as much as possible. I squeezed and pinched all aspects of my monthly plan allocated to rent, electricity, food, going out, ect. and managed to discipline myself into saving one third of my monthly income and placed it into a savings account.

So ... what now?

By now I had a grip on this saving and budgeting thing. So it was then time for me to take the plunge into the rather nerve-wracking world of investing because the 2% interest on my savings account wasn't going to cut it. 

I began to dip my toe into a bit of stock research but I never felt confident to completely jump in, throw some cash in the ring and call it a day. After all, I was certainly not qualified enough to know how not to lose money in the stock market. Stocks hold value whilst the business of choice is humming along, but unlike property which is a tangible asset, stock prices can be reduced to zero if a business fails.

With a little help from my (boy)friend

“Oh, I get by with a little help from my friends” or in my case, “boyfriend.” Not in a knight in shining armour kind of way, but in more of an eye-opening sense. I knew that I wanted to invest but I had no idea where to start. My partner, a fellow commerce buddy who I met at a music festival, was lovely enough to point me in the right direction, giving me reading suggestions and ultimately the nudge to buy my first shares.

With a bit of logic and a “good gut feeling” I began to buy a small cluster of shares every month. It felt good, I was making money as opposed to losing it, and I somewhat felt like I was taking small steps towards my goal of passive income. I began to heavily lean on research tools such as the ASX Research Equities Scheme, where the majority of Australian stockbroking firms publish their research and recommendations on high growth stocks. This brought me my greatest success, which led me to become too big for my own boots.

Crashing back down to earth

COVID-19 happened. Everything crashed. My stocks dropped in value by about 20%-30%. I panicked.

I did not panic sell. That was something that I had learned from the previous GFC - everything that goes down must come up again and vice versa.

In fact, market corrections like the COVID-19 induced-one we are currently finding ourselves in offer fantastic opportunities to buy investments such as shares and property at a discounted price. In an attempt to not get too down in the dumps with my diving share portfolio, I decided to muscle up and try to get the most out of the current situation.

This led me to enlist the help of a professional portfolio manager, who I have come to trust and respect, who helps me with the research and execution of all of my trades.

As very few people can successfully time the market, I am taking a dollar average approach, whereby I constantly invest in my chosen stocks evenly over time, to reduce the impact of volatility on the overall purchase. This is just my approach, which seems to be working so far but I am also privy to what is going on in the market to make smart financial plays.

Having gone through this wild ride and developed my own approach to my finances, I now feel confident in my financial independence and ability to grow my passive income. I am in no way doing it perfectly every time, but it is the little steps that count.

Imogen’s Tips for Getting Financially Savvy

1: Build Your Knowledge Base

Knowledge is power when it comes to your finances. Strengthen your financial literacy by tapping into resources that are available to you, such as:

Books:

• The Barefoot Investor by Scott Pape
  This is a great start when it comes to managing all the components of your finances.
  

• Warren Buffet’s Three Favorite Books by Preston Pysh.
  This is a fantastic introduction to value investing that cuts out all the irrelevant academic fluff associated with investing and gets right to the heart of value investing in layman’s terms.
  When it comes to learning the fundamentals of value investing, I couldn’t recommend this book more!
  

ASX Research Equities Scheme

This has been one of the best tools I have used to date. It is a FREE research scheme, run by the ASX (Australian Stock Exchange) that delivers high-quality independent research for under-covered ASX-listed companies. The research reports are produced by experienced professionals from Australia's top stockbroking firms, who have decades of experience. It may be a better source for stock tips than your drunk mate at the bar who keeps suggesting that it's a “good time to pick up Qantas”. The best part is that the reports are sent to your email inbox every Friday afternoon!

YouTube:

SugarMumma TV - This is a YouTube channel by Canna, the founder and director of SASS Financial Services, a boutique financial planning firm, Channel 9’s exclusive ‘money expert’ and founder of financial media platform SugarMamma. Canna provides digestible and holistic advice when it comes to personal money matters. I personally really like her videos on investing!

2: Get Your Budget In Good Shape

Once you know a bit more about your own finances and investing, you need to lay the foundations. Having a budgeting system and strategy will place you in good stead, giving you discipline and the propensity to save.

I personally developed a basic spreadsheet that outlined all my expenses and total income, giving me the visual understanding of how much I needed to save every month and how much I can spend on essentials and niceties. Another great tool is the Money Smart Budget Planner, a free tool provided by the Australian Government. 

3: Take an Educated Leap 

...into the world of investing! Once you feel confident enough to start investing in securities such as shares, mutual funds or property, go for it!

Sometimes it is a good idea to enlist the help of a professional that you trust so that you can be even more confident in your investing decisions. These can be financial advisors, stockbrokers or property investment professionals.

In my case, I am focused on investing in stocks and already have the financial literacy and budgeting foundations to not warrant a financial advisor. I have naturally progressed to getting advice from a professional who analyses companies for a living.

Final comment ...

This is a summary of my unique financial experience and general advice that I would happily pass on to friends and loved ones who seek it. But everyone’s experiences and financial journeys are different, so it is up to you to develop your financial literacy and financial plans to suit your life - and the future you want.

If you are just starting on your journey, start saving, start reading to build your skills in financial literacy - and reach out to a professional to help you set your financial goals, and make a plan that suits you!