How I Pay For My Bills Without Working

My electricity, wifi, water and mobile bill as well as my car insurance and Spotify are paid without me working.

How? The short answer is passive income.

Okay, so I do work full-time because I still need to pay rent, buy $25 cocktails and contribute to my investment portfolio. However, as a lazy 20-something girl – I love passive income. Earning money while doing nothing is the best.

How do I make my passive income? Is this a scam or MLM?

It’s a shame that the term “passive income” is being used by MLMs and weird scams which can put people off actual passive income! For me personally, I made my money primarily off dividends from my stock market investment portfolio. I also make some bank interest which is where I store my 12 month emergency fund.

I know what you’re thinking.

“Money Marketer. You’ve been investing for the last 5 years. Shouldn’t you have a bigger passive income stream?”

Yes, yes I should. As a long-term investor, I primarily focus on growth. This means I purchase investments that are likely to gain value in the future rather than ones that will pay me a larger dividend. I do this so I can make more money. Many of my individual stocks and commodities do not even pay a dividend. If I focused on high-dividend stocks, I could potentially double my passive income stream which is something I would like to do when I’m a bit older.

“Money Marketer. Is a couple of thousand extra a year really worth it?”

It’s easy to dismiss the power of passive income. You can instantly earn an extra $10,000 a year with a promotion at work so does an extra $2,000 or $5,000 really matter? Yes, and I’m about to show you why!

I remember when I first started making passive income as a student, I would make $14/month in bank interest. Excited, I shared this with my friend who said “Does an extra $14 month matter? That’s not even $200 a year”. That is, until I mentioned that my bank interest was essentially buying me 3 bubble teas a month. It made my little baby passive income stream seem so much more powerful!

Rather than seeing dividends/interest as $X amount per year, assign them to a bill.

This means my passive income from this year will “pay” for my:

  • Electricity bill
  • Internet/wifi bill
  • Mobile phone bill
  • Spotify subscription
  • Water bill
  • Car insurance

I can cover all of these expenses without working, how awesome is that?! My lazy self would love for my passive income to pay for all my expenses with some spending money leftover. I wouldn’t have to work at all, haha! Hope my boss isn’t reading this.

Don’t dismiss the value of a small passive income stream as it can be incredibly powerful – if you just view it differently.

Financial Advice From My Immigrant Parents

Here’s where I get my good looks from.

I’ve had a few different guests to share their advice on this blog and I have a special one for you today – my parents.

Migrating twice to completely new countries with zero help, they have a unique financial outlook and perspective which I would like to share with you today.

First up, my dad.

A high-risk, high-reward entrepreneur, he has a very different financial outlook to myself. Preferring real estate to the stock market, he is also very pro-debt such as taking out mortgages to buy real estate or business loans. 

Here’s what he said!

“Monitor your spending. Determine what you want vs. what you need.”

I remember when I was a teen with my first salary and if I wanted something he would ask me “Do you need it or do you want it?”. That might be a good question to ask yourself to help stick to your budget.

“Earn commission not allowances”

I wasn’t sure what he meant by this one so I clarified. He means try to get a commission-based role that can give you unlimited earning potential (e.g. sales) if you put in extra work vs. relying on the income you get.

“Remember that it is natural for money to a burn a hole in your pocket so make sure you save and have a spending budget”

“Communication in your family plays an important role in managing money well. Have honest money conversations with your partner – it can help avoid conflict about money. Involve your children in planning and budgeting, it can make it easier to achieve savings together.”

Next up, my mum.

My mother has always been more conservative with money and prefers less risk. I asked her what advice would be to a young couple just starting their money journey.

“I think savings for the future should be compulsory and buy what you need only. Don’t spend more than what is in your budget. Think twice before spending.”

And, there you have it! Be frugal, only buy what you need and stick to a budget!

How I Lost 10kg/22 lbs Without Spending Any Money

It’s no secret that the diet industry is massive. The weight loss market size was valued at 192.2 billion in 2019, and is projected reach $295.3 billion by 2027. Does this mean that your only option to lose weight is to invest a lot of money? No, not really. I did it for free and here’s how you can too.

Note: I discuss weight loss and calorie counting so if these topics can be triggering to you, please avoid this article! Everything mentioned is also based on my personal experience and not a substitute for proper nutrition/fitness advice!

Okay, I did cheat and bought a $13 food scale to help me measure my portions – other than that, all free!

Some numbers and a bit about me

Why no before/after weight loss picture in a bikini you ask?
Well… I’ve already disappointed my Indian parents enough by getting a degree in marketing – I can’t do anymore

I was 5.6kg (12 lbs) overweight at the start of my journey. Of course, I got a gym membership right away, costing me $80/month. After 8 months of hard work at the gym and eating healthier options – I weighed exactly the same. I was really frustrated as on top of my gym membership, I paid for personal training sessions and was buying expensive health foods.

I knew I had to try a different strategy.

And, it worked! I managed to lose 10kg in 5 months without spending any money.

1. Get a free calorie tracking app

One of the biggest mistakes I made previously was not counting my calories – it is one of the most powerful tools that can help you drop weight. The best part is that counting calories is free. While a phone app is really helpful, you can also use pen and paper. The internet is an incredible resource that can help you get started.

I love, LOVE food. Therefore, rather than eating the least calories possible, I always focus on eating the most possible calories that you can which will still allow you to lose weight. I am really careful about reducing my calories and won’t eat less unless I absolutely have to. For example, if I can lose weight eating 1,600 calories then I will refuse to eat 1,200 just to lose weight faster. My food is very important to me!

2. Exercise daily (even if it’s a small walk)

The incredible thing about exercise that is that while it provides you many benefits, it is also free.

I hate strenuous activity, I don’t get endorphins I just get uncomfortable and frustrated. Instead, my goal is to exercise for at least 30 mins daily which is usually low-intensity such as post-dinner walks around my area. I also use free YouTube videos for yoga and pilates to do at home.

While a gym membership or a fitness class can be a great investment in your health, you don’t have to if you’re on a budget. Plus, it’s easier to stay motivated to exercise when you know your $55 per session PT isn’t going to pressure you to lift heavy weights. It’s also a lot cheaper. Ugh, the PTSD.

3. Stop eating snacks!

This tip is a great one because not only is it free, it also helps you save money!

Confession time, I used to be a serial snacker.

I’d sit at my desk at work and eat snacks non-stop. I didn’t think this was so bad at the time because I’d be eating healthy options such as an apple, tub of yogurt or a handful of nuts. However, I was simply eating too much. Some days, my calories in snacks would be more than entire meals!

Just by cutting out snacks, I reduced my calorie intake significantly but also saves money grocery shopping! It’s also nice to not be thinking about food constantly. Now, I eat two meals a day and don’t think about food until my next meal.

You’ve got this!

3 Signs You’re Living Above Your Means

While there’s nothing wrong with treating yourself and making lifestyle upgrades, it can be a fine balance between reasonable and a lifestyle that you cannot afford.

So, how do you actually know if you are living beyond your means?

What a lot of people do is compare themselves to others, especially those similar in age. However, this is not a great strategy as everyone is in different stages of life. We have all had different experiences, privilege etc. and comparing your financial situation to someone else can just lead to feelings of disappointment and insecurity.

Here’s how you can find out, instead.

1. You are not prepared for financial emergencies

If you were slapped with a $2,000 emergency that needed to be paid ASAP, how would you deal with this? Could you pay it off in cash or would you have to stick it on a credit card?

If you don’t, it’s likely that you haven’t prioritised creating an emergency fund. An emergency fund is a pool of money set aside to cover any unexpected financial costs that you may encounter. This is one of the most powerful financial tools that you can create for yourself – having one can ensure that you are putting your financial future first.

2. You are not saving any of your income

If you’re not making a large income or have high expenses, it can be very challenging to save even a small amount of money.

However, it could also mean that you are simply spending more than you can afford. For example, you may believe that your $100/month gym membership is a necessary cost. If you are unable to save any money at all at the end of month, it is likely that you cannot actually afford that membership and are living beyond your means.

Remember – just because you physically have the money doesn’t mean you can necessarily afford something.

3. You have to go into debt to pay for large purchases

Have you ever put costs for a holiday on your credit card because you didn’t have money at that time? Or, had to borrow money from family to buy a designer bag?

If you have to go into debt for a large purchase that you don’t need, it is likely that you are living beyond your means and that you can’t actually afford it.

Of course, this doesn’t apply to debt such as house mortgages or even car loans but rather discretionary expenses that are not a necessity. It’s a matter of asking yourself “Can I really live without this purchase? Is it truly worth getting into debt over?”

At the end of the day, no matter how much money you make – if you are overspending, you cannot build wealth. Similarly, just because you make a low or average income (like myself!) doesn’t mean you just give up and spend all your money.

Your money habits can be a much more powerful thing than your income itself.

As A Finance Blogger, Here’s What I Invest In

“What stocks do you have in your portfolio?”

“What stocks are you currently buying?”

As a finance blogger, I frequently get the above questions. To be honest, it’s pretty boring! I purchase Vanguard Diversified High Growth Index ETF shares every months, or VDHG for short.

By percentage, it is the largest holding in my portfolio as I think the breakdown of the fund is suitable to my personal finance goals. It has a great mix of Australian, international and emerging market shares but is unique in that it also has a small percentage of bonds.

Wait, you’re not 100% in shares?!

Yup. I’m not. It seems unpopular for someone in their early 20s like myself to hold bonds, however I think a small percentage for diversification purposes can be beneficial. As I don’t own any real estate, my net worth is primarily tied up in shares. As this portfolio grows bigger, I like having a small percentage of bonds in there to act as a defensive asset.

This is just the investment that suits my personal goals and is certainly not a financial recommendation or what will work for you, also. However, if you are interested in index and ETF investing, I would suggest checking out Vanguard and their associated investment products and choose one that aligns with your goals.

How To Save Money Without Giving Up Everything You Love

There seems to be a common misconception that if you want to save money you need to give up everything fun.

No takeaway coffees, no international trips, no brunch out with friends, no shopping – it all sounds pretty sad. And frankly, is it even worth saving money if you will be miserable in life? I don’t think so!

I’m Ruby and I’m a woman who supports herself on an average income while saving and investing a large percentage. However, I still spend way too much on beauty products and food because it makes me happy. Yes, it is definitely possible to keep things you love while saving money! Here’s how I do it.

Figure out how much money you need to save

$100? $1,000? $10,000? $100,000? Write down how much you want to save and start a separate savings account. If you save money aimlessly without a specific figure, it can be very hard to stay motivated.

I’d advise to create a goal that is just slightly unachievable. If you know realistically you can save $10,000, have a goal for $12,000. This will keep you challenged. If your goal is too low, you won’t be able to save as much as you can. If it’s too high, you’ll feel demotivated and give up.

The Money Marketer Blog, The Money Marketer, How To save money, Ruby Khan, Ruba Khan, Ruba khan blog

I’m sorry but yes, you need to budget

Before you roll you eyes and exit this article – just hear me out! Yes, you can save money and do well financially without budgeting. However, this is only really possible if you earn a high income or have low expenses. Which you don’t, and neither do I. Budgeting will allow you to prioritise what is important and remove expenses that are not. By looking at all your expenses, you can stop spending money on things you don’t care about and put it towards things you love.

As previously mentioned, I love food. I would die for food. I love buying fancy groceries, eating out, cooking, baking – you get the point. So, I will always allocate a large chunk of money towards this. It makes me happy. However, I personally don’t really care about buying new things. It doesn’t give me that much joy. So, I’ll buy furniture, clothes, shoes and books second hand and reducing therefore reducing these expenses in my budget. It’s all about creating a balance between things you need, love and things you are fine without.

The Money Marketer Blog, The Money Marketer, How To save money, Ruby Khan, Ruba Khan, Ruba khan blog
Yes, I am salivating over this image – just look at that salmon. So beautiful.

Okay, but how do I budget?

Honestly, whatever works for you is the best way to budget. You can grab a pen and paper and write down your income and expenses each week. I personally like using a manual excel spreadsheet. There’s even apps you can link to your bank account which automatically budget for you.

Slow and steady wins the race

I’m all about slow yet sustainable results.

Yes, if you were extremely frugal you could reach your savings goals much faster. However, you only get one life and I believe that it isn’t worth being depressed just to save money faster. Instead, save slowly. Give yourself plenty of time to slowly build up your savings.

The most important aspect to make sure this will be successful is that you have to be consistent and can’t give up. Even if you’re saving $10 a month, save that money every time and do not skip a month. Do not withdraw it out of your savings unless it is an emergency.

And, that’s it! If you implement these tips into your life, you’ll be shocked at what you are able to achieve. Just remember that the first $10,000 you save will be he hardest but every $10,000 after that will get easier and easier. Just keep going!

What’s Your Money Personality?

I stumbled across a fascinating study by Kansas State University that came up with four different ways that we view money. You can check out the study here.

Our attitudes towards money is shaped by so many different factors such as our upbringing, income and our social circles and understanding this can help set you up for financial success.

Find out your money personality by seeing which phrases resonate the most with you – make a note of the letter and find out your personality type at the end of the article!

A:

  • Money buys freedom
  • More money will make you happier
  • There will never be enough money
  • Money is power
  • Money would solve all my problems

B:

  • I will not buy something unless it is new (e.g. car, house)
  • People are only as successful as the amount of money that they earn
  • Rich people have no reason to be unhappy
  • Your self-worth equals your net worth
  • If someone asked me how much I earned, I would tell them more than I actually do

C:

  • It is important to save for a rainy day
  • You should not tell others how much you have or make
  • Money should be saved, not spent
  • I don’t believe in treating myself
  • If someone asked me how much I earned, I would tell them less than I actually do

D:

  • I do not deserve a lot of money when others have less than me
  • Rich people are greedy
  • It is not okay to have more than you need
  • I do not deserve money
  • Money corrupts people

And, here are the results:

A: Money Worshipper

Individuals who subscribe to this notion believe that an increase in income and/or financial windfalls would solve their problems and make them happier. Money worshippers tend to have more debt and not pay off their credit card each month so if this is you, keep an eye on your debt.

As a personal finance blogger, you won’t be surprised to hear that I am in fact a money worshipper. What can I say, I love money!

B: Money Status

Individuals in this category equate self-worth with their net worth. They can be competitive and have a desire to acquire more than those around them. They also see a clear distinction between socio-economic classes.

What I would interesting was those in this category were less educated and less wealthy! If this resonates with you, try not to keep up with others with your finances and focus on your own goals.

C: Money Vigilance

Individuals that fall in this category treat money as something shameful to be secretive about – it doesn’t matter if they are rich or poor. This approach can mean the person is more frugal and prioritises saving, however it is out of fear and anxiety rather than knowledge. This stress can defeat the purpose of money providing financial security and peace of mind.

This approach is one that is probably the most further away from my personal financial outlook. If you fall in this category, I would recommend becoming more knowledgeable about finance so it is something that isn’t so scary.

D: Money Avoidance

Money avoiders feel that money is bad or that they do not deserve money. It is something that triggers anxiety and fear. As a result, these individuals may abuse credit cards or give away money to have less control around their finances. As expected, money avoiders usually do not know about their financial situation or what their net worth is.

If you’re a money avoider, it may help to become more in control of your finances. Start small with a simple budget, figure out your income and expenses to get on top of your money.

3 Tips For New Investors

As a new investor, there is so much information out there. It’s easy to get overwhelmed and not know where to start.

To make things easy, here are 3 tips to know before you get started.

1. Time is a more important factor than how much money you invest

Logically, you would think that the more money you invest – the bigger your net worth. However amount of money isn’t necessarily the most important factor when investing – it’s time! Time can outperform someone who invests more money than you or someone who times the market. The reason for this? The magic of compounding.

Keeping this in mind, this is the reason why it is so important to invest early – even if it’s a small amount!

2. Investing in different types of things reduces risk

You’ll hear the term diversification thrown around a lot when you get started with investing.

It basically means “don’t put all your eggs in one basket” or don’t invest all your money in one type of investment. So, if you put all your money in one single stock you wouldn’t be well-diversified at all. Compared to if you own a home, have a stock portfolio, some bonds and some silver bars – you would be well-diversified.

The reason it is important to diversify is because it helps you reduce market risk. This basically means it helps your portfolio become a lot less risky and you’re more likely to make a profit.

3. Don’t sell just because you made a profit

As a new investor, it is so exciting when you make a profit for the first time.

With this excitement also comes temptation. Temptation to sell and cash out your investment. However, unless you have a good reason – do not sell just because you have made a profit! The reason for this is because you can miss out on significant gains in the future and it can be more difficult to re-enter the market at a higher price.

There are so many tips that I could give you as a new investor, however these three are a great start!

7 Financial Mistakes To Avoid In Your 20s

Your 20s are an interesting time.

It is when most of us are able to start earning a decent pay check for the first time in our lives and take on major financial responsibilities such as debt. While it is really exciting (Especially the whole full-time salary part!), it can also be scary and overwhelming.

As a member of the 20s community, here are some mistakes to avoid. I’ve made a lot of these mistakes myself but also seen it affect my friends and peers.

1. Living Beyond Your Means

It is really tempting to go into debt in your 20s.

It’s often the first time you are really allowed to take on a line of credit. You want to travel and make memories while you’re young, keep up with the latest trends, look your best and have a nice vehicle. All, which cost money. Just remember that while it is important to go out and have fun, a balance is really important. If you are perfectly happy with your current old car or living in a share house – don’t increase your expenses just because you earn more money.

If you keep inflating your lifestyle, you will struggle to save, invest and achieve other financial goals.

2. Not investing until later in life

Are you someone who has thought they would “invest eventually” when they’re older?

If you have the means and it aligns with your goals – do it now! Don’t put off saving and investing as a “future me” problem. The reason for this is that time in the market is one of the most financial moves that you can make.

Okay, but what does this mean?

Basically, just buying stocks early and letting them sit in your portfolio for years can help you build significant wealth. For example, If you started investing at 40 versus your 20s, you’d have to invest eight times as much to have a similar portfolio value. You can check out my article with all the graphs and sources here.

3. Buying an expensive vehicle

Expensive cars can honestly kill your financial situation.

Especially when you’re in your 20s with a lower income. Just because you can afford your dream car doesn’t mean you should get it. While this includes things like a car loan, it also include maintenance and other associated costs. I discussed a real life case study about one of my friends who bought a $20,000 car at 19 – you can read all about it here (hint: wasn’t a good idea!).

4. Not learning how to cook

Look, I know not everyone enjoys cooking.

But, eating out everyday can really kill your wallet long-term. Forbes found that it is five times more expensive to order delivery from a restaurant  than it is to cook at home. And if you’re using a meal kit service, it’s a bit more affordable, but still almost three times as expensive as cooking from scratch. You can check out the full article here.

Here are some of my tips as someone who cooks nearly everyday:

  1. Freeze several different ingredients so you have them ready to go. I have beef, chicken, seafood, veggies all sorts of things frozen. It’s hard to justify ordering a meal when you already have the ingredients at home. You also have reduced food waste.
  2. Figure out your top 3 favourite dishes and learn to make them really well – you’ll start craving your own home-cooked meals!
  3. Open your food delivery app, decide what you want to eat…and then cook it! This is something I’ve been doing a lot lately. I’ll choose what I want to eat on UberEats and then google the best recipe and make it. Weird tip, but works for me!

5. Not setting financial goals

If you don’t have any financial goals – please get a pen and paper out to write them down. Even something simple like “Millionaire at 35” or “Save $50,000 for a house deposit”.

The reason for this is, simply writing your goals out will make you more successful. According to a Harvard Business Study:

  • 83% of the population does not have goals
  • 14% have a plan in mind, but are unwritten goals
  • 3% have goals written down
  • The 14% who have goals are 10 times more successful than those without!

6. Telling yourself that “you’ll work it out in the future”

“That’s a future me problem.”

I’ve seen this mentality a lot when young people take out debt. It can be easy to tell yourself that it’s okay to overspend or make poor financial decisions because you can “just make more money in the future”.

However, decisions that are seemingly small now can compound and affect you significantly in the future. This could be debt that has spiralled out of control, poor money habits that are difficult to break or a very inflated lifestyle.

7. Not taking career risks

Your 20s are a time where you can be selfish and spend time figuring out your career path. Don’t be afraid to go to that networking meeting, take that job offer or even learn a new skill.

And at the end of the day, it is all about maintaining a balance. Yes, you could live with your parents until the age of 35 to save on rent. However, the independence you gain from moving out is significantly more valuable than the money you save.

Similarly, spending money on your physical and mental health, as well as self-development is always worth more than the money itself. It is up to you to decide what your personal goals and priorities are.

How Much Should You Be Spending on Rent?

Okay, I’ll admit – rent is a pretty boring topic.

However, housing costs can make or break your finances. It is one of the largest costs we incur and therefore important to get on top of it. Here’s how much you should be spending.

How much should you be spending on rent?

The generally accepted rule is that 30% of your gross income should be spent on rent.

Why 30%?

The reason for this figure is that generally paying more than this can indicate rental stress. If you seem to be struggling with your finances, assess how much rent you pay as a percentage of your income – this rule is a good baseline to start with.

However, I think this rule should be used as an upper limit, especially if you have a larger income. I’d say a better rule is “as cheap as possible without compromising your values“. For example, my rent is 22% of my (very-average) income. Sure, if I followed this rule I could spend a bit more, however I’m happy with my current situation and would rather put the extra money into investments.

I’m spending more than 30%, is this a problem?

Depends.

If you’re on top of your finances and putting a little aside each month, I wouldn’t stress about going “over” this rule. Especially if you’re young and live in an expensive city such as Sydney or New York. It can definitely work if you budget wisely and live frugally. However, if you’re living pay check to pay check and always short on money – you’re paying too much.

How can I cut back on rent?

Yes, you can get a roommate to cut down on rent and negotiate with your landlord but I’d say the best way is to sacrifice what you don’t prioritise. The best way to do this is to make a list on what you need and really want – and, stick to that. Don’t let anything else sway you!

I remember when I was choosing my place, I got comments that it wasn’t a “good” place because it was old, very used appliances and just generally a lower quality place. At first, I started to re-consider. I thought “I guess I could pay a bit more to have these nicer things. I guess it’s worth it. Thankfully, I quickly snapped out of it. I really had to ignore people’s opinions and focus on what I wanted. Did I really care about an old place? No. I was fine with it actually.

Sometimes we tell ourselves (I’m guilty of it, too!) “Oh, an extra $50 a week isn’t a big deal”. However, if you invested that money instead, you’d have $40,000 in 10 years* – not a small amount at all.

*Starting portfolio value of $100, 8% rate of return over 10 years