$300k-a-year is not enough
AT JUST 31 years old, Phil earns more than three times the national average and has a portfolio of eight investment properties across Victoria.
On face value, Phil's independent income of $300k sounds like a dream. But the father-of-one says "life would be impossible" if he earnt anything less.
Based in Melbourne, the IT sales and development manager works on a commission based salary.
Phil admits that he doesn't live by a budget, but when it comes to living a life of luxury - his lifestyle is anything but.
"I wouldn't say we live a luxurious life at all," he told news.com.au.
"My partner has said that if people came to our house (in Clayton, Victoria) they wouldn't believe we earn the money that I do."
Phil, who has been working in his current position for six years, must maintain his income in order to maintain his lifestyle, family requirements and extensive property portfolio.
Each month, Phil says he needs to meet a certain commission to be able to afford his monthly expenses.
At the supermarket checkout, he and his wife and six month old baby will spend $1000 each month and $8000 in mortgage repayments. Personally, Phil will spend around $300 on coffee and takeaway, $250 with a personal trainer and $1000 as a personal allowance to his wife who is currently on maternity leave.
But while the income may sound a lot on paper, Phil says people don't understand the lack of benefits he receives for falling into a high income bracket.
"I pay 60 per cent in tax," he said. "We get no government benefits, my partner doesn't work, we get nothing for childcare assistance.
"While my income sounds like a lot of money, not having any assistance or welfare brings it down very quickly and people don't factor that in.
"Our investment properties suck on to a huge amount of discretionary cash, meaning we just don't seem to have a lot left over at the end of the month."
Phil wrote into news.com.au after reading about Toby's income woes for our weekly Cash Confessions series, which looks at average Australian income earners and how they spend their money.
Earlier this month, 40-year-old Toby* and his wife Leanne* claimed that their gross income of $215,000 a year wasn't enough, and that as a young family he will "struggle to make ends meet" each month.
"I am $80k net and my wife is $75k net," he told news.com.au for Cash Confessions.
"Which doesn't feel like a huge income … and we aren't able to save much at all … only around $5950 each year.
"Everyone has different circumstances, but we do not live a life of luxury. There's no big holidays, or boats or houses. Our biggest expenses are education for our son, transportation and our personal loans each month."
Phil said he and his wife had only been on two holidays since getting together seven years ago, and while he doesn't spend much on luxury items - the pair don't stick to a tight budget for every day living.
"We don't spend a great deal," he explained.
"Buy it if I want something, I will buy it for me or my family. For example, my daughter turned six months old, so I bought her a $500 pair of earrings.
"If there's a new iPhone that comes out, I will buy it because I want it.
"But now that my partner doesn't get paid, the finance falls on me. So I try and save the amount she was making each year. I do this by trying to get a better rate on my mortgage and insurance, stopping my gym membership and cutting down our streaming services."
According to McCrindle research, the average household earns just under $110,000 per annum, while the top one in five earn more than twice this (exceeding $260,000).
On the other end of the spectrum, the bottom one in five take home around one-fifth of the average (a little over $23,000).
Phil said his lifestyle and investment commitments means he is under pressure to maintain his high income, and wouldn't be able to survive on anything less. But he hopes his lifestyle will allow him to reach a point sooner rather than later where he won't have to work as much.
"It would be impossible for us to live on less," he said.
"Our investments are at a point where I need to sustain this income. I couldn't imagine one month without earning commission. It would kill me so much."
Australia's residential investment market is dominated by people who, having bought their own home, have moved on to buying an investment property. These small-scale investors own 83 per cent of all investment properties.
Previous research shows that real estate investors tend to be married, wealthy males with high income and full-time employment.
A typical rental housing investor is a high-income earner or family partnership, owning one or two dwellings as an extra income source. The probability of becoming a residential investor tends to increase with age and homeowner status, but declines after the age of 65.
According to the Australian Bureau of Statistics, home ownership rates in Australia sit at around 70 per cent.
Most residential investment is centred around rent or resale; only a small proportion goes on construction of new homes. And residential investment by corporations or big companies represents only 8 per cent of the market.
According to The Conversation, the main reasons for accessing finance to buy a house, other than to live in it, are income and wealth accumulation.
Some investors invest because they see it as a long-term, secure, "bricks and mortar" investment. To these investors other types of assets (such as shares and bonds) may seem harder to understand and it may be more costly to enter these markets.
A proportion of real estate investors see it as a source of permanent income, while others speculate on the potential capital gains in real estate and invest expecting to increase their wealth.
Phil says investing should be at the forefront of all Australian families.
"Always invest what you earn and then spend the leftover," he said.
Can you relate to Phil? Perhaps you're a smart saver who tackles everyday expenses a little differently? I'd love to hear from you. Email email@example.com and share your story.