Have you ever wondered how the top 1% Manage Their Money?

According to the ATO, the top 1% of income earners in Australia start at $237,300 but average $438,100. Inspired by this article from the US, readers asked me to do an Australian version.

Below I interviewed some households with incomes above $250,000 for singles or above $400,000 if a couple.

Also check out The Ultimate Guide to Make and Save Money at Home – over 100 frugal recipes, tips to start a business for under $100, ways to save money at home, ideas to make money, how to balance it all and tips for childcare.

How to top 1% wealthiest people in Australia manage their money.

Disclosure: This post may contain affiliate links for products and services I use or they recommended.

Common Themes

Unsurprisingly when you speak with people in similar income brackets, common themes emerge.

1. They get Advice and have Since Before they were in the 1%

From early on they sought advice from professionals, well before they were on high incomes.

It enabled them to make good financial decisions, budget, invest and as their income grew, they had teams in place to help them grow more.

2. They Have Multiple Accounts

Instead of having one account everything goes into and is paid from they have numerous everyday accounts, credit cards, mortgages and manage their money between them.

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3. They Avoid Debt

All credit cards are paid in full every month so they can accrue points but not debt.

The only debt carried tends to be for mortgages on their own home or investment properties.

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4. They own Their own Business

They spent a few years learning what they needed to and working with others, with the business owners mentoring them, then branched out and spent a few years building their own business.

They still have mentors or circles for advice though.

Read how to start a business for under $100.

5. A Single Focus

Each one has a single focus when it comes to their career or business.

Whether it be property, business, finance, medicine or construction, they have all been dedicated to their industry from the beginning of their careers.

I spoke at length to many people in this income bracket, not just the ones interviewed below and these common themes continued in all the conversations.

Here are the 4 who were willing to share their details, although their names have been changed.

Holly – age 33, Married with 2 Children Living in Sydney

Occupation

Own a property firm.

How much do you earn?

$400,000 a year

What age were you when you Started Earning this much?

30. Prior to that, before building the business and while growing it, my average annual income was $80,000.

So it was a few years of less money until we got to the tipping point.

How do you make your Money?

I was a property valuer for about 10 years then started the business about 6 or 7 years ago.

If you have a Partner, do you Practice Joint Finances, Separate Finances, or Something in Between?

I’m married with 2 primary school-aged kids. We have joint finances, all joint accounts.

When we were earning less we had a proper budget and were strict with finances.

Once we started earning more, we didn’t really have a budget because we didn’t need it.

We put everything on credit cards and paid everything off at the end of every month. We never had credit card debt.

If ever we saw that going up significantly, for example, if one month was a couple of thousand more than the previous month we’d reign it in.

But it wasn’t really a budget.

It was only when we bought our most recent home which increased our mortgage quite significantly, that we created a budget.

Now we do have a loose amount to spend each month. Our budget is more a guide than hard and fast.

Where do you have your Money Invested (not Including Retirement Accounts)?

Mostly property. We have 4 or 5 investment properties now.

My husband is a mechanic by profession so we have a lot of cars and tools and things like that which we have collected over the years and has a fair bit of value sitting in that too.

It might not really be an investment, more of a hobby.

With the cars, we have two race cars which are vintage cars that we use as show cars.

They have a fair bit of value and the more work he does the more they increase in value. I don’t think he will ever sell them though.

He buys things that need work, fixes them up and resells them.

We invest $40,000 to $50,000 in cars which need a fair bit of work, then he will fix them and sell them.

In the past few years, I have started investing in artwork.

I select the art based on what I like more than going after specific artists and have around $50,000 worth.

We haven’t really done a lot in the stock market but that is a focus for this year.

How many Accounts do you have to Manage your Financial life (Everyday Account, Savings, Offset, Retirement, Mortgage, etc.)?

Too many! For bank accounts, outside of the business, we have about 8 because we just culled a lot.

We have a few mortgages and loan splits, probably 10, on top of those 8 accounts and 6 credit cards.

Our money bounces around the accounts week to week.

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Image of AUD currency. Text reads how the top 1% manage money in Australia

What’s in your Wallet Right now? (e.g Credit Cards, Licence, Photo, Loyalty Cards etc)? Do you Regularly Switch Credit Cards to take Advantage of new Bonuses?

I don’t carry my wallet with me. I have a phone with a cover with 3 cards in it (one card for business and two for personal) and I never carry cash.

In my actual wallet, I have a heap of loyalty cards, licences and things like that plus about 10 cents change.

I always leave my wallet in the car though and just take my phone with the 3 cards.

What’s one Money tip or Piece of Advice You’ve Received that you Thought was very Helpful?

There have been two really good pieces of advice I have received around business and finance.

One was from my very first boss. Because I was in the property industry, he said to me:
“You’ll never earn enough in this industry, not for a very long time unless you get lucky to be wealthy, but you’ll learn enough to use your knowledge very wisely to be wealthy if you use it the right way.”

Which is advice fairly specific to property and finance industries.

The other, more general piece of advice was when we bought our first business, which was my husband’s business, a mechanical one.

We bought a 20 year old established business. The previous owner said to us:

“Nothing here is broken, so don’t go break it. Don’t spend any money for 12 months, unless it’s essential to run the business. And then after 1 year, when you’ve seen how it runs, and seasonal change and get to know the customers, then make all the changes you want.

Change the name, change the finances, go buy the boat, go buy the cars, do whatever you want to do but just spend one year learning about how the cash flow of the business works and don’t go do anything because you don’t need to.”

That was the best advice ever.

We spent the first year not spending unless we had to, we just followed their pattern and then we got a few little things at the end of the year, but really the things we thought we wanted, at the beginning of it weren’t the things we needed at the end of that year.

We then sold that business for a profit about 4 years later and gave the same advice to the new guys.

And they went and bought all the newest and fanciest in the first year and now they’ve almost gone broke.

Learn the money management thing for a year before you go change the stuff.

Where do you like to Splurge?

I’m not big into clothes or shoes, in fact, I only have one handbag.

I bought my whole year wardrobe in the sales after Christmas.

I splurge on horses, I like horse riding so I splurge on saddles and toys in horse riding, that’s my little hobby.

I splurge on artwork which is something I love.

And jackets.

I love jackets. I seem to spend a ridiculous amount on jackets, it’s about the only piece of clothing I really get excited about.

Dinners. My husband and I like to go out for dinners.

Happy to spend good money on a really nice dinner out. It’s nice to take the kids out now too.

My husband splurges on anything to do with cars.

What are your best Financial Resources? e.g. Recommended Books, Podcasts, Websites, Courses, a Financial Advisor etc.

I look at more business stuff such as The E-Myth which is very good for business owners to learn how to run a business, which directly impacts your finances. Good To Great is another fantastic book.

I haven’t spent a lot of time investing in financial education, mainly because my background and degrees are based on finances.

Do you have a team to help with your Finances and how do they help? E.g. a Virtual Assistant, Financial Advisor, Lawyer, Accountant etc.

Sure do. We have a great financial planner we work with.

A lot of people think financial planners are only for wealthy people but we worked with ours well before we had a few dollars to rub together just getting our super right and our insurance right.

Now that we have more money we look at things like where do we invest and how do we use that money better.

We’ve got a great accountant. In my work and industry we work in the peripheral of a lot of accountants.

My accountant is my go-to for everything, but I also talk with a lot of different accountants and go to their networking and events, learning about what they are doing, what they recommend and how all that works.

Image of family at the beach playing in the waves, Text reads how the top 1% manage money in Australia.

I have my accountant on speed dial.

Anything we do, personally, professionally, everything we run past him. Even when we were looking at buying a new house, I rang him and said this is what we are thinking of doing and he said no!

Every investment property we buy is run past him. He said to me “Your business is for cash flow and property is for wealth. Look at it that way.

Build the cash flow in the business, and if you don’t do anything with it when the business stops, the cash stops. Use the property to build your wealth.”

So I’ve always invested in property and done it really tight-knit with his advice.

I have a great commercial lawyer we run everything by as well.

Pretty much anyone that sits in this space we work with.