Finally, I'm a net worth millionaire!
Feb 2, 2020
It’s me, RUTH, The Happy Saver!
I’ve waited a long time to fill out my own Net Worth Millionaire Questionnaire! YES, our net worth has finally ticked over from 6 numbers to 7 and it’s fair to say I’m delighted. But what is the purpose of me and other people sharing this information? It’s so that you can apply it to your own situation and see the variety of ways that other Kiwi’s have created wealth for themselves and know that it is possible for you as well.
So, here goes...
What is your net worth? $1,004,000. Interestingly we cracked $1,000,000 and the share markets had such a strong week that we instantly added another $4,000 to our net worth. Our investments are gaining momentum.
My dashboard in the PocketSmith app showing our current net worth.
At what age did you become a net worth millionaire? 46 for me, 47 for Jonny. He was a bit disappointed that it took us this long, he wanted to be a millionaire by 45 AND also retired. He is 47 and working part-time, so it’s heading in the right direction!
What region of New Zealand do you live in? Sunny Central Otago
How did you accumulate your net worth, what are you invested in? Like many people we were late to the party and didn’t really start to focus until we hit our 40’s. We paid off our own home in 2005 when I was 32 and Jonny 33, started with KiwiSaver back in 2007, bought our first shares in 2013 and continued spending too much of our income on travel and cars. But we finally woke up and educated ourselves about money and really started to focus on budgeting and investing in 2016 (which is when I started blogging). In Jan 2016 our net worth was about $690,000. Since then we have really knuckled down and are now invested in our house, KiwiSaver (Simplicity High Growth Fund), four funds (SmartShares: NZ Top 50 (FNZ) and US 500 (USF), Sharesies: SmartShares NZ Property (NPF), Hatch: Gender Diversity Index (SHE)), one holding of shares in an individual company Meridian Energy. You can read more about all of this on my blog.
What was your highest average household WEEKLY income after tax? We both used to be on high incomes (about $160K combined) and that was how we paid off our house, but for the last 12 years we have had substantial pay cuts and in 2019 our average weekly income, after-tax for both of us was about $1,200. We both choose to work part-time hours.
What is your career? Jonny is a fantastic freelance Graphic Designer and Creative (get in touch if you need one), I’m a former Business Development Manager and now a part-time office worker and blogger.
Do you have children? A wonderful 12-year-old daughter.
Do you have a tertiary qualification? Yes, we both studied at University and/or Polytech.
Did you inherit any of your money? Back in about 2012, I inherited $5,000, which I invested and therefore still have to this day (plus capital gains, plus dividends). It’s the gift that keeps on giving...
What's the approximate value of your house? $700,000
Are you debt-free now? Yes. The only debt we have ever taken on was a mortgage.
Are you in KiwiSaver? Definitely. We both joined when it first began and signed our daughter up as soon as she was born. We are all with Simplicity in high growth funds.
Were you taught about money? Jonny was. His parents, particularly his Mum, are pretty wise with money and taught him by “doing”. They just set a very good example. For me, I was not taught anything specific but I always observed that my parents struggled with money, so my lessons came from observation and thinking “surely there has to be a better way”? In a way, Jonny’s Mum has also been a strong influence on me, she is the master of “slow and steady wins the race”. So, it took me a long time, but I eventually worked it out.
What is the most enjoyable thing you do with money? Save some, share some. Probably the thing that brings me the most satisfaction is investing a portion of our take-home pay and watching what happens to it. Neither of us are big spenders, so when it comes to spending, money is simply a tool to purchase what we need and the thought of going on a ‘shopping trip’ is my idea of a bad day really.
Do you use your money or your time to help others? Yes, we do both.
If YES, can you please elaborate. We give more time than money because both of us work only part-time so our incomes are not high BUT we have the time to volunteer when many do not. So, we (particularly Jonny) help out at school throughout the year. I give a lot of my time helping people with their financial questions online via my blog, so I think of that as my volunteering. When we see a cause that is asking specifically for money, we also donate money.
What is your greatest financial win? Probably marrying Jonny! The fact we are on the same page with pretty much everything is MASSIVE. Second to that is reading JL Collins The Simple Path to Wealth and working out that I didn’t have to buy a rental property to get ahead and in order to invest outside of housing I don’t have to pick stocks but can instead invest in funds. The day I discovered that, back in 2016, everything became so much clearer. The other win was learning contentment and the art of being happy with what I have and not comparing myself with others. So, my wins don’t have dollar amounts attached to them but are instead about using money to create a purposeful life.
What is your worst financial mistake? Buying five brand new cars… We could afford them and we paid cash, but who am I kidding! We kept selling them just a few years later and we lost HUGE amounts of money in depreciation. Oh, if only I had invested that money instead…. I also consider having “too much house” as a financial mistake and think that although our house is appreciating in value, it does us no good at all. We don’t want to leverage off it because we don’t do debt, so the bulk of our net worth is tied up in a house that returns us zero income (in fact it only costs us), I would far rather have more money invested in assets that return us a monthly income and that’s what we are working towards. Of course one of our mistakes could be that we choose to only work part-time. Had we both been full-time we would have reached this milestone many years ago, but it does not really feel like a mistake and I don’t regret for a second the relaxed lifestyle, time with our daughter and opportunities that part-time work has given us.
What advice do you have for others? Oh, I have a lot of advice for others, hence creating The Happy Saver! It’s never too late to be better with money but the sooner you start the better. Don’t take on debt. The exception would be for a house or a business, but my rule of thumb is pretty much “if I don’t have the money I don’t get to buy the thing”, if you want something, save up for it. Go without. Also, sign up to KiwiSaver, have an emergency fund, invest a percentage of your wage each week (a minimum of 20% plus if you can). And budget, you have to have a budget because that way you can tell your money what to do and can plan ahead. And live a simple financial life and avoid complicated math.
What is the point of having a net worth above $1,000,000? What does it mean to you? A lot! It’s more than just a number, it’s a milestone and a huge goal that we have achieved together. And we have largely done it on just part-time incomes, neither of us has worked full time in the last 12 years, but we paid off our house before we cut back on work. Because we now have about $300,000 in investments (KiwiSaver and Funds) I am really starting to see compounding now and that is what pushed us over the line, so I’m really excited to see this momentum continuing to build.
Finish these sentences:
If you want to build wealth do this… Acknowledge that you can’t have everything that marketers are telling you that you should have. And you probably don’t need 90% of it anyway! You won’t find happiness in things, consumptive spending won’t make you happy. If you know someone in your family or in your community who you think is financially secure, go and have a glass of wine/coffee with them and ask them how they did it. You don’t need to work all this out on your own and “invent the wheel” over and over again. Those who succeed with money generally just have a simple, long term strategy that they stick to and they are happy to share their life lessons with you and I - IF you ask them. Oh and invest in broad-based funds.
If you want to build wealth avoid doing this… Don’t let your banker be your financial educator and don’t try to borrow your way to wealth. Avoid taking on debt of any kind because it will suck up your pay for the rest of your life if you let it. Be a saver instead and earn interest/dividends instead of paying it. Do everything in your power to pay cash for the things you do and this is achievable if you plan well in advance and practice a bit of self-control. Planning well in advance is something like realising that your child WILL want to buy a car when they reach 17, so get them to start saving for it from the day they earn their first $1. They will most likely also want to leave home and study or travel, so get them saving for this when YOUNG and they can then pay cash for it and not take out loans. Always be looking ahead at what expense is coming in the future, whether it be a winter power bill, car repairs, holiday, house or retirement. Failure to plan: Plan to fail and the result is that we turn to debt.
And a final note: Young people coming through have a particularly hard time when it comes to housing, so let the landlord service the housing debt, not you, while you share your housing costs with your flatmates, get great jobs and invest as much of your income as you possibly can. With the remainder: BUDGET, tell every cent what to do, while saving and planning for the cool things in life. But always be an investor from your very first pay, it’s a great habit to have.
