The Family Christmas Newsletter
Dec 22, 2019
Christmas at my house when I was growing up was always a busy, crowded and fun time. With seven in my family there was always something going on and as Christmas approached friends would come and stay with us for their summer holidays and my poor Mum would head for the kitchen in an effort to keep the food up to us all.
Back then, I’m thinking the late 80’s here, we used to receive heaps of Christmas cards. They were fun to receive but the most exciting ones were the cards that contained the “annual Christmas letter” from the sender. These came from friends and overseas relatives we had not heard from all year and we used to howl with laughter at the different and marvellous achievements of each family member. In an annual Christmas newsletter, you only got the best news and they had not fulfilled their purpose unless at the end of them the reader, us, felt like an utter failure who had underperformed all year. I still remember feeling jealous when I read that “little Lilly can now sit on her hair”. We had been told in the previous year’s newsletter that this was her goal, to grow her hair so long that she could sit on it, and by god, she had achieved it!
And I had not, despite trying really hard to all year long!
The ones written in the third person were the best when Sarah said things about herself such as “Sarah was delighted to receive her promotion at work as all her hard work was recognised by management”. Groan.
So, I thought I would write you a Christmas Newsletter from my whanau, with a personal finance twist of course…
Greetings to all,
Well, we started the year, 2019, at the very beginning. January. And we are ending in December.
Bitcoin went up and down like a Disneyland rollercoaster and despite my thoughts that it was time to cut our losses because the whole thing was a terrible idea, Jonny disagreed, showing grit and determination in the face of adversity and he has held on to them. As the year trickled by the price rose to return to its original value of $1,000. Hang on, I wrote that line a week ago and it should now read “as the year trickled by the price rose to finish $989, just below its original value of $1,000”. Christmas letters are all about finding the positive and Jonny’s learning from this has been so much greater with the key one being “I don’t think I will buy cryptocurrency again” and as for me, I think I actually understand blockchain now. Holy cow, I’ve learned something this year!
Oh, hang on a minute, I just tried to write a sentence to explain blockchain but have failed. Right, that goes under the heading “explain blockchain in one short sentence” on my “vision board” for 2020...
The early months of the year saw our Meridian share price increase rapidly. This was due to me being entirely focussed on each and every board room development, with my finger firmly on the pulse of their strategic direction and my attendance at every shareholder meeting where I gave them my considered input. Well, that’s an absolute lie right there but I do think there is a direct correlation between our daughters cooking skills advancing to such a level that she can use pretty much every electric kitchen appliance we own while cooking a single recipe, thus increasing our energy usage which was then reflected in the rising share price. The Meridian shares we do have had a value of $21,000 in January and began a march upwards from there, tapping out at $31,000 in September (a whopping 45% rise) before dipping after the Tiwai smelter announcement and bouncing back at the end of the year at about $30,000.
Yet again, it makes me question owning shares in a single company but their twice-yearly dividend payouts and that habit I just can’t seem to kick, procrastination, keep me in the market. So, I’ll carry on asking Jonny the question “should we sell the only individual shares we own or should we hold onto them” well into 2020, I think! I’ll put it on my vision board...
We started 2019 in the heat of summer lounging by the 3m wide Warehouse pool ($139.00) and it got me thinking about our retirement years ahead, it’s technically 19 years away now. By the end of 2019, the balance of our KiwiSavers (Simplicity Growth) has risen 17%. Not bad, keep up the great work retirement fund! But it could have been a whole lot higher IF we had actually worked harder ourselves, more than 30 hours a week between us and contributed more than the minimum required.
As you can tell the year has not been without its challenges, with work continuing to be an issue. The main issue is that neither of us really want to do it, work that is, and would rather be retired instead. It’s a catch 22. But we use the remaining 50 hours of the working week to plot and plan our futures.
A family conference saw us make a unanimous team decision to start saving for a holiday adventure and we added $100 each week into “the holiday fund” and waited for it to build up. Out came the brochures for a 21-day cruise, for a European holiday where we would pack in as many castles, espressos and croissants as we could, maybe even a month-long stint in Hoi An in Vietnam, the offer is there to spend time in France too? Our imaginations ran wild! By May we had enough set aside to book flights and accommodation and by our departure date in November everything was paid for in full, the dreams were about to become a reality and the adventure began: a week on the Gold Coast! Don’t knock it till you’ve tried it, it was great!
Jonny and I in the front row of the Doomsday Destroyer ride at Movie World.
On the beach looking towards Surfers Paradise.
One of the things to look at while on my morning run streak.
The budgeting has already begun for our 2020 holiday of a lifetime…
My ability to know how much we are going to spend before we spend it has really hit its stride this year and I think the most commonly heard word this year would have to be BUDGET. There have been a few other words that I’ve used far too often, but at 50c a swear it was costing me a fortune so I’ve been cutting back… So, I’ve got two words to share with you and they are PocketSmith (although technically that’s one word as they have joined them together right?) This budgeting software has been the biggest eye-opener for me and do you know what I’m looking forward to most on 01.01.2020? Resetting my budget categories for the year ahead! The excitement is building!
Spending less than we earn is always a challenge and with Jonny being a freelancer any leave is unpaid, while my lovely employers pay me while I holiday. However, with no credit card bill waiting for us when we got back from our holiday (because we took the scissors to the credit card earlier in the year and now it’s debit card all the way), we still invested as per usual in our SmartShares funds: US500 (USF), NZ Top 50 (FNZ) and into the NZ Property Fund (NPF) via Sharesies.
Talk about a stellar year! 2019 has been a particularly strong year it seems. It won’t always be this way, but while the sun is shining, make hay!
This week I was awoken by the soothing sounds of RNZ business news and my day was off to a great start with the news that the NZX Top 50 index is on the brink of it’s best year EVER, up nearly a third from the beginning of the year. That made me take a look at our net worth and it too has increased by 30% compared to last year.
My favourite fund, the FNZ reflects this. It was $2.480 per unit 12 months ago and is $3.093 today and to add to the good news they paid out a dividend in the week before Christmas. How’s that for timing! As always, I showed a bit of restraint and this money was reinvested instead of being spent.
Our investments into the SmartShares US500 (USF) fund continue on at pace and the word ‘resilient’ is one that regularly came to mind because despite their country being run by a complete and utter buffoon the companies that make up the US economy appear to have turned off their twitter feeds and kept doing what they do with a 23% growth over the last year and 17% over the last three years. Remarkable. The price per unit was $6.694 twelve months ago and is $8.920 at time of writing. Unfortunately, they didn’t really get into the Christmas mood though with their dividend payout being a teeny $39.78; they just don’t really do dividends in the US.
Deciding to get into property has paid off and Jonny and I continue to invest in hundreds of properties via the SmartShares NZ Property Fund (NPF) which we buy via Sharesies. And you know what? Not one tenant has phoned us to come and fix the dunny. Win! The price per unit 12 months ago was $1.168 and ended the year at $1.480. They got into the Christmas spirit though and their dividend payout just before Christmas was just enough for two bottles of Central Otago Pinot Noir (from Legacy Wines, 113 Earnscleugh Road, Alexandra - stop in for a wine tasting if you are passing through this Christmas!) Delicious!
With our impending retirement in mind, I did end up buying just a handful of shares in Ryman healthcare, just $100 worth to see what would happen and so I could blog about the process. But as an example to all about why humans are best not to meddle in individual shares I inadvertently bought $30 more of them when I was trying to buy something else on Sharesies. Oops. It kind of worked out though as the value is now at $160.75 - up 23%!
And finally, despite vowing NO MORE investments, when I was looking through the giant pick n mix chocolate box that is HATCH, I thought “what’s the harm with just one more”...and bought the Gender Diversity Index ETF (SHE), a US fund made up of companies that demonstrate greater gender diversity (aka more women) within senior leadership. Currently up 2.1%, but it’s early days for this one! Go well in 2020 ladies!
We all dream of big things for our children, however, our motto with our one and only daughter who is now twelve, has always been that we aim for her to be “average and not get picked on in the playground”. Well, she is living up to our expectations wonderfully. No black eyes this year, no detentions and no notes home from the teacher. Her negotiating skills are coming along well at home, she successfully argued for a 50% investment rate for all pocket money, when I would have preferred 80%. With her getting her very own bank account and bank card this year it has been harder for me to raid her money box when I need spare change but on the bright side, she has managed NOT to share her new pin number with her entire class at school. Plus, because her math is still a work in progress, she has not yet worked out that I invest more of her pocket money than she realises #80%! She will thank me later...
Financial planning is well underway for her teeth because in 2020 she will end up with a mouth full of metal but to throw a spanner in the works she might need to act fast because Jonny is about to raid the ‘teeth savings account’. In a bar brawl, he lost his front tooth and the bill is going to be horrendous. OK, another small lie right there, maybe it was just an ongoing tooth issue that lead to this. Either way, the good old emergency fund may or may get a work out next year to cover both of them if I can’t save up enough in time…
What about me, once again social media makes me feel inept, especially when people refer to their “vision boards” and how it’s giving their life purpose and direction in this goal-orientated world we live in, it makes me realise more than ever that I don’t have either a vision board or hard and fast goals. I have been TRYING at least and have been working hard on my vision board, but never seem to get past writing down what meals we are having for the week and that’s never overly visionary! Maybe next year will be the year that I think beyond my stomach and we plan out our life goals? The best quote that came from Jonny this year was when we were having an executive board meeting, aka a cup of coffee, and discussing an upcoming expense but he said ‘well, if we buy that Ruth, it will put us backwards in our future”. Such wisdom, that’s why I married him. So, while we await the goals for 2020 to unveil themselves to us, we will just carry on spending less than we earn, investing the difference and having great chats about our money over a cup of coffee. Seems to have worked so far.
Jonny and I continue to be a tight team. I need him and he needs me. That’s the definition of a symbiotic relationship right there! He said to me that we have to stick together, divorce nor death will never be an option because I know where all our cash is stashed and in order to find out where it is invested he would have to actually READ my blog. I, on the other hand, said I have to stick with him because otherwise, I would have to learn how to actually create the back end of a blog and by the amount of mouse clicking that goes on from his side of the office, it’s a lot of work! Yep, we fit together like peas and corn and I’m ever grateful to have him in my life. Awwww!
And a good Christmas newsletter would not be complete without giving you, the reader, a little uplifting morsel of wisdom. On the 19th of September 2019, I started a running streak. I decided to run a minimum of 1km every single day, just to see if I could last. Today (Sunday, December 22nd) is day 95 and I’m still going.
What the heck is the point?
I just wanted to see if I could commit to something. It’s habit-forming and that’s the key. Investments are no different. You just have to start something and continue on with it. And those gains soon start to add up. I’ve now run 95 days in a row, averaged 16km a week for seven days a week and if you had told me on Day 1 I would soon be at Day 100 I would not have thought it possible. Same with investments. If you had told me when I made my first $10 deposit into a fund that I would now have tens of thousands invested for my family I would have scoffed. But I started, I have never stopped and now I can see it reflected in our net worth. So, there you go! Give it a try, form the habit of investing and it just might work for you too.
Happy Christmas Everyone. Thanks for continuing to read my blog, listen to my podcasts and for supporting and encouraging me along the way. I hope that I’ve managed to speak to you in a way that makes you take a look at your own financial life and make changes and improvements that will benefit you and your family in the years to come. I still love what I do, I still have “is this content helping people” at the top of my mind each time I write and the best Christmas gift I could receive this year is to know that I’ve encouraged a Kiwi to start thinking of their own financial future too.
