Millionaire #130

What is your net worth? 1,000,000+ Millions, without being too specific

At what age did you become a net worth millionaire? 30s

What region of New Zealand do you live in? Wellington

How did you accumulate your net worth, what are you invested in? My path was a four-step process. First, keeping expenses low in order to save as much as possible each year. As my salary increased I continued to live on my previous salary level so most of the increase was saved.  

Second, I invested in real estate, this included buying a property and getting roommates to reduce my housing expenses as much as possible. I would save for a property and then after I bought it, I would rent it out. As the property appreciated I would refinance it and take out my deposit to use again to buy the next property.

Third, investing my savings in the most tax advantageous way possible, such as in accounts like KiwiSaver or their overseas equivalent (401k or Superannuation) - USA. This reduces the amount of tax owed and helps my savings snowball larger and larger. 

Fourth, I tried to create more income streams to replace the income from my day job. I believe the real path to financial freedom is creating multiple (diverse) income streams and living below your means.

What was your highest average household WEEKLY income after tax?: About $14,000. But what you make is not as important as what you keep at the end of the year.

What is your career? I had a few careers including starting small businesses, economic development and serving as a diplomat. I write about personal finance now for www.loadedforlife.com

​​Do you have children? YES

Do you have a tertiary qualification? YES

Did you inherit any of your money? NO

What's the approximate value of your house? $1 million+

Are you debt-free now? NO

If NO, how much debt do you have and what is it for? I have no personal debt. But a few hundred thousand in mortgage debt on investment properties. A low debt to equity ratio.

Are you in KiwiSaver? YES

Were you taught about money? YES

If YES, how were you taught? I was taught how to think like an entrepreneur, but not taught about money. I really wish I had been taught about money it would have made the journey much easier. I teach my kids about money and my notes to them turned into a book titled Become Loaded for Life which teaches people how to use money as a tool to get to financial independence. It covers how to invest in various asset classes and how to avoid many of the pitfalls on the way to retirement.

What is the most enjoyable thing you do with money? Money is about buying the freedom of time. That is how it brings joy. Not buying material things.

Do you use your money or your time to help others? YES

If YES, can you please elaborate? By writing a number of free articles and doing talks on personal finance to teach others how to improve their financial situation. And also donating to worthy causes.

What is your greatest financial win? Predicting that real estate would decline before the global financial crisis in 2007-08 and selling my real estate holdings. This allowed the ability to buy back at the bottom of the recession.

What is your worst financial mistake? There have been more than a few. I think my biggest was investing in a startup because the idea was so innovative, but it was in a market that I did not understand particularly well. But, I don't regret it. Mistakes are how we learn, I think of the financial losses as the cost of tuition. I am pretty open with my mistakes so hopefully, other people won't make the same mistake.

What advice do you have for others? Make a plan and get started right away. A lot of people talk about getting serious about financial freedom but to be successful you have to take small but meaningful steps every day and measure your results to see your progress. It is not nearly as hard as people think, but it won't happen without effort, grit, and perseverance. Setbacks will occur along the way, you have to just keep going.

What is the point of having a net worth above $1,000,000? What does it mean to you? Freedom of time to be with friends and family and to enjoy nature.

Finish these sentences:

If you want to build wealth do this… Write down the five goals of what you want your life to look like in ten years. Post them in a place where you can see them every morning. Then start writing an action plan for the next ten steps (they can be small) that you will take towards making that life a reality. Each time you complete a step add a new one. Keep the entire list as a record of your progress.

If you want to build wealth avoid doing this… Falling into the trap of lifestyle inflation. People who spend more on consumer goods each time their salary increases never seem to get ahead. Buying nicer cars, bigger homes, and more trinkets are the path to working until you are in your 80s. And none of these purchases really bring happiness.

If these questions don’t adequately tell your story, feel free to briefly elaborate here: I think learning about how money works is one of the best ways to reduce stress in your life and to get serious about maximizing your long term happiness.

Millionaire #131

Millionaire #129