What is your net worth? 1,900,000
Are you filling this out as an individual or a couple? Couple
At what age(s) did you become a net worth millionaire? Early 30s
What region of New Zealand do you live in? Canterbury
How did you accumulate your net worth, what are you invested in? We are both working professionals with relatively high incomes. We are definitely selling our souls in our 30s with the hopes of early retirement! Despite high incomes, we've kept our expenses more or less static and modest since we were students (only got together fairly late on but had similar habits). The residuals after expenses go into Simplicity Growth and InvestNow where I have a portfolio mostly of highly diversified passive equities funds. I was lucky to find a role where I was profit incentivised without any caps, and a few years of good performance allowed me to significantly increase my income. Not giving into lifestyle creep (honestly being too busy for it) means that the money just starts to build up.
What was your highest average household WEEKLY income after tax? Maybe $6,000 peak? Hard to calculate because of lumpy income.
What is your career? Technical Sales and Management
Do you have children? NO
Do you have a tertiary qualification? YES
Did you inherit any of your money? YES
If YES, how much did you inherit? A few different lumps. Maybe $300,000 total on both sides of the family.
What's the approximate value of your house? $1,100,000
Are you debt free now? YES
Are you in KiwiSaver? YES
Were you taught about money? YES
If YES, how were you taught? A mix. I grew up in a family business, so money was talked about frequently around the dinner table. When I was about 15, I got a small inheritance ($20,000) that I was required to invest. I ended up putting it in an actively managed fund and learned that most fund managers aren't worth their salt, but it sparked my interest in investing. Then economics and accounting at school. Then uni, followed by commercial-type roles professionally. My partner, on the other hand, grew up without much money in a struggling family, and money was a taboo topic. It's taken years for us to be able to talk freely about it, but we got there 😊.
What is the most enjoyable thing you do with money? Two things - I like seeing the numbers go up and thinking about the goal for F.I. The other thing I really like to do with money is being able to afford to buy good quality items that make my everyday life better and will last my lifetime. An example - I bought a really nice chef's knife. It was $250, which is pretty outrageous, but I use it multiple times a day; it being awesome saves me time and makes me enjoy chopping up vegetables to cook healthier meals, so I use it more... A virtuous cycle. Things that provide long-lasting benefits like that are my favourite things to buy.
Do you use your money or your time to help others? YES
If YES, can you please elaborate? Donate fairly significantly to charity, and also we both volunteer for non-profits at governance levels.
What is your greatest financial win? Mortgage Free! The feeling of security is incredible.
What is your worst financial mistake? I didn't buy a four-bedroom townhouse in Mount Wellington for $500,000. "That's outrageously overvalued", I muttered to myself, "Who would pay half a million bucks for a townhouse in the burbs? This is just a bubble and all my mates buying property are going to lose their shirts any day now". If I'd jumped into Auckland property when I was able to, I'd be retired now.
I'd stress that it's easy to see a "worst mistake" in hindsight. That definitely could have gone the other way with different political outcomes over the years since.
What advice do you have for others? Focus on what you can control. Markets go up and down, and investments can perform or not. You can however target high-income roles and work your butt off in them. You can keep your expenses modest. You can avoid buying things you don't need. You can invest in yourself and your knowledge and skills, and it's a double win if those investments help you earn more money or reduce expenses.
Time is a huge motivator for me. We all have a finite amount, and we don't know how much we get. So when evaluating the purchase of an item, I try and think about it in terms of how many extra days/months/years I will have to work before F.I. to have it. For example, a holiday home would be cool, but it will cost me 4-5 years of my life (at a high income, which isn't guaranteed to last forever). Is it worth it? Probably not.
What is the point of having a net worth above $1,000,000? What does it mean to you? It's just a number and a hangover from the days when it was a lot more money, so it doesn't mean much. For me, the target is $1,700,000 invested + house (my F.I. number).
Finish these sentences:
If you want to build wealth, do this: It's pretty simple - keep your expenses below your income and try and maximise that gap. Reduce your expenses, invest in yourself, simplify your lifestyle, and chase higher income at work.
On the expense reduction side, go through a year or two of transactions (this will take you a few evenings) and see what stands out in your outgoings - I think this is the most valuable step in building a budget.
Start as early as possible. Make hay when the sun shines - it won't always.
If you want to build wealth, avoid doing this: Giving in to lifestyle creep. Spending blindly. Renting for life.
If these questions don’t adequately tell your story, feel free to briefly elaborate here: Nothing much to add other than to say I had a few legs up - significant inheritance etc., but most important financial literacy from a young age - but all that has changed is my timeline. The fundamentals are packaged up in lots of different ways but have the same underlying themes:
Start early, earn more than you spend, try to maximise that gap by working on both sides of the equation (income and expenses), and invest the difference in whatever investment vehicle you think is best for you. Stay the course and time will do the rest.