What is your net worth? 1,800,000
At what age did you become a net worth millionaire? 39
How did you accumulate your net worth, what are you invested in? I have two residential properties. One in a mid sized town (100,000+ population) in the North Island which I live in ($650,000) and one in a small Northland seaside town close to Auckland ($900,000) which is my holiday home (I rent my holiday home out on sites like Airbnb and Bookabach for rental income so I can use it whenever I want but also make income from it). I buy small businesses which are under performing and work hard to 'do them up' (like buying an old house and renovating it but with businesses) and then after a few years I sell them for a profit. Few people know the power of capital gain in a business as it is tax free (not quite so straight-forward but true). My last business I bought for $50,000 and after 5 years spending no money on it (but lots of effort) sold it for $430,000 - tax free gain. At present I own two other businesses which are growing rapidly and I will sell one or both again in the mid term future. In summary - my investments are two properties (one I live in), two businesses which I work part time in but don't require me to be there on a daily basis.
What was your highest average household weekly income after tax? $4,800
What is your career? Business 'Flipping'
Do you have children? NO
Do you have a tertiary qualification? YES
Did you inherit any of your money? NO
What's the approximate value of your house? House I live in $650,000, holiday home $900,000
Are you debt free now? NO
Are you in KiwiSaver? NO
Were you taught about money? YES
If YES, how were you taught? My father was a very driven person who sought FIRE. He always talked to me about money, how to save, the importance of owning a house, the miracles of leveraging (borrowing against your home to be self employed). He instilled in me a desire to be self employed - he never wanted to work for someone for a fixed wage - selling his time for a fixed price seemed absurd when he could set his own earnings by owning his own business where he earned the price of his time and also kept the business profit. I soaked all this up and basically became my father! I watched my Dad lose everything (I mean EVERYTHING) in the GFC - he was wealthy and became broke more or less overnight so this second lesson has tempered my use of leveraging and has given me a more balanced approach to debt and asset management.
What is the most enjoyable thing you do with money? Travel travel travel travel, eat, drink, live music, travel travel travel travel.......
Do you use your money or your time to help others? YES
What is your greatest financial win? Buying a business for $50,000 and then after working hard but investing no money back in selling it five years later for $430,000 with the capital gain being legitimately tax free.
What is your worst financial mistake? When I was 22 I bought my first home in Auckland for $220,000. My marriage broke up and when I was 26 I sold it for $250,000 - I cleared $20,000 profit after holding for four years. I invested that money in the bank at pathetic interest rates. Same house is today worth around $750,000 and I'd be mortgage free on it if I'd just held on! It was hard to pay that mortgage at such a young age but the lesson is DON'T SELL YOUR STUFF!!!
What advice do you have for others? STOP STOP STOP caring about what other people think! Don't borrow money for nice cars to show how well off you are. Don't borrow money for ANYTHING you can't afford that isn't a lasting assets. Work harder than you are (provided you aren't on a salary!). Pay attention to the little things - $20 a month for a cheaper insurance policy, those $5 flat whites - they all sure add up!! TALK about your finances with your partner and children and for god’s sake have a plan to pay off your mortgage quicker than the length of time you have taken it out for. Finally - learn about compound interest both as a borrower and a saver.
What is the point of having a net worth above $1,000,000. What does it mean to you? It means I am on my way to being independent from the 'system'. $1,000,000 isn't enough to do this but soon I won't have to go to work to earn money as my capital base will earn it for me while I travel. 'Wanting' to go to work because I love what I do vs 'Having' to go to work so that I can get paid in dollars to spend on the things I have to have......big difference.
Finish these sentences:
If you want to build wealth do this… stop wasting your money on flashy shit like cars worth more than $5,000 and stop borrowing money for any single thing that isn't a capital asset that will gain value (sorry most cars don't gain value!).
If you want to build wealth avoid doing this… looking for get rich schemes - anything you invest in will need to have at a bare minimum a 10 year commitment, sometimes more depending on economic cycles.