What is your net worth? $3,200,000+ (couple)
At what age did you become a net worth millionaire? 36
How did you accumulate your net worth, what are you invested in? Shares and property - Both family home and some residential properties (also lost on a couple of these properties and realised being landlord is definitely not our cup of tea, nor a free lunch).
What was your highest average household WEEKLY income after tax? Prefer not to say.
What is your career? Finance and Accountant (latter turned Mom-in-chief and Chief Investment officer LOL)
Do you have children? YES
Did you inherit any of your money? YES
If YES, how much did you inherit? $50,000
What's the approximate value of your house? $2,000,000
Are you debt free now? YES
Are you in KiwiSaver? YES
Were you taught about money? YES
If YES, how were you taught? Parents - Only ‘taught’ by osmosis from our parents to be frugal and pay for things with cash, to live within our means. When I think about it, my parents lived by quite mustachian principles without really knowing it. Both our parents didn’t really diversify enough in their investments and were caught overweight in property and too narrowly invested in a handful of shares or else in leveraged investments, as well as having investments driven by tax reasons – whew!! So I guess we learnt a lot from our parents’ financial experiences. My parents were keen on property, we have taken a different path to them. We did learn from both sets of parents that education and hard work are what is likely to get you places though.
What is the most enjoyable thing you do with money? Being able to live close to the city, travel, dining out, being able to afford having one full time stay at home parent.
Do you use your money or your time to help others? YES
What is your greatest financial win? There isn’t one single win, it’s an accumulation of factors and also luck as detailed below:
Lived in our first home for four years after we paid off the mortgage before upgrading.
Buying a central city property – better returns but scary buying in there due to the size of numbers.
Being fortunate that one of us could stay home and also attend to looking into investments and actually actioning a plan. However, we did suffer from investing procrastination and inertia up till a few years ago.
We realise we have been lucky enough to hold assets through the current sustained economic boom, investments that have gone up at above average rates, compared to historically. That has given us a strong tailwind to our portfolio that we believe will stand us in good stead.
Got to where we are through reasonable income and being paid by bonus system which allowed us to put away chunks of money periodically. We were lucky enough to pay off our mortgage early on compared to other New Zealanders.
Finding Mr Money Mustache principles and facebook group was huge in having a formula and target (ie the 4% rule) that made sense to us.
What is your worst financial mistake? Many of these – not starting early enough to put away small amounts – “if only we knew then what we know now...” Over capitalising on holiday home renovations in a regional town with low capital growth (but nice place to get away to…). Lifestyle creep as our income increased.
What advice do you have for others?
Educate yourself on personal finance.
Having long term, big picture plans.
Focus on household cash flow, monitor net worth.
Doing a household budget and monitoring it regularly.
Understanding compounding and also the 4% Rule.
Put small amounts away early.
Use Sharesies, InvestNow, SuperLife and SmartShares to invest in shares. Start small and keep to the plan.
Read the Millionaire Next Door book.
What is the point of having a net worth above $1,000,000. What does it mean to you? I would look more at our own FIRE Target than reaching $1m net worth. $1m really doesn't get you far these days. It's a milestone but I'd say $2m is the new $1m and that's excluding your house.
It means having “f**k you” money as JL Collins puts it, it means sleeping in late and getting control of your time.
Finish these sentences:
If you want to build wealth do this…
Live within your means and know your net worth.
Diversify
Try various investments out whilst young enough to recover and learn from your mistakes.
Don’t compare yourselves to others around you.
If you want to build wealth avoid doing this…
Lifestyle spending creep.
Purchasing depreciating assets.
Not planning.
Taking on too much borrowing.
Make sure you live a balanced life too, you never know what is around the corner.
If these questions don’t adequately tell your story, feel free to briefly elaborate here: We are lucky we are both geeks and interested in investing and finance, so working on our financial planning is not a chore, more of a hobby really.