What is your net worth? $2,000,000
At what age did you become a net worth millionaire? 45
What region of New Zealand do you live in? Auckland
How did you accumulate your net worth, what are you invested in? I own my own house in Auckland with no mortgage worth about $1,000,000. Have a second house also in Auckland worth about $750,000 with a mortgage of about $200,000. I am lucky to have approximately $500,000 in a workplace superannuation scheme that I joined approximately 25 years ago, putting in 5% of my salary each year which has been matched by my employer. I am 55 and have been working full time for 25 years. Before that, I was a student and worked part-time, living paycheck to paycheck.
What was your highest average household WEEKLY income after tax? $1,800
What is your career? University lecturer
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? $1,000,000
Are you debt free now? NO
If NO, how much debt do you have and what is it for? About $200,000, for a second house that is a rental property.
Are you in KiwiSaver? YES
Were you taught about money? NO
What is the most enjoyable thing you do with money? I wanted to be mortgage-free in my house, which was achieved by age 50. I have spent some money on upgrading the house, as it was 40 years old when I bought it and in "original condition". I like to travel and participate in sports, which is my main form of socialisation. I would like to give more to charity, in recent years I have given about 1% of my salary.
Do you use your money or your time to help others? YES
If YES, can you please elaborate. I help with the organisation of sports events, and occasionally tutor students in my subject for no fee.
What is your greatest financial win? Being born in the 1960s and buying a house in Auckland in 1999 and a second house in 2004, back when they were affordable, and hanging on to them. Also, getting a job that effectively forces saving 10% salary (consisting of 5% of salary, matched 5% by employer). I was 29 when I joined the superannuation scheme of my employer; back then, I could not comprehend getting old, it was an abstract idea that I knew would happen, but seemed so far off. I would not have started saving for retirement without that workplace superannuation scheme.
What is your worst financial mistake? I don't regret any of my financial decisions. In 2004 I came close to buying a leaky house. It was just by good luck that I didn't buy the leaky house, as that would have wiped me out.
What advice do you have for others?
Save 10% of your salary from an early age as possible, for retirement.
Buy a house, and pay off the mortgage as fast as you can.
Do due diligence before buying the house and check that it doesn't have any problems that you don't know about. It could be a very expensive mistake, otherwise.
Do get health insurance for surgery and major procedures. Your health is the most important thing you have.
Do not spend a lot of money on a car, and try to live near your work to save on the commute.
Don't forget to live - work hard to build and maintain friendships, take opportunities to travel, if you can.
Avoid student loans as much as possible. If you have to take a student loan, take care to live frugally and borrow as little as possible. Work part-time instead, if you can.
What is the point of having a net worth above $1,000,000. What does it mean to you? It gives a certain amount of security, which until I was 50 I never felt that I had.
Finish these sentences:
If you want to build wealth do this… Avoid debt such as student loans, vehicle loans. If you must get a loan, get as small a loan as possible and repay it quickly. Join a superannuation scheme, e.g., KiwiSaver, from a young age and contribute to it every week without fail. Buy a house when you can, and make sacrifices to repay the loan quickly. Have a budget, even a rough one, to keep track of what your expenses are and where the money goes.
If you want to build wealth avoid doing this… Do not spend too much money on a car. Except for a "gap year", do not take too many overseas holidays until you are set up with a house with mortgage payments well under control.