74. Interesting things happen to interesting people.
PODCAST TRANSCRIPT: Episode 74 - OCT 19, 2022
This is the first time I’ve let the guest's mother write the introduction. But here goes, this is the email I received outlining why the story of her daughter, Ayana, would be a wonderful one to share on my podcast.
“Ruth”, she said, “I was listening to your latest podcast and heard that you were looking for some under 30-year-olds to interview.
I immediately thought of my daughter Ayana. She is 25 and currently doing very well in life, not just financially but work-wise as well.
She worked at subway from the age of 13, having done a paper run before that. Left school with $12,000 in the bank. Had a brief stint in the Navy. Completed a Bachelor of communications. Started an internship in LA. Came back to NZ because of Covid. She picked up work at a radio station, then worked as a carer and then spent last summer working as a cleaner in Antarctica. Now back working in radio, she takes life by the horns and is absolutely making the most of it.
There have, of course, been ups and downs, but they all come with lessons. She has enjoyed a few wonderful jobs so far, and her aim is FIRE at some stage.
Her story is simply about a young person who budgets, saves, invests, has goals and makes them happen.”
Crikey, what a wahine; I can’t wait to tell you more about her.
I hope I get to be as proud of my daughter one day as Ayana’s Mum is of hers. It was really heartwarming to read the email she sent me about her daughter, and it meant I was pretty keen to pick up the phone and chat with Ayana, which I did in late August.
Ayana grew up with her younger brother in the stunning region of Whitianga. As we chatted, she remembered that she was really keen from quite a young age to have her own money, she really latched onto the thought of earning money, and she did a paper run from the age of just nine. She had saved her first $1,000 by the time she was just 12, just by doing her paper run.
Her parents talked a little about saving and doing good things with her money, but she doesn’t think it was their intention for her to be quite that intense. She doesn't recall any conversations about investing, but saving for travel or uni was definitely discussed.
A family friend owned a Subway franchise and Ayana made her start there working 2 - 3 weeks over summer being the runner, chopping tomatoes, and doing dishes and just generally helping out. After that summer stint and when she was in Year 10 (so about 14/15 years old) she stayed on and worked a 5-hour shift after school once a week and she worked maybe a 6 hour shift on the weekend.
At the age of 16, and after she had been at Subway a while, her mum sat her down and encouraged her do a spreadsheet on her spending, noting down where her income was coming from and going to.
I asked what prompted her Mum to do this. Although fabulous, it is unusual.
Ayana didn't really know how much she was spending. So she thinks she was just starting to spend a bit more money a bit too freely, which her Mum had noticed, and it was time for a lesson. Noting it all down in a spreadsheet was a good way to look at what was actually happening with her money and having that conversation just made her more aware of where it was coming from and going to.
Prior to this, in her own mind, she thought she was doing great, but her mum showed there was a little room for improvement. Although I know it would be a bit jarring to realise you were not quite as fabulous as you thought you were, I’d far rather that this gets worked out while a teenager and at home with a caring adult to give perspective and guidance. In hindsight, she wonders if digging into this level of detail might have increased her anxiety around spending a bit - which was not the intention of her well meaning Mum at all. But she pointed out that it was a fine line, learning to earn money, learning to spend and enjoy money, and learning to always keep some back for later.
When she thought about her brother, who is three years younger, she pointed out that he had quite a different personality when it came to money, despite the same upbringing. He needs reminding not to spend too much, and needs the lesson to have a bit of caution, but Ayana said that she had the tendency to take being cautious with spending a bit too far.
And this is the fine balance a parent walks between different tamariki. The same conversation with two different children has a different outcome and I must admit that I’m mindful with my own daughter to not impose my will on her, instead I try to give her information in a way she likes to receive it with my hope being she retains some of it. I think it is going to be fascinating to talk with her as an adult about what she remembers me teaching her about money as she grew up.
In their home, Ayana and her family openly talked about money, not all the time, but enough to get Ayana asking questions about interest or tax or whatever was on her mind. She knew it was perfectly OK to ask money related questions which was great to hear.
So, all through school, she worked at Subway, and similar to Pipi who I spoke to in episode #73, she also picked up another job as a lifeguard, just as a way to financially prepare for the end of school, trying to save as much as possible.
And what was one piece of advice that her parents taught her about money?
When they realised she was taking money too seriously as a teenager they told her to relax and enjoy spending some of her hard earned money, because she WAS doing a good job with her money as a whole. She said the advice was good and needed, because she was internalizing only saving money, not spending it. She took it too seriously and she needed to know how to have a bit of fun.
Now an adult, she enjoys paying herself a comfortable weekly amount, to blow and enjoy guilt free, because she knows she has saved enough elsewhere.
Now, I could fully relate to this tendency to just hoard money, as I saw it in myself and now I see it in my daughter. So, much like Ayana’s parents did, I’m stepping in early to remind her that as long as you always hold a portion back to save and invest, so you can plan and pay cash for future goals, and so you can watch your investments grow and compound and create a passive income, you can happily spend a portion guilt free. As my Dad used to say, money is made round to go around.
When Ayana was working as a life guard on a local beach, she did an advanced first aid course. She spent 6 days in the bush, and was up all hours of the night doing all sorts of wild first aid rescues. One of her instructors was an ex-army medic and they became a mentor. Ayana was loving the course so much that she asked how she could do this sort of thing as a job. They said, go into the defence forces.
By the time she finished her final year of school, she had saved up $12k and it was in December of that same year that she also started doing the paperwork required to join the Navy as a medic. She completed the required assessments in March of the following year, was interviewed and accepted in April and would begin with the Navy in July.
While that was working its way through, at the age of 18 she left home, spent $5,000 on a car and drove it around Te Wai Pounamu, the South Island for four months, spending most of the money she had saved up.
She knew she could get out and explore a bit because she had applied to join the Navy and was confident of being accepted and would therefore have a steady income soon enough.
So, that trip was a way to break free, travel, and spend her money, which she found challenging. She was still pretty stingy she said and found deals where she could, such as WOOFING so that she worked a little and got free accommodation and food for a night, or stayed with family where she could. I understand that if you have saved and saved and saved, it’s hard to flip the switch and do a bit of spending. She experienced that feeling at 18, but retirees actually experience that same feeling. They spend a lifetime earning and stockpiling cash and investments, and then have to mentally flick a switch to allow themselves the freedom to then start to eat into that capital. It is hard at both ends of life.
She didn’t just embark on this tiki tour without a plan B though, just in case the Navy didn’t work out.
Ayana’s plan B was to go to university.
In her final year at school she had been told what scholarships were available and what database to go to to find all the relevant scholarships from different universities. She was able to filter what she was eligible for and there was a wide range available, from ones offered through different businesses and companies for a few hundred dollars, right through to a full ride scholarship.
Just to add to that, I was reading my community paper recently and I saw in that there were organisations asking for applications to scholarship programmes, so my advice is to look under every rock for scholarship opportunities. She had applied for and won some scholarships that she was then able to defer for a year, so her plan B, if the Navy was unsuccessful was to take a gap year, travel around in the first half of the year and get some work in the second half of that year. The following year she would start uni and use those scholarships then.
But, given she was accepted to the Navy, she followed her plan A.
After half a year of wandering about, she began her 18 weeks of basic training in July with the intention of becoming a medic. She started out earning the minimum wage which was about 34k a year. In those initial 18 weeks, even though she was located at Devonport in Auckland, other than the odd weekend out, she could not leave base and spend anything, so it was pretty much 4.5 months of enforced saving.
Using gross figures, based on her annual income of $34k she was earning about $653 a week, or $11,769 for 18 weeks, the length of her basic training. She contributed 4% to her KiwiSaver. Her living expenses were very low given the Navy fed, clothed and housed her, and after tax, she came out having managed to save about $6,000 of that income which is pretty high. She shared that she found it interesting how some of her peers saved their income and some blew it on their limited off base outings.
When she finished her basic training her salary increased to $45k. Not a bad jump after less than five months in.
Ayana’s intention and understanding was that after this initial period she would then go and spend three full years with the army training to be a medic and would then return to the navy and continue her career with them. But in a twist that shows the best laid plans are often out of your control, she had no sooner finished than it was announced that all medic training was cancelled for the forseeable future.
Now, obviously this was a huge issue and shock for Ayana and she rightly felt that she had been enticed into the military under false pretences. Plus it was very intimidating for a fresh faced 18 year old to have to deal with this plan change and work out how it might impact her future.
So, she sat tight and hung in there for a year, she said there was a lot of sitting on the couch waiting. She managed to get some first aid courses and qualifications under her belt. But they were short stints between lots of monotony while she waited to see what she could do next.
By July of the following year she made her mind up that she would not stick around wasting her time waiting for an opportunity that may never come and that she would move on to her plan B and start university the following year.
But she bided her time and stuck it out for the $60 accommodation, and having all meals cooked for $5 a meal. And I can’t blame her, it was a good deal and she saved a lot of money until she could quit for uni. She said she was constantly asking and looking for opportunities and training, so that she could salvage something from the experience, and she took part in whatever she could, gaining a certificate in healthcare during her time there.
Also during that period she fell ill and because she A) had unlimited sick leave and B) worked in the hospital, her care was exceptional. With free dental care she also got her teeth sorted, got new glasses and basically she was able to receive all that someone in the defence forces was entitled to.
I wondered what others on her intake did at this time, because there were four of their larger group wanting to be medics. One pretty quickly left to study nursing. Another used the time to go through the application process to join the police force. The fourth person stayed in and took a different path.
Although her navy career failed to set sail, it did teach her how to be a bit more carefree with her money, and I think that comes with having a more consistent paycheque. Learning how to save, spend and enjoy was a good lesson she said. It pulled her back from being as intense as she was when she was young.
At the start of a new year, aged 19, going on 20, she went to AUT and studied a bachelor of communications. Why this course I wondered, what happened to nursing? She has always had a wide variety of interests and had been tossing up trying to do medicine but was feeling a bit down in the dumps after the navy and wanted something fun that would pick her back up that she would enjoy. The thought of 7 years of study at med school would not pick her up, but a shorter degree that would let her explore her creative side, with drama, writing and media studies would!
Because she was now two years out of school, the scholarships she had deferred had expired, but due to her full time work she had saved up $25,000 so was feeling flush enough. Applying for scholarships is a lengthy process and you do need to set aside the time to track them down and apply and that just was not a path she felt she needed to go down, which was a shame as she may have left some money on the table there.
She took out a student loan to cover the cost of her fees and she was fortunate in that she was eligible for a small student allowance, that does not need to be paid back, of $150 a week that went towards paying her living costs, But she took out some living costs, about $20 a week, on student loans as well to top up the shortfall. In her first year, in total, she took out $8,000 in student loans.
I wondered how all this worked. Working out the combination of student allowance (which you don’t pay back) and student loan (which you do) and she said that when you applied for a student allowance you told them what your parents earn and they tell you what percentage you can get as an allowance and what you need to loan. So, she got $150 a week, and loaned $20.
She also got a part time job as a pool lifeguard which would make her somewhere between $100 - $200 a week. In her first year she was very strict, dipping into her decent pot of savings as little as possible, maybe by just a few grand and then when summer holidays rolled around she spent the summer earning that money back by working as much as she possibly could.
In her second year, she took out more loans, she didn’t work near as much and nor was the work as regular as her first year, meaning that she spent maybe $5,000 - $6,000 of her savings that year, which once again she earned back over the summer break.
I should point out that she had a pretty cool summer job, working on a glass bottom boat in Whitianga as a tour guide. She could earn $60 for a 2 hour trip and weather permitting, she could do four trips a day. She would then get paid extra for washing down the equipment they used. So, on a good day, she could earn $250 - $300 a day. But if the weather was bad, she would earn nothing. But as you could imagine, just a couple of weeks of doing four tirps a day was great money for a student. However, sometimes, other things get in the way of your summer job too.
In her third year of study, she was fortunate enough to complete an Outward Bound course. I was not aware that you could do these as an adult, but you absolutely can. In fact, her own aunt, who had a serious health issue, had done one in her 60’s and it gave her a whole new lease on life. Ayana did a three week course aimed at 18 - 26 year olds. She said it was an amazing reset. The cost is high, about $4,500, but for people who cannot afford that amount, if you put yourself on their scholarship list, it might take a year, but they will get round to you. Of the participants on her course, 80% were on scholarships she said.
She had put her name on the list but got the call up sooner than expected because they had a couple of places to fill at short notice, so she downed tools on the glass bottom boat gig and jumped at the opportunity.
She said they get on the phone with you, did an interview and asked how much you can financially contribute to cover the cost of the course. There is no wrong answer but it puts the onus on you: how much are you willing to pay or how much can you pay given your circumstances. She felt she could pay $1,000, so the scholarship paid the remainder, something she is extremely grateful for. She could have said $50, or could have said $4,000. The point is that they want everyone to be able to achieve going on Outward Bound, which I thought was pretty awesome.
In her third year she had a much heavier study workload and was unable to work as much. Plus as winter came around, she got into the fun but expensive sports of skiing and snowboarding that year, meaning she spent a lot more of her savings, probably $8,000 - $10,000 in that year. Once again she took out more loans.
At the end of her three years of study and with a freshly minted degree in Communications she had student debt of $28,000.
Having continued to work when she could, she also still had a bit more that $8,000 in savings.
Her KiwiSaver had also been growing throughout this time. When she was in the Navy they contributed 4%, as did she and from then on she contributed 8% from all of her summer jobs, so it had been building up over the few short years she was in the scheme.
Her KiwiSaver contributions were actually what she considers a bit of a financial miss step.
She wishes that while she was in the Navy she had put 8% of her wage into her KiwiSaver, because she had the money spare to do so, and she now understands how a retirement fund will compound faster over time if your contributions are greater, particularly in the beginning.
Ayana has worked out that if she wants a comfortable retirement, 3% is just too low and she needs to have a higher contribution to her KiwiSaver from a young age, much like they do in Australia for example where they currently contribute I think 10.5%, which is about to go up soon. Ideally she wants to leave it alone for retirement and try to avoiding draining the account for a first home.
Ayana said it was her understanding that the more she invested younger in life the more that money could build over time. When she understood the concept of compounding returns and time in the market she wanted to make it work and she has continued with this thought. Now, at the age of 25 she has a $33k KiwiSaver balance and her investments are with the provider Simplicity in a Growth Fund.
What are her intentions with her KiwiSaver? She listens to a Kiwi financial writer that I have a huge amount of respect for, Mary Holm, whose view Ayana said is that ideally KiwiSaver is for retirement. But if she does want to buy a home, and didn’t have the time to save for it else where, although it would be nice to leave it there, accessing her KiwiSaver might be the only way.
Straight out of university she had a full time job lined up with a regional radio station with what she called a whopping starting salary of just $40,000. She was being ironic, in case you were wondering, following up with “I definitely went into communicaton and journalism for the money. Not”.
However, this job was the only thing she applied for. As any graduating student will, they spread their net far and wide in search of employment. I think I had learned enough about Ayana by now, not to be surprised that she had a number of irons in the fire.
She had applied for many things, one of which was an internship with a recording studio in LA. Soon after starting her radio job, she found out she had won this internship. It would pay for flights, insurance, her visa, three months of living allowance (which equated to about $10K NZD) and three months of invaluable experience with one of the most well known recording studios in the industry.
Her Kiwi employer was really supportive, after all, what an opportunity, and they gave her a short term summer job instead of a full time job, in February of 2020 she jumped on a flight and left to begin her three month internship.
But, you know what else got to America right around that time don’t you. Covid.
For two weeks, she was into it, starting her internship, seeing lots of famous singers, it was a really cool experience but then, extremely quickly, covid arrived and things became quite serious, quite fast.
One day she was like ‘this is nothing more than a cold’, she had rung her Mum and said she was going to stick it out, the next day they were televising the digging of mass graves. President Donald Trump was blaming everything on China, so that was chaotic in itself and she said it was just a really scary time.
On that day, she was too scared to go on the bus in case she caught this unknown illness and her hour long walk to get home took her past long lines at the supermarket with people panic buying. Ayana thought I dont’ think this is the place for me anymore.
The day after she told her Mum she was staying, she changed her mind and was booking flights home, managing to get on the last flight home that she could still use her ticket for.
She loved the very short time she had over there, but much like her brief Navy stint, sometimes plans changed and she was getting pretty good at making fast decisions now and adapting to whatever was coming her way.
She arrived back right at the time when none of us new what covid was about. We were all just adapting as we learned more information. Every day brought something new. She acted fast to find somewhere to put herself into isolation, because this was before we had isolation hotels and full credit to her she just tried to stay one step ahead and solve her own problems, and I really admire her for that. Although stressed, she had a clear enough head to work out what to do, plus her family and random members of the community stepped in to help, which is what this country is all about right?
As stressful as this unfolding situation was Ayana said that when unusual stuff like this happens she gets a bit of a thrill and you have to go into a different mode. It is a good skill to have because it lets you keep a clear head and look for hazards, weaknesses, strengths and opportunities.
While in isolation she started working again at the radio station that she was originally meant to work for. And that $10k NZD from her internship that was meant to pay for her three months, they allowed her to keep whatever was left, which was was immensely useful. To get out of her accommodation lease in the US, she had to pay another $1,000 in rent which she was able to cover and once she had tied up all the loose ends over there, she came out of the whole experience a bit richer, maybe by about $6k NZD. Plus, for a person working in radio, the stories she has to tell are ones people want to hear.
So after coming home in March of 2020 she stayed isolated and broadcasting all on her lonesome, which unsurprisingly got a bit weird after a while. By May, Ayana was just not enjoying the job, the isolation, missing friends and her whānau so she decided to quit at the start of June. At that point she thought I’m either doing something really stupid here or something really good. Considering there was talk of looming unemployment due to covid, she did take a big risk. But then no job is completely secure anyway, so if you are not happy, why not try to find something else?
A friend had been telling her how much she loved the work she was doing which was helping people who had a disability. So Ayana asked if there was any chance to do that sort of work. Talk about right time, right place, there was a job being advertised that was closing at 5pm that very day for a support worker working with adults with an intellectual disability. Ayana applied, and got the job!
She started in July of 2020, was guaranteed 30 hours per week, but there were extra hours if you wanted them. She was paid $25 an hour. Because of the qualifications she had gained in the Navy she was bumped up from the base pay rate of $22 per hour. Had she had more relevent tertiary qualifications her pay rate would have been $27 per hour. She said that this type of work has standardised pay across that sector.
She became an all round support person to people in their own homes. She helped with relationships, money, cooking, household work, exercise, fun things, and sports stuff. All sorts of varied and diverse things. And she loved it, finding the work really rewarding and meaningiful.
I think a good way to describe the types of work she has done is ‘diverse’. And I can relate, because my CV is equally diverse, it just makes life more interesting I think. Ayana’s trick is that she doesn’t get put off by a job description. She has learned to read a job description and make a good list of how the things she has done in different areas do apply and she pulls those things out when she applies. That is a good tip to take away from this, not to take a job description at face value. If you have some of the things an employer is looking for, even if you come at those skills from a different angle, go ahead and apply would be her advice to you and I.
Because her support worker role meant she could stick to 30 hours a week if she wanted to, she managed to pick up some freelance work in journalism, podcasting and radio and that helped bring in a bit of side hustle income and the various content she produced was as varied as it was fascinating. She wrote some radio ads, plus volunteered at a student radio station helping to both present and produce a show. She saw this as a valuable opportunity to learn new skills and a little money too.
When February of 2021 rolled around she overheard someone talking about the fact that Antarctica NZ were actively recruiting people to go down there to work for the summer season to maintain the base. She had always wanted to go there, so this stuck in her mind.
She went on their website and looked at the jobs they had going. She was not a chef, not a mechanic, not a water engineer either. Her various skills do have their limits. But there was a domestic role on offer, which required mostly cleaning.
She read the job description which explained that you must have heaps of commercial cleaning experience. At first glance she though, no, I don't have any of that. But she couldn’t let it go, it stuck with her.
Before she was put off by the job description she thought she would look more closely. She sat down and wrote down all the cleaning experience she’d had over the years. While in the navy, she cleaned all the time. When she worked at Subway, she cleaned all the time. In her role as a support worker she was helping people maintain a household, which you guessed it, is helping people clean. Plus, she had even done some paid cleaning work in her weekends for family.
The more she thought about it, the more qualified she became, so, she went back on the application website. Before it would let you progress with your application, you had to put down your experience, so, in light of her long list of former cleaner roles, she clicked “Heaps of experience”. And made it through to the next screen.
She wrote up a CV and cover letter that was personalised for the job and highlighted all her cleaning experience, and submitted it.
And she got an interview!
And of course, once they had the chance to meet her, could see she knew how to clean, they didn’t really care about the job itself. They could see she was capable. They cared more about how this 23 year old would cope being away from home for six months and fit in with a diverse group of people in one of the most isolated parts of the world.
She drew on all of her former life experience. Turns out she was already pretty good at isolation. And that Outward Bound experience that she had in her final year of uni came in handy again too.
In May of 2021 she found that she had secured a job in Antarctica. Her manager at her support worker role was delighted for her and happy to let her take a break, letting her know a job would be there when she returned.
That is something else that I noticed about her. Everytime she left a role, she left the door ajar, all of her former employers seemed to want to take her back. And that says a lot about a person. So, to those listening, don’t burn your bridges when you move on.
She completed the medicals and the prep required by Antarctica NZ and went to Christchurch in August of 2021 to undertake two weeks of induction training, meet her new colleagues, carry out first aid courses, learn how to put up tents, and basically be safe in the extreme cold. She then went into two weeks of isolation for covid, which ended up being five weeks, all the while put up in a Christchurch hotel. It was quite cushy she said.
In Septemer of 2021 she flew down to Antarctica for a six month period located on Ross Island.
She was on a $52,500 annual salary, but given she was only there for six months, that makes it $26,250.
But, apart from what you spend on the bar, or in the shop on tee shirts and souvenirs, it was ALL savings because you don’t pay for either food or accommodation.
They also offered an employment assistance programme and she took the chance to sit with a budget planner and together they went over her earning and spending and worked out a loose budget.
She said that most people think that these types of programmees only offer counselling, but in most cases they offer a wide range of support and she recommends we all dig into what is available. At any place she works she actively looks for the job perks that are available and we should all do that.
As for the work itself, the cleaning, it was long days and long weeks she said. She worked six days a week, so a 48 hour week, instead of a 40 hour week. It was more than what she expected in every way: More cleaning, and more work, but more opportunities and more fun than she thought she would get to do.
She thought that if she got to go into an ice cave once she would be happy. But she ended up in glaciers, crevasse, historic huts, in a helicopter, and was able to visit other parts of Antarctica, including the Dry Valley.
In February of 2022, she returned to the land of the long white cloud, Aotearoa.
Was it a once in a life time experience I wondered? Would she go back?
She would, yes, but not for a few years.
And who knows where she will be then. So, I’m glad that she made the most of the opportunity while she had it, just in case life takes her elsewhere, which I suspect it might. Just prior to heading to Antarctica, she met someone and they managed to maintain a relationship, even with limited communication, while she was away. There are many other parts of the world she is excited to visit, including, maybe, Antarctica again somewhere down the track.
She returned to her support work role soon after coming home but in June, she moved back into the radio industry, this time as a producer. I always wondered what a producer actually does, to me it sounds as vague as someone who works in I.T. But she said she finds stories and writes up questions for presenters, answers phones, and screens and puts callers to air. It is the background work that is involved in putting a radio show together. She now brings in an annual gross salary of $60,000 and this role has room for progression too, with a little pay bump after 3 months and then an increase if she were to ever move up into a senior producer role. Her employer pays 4% into her KiwiSaver - which believe it or not is considered generous in New Zealand. She is contributing 8% of her income into her KiwiSaver fund.
As it stands today, the 12% deductions from every paycheque, plus the extra $1,000 of voluntary payments she has made has brought the outstanding amount of her student debt down from $28,000 to $15,000. With the momentum she has she estimates that her loan will be fully repaid within three years, a period of time that she feels comfortable with.
The reason she is pretty comfortable is because she is intent on investing as much of her income as possible, because it’s her view and intention that this will make her more money in the long run. Remember that she worked out early on in life how compounding returns work. They need time. If she were to put all her money on her loan, her view is that this is money that is not invested.
As Ayana has worked out, life can and will throw you curve balls. She agrees that one fly in the ointment might be if she decides to move overseas, yet still has student debt. Currently she has no plans to move overseas, but she has thought about this scenario though. If she did decide to up and leave New Zealand she feels you could clear any remaining debt pretty fast and leave the country owing nothing.
So, where is the money she saved in Antarctica and the money she saves in her current job going to?
One of her investments is with provider Hatch and she has a balance of about $10,000 NZD. She chose them because she had USD left over from her LA trip and was able to transfer her USD straight into her Hatch account, so not incur any money exchange fee. Because of their $3 fee when you buy shares though, it makes better sense to invest larger amounts, so she invested this lump sum amount and she now saves up between $500 - $1,000 and invests that in one go, it makes the fee more palatable she said.
She said she is buying a Vanguard S&P 500 fund, a Vanguard Growth ETF, and a Vanguard Information Technology ETF.
She also has a regular investment of $100 a fortnight going into the Simplicity Growth investment fund and that has a balance of about $15,000. This is outside of the KiwiSaver fund that she also has with them.
So, I probably should explain a little more just why I lean on the side of just smashing out your debt or not taking it on in the first place.
Why didn’t she just use the money she had saved to cover her university costs? Although I didn’t ask, and I can’t understand why I didn’t, I find that it is not uncommon for people to save up money, yet take on debt. Having that cash in the bank gives them a feeling of comfort and security, even though on paper they might be in debt, often with a negative net worth. Coupled with that, the fact that student debt in New Zealand is interest free, the view is commonly that “it’s cheap debt, why would you NOT take it on and use OPM, or other peoples money”. Some even think that they will invest their own money instead and hopefully make money while they also borrow money. I understand the theory, but often the execution of it is poor. Many that I hear about end up with both debt and no money, having failed to invest it, or invested it and lost it, or just plain old spent it.
Most don’t get beyond the theory of borrowing money to invest.
At least, in the case of Ayana, she is true to her word. She has a plan in place to have her $15,000 of student debt gone within three years, and she is systematically also investing into the investments she has chosen. If you add up her KiwiSaver, Hatch and Simplicity balances, she has money invested of about $58,000. So, she is clearly walking the talk.
She banks with BNZ, and always has. They have a bank account that they call You Money and according to their website it lets you open up to 25 accounts, make unlimited withdrawals, it has no transaction fees, and no monthly account fees. Why so many accounts? They would be used for a variety of sinking funds.
At the moment Ayana uses up to nine accounts and she told me about six of them.
She has a bills account that her pay goes into and she distributes money to other accounts and bills from there. She has seeded this account with money and likes to keep a minimum of $1,000 in there, which is a good buffer to have. She does not give herself eftpos access to this account. Think of it as the distribution centre for her other accounts.
Another account has an eftpos or debit card attached and into here she pays herself $285 a week to cover food, petrol, socializing and what have you. If at the end of her week she has money left over she moves that into her savings account before topping up the account with a new $285.
She has a savings account that she touches only rarely and this also acts as her emergency fund. She puts money in, but takes it out very reluctantly. And this account actually has a fee attached if she does take money out, so it must be a sort of interest earning savings account. She recently finally made a withdrawal from this account to buy a $6,000 car in cash.
She has an account, which is commonly referred to as a Sinking Fund for short term savings to cover things like a dentist bill, a service on her car or concert tickets. She puts $150 a week into here.
One account is her travel fund which she adds $100 a week to.
She also has one shared bank account with her boyfriend that they each put $20 a week into. They use this money for shared activities.
I asked her if she felt in control of her money. That is a resounding YES.
I love this. A 25 year old with a good grasp on her own pūtea. Perfect!
If Ayana were to strike it lucky and $10,000 arrived in her bank account right now, I asked her what she would do with it.
She would go have fun with 10% of it and invest the rest. She would split it evenly between her Simplicity and Hatch investments.
One of the challenges when you are wanting to learn more about personal finance is finding someone to korero with. Fortunately for Ayana, her partner, is willing and able to discuss money.
Since leaving home, Ayana and her parents have talked a lot more about money. She said that her parents don’t have high salaries, but they ensure that the money they do make works for them. I was really happy to hear that these days they are constantly having conversations with each other about goals, money and what that looks like for them and where money fits within the life they want to lead.
There is also one other investment that Ayana began. With her Mum, Dad, and brother they each put $5 a week into a NZ ETF that they buy using Sharesies. It’s a way for them each to learn and talk about investing. It’s early days, but already the value has grown to $300 and the intention is that this money is for them to share and use at some later point.
Added to this she feels able to talk about money with her wider family and friends, and she would encourage you and I to do the same.
I know this is a hidden struggle for many of you listening, and it’s why the Phone A Friend one on one chats I have are so popular. Most tell me that it’s darn hard to find a range of people to chat money with. I’d encourage you to just keep trying because a lot of people who are deeply into their own personal finances, but keep it to themselves, are out there feeling as isolated as yourself. So, just keep looking for those people within your range of friends and acquaintances.
I asked what her money elevator pitch was, how would she sum up her approach to money?
She said that it is not how much you earn, it is what you do with that income that matters. She knows plenty of people who make a lot more money than her, but they are unhappy in their jobs. Ayana has worked out early in life that you can find a job you find value in, even if it is low paid and you don’t have to compromise your values just to chase more money. You will see from the jobs Ayana has already had that she doesn’t select jobs based on salary, but she has worked out how to be smart enough with her money to always live within her means and enjoy each new experience.
So, what might she consider her biggest financial triumph?
It is how much she has already learned about money and how much she is still learning. Through listening to podcasts like mine, hearing the wise words of Mary Holm, becoming familiar with financial terminology, learning about KiwiSaver and actually taking the simple steps and actually acting on the information.
Some other resources that she rates are Sarah from The One Up Project podcast. Ayana said she is up front in talking about her money, telling you what she earns and where she puts it and is a cool resource, particularly if you are younger. She also likes some of the work of Girls That Invest, because she really likes the Kiwi nature of their content.
Firstly, I have to start with a huge thank you to Ayana for saying yes to a chat - and to her Mum for putting her up to it. If people want to check out some photo’s of her adventures so far you can find her on her personal blog at: www.ayanamay.wordpress.com
My task now is to try to wrap up this episode in a way that encourages you to take action with your own personal finances.
You may have heard the introduction to today’s episode and felt a little inadequate. This young wahine has achieved a tonne of stuff in her short life.
Her proud Mum put her name forward because she thinks she is doing very well, not just financially but work-wise and personally as well.
She worked from the age of 13. Left school with money in the bank. Joined the Navy. Got a university degree. Started an internship in LA. Picked up work at a radio station, and as a carer and then, to top it off, spent last summer working in Antarctica. She takes life by the horns and is absolutely making the most of it.
She budgets, saves, invests, has loose goals and makes them happen.
There have been ups and downs, but she quickly pivots to Plan B or Plan C and just keeps moving forward. Throughout our conversation it was clear that she quickly chalks these experiences up to well, an interesting experience and she has a sense of excitement about her future.
Comparison is the thief of joy. If you look at your own life and feel inadequate, compared to Ayana, please don’t. She was as surprised by her journey so far as I was.
The point of this podcast is not to model your life on Ayana’s. It is instead to use the experiences of others as a benchmark in your own life. My hope is that by hearing how other Kiwis have gone about the business of living you will pull things out that you can use in your own life. And if you are doing well, tell yourself you are doing well. If there is something you have been putting off doing, take a leaf out of Ayana’s book and get busy doing it already! Take action.
She said of her own journey, it’s been pretty random so far and that she mostly goes off gut feelings rather than stats and data and while she does have a goal in mind to buy a home one day and retire early, she doesn’t have specific or detailed plans on when she is going to get there.
But I think the key to her interesting life is that she is trying to do the basics right, in order to set herself up. Apart from paying off the student loan, which is ongoing and she has a plan for, she moves from one thing to the next cleanly. A lot of people lurch from one thing to the next and leave a right financial mess in their wake. Not Ayana. By finishing something cleanly, she keeps her options wide open and is not weighed down by past decisions. She plucks out the useful bits and moves on. Because she has experienced first hand, that the best laid plans can and will change she is getting very nimble at moving on.
The one word that jumps out to me from speaking with her is “adaptable”. She has the basics right and that forms the basis of her toolbox. She is constantly adding to her toolbox of useful skills. So every time an opportunity comes along, or a challenge presents itself, she rumages around in that toolbox of hers and works out how to adapt her emotions, her skills, her resources, her time, and her money to keep moving forward in a positive direction. Given enough time, as her net worth grows and the invested assets that she is building up grows, she is going to find that an increased level of wealth is going to offer her even MORE fun experiences.
Interesting things keep happening if you are an interesting person and I’m looking forward to staying in touch with Ayana to see where life takes her next.
