"I've got it a lot better than many of my peers and I still wonder how I'll ever afford a house."
Brad Olsen, senior economist and director, Infometrics.
Money. It's the driving factor behind many life choices, but is it the be-all and end-all?
'Me and My Money' is a regular feature that investigates Kiwi attitudes towards money and what drives the choices they make. We also share financial learnings from COVID-19.
Newshub spoke to Infometrics director and senior economist Brad Olsen about the overheated housing market and what can be done about it, the merits of investing in a good bed and pair of shoes, and what matters more than money.
1. Are you a saver or a spender?
A spender. Life is for living and I intend to live it to the fullest.
I still save (eventually I'll give up the eggs benedict in favour of a house deposit). But I make sure to enjoy life along the way.
2. What can people learn financially from COVID-19?
It's amazing how much money you’ll save if you stay locked up at home and can’t fly overseas.
But seriously, I think COVID-19 has taught a lot of people that what you actually need to buy is much more limited.
3. What's the biggest financial lesson you have learned?
You can never know everything, but you can work to learn more and keep yourself up-to-date on how the world is shifting.
Knowledge is power. The better informed you are, the better your decisions will likely be.
Keep up with the world around you, otherwise you'll be left behind.
4. How can the overheated housing market be controlled?
The housing crisis is getting worse, but everyone's too busy deciding blame or searching for a silver bullet.
I've got it a lot better than many of my peers and I still wonder how I'll ever afford a house.
We can’t fix the housing market overnight. But every day we delay only exacerbates the problem further.
We need to increase supply by increasing state housing, making changes to infrastructure finance and zoning, plus some tax reform.
5. Give an example of a recent purchase that you consider great value for money
A good pair of dress shoes.
Gloria Hunniford once said, 'Always buy a good pair of shoes and a good bed, as if you aren't in one, you are in the other'.
I don't spend as much time in bed, so a solid pair of shoes is a must.
6. What was your last impulse or 'fritter' purchase and how did you feel about it afterwards?
A weekend away in Auckland. It was a great chance to recharge and catch up with some great friends. It was well worth the money.
7. If you have spare cash to invest, what's your preferred form of investment and why?
Generally, into my house deposit fund!
I don't have any strong preferences, but it'll depend on the homework I've done to get the numbers in line.
A diversified strategy seems to help. If I'm investing, it’s generally for the longer-term. I'm hoping to play around with Sharesies a bit more over summer.
8. Does having more money increase happiness?
No, but it helps.
Money gives more options and choices in life, and a bigger backstop if things go wrong.
But at the end of the day, what you do in life matters more than how much money is in your back pocket.
9. The best money advice someone's ever given you?
Never invest more than you’re willing to lose. In other words, be aware that all investments carry risk and consider that risk accordingly.