"Always pay yourself first. Invest before paying your bills. This could be via KiwiSaver or another regular investment.
"Don't have an account you can easily access."
Chris Smith, general manager, CMC Markets.
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.
As an advocate of 'pay yourself first', Chris Smith, general manager at CMC Markets, suggests people put money away - preferably into an account they can't access - before paying the bills and any discretionary spending.
As a spender and risk-taker, Smith prefers to take a 'big picture' approach to money. That means focusing on things like where to invest money for long-term growth, rather than whether to buy coffee and brunch at the weekend.
Currently into buying electric tools, he considers his electric mower, vacuum cleaner and weed-eater as good value for money, as they save time.
1. Are you a saver or a spender?
If I'm honest, I'm more of a spender, but only after investment allocation.
I do spend if I believe there is value longer term. I certainly sit in the upper risk category.
When it comes to spending, I sit in the upper risk category. I have an investing mindset as much as possible and will spend if I believe there's value longer term.
Rather than deciding whether to buy a coffee or brunch over the weekend, which many people say you need to do to save, I prefer to worry about the smart, bigger life decisions.
2. What's been your biggest financial lesson, success or failure?
To focus on getting the big financial decisions right.
Buy quality, and let time take care of it also. If you look at the success of equities (shares) like Visa, Apple and Microsoft over a 10-20 year chart, quality often performs well long-term (as quality property has globally).
3. Has the Government housing announcement had any impact on shares and foreign exchange trading?
As the goal for many New Zealanders is still to save for a house first and foremost, I wouldn't say it's had an impact.
As the COVID-19 lockdown period had a major impact on interest in the financial markets, any other spike in demand is now hard to notice.
In the last five years, some really exciting innovation and accessibility to the financial markets has emerged, such as the creation of syndicate investments from investment funds, collectibles and commercial property, for smaller investors.
Investors from any age or wealth now have an abundance of options to start creating a diversified portfolio with less fees.
4. A recent purchase you consider was value for money?
At this stage of my life, I’m a bit obsessed with buying electric tools and things for house chores (which sounds super boring).
So I must say my electric mower, vacuum cleaner and weed eater give me great value for money - and more time.
5. What was your last impulse or 'fritter' purchase and how did you feel about it afterwards?
I’m currently doing a mini-renovation and that seems to have escalated in surprise costs, as I've started to notice other items to repair or replace.
There’s been plenty of extra impulse spending, but I’m trying to focus on the end goal.
6. What's your best saving tip?
Always pay yourself first. Invest before paying your bills. This could be via KiwiSaver or another regular investment.
Don't have an account you can easily access. For most, KiwiSaver has been a great solution.
7. Does having more money increase happiness?
I believe, money behaviour is very impacted by surroundings and social 'noise'.
Sometimes, we must reflect on how happy people are in countries with no welfare system or mass inequality divide.
I think having financial independence would calm the mind from physical stress and allow opportunities, such as more quality time, experiences with family, and chasing your bigger business goals that may be restricted.
Your financial success should be the by-product of hard work and doing positive things for the economy.
8. What’s the best money advice someone’s ever given you?
The power of compounding and leverage. If there’s no risk, there’s no option for reward.
Naturally due to my work background, I'm a big fan of financial investing books, particularly given there's a lack of real investment and money education in schools.
Read as much as possible and create multiple income streams.
The views expressed in this article are personal and are not professional financial advice.