"I recently purchased a property for $860,000 and spent $100,000 renovating it.
"Three months' later, I had it revalued at $1.84m. The property pays me $80,000 in rent (after all costs), per year."
Steve Goodey, property coach
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.
Property coach Steve Goodey spoke to Newshub about why he returned to investing in residential properties after 14 years plying his trade as a property developer, sharing a recent property purchase that makes him just over $200 per day.
Reeling off his 2022 goals, which are to increase his "weekly rent roll target", "achieve $50,000 in air dollars" and to "be less fat", Goodey believes that having more money does increase happiness.
As the property market returns to a more stable 'normal', opportunities will be available for people who are in a position to grab them, he says.
1. Are you a saver or a spender?
I've never really been a saver. It's not fun or exciting to save, but I understand the need for it.
I spend, but I spend my money, time and resources on investments and assets that will eventually pay me.
My target (wherever possible), is to spend my money on assets that create cash flow.
I then spend the cash flow on toys, family, holidays and lifestyle - or just more investments.
2. What's been your biggest financial lesson, success or failure?
I tried to be a property developer once, but rather than wanting to do the work, I really just wanted the result.
It just wasn't my passion.
This cost me a million dollars and 14 years of my life. I survived it, but it wasn't fun for a very long time.
I stepped out of my lane and quickly went back to my knitting with standard residential investing.
Many learnings were had, including a better understanding of my own limitations.
3. What do you know about money now that you wish you'd known sooner?
I used to think there wasn't much of it around - that's actually very wrong.
For those who make the effort and have the right habits, there's actually plenty of it. In my opinion, it's not about 'getting rich quick'. It's about 'getting rich for sure'.
Consider the age and stage of your financial life.
- In your 20's, you have fun and find your place in the world.
- In your 30's, you become more specialist and get very good at something.
- In your 40's, you make money and invest it.
- In your 50's, you start to earn more from your assets and investments than from your 'work'.
- In your 60's, you do whatever the heck you like.
4. A recent purchase you consider was value for money?
I recently purchased a property for $860,000 and spent $100,000 renovating it.
Three months' later, I had it revalued at $1.84m. The property pays me $80,000 in rent (after all costs), per year.
So this one house purchase made me $880,000 wealthier on paper (after renovation costs) and pays me something like $219 per day as well (that's pre-tax and dependent on occupancy).
5. What's your best tip for people wanting to save a first-home deposit?
Don't just save - be the master at saving.
I suggest sitting down with family and friends and letting them know you're on a mission for the next couple of years.
You're not going to be going out as much: you're going to turn into a total saver and be very tight on your money. You need them to support and assist you.
- Have a goal: write it down and put it on the fridge and on the mirror in the bathroom.
- Look at it every day, update it every week.
- Be fanatical and overdo it: your future self will thank you.
- Join KiwiSaver (if you haven't already) and aim to increase your contributions to maximise savings for the first home withdrawal.
6. In your opinion, is now a good time to buy property?
There's never a 'bad' time to purchase good quality assets - and there's never a 'good' time to buy a bad deal.
This year, I will be a little more conservative. Assuming the market cools or shifts, I'd rather start with an amazing deal that becomes just 'good'. I don't want a good deal that becomes 'average' or 'bad'.
For me, this is all about cash flow and buying assets that pay me, because you can't eat or live on paper equity.
7. Does having more money increase happiness?
Yes. In my unpopular opinion, it does.
I could joke that it's nicer to cry in a Lamborghini than a Toyota, but the reality isn't far from that.
Life is really a 'pay to play' platform.
Money gives people time and options. The easy part is getting money - the hard part is keeping it long term.
The really hard part is being happy with the journey and knowing when you have 'enough'.
The views expressed in this article are personal and are not professional financial advice.