Rebecca's Money Story

Rebecca discusses growing up with entrepreneurial parents and how creating discipline early on in her life has shaped her money story.

What are your money memories growing up ?  

I grew up with two entrepreneurs in my family. My mother had a business before she married my father and had children. After my father finished with national service, he ended up starting his own business, so I had two entrepreneurs that definitely coloured my view on money, the importance of money, the role of money in that in that family structure. I certainly learned what it took and the sacrifices that had to be made in order to keep a business running in good times and in bad. My parents were never ever shy about talking about money to us [me and my siblings].  I think that's an incredibly good lesson because we don't talk about money enough speed over to do taboo subject. But I definitely got a good understanding when things were going well and things were going badly in my parent's businesses, they were very transparent about that.  I also learned about the trade-offs and the sacrifices they made. We would have friends who were going on great holidays, we wouldn’t tend to do that, we would tend to visit friends, and relatives but not have flashy holidays. Their focus for their free cash flow was our education, so we all went into private education at the age of 11. My parents focused for their businesses was maintaining an income stream to allow that to happen, so that gave me a good understanding of the value of money.

How would describe your relationship with money?

My relationship with money now is good, but my relationship with money to be frank, has always been good. I had a long period of time before I got married and had children, where I was working and had a very good salary relative to my expenditure. So I started saving very early, 22 [years old] onwards in my life. That has been a very good experience for me understanding the value of using debt and the value of saving. So I would say I have a good relationship now and I'm now entering a new phase in terms of in my 60s I'm looking at passive income and very different to PAYE.

What experiences have shaped your money story?

The main experience [that shaped my story] is starting investing early and as early as possible. I mean we all know we can't make up for lost time, and it's very hard in capital terms to make up for the lost years that we don't save. So I learned really early how to deal with deferred gratification which is a very, very hard thing behaviourally for people to learn, we all naturally want things now. The trade-offs between saving and having something better down the line is very, very hard to do. But certainly, the benefits of starting investing and saving at 22, really came into their own and they certainly shaped my experience with money. By the time I got to my 30s or 40s, yes I had got myself established pretty early on in life which was very fortuitous.

What advice has shaped your money story?

I think the advice, I really learned was understanding leverage. So I learned how to understand, how to use debt in order to create longer-term assets and I've never been fearful of using debt. So I'm not a typical Kiwi, I never look to pay off my mortgage,  I've used it for my entire life and had a trade-off between having and using debt against assets to build up asset value. Obviously saving as well along the way so that's one of the observations that I would make about how I'm probably a bit different from the average Kiwi.

How has investing added to your story?

So I've always been a saver but I've been saving in the form of investments. So I've had a whole range of investments during my life from term deposits, which were very low-risk form of investments, right through to venture capital and Angel investing, that I do now. So I've run really the full spectrum of risk profiles of investing and I've been pretty good on my asset allocation. Between having some small number of high-risk investments and a much bigger level of low or medium-risk investments. So I think that's really coloured my view on the benefits of diversification, not putting all your eggs in one basket, and having a variety of different investments, but not putting it all on red and having all the high risk investments. Where I do now have the luxury now of being able to invest in startups, but you know those sorts of things have very high failure rates. So that's really coloured my story, the different types of assets I've had over time.

Are there any financial goals that you’ve been proud to achieve?

I think being a homeowner in my 20s, which is incredibly difficult for people to do now without parental support and without people being in that lucky position. But certainly for me, going on that homeowning journey and doing that early, gave me a real sense of security. The fact that I was earning good money, but I wasn't spending it all, and I was actually thinking about the long term. And the benefits of that dollar cost averaging over time, in terms of putting regular amounts of money away.  So I'm proud of that but I'm also proud of the way that I've used leverage and debt in order to create a higher asset value over time, I think I've used debt very responsibly so I'm pretty proud of that.

What advice you would give your younger self about investing?

I think that I probably be a little less harsh on myself than I was when I was younger, and recognised that there are times for spending and times for saving. You really have to go with the flow on that.  Yes it's great to be an early saver and start on your journey, but there will be periods where you just can't afford to do that. And it's time for you to you know invest in the form of a home or take time for yourself , whether that's travel going overseas, or something that actually makes your heart sing. It's quite important that you let yourself off the hook and you recognise it's a very, very long journey.  It's a bit like dieting you know, 80% of the time if you do the right thing you'll be in a good place. So I think I'd teach myself to be a little less harsh on myself than I was.

What financial goals are you working towards now ?

So I'm in my 60s now and that asset base that I put down, over the last 40 years has matured nicely, and that puts me in a position for a comfortable retirement. So I'm very focused now on switching from capital growth, which has always really been my driver. To actually looking at passive income and ways that I can generate a reasonable income to sustain a decent lifestyle and do the things I want to do without being on PAYE. Which has been my main way of developing my savings over the years.