As part of our series exploring how New Zealanders live and our relationship with money, a retired professional explains the benefit of a lifelong saving habit, and why NZ Super ought to be means tested.
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Gender: Male
Age: 66
Ethnicity: Pākehā
Role: Retired professional. Volunteer in our local community.
Salary/income/assets: Annual pension income: Private pension $210,000, NZ Super $30,000. Assets: $5m+ in houses and investments.
My living location is: Small town
Rent/mortgage per week: $0. Houses paid off.
Student loan or other debt payments per week: $0. No debt.
Typical weekly food costs
Groceries: $400. We eat mainly organic.
Eating out: $50
Takeaways: $0
Workday lunches: $0
Cafe coffees/snacks: $20
Other food costs: $50 a week for pet food.
Savings: Ever since I was a child, I have put aside 10% of every pay cheque as savings, which I invested in the stock market. After 50 years I have over $1m of savings in cash and the stock market (through managed funds, not individual stocks). I have a second bank account where 10% goes in for donating to the church. There is a third bank account where I put in 10% to donate to charities. I still invest 10% of my pension of even though I am retired. It is hard to change the habit of a lifetime!
I worry about money: Never.
Three words to describe my financial situation: Secure through saving.
My biggest edible indulgence would be: Kapiti ice cream.
In a typical week my alcohol expenditure would be: $0. Stopped drinking at 25.
In a typical week my transport expenditure would be: $50. Have an EV and ride my bicycle everywhere.
I estimate in the past year the ballpark amount I spent on my personal clothing (including sleepwear and underwear) was: $750
My most expensive clothing in the past year was: My waterproof jacket.
My last pair of shoes cost: $200 for a new pair of sports shoes.
My grooming/beauty expenditure in a year is about: $200. Barber every two months.
My exercise expenditure in a year is about: $2,000. I have a very expensive bicycle so when things break it’s expensive to fix!
My last Friday night cost: $96. We subscribed to the ‘Mountain Film Festival’ and watched some great documentaries at home.
Most regrettable purchase in the last 12 months was: A used RV. You don’t buy them, just make a down payment and then pay lots of maintenance costs!
Most indulgent purchase (that I don’t regret) in the last 12 months was: Shokz bone conduction headphones. They are unobtrusive and work great when riding my bike or working around the house.
One area where I’m a bit of a tightwad is: Going out to eat. I have simple tastes and object to visiting restaurants which don’t offer value for money.
Five words to describe my financial personality would be… Prudent but generous when called for.
I grew up in a house where money was: Valued. My father was raised in abject poverty and we were not wealthy, but did not go without. From the time I was 10 he taught me the value of money – my birthday presents were savings bonds. Once a year we would go and get the coupon clipped and the interest was my spending money.
When I got my first job at 14 he taught me to put aside 10% of every pay cheque into savings via the stock market. Over the long run (and we are talking 50+ years) it returns an average of 7% a year. As mentioned above, a second 10% is put aside for the church, and a third 10% is for charity. The rest is for living on.
He avoided debt. I was taught if you can’t buy something with cash, find something cheaper or don’t buy it – unless it’s a house. Then, pay off your mortgage as fast as possible. When possible, buy used. That is how he lived and I am grateful to have had his example.
The last time my Eftpos card was declined was: Never.
In five years, in financial terms, I see myself: Very comfortable. When I retired I bought a private annuity pension so I have a guaranteed income stream until I die. It’s why I think they should means test NZ Super. I don’t need it and so I donate it to charity.
I would love to have more money for: Giving away. A few years ago we reached the point where we had more than enough for ourselves and family so have been actively making donations. We’ve given away about 20% of our wealth.
Describe your financial low: I returned to university for postgraduate studies after purchasing a house in the mid-1980s. The interest on the mortgage (>10%) was equal to my monthly stipend for studying. While I had the option to defer payments, I didn’t want to go deeper into debt so I paid the interest on the mortgage. This meant that the funds I got from my flatmates had to cover all my food and other living expenses. One time I only ate because someone paid me back money they owed me. Was worth the sacrifice since it meant I paid off my mortgage faster.
I give money away to… We donate over half the income from my annuity pension to charities, as well as the NZ Super. We took half of our investment portfolio and gave it as an interest-free 10-year loan to a charity. We probably won’t see it again but that’s OK as it goes to a good cause. We are also helping support some poor children from our community with funds to pay for their university. This is the greatest benefit from a lifetime of prudent saving and investing: being able to use our funds to help others. When we die most of our estate is being donated to charities.
