Books we love: How to Fail at Almost Everything and Still Win Big – Scott Adams

One of the books that had a really big impact on me was a book by the cartoonist behind Dilbert – Scott Adams.

The book basically goes through his various failures, how he overcame them and ended up being wildly successful.

Along the way he espouses a few principles that are particularly relevant for those of us seeking to become financially independent.  The one that resonated the most with me is that…

…one should have a system instead of a goal. The system-versus-goals model can be applied to most human endeavors. In the world of dieting, losing twenty pounds is a goal, but eating right is a system. In the exercise realm, running a marathon in under four hours is a goal, but exercising daily is a system. In business, making a million dollars is a goal, but being a serial entrepreneur is a system.

In FI terms saving more than you spend is a system.  Trying to save a specific figure is a goal.  Both have value but the system results in long-term habits that consistently move you forward.

For our purposes, let’s agree that goals are a reach-it-and-be-done situation, whereas a system is something you do on a regular basis with a reasonable expectation that doing so will get you to a better place in your life. Systems have no deadlines, and on any given day you probably can’t tell if they’re moving you in the right direction. My proposition is that if you study people who succeed, you will see that most of them follow systems, not goals…

For me, this book was really valuable as it reinforced the importance of mindset. I’m not naturally frugal and have had to work at it.  However, being frugal has become a system in my life and now I get a buzz every time I choose not to waste money.

“Goal-oriented people exist in a state of continuous pre-success failure at best, and permanent failure at worst if things never work out. Systems people succeed every time they apply their systems, in the sense that they did what they intended to do. The goals people are fighting the feeling of discouragement at each turn. The systems people are feeling good every time they apply their system. That’s a big difference in terms of maintaining your personal energy in the right direction.”

Definitely worth a read.  Try your local library!

Speculation vs Investment And How It Relates To Your Retirement

Most of us have had this colleague at least once or twice. The one that comes into work with a spring in their step (I can sense that you’re tensing up already) and over your coffee break chit chat regales you with how they’ve bought some shares or a piece of land.

The conversation usually goes something like,
‘Hey colleague, I’ve made this great decision in my life of buying this asset. I’d like to inform you that it’s been one of my best decisions, the value of it has already risen by $x! I knew it would do this because of various factors I’d taken into consideration before buying’

The inference being that they have some inside knowledge that others don’t or they really just want you to know that they’re a bit better off from last week than you are, without all that gosh darned work everyone else is putting in.

I can tell you this story in this way because I was this person for a few months and I’ve heard it from others a couple of times too.

I was 21 and was working in what essentially amounted to an insurance sales boiler room. Our customers bought reasonable insurances like car or home insurance, and we’d then thank them for their business by harassing them with multiple phone calls to buy worthless insurances that never paid out, with very high premiums compared to most and being encouraged to guilt them by asking ‘Do you have a plan for your family if ‘x’ happened to you or them?’. Not a nice job.

I decided I’d start using Plus500 on the side, an online share buying platform that uses leverage. This was my way to get into learning about shares with an eye to day trading. This was around 2011/2012 at the start of the Greek Debt Crisis.

Because I was clever and I’d watched the news, or so I told my colleagues, I’d mainly gone short on Greek shares (sold the shares before buying them, essentially I’d make money if they went down in value). I’d put in 500 of the Queen’s finest pounds and grown it to over £1000 within a few weeks. I justified this with a few of my own political biases and historical takes on the situation. I’m sure they hated me, I would have.

I continued to hold onto these shorted Greek shares and they continued to fluctuate. The news was telling the world that Greece will default at any moment and everything within it’s borders will be worthless.

Now you’re probably thinking that I’m going to tell you that it all turned to custard and I lost it all. Well, no. I cashed out at £750 – £250 profit in all.

So why would I tell you this? Well, the truth in this isn’t whether a profit or loss was made but what was learned.

The key point was that the news, and therefore my reality as far as Greece was concerned, had very little correlation to what the share price was now doing. The shares were rising in value, the opposite of my prediction, wiping out some of the gains I had made in that time. I’m sure someone can fill me in on why that happened but even then, it’s 20/20 hindsight at best.

Why didn’t I cash out at £1000? If I crystallised my gains by selling, what could I invest in next? How could I possibly know if I was buying in a peak or a trough and how quickly that might change?
The answer to all these was that I didn’t know, and if I did, I wouldn’t be working in a poxy call centre.

The only thing I learned about day trading was that I had absolutely no control over the result. Perhaps other more knowledgeable people do but little Andy here, whose credentials didn’t extend much further than filling in a Plus500 sign up form and debit card details certainly didn’t. Realistically, in this manner, what was the difference between picking a share and picking a horse? I decided to quit at £750 before one of my colleagues asked me how things were going and I’d no doubt have to sheepishly tell them I’d made a loss. This way I made a profit and didn’t lose face.

I’m certainly not saying don’t buy shares and I’m not saying don’t buy land (I might say don’t buy horses!), what I will suggest is don’t buy them like this, where you essentially guess off a hunch and make up your reasons to justify your decision after the fact.

Whilst I thought I was investing, simply because I was putting money into an asset with the intent of making a profit, I was really speculating. These terms are used relatively interchangeably colloquially but there are definite differences.

Which brings me to the overarching point.

What’s the difference between a speculation and investment? In terms of how we can separate the two in a practical sense, it’s about where you intend to draw the projected income from.

Investment – Your profit is primarily drawn from the income the asset produces. This can be in the form of rent or dividends.

Example: You buy a share in Acme Company for $100. It pays a 10% dividend which is the best return on your dollar you feel you can achieve.

Speculation – Your profit is primarily drawn from the increase in the asset’s value.

Example: Based on your astute observations, Silver is at a bargain price and you feel it’s got to go up in value. You buy at $100/oz and plan to sell once it hits $120/oz

It’s not to say that any single type of purchase, whether it be shares or property, is either a speculation or an investment exclusively. The same category of purchase can be either.


A house is bought for $500k. The purchaser buys as they expect local house prices will rise due to new transport links with the city centre, the intention is to sell once it hits $750k in value. The rent collected is secondary. This is speculation.

Another house is bought by a different purchaser. It provides an 8% return in rent, whilst the holding costs only run at 5%. The purchaser buys as they want to to use the 3% difference to supplement their regular income. The potential rise in capital value is secondary. This is investment.

Both have bought a house. Both have bought with the intention of drawing a profit but the methods of drawing that profit are entirely different.

That’s also not to say that investments can’t rise in value and be sold off at large capital gain. They can and do, but it wasn’t the primary intention of the buyer.

With speculative instruments, when you sell, you realise the loss or gain. This is your profit and you must continue to speculate with new purchases to continue to draw an income in this manner.

The risk is higher with speculation as you’re drawing your profit from an unknown variable, namely which way the price will go and by how much. If people knew where the price was going, it would already be at that price. The rewards can be massive but equally the losses can be devastating.

Even the best of us can only guess the outcome correctly a small percentage of the time which is why investments make more sense for the early retiree as the bulk of their retirement plan. Sure, you’re less likely to have that one off win where you make bank for life with little to no effort, but you’re also less likely to lose or go bankrupt if your investments are wisely chosen.

With investments, the owner draws an income from the asset for as long as they own the asset. The owner knows approximately what the income will be from the asset from day one. Investments are therefore more ideal for a steady income and an early retirement.

The risk is mitigated with an investment because if the price does drop, the owner can continue to hold on and ride out a market downturn without any cost to holding the asset as the income will likely continue to cover holding costs.

Neither investments nor speculations are inherently good or bad, and the advice here is neither prescriptive nor proscriptive. Both are necessary functions of markets and hey, a little speculation here and there can be fun, but being able to distinguish and understand the risks is really important to your early retirement and financial security.

The advice is to not bet the farm on speculation and choose strong, steady investments for the bulk of your portfolio.

SmartShares, SuperLife, Simplicity & InvestNow. ETF & Index Fund Investing in New Zealand

(This is a repost from, originally published on 13 June 2017)

ETF and Index Fund are simple, low-cost and diversified investment option with a positive result in the long term. It plays an important part in my plan to achieve financial freedom by only do a few smart things and nothing much else. To put my money where my mouth is, over 90% of my investment are in ETF and Index Fund. I believe everyone should have at least some investment in those products. SmartShares, SuperLife, Simplicity, and InvestNow are the four investment services in New Zealand that I am currently using. Here is a breakdown of them.

The Breakdown

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Compare four ETF/Index Fund investment in NZ. Best option highlighted in yellow


New Zealand Stock Exchange owns SmartShares. They issue the ETF for local share markets such as NZ Top 50 (FNZ), NZ Top 10 (TNZ), NZ MID CAP (MDZ) and NZ Bond (NZB). They also repackage ETFs and index funds from oversea to sell to New Zealand investor. Those ETFs cover Austraila, Europe, Asia Pacific, US, emerging markets and world markets. You can check out the list of offering here. The most popular oversea ETF is US 500. It tracks the top 500 companies on US stock example, most of them are top international corporations.

Some people mistaken SmartShares as an investment service provider but in fact, SmartShares is an ETF issuer. Their job is to manage and issue ETF for New Zealand stock exchange. That’s why investor can’t log onto SmartShares site for track their holding because they are not managing the holding for you (hence there is no annual admin fee).

If you invested in their ETF, you are basically buying a share on the share market. You can but those ETF directly on share market if you wish.  SmartShares will direct investor to Link Market Service to register and track their ETF holdings. An investor can track their holding on other services like ASB securities, ANZ Securities or Share Sight.


Superlife offer the most ETF and Index Funds investment options in New Zealand. They not only offer SmartShares ETF in fund format but also provide managed fund and sector fund options for the investor. All of those funds invested in a passive index fund or ETF.

The Sector fund cover different country (NZ, AUS, Overseas), industry (Property, Shares) and investment vehicle (Cash, Bond, Shares). Those are great options to build your own balanced and diversified portfolio.

The Managed Fund is is a grouping of financial assets such as stocks, bonds, and cash equivalents. The nature of those financial assets can be classified into two groups, income asset, and growth asset. Income asset includes cash and bond. They tend to carry lower risk levels and, therefore, are more likely to generate lower levels of return over the long term. Growth assets are shares and property. They tend to carry higher levels of risk, yet have the potential to deliver higher returns over longer investment time frames.

Superlife managed fund have different names, like SuperLife 30 or SuperLife 80. The number at the end show the target portion of growth asset in that fund. Superlife 30 will aim to hold around 30% of growth asset and 70% of income asset in the portfolio. So this fund is a low risk (or conservative) fund. On the other hand, Superlife 100 will aim to invest 100% into the growth asset. So the risk is high. Here is a breakdown.

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SuperLife offer the most options, functions in the breakdown. The entry requirement is basically nonexistent, and the cost is relatively low. That’s why I recommend the beginner to start with Superlife.


Simplicity started as a nonprofit KiwiSaver provider. They provide low-cost KiwiSaver options to New Zealander while donating 15% their income to charity. Simplicity recently opened up their investment fund as non-KiwiSaver options as investors can deposit and withdraw their investment anytime they want. Simplicity only offers three managed funds as conservative, balance and growth fund. The majority of Simplicity fund invested in Vanguard’s funds or ETFs. The management fees are the lowest in New Zealand at 0.31% for managed fund. However, the initial investment requirement is $10,000.


InvestNow is a new online investment platform. Investors can directly invest into the selected fund on their platform with as little of $250. InvestNow does not charge any transaction, admin, setup or exit fee at this stage. Investor only needs to pay the management fee on an individual fund.

The biggest advantage of InvestNow is to allow the investor to directly invest into two Vanguard index fund in Australia. They are Vanguard International Shares Select Exclusions Index Fund (currency hedged and non-hedged version) with management fee at 0.20% and 0.26%. Those two funds are not PIE fund, means you will have to do your own tax return. For under 50k holding, you will only have to do tax return on dividend received, which is not that hard. You can check out the detail in this blog post.

Fund Comparison

I picked a couple of index funds and ETFs from each provider and made a comparison. Here is the breakdown.

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As you can see, most of the option’s underlying asset are Vanguard ETFs and Index Fund. That’s basically what I am trying to do on my international exposure, putting money into low-cost Vanguard cost for long term.


Me try to invest in NZ 2
Accurate description of my international investment strategy.


  • Superlife have the most function, investment options and easy to start. Also have the lowest cost aggressive managed fund in NZ. It is great for both beginner and experience investor.
  • Simplicity have the lowest cost managed fund in Conservative, balance and growth aera. Great for anyone with $10,000 to start investing.
  • InvestNow user can easily invest in Vangaurd index fund in Australia with 0.20% – 0.26% fee. Great for someone who can handle their tax return on dividend recived (not that hard) or calculate under FIF rule.
  • SmartShares is good if you wish to buy ETF on share market.
  • There are other ways to invest into passive fund and ETF in New Zealand, like ASB Investment Fund, AMP, and Lifestages. However, the cost on those fund are quite high compare to these four services, which defeat the purpose of low-cost passive investing.
  • New Zealand investors can buy Vanguard ETFs on Australian Stock market. The management fee can go as low as 0.04%. I will go into that later once I’ve done it myself.

Email or follow me on Twitter @thesmartandlazy if you have any questions.

Choosing your free hour of power

For all Electric Kiwi customers out there, here’s how to view your electricity usage to choose best time for your free hour of power.

  1. Log in to your account
  2. Scroll down to “Analyse your usage between”
  3. By default you’ll see last weeks power usage
  4. Now change the date range to be a specific day that’s representative of your average power use
  5. You’ll get a nice easy to read graph that breaks down your power usage in 30 minute chunks
  6. Find the off peak hour in that you used the most electricity, and set it as your free hour of power
  7. Now up your electricity savings by moving any additional power consuming activities to this time slot

Not an Electric Kiwi customer? Get you free hour of power and $50 credit  at

Disclaimer, I also receive $50 credit if you sign up from the link above. 

Got your own tips on how to get the most out of the free hour of power? Let us know in the comments below. 

Compare ETF Fund Cost between Superlife and Smartshares

(This is a repost from Published on June 8, 2017)

Recently SuperLife and SmartShares lower the management fee on four ETFs. So it’s time to update the ETF cost comparison. Also, I am changing my initial recommendation on starting your investment with SmartShares then switch to SuperLife.

Cost update

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Both Superlife and SmartShares lower their cost on Total World, Europe, Asia Pacific and Emerging Markets ETF. The reason was Vanguard reduce their underlying fee, so SuperLife and SmartShares passed on the cost saving to its customer.

Should you start with SmartShare?

In the past, I recommended to start your ETF investment with SmartShares then switch to Superlife when the fund hit a certain amount. The main reason was Superlife charge a $12/year admin fee, it will cost more in term of percentage for beginners with a small amount of investment. However, that calculation ignored the $30 one-off initial fee, the cost of setting up extra funds with SmartShares and the exit cost.

Let’s look the following example for an investor started NZ Top 50 ETF with $500 initial investment and $50/month contribution for 5 years. NZ Top 50 ETF 5 years annualised return is 16.49%. I’ve put it in a simple simulation to compare investment between SuperLife and SmartSharesand for 5 years.

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SmartShaers started with $30 less due to the setup fee. That $30 initial different made Smartshares cost more for that first 3 years, (38 months to be exact). By the end of the 5 years, the different between Superlife and Smartshares is only $24.09. That’s about 2 years of SuperLife admin fees and represent about 0.44% of your holding. That percentage will decrease if we increase the investment amount. So, there are some saving with Smartshare, but the saving is insignificant.

Also, there are some other benefits with SuperLife.

  • Better user interface compare to Link Market Service
  • Easy to switch fund with no cost
  • No setup cost for new fund
  • More fund options included sector fund and passively managed fund
  • No withdrawal cost

Personally, I think those benefit worth that $12/year with Superlife.

My Recommendation

If you wish to invest in S&P500 ETF, NZ Cash ETF and Emerging Market ETF, start with SmartShares because their management fee is still lower than SuperLife.

For any other ETF, just go and join SuperLife. You will be much better off.

If you are currently holding SmartShares ETF and want to switch to SuperLife. There is a way to switch without open a brokage account and pay $30 to sell your Smartshare. However, you will have to email me on that.

Email or follow me on Twitter @thesmartandlazy if you have any questions.


How to Set Property Investment Goals

Property investment can appear to be a minefield, with investors either making huge windfalls or crashing and burning… depending on what you read in the news.

Ignore the news because in reality successful investment is methodical and almost boring. Good investors devise a repeatable, controllable process and rarely deviate from it. They have clearly defined what they are working towards and stick to the path.

Many successful investors, even if they don’t know it, use S.M.A.R.T goals, which means their goals are:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time bound

What is a S.M.A.R.T goal? Lets illustrate that with an example of what it isn’t.

“I want to be able to give up working someday”…. ummm, this matches none of our criteria for a S.M.A.R.T goal! How do you measure “someday”.

“I want to be able to retire at 55″…. OK, we have a deadline but not much else to go on.

“I want to have $50,000 in passive income to retire on by the time I turn 55″…. Getting better, we have a specific goal and a deadline. The goal is also measurable, so 3/5. But if you spend $60,000 per year you still can’t retire (unless you plan to cut your spending, hint hint!) and what if you are 54 years old and have no passive income – the goal may not be achievable.

“I want to invest in property to build up a passive income of $50,000 per year over the next 20 years, by which time I will be mortgage free in my own home and able to retire on that amount.” Boom, $50,000 is specific and measurable, it is probably achievable to do this over 20 years due to the miracle of cumulative gains, we have a deadline and we know we will be able to retire on that amount.

Why is it important to distill your goals? It does two key things for you

  1. You gain clarity on what actions to take to move towards your goal
  2. You gain peace of mind from ignoring distractions that would deviate you from your chosen path

When somebody asks me how to property my first response is to ask why they want to do so, what I’m really looking to see is how clear and S.M.A.R.T are their investing goals. Once those are clear in your mind the “what”, “how”, “where” and “when” components of property investment are far easier to work out.

Why Your KiwiSaver Employer Contributions Are Less Than Yours When You Are Both Paying 3%

(This is a repost from, published on June 2, 2017)

By New Zealand law, employers are required to contribute to their employee’s KiwiSaver account or complying fund at 3% of their gross salary or wage if the employee has joined Kiwisaver. However, when you look into your KiwiSaver contribution transaction record as an employee, you may notice the employer contribution amounts are less than your employee contribution.

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Here is an example, assume your weekly income before tax is $1200, $62400/year.

Without KiwiSaver, your take home pay will be $1200 – 225.77 (PAYE) – 16.68 (ACC) = $957.55.

If you join KiwiSaver and contribute 3%, your take home pay will be $1200 – 225.77 (PAYE) – 16.68 (ACC) – 36 (KiwiSaver) = 921.55. On your KiwiSaver statement, your contribution will be $36, however, your employer contribution will be $25.2, not $36. Why?

The reason is that employer contributions are taxed under Employer Superannuation Contribution Tax (ESCT). Your employer pays out an extra 3% of your income to KiwiSaver but part of that went to IRD as tax.

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You may think ‘If both employer and employee are paying 3%, how come the cash hit my KiwiSaver fund is different?’ (That was me two days ago)

Let’s break it down in detail. The 3% contribution is calculated based on your income before tax. In our example, the weekly 3% KiwiSaver contribution will be $1200 x 3% = $36. So both employee and employer will pay $36 each into the KiwiSaver Fund.

Here is the tricky part, on the employee contribution, it was calculated based on pre-tax income and taken out of after-tax income. So the $36 will be taken out after they deduct PAYE and ACC and that $36 will reach your KiwiSaver fund without IRD taking out any more tax.

On the other hand, employer contributions will be taxed under ESCT. So 30% of $36 = $10.80 will go to IRD, and the cash that hits your KiwiSaver fund will be 36 – 10.8 = $25.2

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Therefore, I was wrong by saying you will have 100% return on your employee contribution. It’s more like 67%-89.5% return. It’s still an unbeatable risk-free guaranteed return and one of the best investment in New Zealand.

Check out IRD website on ESCT for more information.

Why You’ll Never See A Downturn Coming And How To Grow From It

The year was 2015. Yeah, not that long ago really but it sticks in my memory as a tough year.

Things had been going pretty well for me financially up until this point. I’d hit 25 years old and managed to garner 4 rental properties all providing nice returns on investment by the room.

The Christchurch rooms market was steady, a single room went for a minimum of $160pw and a double for $220. I had one house that now became a 6 bedroom, due to the addition of a sleepout in the garden that was returning $1080pw. This was from a properties that cost about $250k, so as you can imagine I was pretty happy.

Christchurch was riding the coat tails of the earthquake. As much as it brought great difficulties and undoubtedly did a great deal of hurt to a lot of people, there was undoubtedly a temporary economic boost to the area.

My rooms were mostly rented to international EQC workers. They weren’t looking for somewhere to settle down for a lifetime, just somewhere to rest their heads for a few months whilst working. Somewhere that didn’t cost them the earth as even my high rental rates were a little below the norm.
With having a number of people in a house, wear and tear starts to accumulate. Chips out of paintwork, the garden gets overgrown, the house gets untidy but you know, at the time, it didn’t feel like a big deal.
I knew I could put up an advert on Trademe (those were the days, I’ve not used Trademe for renting out rooms for years now!) and my phone would ring off the hook for half a day until the room was full.

‘Why should I improve things?’ I thought. ‘These places are shooting up in value, the tenants will only break stuff anyway and the rooms get rented out in no time.’

So, it went on and by this stage, the houses were all getting pretty shabby. I hadn’t put much aside for them because with such strong cashflow, I could always rely on just taking any maintenance out of that, right?

Then May hit. It was cold and unforgiving in every sense.

The first signal something was wrong came early on but it sounded just like the normal ebbs and flows of the year. There was a mass exodus and roughly 6 rooms emptied out within 2 weeks. This might sound drastic but really, it’s not that unheard of in my end of the market as travellers don’t like winter so much. They move on to the next place with a job and a bit of sunshine.

Now I put up the ads, I did put up some pictures I’d taken on my phone, which I hadn’t before.

There were no calls.

I checked the ad, made sure I hadn’t mistakenly put my phone number down wrong. Nope, all correct.

Then a couple of days passed. Nervously, I decided to drop the price by $10pw. There were a couple of texts but I didn’t get any replies when I responded to them.

Then another $10pw off. The cost of having these rooms empty, maybe $200pw greatly outweighed a measly $10pw in lost potential income.

A few calls and a couple of viewings. People came over to look, they were the exact sort of person that only a month before would have jumped at the chance to rent a room at these prices. What was happening?

The air in which they viewed was entirely different. Before, the choice was in my hands, it was a complete sellers market and everyone knew it. They used to talk to me on a level, I’d learn a little about them as a person, what they did, what they’re wanting to do in Christchurch and maybe share a joke or two and we’d come to an agreement.
Now there was no eye contact, just a quick scan around and a short ‘thankyou’ and ‘I’ll let you know’. It felt alien. ‘I’ve just got a few more places I’d like to look around’ became the new catch phrase.
When asked, the house viewers simply said that it’s nice but not what they’re looking for. ‘Was it the price?’ ‘Was it the location?’, usually met by replies of ‘No, no it’s fine, just not for me.’

In business, people don’t usually tell you what’s wrong verbally, they only say through their wallets. They’re nice people and they don’t want to be the ones to hurt your feelings.

I dropped my deposit amount from 3 weeks rent to 2 weeks. I had a little more luck, I managed to fill a room or two but not in an ideal way, short termers that didn’t quite fit my ‘ideal tenant’ shortlist.

The rents came down another $10pw and there were enquiries but still few takers.

I removed a sleepout as some of the feedback suggested that people were no longer willing to live with 7 other people in a house, and what was once commonplace was now unheard of.

Then an entire house full of Irish guys decided to move into another house together, including taking the guy that had just moved in a few days prior. I’d really worked hard to get him in too!

This all happened within a few weeks. The speed was overwhelming. I had to do something fast as I was hemorrhaging cash.

Don’t get me wrong, I knew on some level that this EQC boom wouldn’t last forever but I always thought I’d see it before it hit and be able to make adjustments. The oft vaunted ‘soft landing’ (Clue: There’s no such thing, booms and busts are inexorably linked). In a lot of ways, this is borne out in the housing markets up north at the present and explains why bubbles happen. We all think we’re smarter than the other guy but we can’t all be right. The only truths we can accept is that we are all naive and that no one really knows anything.

By this time I was getting exhausted and frustrated. Rooms empty everywhere and the rooms that were full were at ‘discounted’ rates.
I sat in the car explaining my thoughts to my girlfriend. Possibly more like whinging and whining. She’s a fantastically patient girl and equally knows how to get me to do things and we agreed that I’d show her around as though she were a potential tenant and go from there. I was a bit nervous as, honestly, I was a bit fragile by this point. Constant rejection in the face of your best efforts can do that.

We opened the front door of the first place. Her review was blistering to me.

‘There’s hand prints up the walls, this furniture needs replacing, the shower curtain needs replacing, the bedding’s not up to scratch, the garden’s a nightmare, the TV remote doesn’t work, there’s no lady bin in the toilet, the walls need repainting………’

It went on. It was harsh and painful but it was exactly what I needed and we both knew it. I wasn’t emotional or silly enough to not take her advice. We spent weeks replacing nearly every article in the houses, cleaning, gardening, painting and making repairs. The most painful thing is having to spend thousands you’ve only just got when you’re losing money as it is. At times it was a juggling act with paying bills and doing the necessary work. I wasn’t really sure whether it was terminal and wouldn’t pay off.

Rents eventually settled at around $150 for a single and $190 for a double so pretty steady. Rooms filled up again. It’s never got back to those heady EQC days and a part of me wouldn’t want it to. I became complacent and weak as a result. I let hubris and laziness take over my business.

Over the last 2 years it’s been a process of constant improvement. We’ve started our website. I’ve learned a bit of amateur photography and my girlfriend helps me stage the rooms as I tend to get a little too practical. The houses have been repainted inside and out. The process is still ongoing, I’ve got bathrooms to replace and various other projects. Marketing has moved to Facebook, rather than Trademe and we’ve changed pretty much every supplier of anything. My personal spending has gone through the floor and frankly, I’m still in ‘survival mode’ this long after, I sometimes fret I haven’t done enough and will end up like this again. Rents have edged upwards ever so slightly. I managed to negotiate my interest rates down by around 1% on average which was an unexpected boon that really saved my arse.

My message is, if any of this sounds familiar, if you’re too comfortable, too complacent and not keeping a decent cash buffer and constantly improving your portfolio, you may be at risk. If you think it’ll never happen to you and you’re too smart and you’ll see it coming long before it hits or that rents only go up and interest rates only go down, you are most definitely at risk. I’m lucky and had great people around me and got a second chance, others might not be. Had interest rates gone the other way, although I would have likely survived, it would have been a far far more painful affair.

My thoughts as I was writing my last blog post on property was that it sounded too mechanical. It’s easy not to include the trials and tribulations, the self defeating psychology we all have and our own fallibility but realistically it’s the truth. The more we share the bad as well as the good, the more we can hopefully help others avoid it.

Are you overinsured? Ask yourself this one, simple question

As a species, we’re pretty good at surviving. Pat on the back for all of us!

As part of this, we’ve developed millennia of ingrained primal habits and conditions in an attempt to avoid all the hazards life throws at us.
Fortunately, it’s done us pretty well so far. Unfortunately, it’s not a system designed for the 21st century first world, where you’re never likely to run out of food but you might foreseeably prang your motor or lose your passport in a foreign land.

Nothing life threatening but it’s all the same response.

n.b. I’m not including the U.S. due to it’s differing views on healthcare. Your life might be at risk here, luckily there’s plenty of U.S. blogs you can search through for more info on this.

Our latest attempt at group safety, conjured by Lloyds of London just over 300 years ago, is insurance. On the whole it functioned quite well in the beginning.

The premise was, prior to insurance, if you sent out your ship (unfortunately at these times, it was usually involved in the slave trade) and this ship then was lost, you would lose your entire investment. This is a big risk to take.
However, if there’s 100 ships and the odds are that only 2 will be lost per journey, by spreading the risk amongst all the ship owners, with a margin on top for the insurer, no one would ever lose everything and the insurers made out too. What’s not to like?

I’d imagine this was quite a logical affair originally. Edward Lloyd opened his coffee house, shared all the recent shipping information with those with vested interests and saw an opening. But even he, the inventor of insurance as we know it, when it was in it’s infancy, saw that it could be bought as an emotional response.

Whenever news of a ships loss came into the establishment, he would ring a bell, reminding everyone in there that it could be their ship next, and if they don’t keep paying up for insurance, they could be out on the street and broke within no time. Whist the premise definitely made sense, this one simple act made every loss tangible and instilled fear into all that heard it.

Emotions are wonderful things for marketers, easily tugged at, and once you’re in a state of fear, you can be sold anything. It’s often subtle but you hear it played out in peoples everyday reasoning.
‘You must buy a large 4×4, otherwise if you have an accident, your children could die.’
‘You must have an expensive alarm system with 24 hour, pay by the month monitoring because there’s bad people around every corner that want to hurt your family – for reasons unspecified. ‘

You know the ones.

And the thing is, the human brain is notoriously bad at assessing risk. On this page, they use Thaler’s experiments on risk as an example

‘Peter Bernstein cites an experiment by Richard Thaler in which student were told to assume they had just won $30 and were offered a coin-flip upon which they would win or lose $9. Seventy percent of the students opted for the coin-flip. When other students were offered $30 for certain versus a coin-flip in which they got either $21 or $39 a much smaller proportion, 43%, opted for the coin-flip.’

So both scenarios were identical, simply framed differently. However when presented as a potential loss, the human brain runs away to it’s safe, known quantities as fast as possible. This is why it’s so easy for insurers to take us on a ride. We cannot handle loss.

All we need to do is remain rational and we can reap the rewards others run away from.

Right, so how do we remain rational, with respect to insurance?

You ask yourself one simple easy question.

‘If I didn’t have this insurance, would there be any chance, however remote, that I, or my loved ones, could be sent bankrupt as a result?’

When presented in this logical sense, no insurer can start whining at you to ‘Think of your children’ or ‘Do you have a plan in place if you did lose 2 legs an arm and an eye?’. You don’t need a degree in statistics or to become a qualified actuary and it works in 100% of situations I’ve come across.

This is the point of insurance, not to save you from ever having responsibility for your problems in life as some use it. As much as we’d all like to, none of us will ever get away from those.

So let’s run it as an experiment –

Car insurance

Do you go Uninsured, Third party, Third party fire & theft or Fully Comprehensive? I suspect most people go fully comprehensive but is it the best choice?

Now by asking the simple question above, we can work out that you more than likely won’t be made bankrupt by losing your car, whether through an accident, a fire or a theft. If it might send you bankrupt, perhaps you’ve bought too much car for your income and asset levels and need to revisit.

However, with no insurance if we were to have an accident, we could cause ourselves to lose millions in damage claims and court cases so clearly this isn’t the correct option either. Logically, the best and most efficient option is Third Party.

By doing this, you’ll save yourself in the region of $500 per year.

Home insurance

Here the options are uninsured, insured with a low excess, insured with a high excess.

Uninsured makes no sense in this option as the loss of a property will send the vast majority of us into bankruptcy pretty quickly.

So we need insurance, now lets look at the excesses. Low excesses of $500 or a high excess of $5000. Bear in mind, you’ll only be using this insurance in the event of a total loss or major damage and the insurance company don’t charge you $5000 to come assess, they simply take it off your payout.

Would it really make that much difference to you if you were only paid out $95k instead of $100k? You couldn’t find a way of saving that on the repair somewhere?

So if you can afford $5k to come off, it’s the high excess, if not, it’s the low excess.

You’ll save around another $500 a year going for the low excess.

Life insurance

Would your partner be comfortable, financially speaking, if you passed away tomorrow with no insurance? Or would they have to work 3 jobs, sell off the family home whilst raising 3 kids to stave off bankruptcy? More potential situations here but the same principle applies, could it send your loved ones bankrupt? If yes, get it – and just enough to be comfortable. If no, whats the point?

Guess how much you could save here? Yeah, about $500 per year.

Junk insurance

Mobile phone insurance, extended warranties, insurance for sending a parcel, personal accident cover (I used to sell it, it’s awful), all the extra insurances they tack on to your home and car insurance. By this point in the post, I’m hoping these should all sound like thoroughly unworthy candidates for your hard earned.


You know what the best thing about keeping your insurance levels under control is? Not many opt for these levels of cover, other than misers and scrimpers like you and me, therefore they’re extremely competitively priced! They’re sold more with an eye to logic than emotion and are easily comparable against other companies policies.

That’s not to say you won’t lose sometimes. This year I’ve lost 2 windscreens, one through my own fault, loading in timber, one through a guy throwing a bottle at my car. It’s cost me $550 but it’s an aberration. Statistically, you only lose a windscreen every 12 years so hopefully, I’ve got 24 years left with no windscreen losses! Every year from now on, I’ll still be saving $500 per year.

Keep it out of the insurers pockets and send it to your superlife instead.

FireKiwi’s Frugal Food Tips

This is a collation of the best ideas from the last years of discussion on the Kiwi Mustachians facebook group – credit to everyone who recognises their ideas below. If you have any more to add, please share them in the comments!

  • Take packed lunches to work – café or takeaway lunches can be a hard habit to break, but this one really adds up to big savings. If you don’t like sandwiches, try making double-sized dinners and bringing leftovers to work for lunch, or experiment with lunch burritos, soups or salads.
  • Instead of buying supermarket ready-meals for busy nights, cook double or triple portions of your favourite meals that freeze well, and keep a small stock of them to reheat when there’s no time to cook.
  • Do your best to avoid extra trips to the supermarket. You’ll save petrol (if you drive) and time from making only one trip, and you’ll be less tempted by snacks, or reminded of things you “need” if you’re not walking up and down the aisles as often.
  • Plan your week’s meals before you shop. If you know what you’re going to cook, you won’t buy as many perishables that you can’t use in time, and you’ll be less likely to arrive home during the week to bare cupboards and no plans and give in to the takeaways.
  • A Planning Nerd extra: We keep a list of meals we know how to cook on magnets on the fridge, move them left when we have all the ingredients for them in the house, and put them to the bottom of the list when they’re eaten. This has eliminated uncountable numbers of painful ‘I don’t know, what do you want to eat?’ discussions.
  • Some items are more expensive at the supermarket. Visit your local bulk store (eg Bin Inn), Asian or Indian supermarkets, Mad Butcher etc and see what staples you can stock up on at a low price. You can compare with some supermarkets’ prices on your smartphone. Don’t drive round 5 different shops every weekend, that’s too much like hard work! Some staples to look for cheaper include rice, legumes, baking ingredients, imported sauces, I even have a recommendation for Kosco’s bags of frozen dumplings – I’m looking forward to trying that one. Let us know your best find in an unexpected place?
  • If something you eat every week is on a really good special, buy as much as you can store. We only buy chicken breasts at $12/kg or less, freeze each breast separately in old takeaway containers and are never at the mercy of $18/kg chicken prices.
  • Do the math for online shopping for your situation, it has a few hidden benefits – a full post on this topic is coming soon!
  • Try your local farmer’s market, greengrocer or farmer’s direct store and check out the seasonal fruit and veg savings. It might be worth it to shop there weekly. You could even swap your weekly trip to the supermarket for a weekly trip to the greengrocer, plan your week’s meals around the great deals you scored, then order your online shopping delivery to suit.
  • Is there a food co-op in your area? They provide bundles of in-season fresh fruit and veges at sometimes half the supermarket prices.
  • Don’t be fooled by the bulk bin “specials” in the supermarket – sometimes they’re more expensive than the budget brand packet version.
  • When buying meat, don’t automatically choose the cut with the lowest price per kg. Have a look at how much waste might be included in that weight (skin, bone, fat etc). The best value for the meal you’re planning might be a leaner, more expensive cut.
  • Don’t be taken in by false economy and bulk deals if you won’t use it or weren’t going to buy some anyway. If cauliflowers are 3 for $5, but you’re only going to use it in one meal this week, it’s still cheaper to get 1 for $3.
  • If you have the luxury of choosing your timing, shop for groceries on a Monday during the day, as all the specials will still be in stock.
  • Try cooking a few meat-free meals, as meat is often the most expensive part of the meal. Burgers with black bean patties, vegetarian nachos and falafel wraps are all meals that I think taste best meat-free. I’d be keen to hear from readers with their favourites.

  • Does your work provide free food that you avoid because it’s unhealthy? Mention it to those in charge, perhaps with some ideas of your own. Chances are you’re not the only one who’s keen to eat well, and most companies love to get on board with anything that promotes the health and well-being of their staff.
  • Grow some of your own herbs, fruit and vegetables. If you’re not into preserving fresh produce, look for plants that yield year-round, rather than all at once. Last year I ended up with 124 tomatoes ripe in one week! Overwhelming at the time, but it made great pasta sauce to keep in the freezer.
  • If your pantry is overflowing with bits and pieces, challenge yourself to a buy-nothing week and just eat what you have at home. Use the website or similar to help plan what you can cook with what’s on hand.

For some, there’s nothing quite like a cold one at the end of a long day, so I include a few frugal drinking ideas.

  • If you drink wine regularly, see if you like the look of any wine deal sites. One FireKiwi member is a fan of
  • If your friends consistently invite you out to drinks that cost $12/pint, you could try setting up the pub at home.
    Some scavenging and DIY carpentry can set you up with a bar, a few stools and a leaner. Grab a small (energy efficient) fridge and a string of fairy lights* and you could have every second Friday-drinks BYO at your place. (YMMV, this won’t work for everyone, but if I inspire even one new backyard-bar, that’s enough.)

*Or a less cutesy decorating alternative to suit.

  • For the winter version of backyard bar, try inviting friends around for mulled wine – cask red and orange juice plus the spices does the trick, nothing fancy needed. Mulled cider is also great.
  • For the craft beer enthusiast, try brewing your own. There’s a lot of interest in, and support for brewing your own beer and cider at the moment. It has some start-up costs ($500- $1000 to get a setup that can make a decent brew), but once you get into it, you can get “micro-brewery” craft beer for ~$2/pint. If you and 3 friends each spend $250 on brewing gear, you can pass it around to a different mate every weekend and have 4 different brews to share around.