Icebreaker! Buy Now Pay Later — yay or nay?
A friend told me a few years ago that she was vehemently against our funds investing into any BNPL company, as the product was intrinsically unethical. I agree.
What’s your approach to managing money?
Earn more than you spend, and for me, the focus has always been to work on the first part of that equation. That means studying and working with a clear goal of building skills and experience to build my earning power as an employee, and then start and grow a business. These days my advice to people is to start a business early.
My partner and I each come from frugal backgrounds, and we are able to live within our means. We save time and money by living downtown, walking, and using electric bikes for commuting and school runs.
Do you do anything special to keep engaged with your money?
I use PocketSmith, but relatively infrequently, to complete home office expenses and review spending. Otherwise, I focus on the larger flows of capital, such as the mortgage and investments.
How important are financial goals and do you have any you’re working towards?
We reiterate to company founders that money goals are output measures — the focus should be on driving to a mission, or purpose. I guess it’s the same personally — the focus is on building resilience to shocks and allowing us to invest in growing a business and long-term wealth. I also have an obligation to over 1,000 investors in our funds, so we treasure their commitment and work hard to invest and manage it well.
Where do you get your financial knowledge from?
I learned basic budgeting and finance by growing up in the 70s and 80s in New Zealand when being frugal was a necessity. I observed my parents prioritize our education, worked part-time while at school, saved to go to university, and managed expenses through university. I’ve studied finance, learning some finance in the BTech degree at Massey, and then went overboard by doing an MBA at Yale University. And it’s my job — we are financial professionals making frequent investment decisions with large amounts of money, and living with the consequences.
What do you love spending money on?
I have a weakness for shiny electronic objects with Apple logos and Lego, though it seems our family spend has recently evolved to Lego princess castles.
What has been the best investment you’ve ever made?
As far as personal investments, it’s hard to go past investing in the second round of Vend (which ultimately exited for ~$500 million), while for Punakaiki Fund we love our 3500% annualized return from what turned out to be a very short term investment in Moxion. It’s early days, but we see great promise from Climate Venture Capital Fund’s investment in MGA Thermal, a company that makes high-temperate energy storage blocks. And for a bonus, I tried to buy shares in Trade Me in 2003 — but they were far too smart to sell.
Have you ever experienced financial difficulties?
Absolutely. I’ve been worth less than zero several times in my life, lived in a moldy cold house as a student, but have also had the privilege of being able to have a warm bed and food at my parents’ house, albeit in generally another city or country. I learned to be able to live very frugally, and that later helped me travel for long periods of time with relatively low amounts of money.
What advice would you give someone just starting out with their finances?
Invest in yourself so that you grow your earning power. Increasing earning power allows you to better transfer wealth from when you are older to when you are younger. That sounds strange, but it means living at or even slightly beyond your means when young, and using greater earning power when older to grow your investments more quickly. This is not the best financial advice (actually it is terrible) if your income is relatively steady, but many cultures do this well through early intergenerational transfers.
What’s the silliest thing you would put on a new design for the $100 note?
King Charles.
This interview is part of New Zealand Money Month 2023. NZMM is coordinated by trusted personal finance resource Sorted, in partnership with the financial capability community, and it involves events all around the country to encourage New Zealanders to talk about money and develop greater financial capability. To further the conversation about money we got in touch with some of our pals in the personal finance space to get their perspectives on their own finances.
