July 13, 2025 • 41 mins
The cost of living is crunching down again, as more than 30-thousand Kiwis reportedly moved abroad last year.
Are there any more changes can people make to save money? What things can they afford to cut?
Additionally, at what point do we look in the mirror and say the problem is our lack of personal discipline?
"Financial Force of Nature", and Founder of financial strategy site joins Tim Beveridge for Smart money...
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News TALKSB.
Speaker 2 (00:26):
Well, well, well, well ah, yes, I kind of let
that roll for a while.
Speaker 3 (00:33):
Love a little bit of Bond Jovi, Levin on a Prayer.
Speaker 2 (00:35):
It's actually on my on my sort of regular rotate anyway.
But that's got nothing to do with the Does.
Speaker 3 (00:41):
It have something to do with this hour?
Speaker 2 (00:42):
Yes, it probably does, actually, because I think a lot
of people when it comes to money sort.
Speaker 3 (00:47):
Of just sweet issue.
Speaker 2 (00:49):
Yeah, Livin on a Prayer, sweet the issue under the
bed and all that sort of thing. So this is
smart money. By the way, if you've missed any of
the previous two hours, we had a couple of interesting
interviews for Politics Central. One was with Winston having come
back from the Asian Meeting, and also with Tim Tuatini,
who is the team leader for this massive military exercise
(01:10):
that's happening in Australia with thirty five thousand personnel and
seven hundred including seven hundred from New Zealand. You can
go back and listen to those conversations and interviews if
you look up the Weekend Collective on iHeartRadio News Talk
seid B and the previous hour with Andy Johnston. He
is an orthopedic on cologist, and we're talking about sarcoma,
(01:31):
which was a rare ish cancer but highly dangerous to
especially to young people. But if you want to have
a listen to that's a fascinating discussion because it's sarcoma
awareness month. So go and listen to that. That was
just last hour. That's gone. But guess what right now,
as I mentioned, we're living on a prayer. Who's living
on a prayer? Smart money? And look, it's been a
(01:53):
while since we've seen her. I sort of want to
wonder where she's been. She's from Enable Me, you might
call her a financial force of nature, founder of financial
strategy and coaching side Enable Me, and she's back in
the studio with me. She also has run, somewhat smugly
the Odd Marathon, I think, And it's Hannah McQueen. You
have done, You've done the whole marathons.
Speaker 3 (02:14):
Did you do you something? No?
Speaker 4 (02:15):
I just did London, Oh just a couple of months ago.
Speaker 3 (02:18):
Oh just did London a couple of months ago. Just
a quick job, haven't you no? How was it?
Speaker 4 (02:26):
It was horrible?
Speaker 3 (02:30):
Thank you for your honesty? Tell why was it horrible?
Speaker 4 (02:33):
It was hot, also known as a beautiful day when
you're running. I like to run it kind of twelve degrees.
It's sort of the perfect This was like mid twenties.
Speaker 3 (02:45):
It doesn't sound too bad now.
Speaker 4 (02:46):
It was going well. My first half I was great.
I was trying to do four and a half hours
and got over the halfway market just over two and
about maybe two five. I'm okay, great, I'm pacing really well.
And then I looked down at my watch and it
said my heart rate was on one hundred and seventy.
Speaker 3 (03:03):
Oh my goodness, and I.
Speaker 4 (03:04):
Didn't even feel like it was. And so I'm like, oh,
I really don't want to die today. So I tried
to just take it down and go. I mean, when
you're running four and a half hour marathon, you're not
running particularly fast to start with. So I was trying
to get back and in the end I had to
walk for a few ks just to try and get
it under control. And I was annoyed, and I got
(03:26):
to the end and I just didn't want to be there.
It was one of those things you know where it's
going really well and then it doesn't, and there's no
hope of you getting what you wanted, and I tend
to be a high achiever and very systematic and how
I go about things, and it was just it was horrible.
And I got to the end and my husband had
run obviously ahead of me, and he finished earlier. And
(03:51):
one of the things I don't tell you about international
events is there's no queueing at the end, so you
don't see anyone. You just kind of get shuffled along.
And I got to the end and he was there,
and he had waited for me at the end, and
he grabbed me and he gave me a hug, and
I burst into tears, and I was thinking, oh, I'm
such a this is just the worst day ever. So
just see people know because we will have these this
(04:12):
approach to money, I'm sure. And then I'm thinking, you're
not going to be able to say anything that's going
to make me feel better, So don't even bother saying that.
That's what I'm internalizing to belief, And really said, have
you heard of David Goggins, The yes he trains Navy Seals,
is sort of this crazy, incredible athlete and he's got
(04:34):
the saying when they are training the Navy Seals, it's
all about trying to break them right, and trying to
a's part of their training to see how far they
can go without breaking. And apparently there's this event or
this thing where they row boats or they're out in
the ocean on a boat, and people are getting fatigued
and they're stopping rowing, and so the people who are
left who still have the energy are rowing for everyone.
(04:54):
So they are really exhausted. They've got all this heavy
weight and they're rowing for other people. And he says
to those people, he's yelling at them, you're carrying the boat.
You're carrying the boats about his phrase for you, you're
getting the job done. And I got to the end
and after I cried, Billy said, you carried the boat
hand perfect, perfect, you know what.
Speaker 2 (05:17):
Look, I can't remember who we had. We had someone
on our health habit some time ago. I think it
might have been Kent John's and was talking I was
talking about running marathons. I think it was Kent, but
someone and that was if you're running your first mouth
and don't worry about your time, just do just get
the job done, get the job done. And you got
(05:38):
the job done. So and I think probably that the
highs and lows of emotions. That's a physiological response to
the extremes of what you went through.
Speaker 3 (05:46):
Good on you, rock on, Hannah.
Speaker 4 (05:49):
Yeah, well I got it done, and I'm still waiting
for the endorphins eight weeks later. I don't think they're
gonna come. I think I have just like whatever, You'll
be fine.
Speaker 2 (05:58):
So what happens to the what happens to the running?
Speaker 5 (06:00):
Now?
Speaker 3 (06:00):
Then is it? Do you think that you'll take some
time and then go.
Speaker 4 (06:04):
I think I start back in the next few weeks.
Speaker 3 (06:07):
Maybe you'll be like a seal and do some rowing instead.
Speaker 4 (06:11):
I've rowed already.
Speaker 2 (06:13):
Navy seals, should I say seals themselves don't row, they swim.
Speaker 3 (06:16):
Yeah.
Speaker 4 (06:18):
No, I've done my rowing, my rowing days or whatever.
Speaker 2 (06:20):
Somebody texted me who's who's it's who's going to carry
the boats? Who's going to carry the boats?
Speaker 4 (06:25):
Kennah's going to carry the boats? Thank you?
Speaker 3 (06:27):
There we go.
Speaker 2 (06:29):
Now let's we better talk about money. I guess because
I've managed it, we've managed to spend a few minutes
talking about running. But good to hear that news. Though,
I'm delighted I'd filed you a wunder the New York
Marathon for some reason. But anyway, there we go. Anyone
who does a marathon.
Speaker 3 (06:44):
Now, look, it's it's.
Speaker 2 (06:47):
Interestingly the pit for me and a lot of other people.
You know, there's been a lot of talk about inflation
and the cost of living going up, and I for
a while wasn't sort of noticing it too much because
you just have different bills that come in and maybe
over the holidays, and then suddenly the school year kicks in,
(07:08):
and you have in mind you're covering a few costs
here and there, and then all of a sudden, it's
probably only about a few weeks ago, I thought, bloody hell,
the cost of living's got really expensive.
Speaker 3 (07:19):
Have you noticed it yourself?
Speaker 4 (07:21):
And if so, when look, I think most of us
when we go to the supermarket, we thank goodness that
was three hundred or four hundred dollars, and I don't
feel like I've got anything in my trolley. It seems
to be a standard theme. Look, I think for a
lot of us, some costs certainly have increased, but the
biggest cost of all, which is mortgages. For most households
that accounts for fifty percent of their outgoings. That's coming down, right,
(07:45):
So I think it's I think it's that we're not
feeling the mortgage reduction as much as we should because
other costs are absorbing it. But I don't know if
overall of everything's a lot higher. I think that I
think we're just waiting for some positive news. And I
think until the feeling of this economy starting to move
(08:08):
forward and it doesn't feel like it is. And I think,
I don't know about you. I'm so I'm sick to
death about talking about the cost of living. It is
what it is, and.
Speaker 2 (08:19):
Yeah, I know, I mean, I think, I guess we're
actually not going to be talking about so much the
cost of living. But if you are noticing whatever cost
you've got in life, let's not call them the cost
of living. Let's call it something else. You can take
stuff you've got no expression for the cost of living,
the cost of existing.
Speaker 3 (08:34):
Perhaps, but.
Speaker 2 (08:38):
Money saving hacks things where people can easily save money.
And I guess the opposite side of that question is
where is the place that people waste money way too easily?
Speaker 4 (08:50):
Oh, I can tell you those things very easily.
Speaker 3 (08:52):
Got here we go.
Speaker 4 (08:53):
The main area where people waste money is on things
and not even links to their happiness, which is how
they structure their mortgages, how they structure their insurances, and
possibly even their key wei savers. So it's things that
account for so much a great proportion of your total
income is just tends to be quite inefficiently structured. There
isn't say for your mortgages, there isn't a strategy to
(09:15):
pay it off faster or to structure it to enable that.
And that adds up to thousands of dollars a year
of wastage.
Speaker 2 (09:22):
That's later on though, isn't it. So you've got a mortgage, Yeah,
but I mean if you are looking to pay your
mortgage off quicker, that's going to cost you more. If
you're worried about not being able to meet your expenses
and you want to save money. Now are we talking
about different.
Speaker 3 (09:35):
Things on well sort of.
Speaker 4 (09:37):
I mean, if you're saying people living within their means, well,
you need to be able to save. If you want
to make progress, you really need to be able to
save twenty percent of your income. And that's sort of
the starting point. And I think the thing with New
Zealanders is we're not naturally deliberate about these things. We think, well,
we're earning enough. We're certainly working hard enough. That should
be enough to stretch for our cost of existence. But
(09:59):
if there's none left over, you're still not getting ahead.
You can sort of dress it up however we want,
and we can talk about hard it is, but you're
still not getting ahead. So what are we going to
do differently? And some of it is to do with
you need to be more structured around how you spend.
You need to have a budget. The most common areas
where people overspend as food. You spend a little bit
(10:20):
more than what you think, more often than you realize.
Across the spectrum of things to do with food and drinks,
whether it's your groceries or your subscription boxes, eating out coffees.
I mean, I don't even care what you call them,
but they add up and you will be spending more
than what you think.
Speaker 3 (10:36):
I'm absolutely sure you do.
Speaker 2 (10:38):
It's even like for a simple issue that I thought
of the other day with it's chatting with my wife
about I mean, look and look, we are not as
hard up as some people, but we've got a long
way to go. But we were talking about we takeaways,
you know, because we just got back from holiday and
things and we didn't have much time, and I thought,
and I actually did the sums in my head. I thought, okay,
(10:58):
well we can spend probably what one hundred bucks or
something around that, maybe a bit less on takeaways. And
I just said to her, want to just go get
some burgers from the supermarket and I'll make burgers. And
we did, and that probably saved what we saved a
whack on that. And I think it's just a highlighted
to me how easily it is to just go takeaways.
Speaker 3 (11:19):
Sounds so innocuous, obnoxious. I was going to say.
Speaker 2 (11:25):
Innocuous and look, there's a time to get it, but
I just thought, I'm going to save myself sixty or
eighty bucks here done.
Speaker 4 (11:31):
I think that. I mean, it's what, it's just the
creep of the lifestyle, right, Like you've consciously, probably because
you got back from holiday and probably because you're overspent
on holiday, there is a willingness to make some concessions
in that moment, which is great. But for the rest
of the week or the month, we don't make those
(11:52):
concessions and we're not deliberate, and it's innate. We're allowed
to not be deliberate because of how we pay for things.
We tend to use our credit cards and that fuels
and overspend. And I can even talk to that with
my clients. I'm very particular around what they're allowed to
use your credit cards for. But it has been proven
that it is easier to spend when you have a
(12:14):
credit card, that the pain of the purchase is disconnected
from the purchase from and so the further away the
pain is from the purchase, the more likely you will
overspend without clocking it. Like, there's just countless studies on that.
Speaker 2 (12:28):
But even just it's easy to explain because I just
sort of think, I mean, it's easy to understand. I
think because I can imagine if I hand had to
hand over what wadds of fifty dollars bills or twenty
dollar bills just to pay for the supermarket shop, I'd
probably be looking in the trolley going really I talked to.
Speaker 4 (12:45):
That point because I canceled my credit card because I
couldn't find it, and I was like, oh, oh, this
is frightening. So I canceled it a hu and you know,
it takes a week or so a week for them
to the next one to get to you. So I
had to use cash for that week, and it was
stressful going to the supermarket. I was never so aware
of what I was spending. Then I'm like, well, it
(13:05):
was kind of fun. I was saying to my kids, well,
you better put that back.
Speaker 3 (13:08):
Don't sufferable.
Speaker 4 (13:09):
I don't think we could afford that. And that's great,
it was good for the soul, but a rigor and
I think, well, that's how we used to do it,
certainly when I know that when I was a student,
I only had thirty dollars for food.
Speaker 2 (13:22):
A week back then, and we all put it into
a we'll put it into the kitty and somebody here
and that person who is in charge of the shopping with.
Speaker 4 (13:29):
An image of your life, right, and we don't have
that connection to a credit card. You just don't because
there's always going to be more money. So I think
that it's a combination of things. We don't have goals
that are ambitious enough for us to aim for. They're
not lofty enough, and they should be. Our day to
day structures and systems are week and it's all kind
(13:51):
of glued together with a really an effective or effective
if you're a credit card company, way of managing our money.
Speaker 2 (13:57):
Because actually one of the things I think that you've
not inadvertently touched on but mentioned implicitly. It's about you've
got to find that motivation for it. So, for instance,
we are towards the We're not towards the end of
our mortgage, but we it's in sight. And I did
a bit of a calculation about if I paid an
(14:18):
extra such and such extra on my mortgage, that's going
to In fact, I even got chat GPT to do
it for me. I said, chat GPT, this is what
I could potentially pay off. How much will I save
and how quickly? And what will this mean financially. It's
quite good at that because you can literally ask it
a plain English question, if I pay an extra few
(14:39):
hundred bucks a month off on my.
Speaker 3 (14:40):
Mortgage or whatever.
Speaker 2 (14:42):
And it suddenly made me think, oh my goodness, this
really makes a difference, and oh my goodness, the end
is in sight. So what I'm the reason I mentioned
it and what I mean the end is in sight.
I don't mean tomorrow but a few years time. But
that gave that that does help the motivation because I
think there are a lot of people who would get their mortgages,
you know, they bought their home, and despite the fact
(15:04):
people say, look the marketers, you know, it's affordable right now.
It's a great opportunity for first time buyers. We're chatting
with brad Olsen Yest and I just said, you know,
probably is still expensive, isn't it?
Speaker 3 (15:15):
And he said, god, yeah. And so I think when people.
Speaker 2 (15:18):
Get a thirty year mortgage, the motivation that they that
I've got they don't necessarily have because they just see
this massive amount of money going out and they're just
strugging to make it in meet. So how do you
find the motivation long way of asking a question about
finding the motivation to save money.
Speaker 4 (15:33):
Well, it has to be closer than thirty years.
Speaker 6 (15:37):
You know.
Speaker 4 (15:38):
It needs to be ambitious, and you need to believe it,
and you need to want something. Not everyone is motivated.
I mean, they want to be mortgage free, but the
idea of that isn't necessarily their goal. They're happy if
that would be kind of a result of something else
as opposed to what they are seeking.
Speaker 3 (15:55):
For grandma to pass away.
Speaker 4 (15:57):
Yeah, well, no, they might be more motivated by Look,
it's really more important for me to help my kids
through university or to help my kids onto a property
letter that is pulling me harder than wanting to be
mortgage free. Right, So you've sort of got mutually. They're
all good goals, but what one's going to be the
one to motivate you. That's interesting, And it's sort of
(16:19):
like a marathon.
Speaker 3 (16:21):
It is, and where we can all end up in tears.
Speaker 4 (16:24):
Well yeah, and you think that, well, it's not long
to go therefore, and it's downhill, so I should be okay.
But that's when a lot of people get injured, or
they get distracted, or it just feels hard. And no
matter how close you are to the end, for many
people trying to get mortgage free, they are crawling to
the end to do it. And when they've got this
(16:44):
shortened runway because maybe they're going to be retiring in
a few years, it's a bit of a pilon. So
we've got to be able to navigate that. And I think
that the goal for everyone should be to be mortgage
free in under ten years. Whether you have just got
your mortgage or not, it should be under ten years.
And if you're already on track to be mortgage free
in ten years, then we should be trying to make
it five years. Get a giddy up going here so
(17:07):
that you you are prepared to try harder, You are
prepared to be more conscious and deliberate, because the trade
off feels big enough and juicy enough to justify it.
Speaker 2 (17:16):
Funly, though, I look AT's even without our pathway to
paying hours off, and then you suddenly think, well, hang
on a minute, my car is getting towards the end
of its legs, and oh god.
Speaker 3 (17:24):
How much is that going to cost?
Speaker 2 (17:26):
And it's just the other expenses which I don't know,
they're just do I flog my car till it's dead?
Speaker 3 (17:32):
Basically that sort of question.
Speaker 2 (17:35):
Actually, we'll come back on that because we need to
take a break, blave of not because we've flogged that
one for way longer than we should have. But we
want your calls on No. E one hundred and eighty
ten and eighty as well. Is where is the first
place you can save money? And what's your money saving hack?
What is the place that you looked at yourself, you
looked at your lifestyle. Maybe you did have the motivation
you thought, hang on a minute, I'm spending way too
(17:55):
much on other things. I should be paying my mortgage
job for I should be saving from a first deposit.
Where did you save money easily? Or is there no
such thing as easy? He's saving them money. Give us
a call eight text twenty five past five. My guest
is Hannah McQueen. We'll be back in just a moment.
Speaker 3 (18:49):
Oh, by the way up.
Speaker 2 (18:51):
My laughter is because we always offer our guests a
chance to choose a song, and Hannah McQueen, my guest
for Smart Money, suggested another song other than that.
Speaker 4 (19:01):
Definitely even got.
Speaker 2 (19:05):
Time to just bang out Welcome to the Jungle, and
Hannah's face when she had.
Speaker 3 (19:09):
Like, this is not my request, that's just the best.
Speaker 4 (19:12):
Basically, over promise, under deliver.
Speaker 3 (19:15):
Hey.
Speaker 2 (19:15):
One of the things we were talking about when it
comes to motivations to save money is that there is
a point when people, you know, in the early stages
of their mortgages, it's just you know, you're paying off
a fraction of your principle.
Speaker 3 (19:27):
And whack and interest.
Speaker 2 (19:29):
And I think what I was honing in on with
what I was saying before was that the kick for
me is that when you start really seeing that you
are paying down the principle because the interest is you've
got to that point where the bulk of your payments
off principle and it's like, hellolujah.
Speaker 7 (19:46):
I know.
Speaker 4 (19:46):
So when I actually first started to enable me, I
did some analysis on that. And because you can pay
between two and three times back to the bank. So
if you borrowed five hundred thousand, well my first mortgage
was three hundred thousand, and I was going to pay
close to a million dollars back to the bank. And
kind of interest rates move around, but let's assume that
interest rates remain this same for that thirty years. You
(20:07):
make these monthly repayments every month, and a portion of
that is principal and a portion is interest. And I
thought that at year fifteen, or halfway through the mortgage,
you would start paying more principal than interest. So I
understood that you paid interest made up the large whack
of it to start with. It's not actually until year
twenty three. So not only are you going to pay
(20:28):
back to the.
Speaker 3 (20:29):
Bank, and that's where two times you are paying more
principal than interest. Simply you've just.
Speaker 4 (20:33):
Got within within that monthly a portion, yes more than
fifty percent, is going towards the principle. So it's a
great business model for the banks, right, pay them a
lot and pay it all pay them back first essentially, actually.
Speaker 3 (20:47):
How much of the how much of them?
Speaker 2 (20:50):
There would be some sort of bell curve, wouldn't there
where you'd just be paying interest interest, interest in test
and very little principle.
Speaker 4 (20:55):
It's not a bell curve. It's kind of like a
hockey stick where you paid that a flat your flat
line for about twenty three years, and then it starts
to come down very quickly. I mean, it's gradually coming
down for those first twenty three years, but nothing to
write home about. But it's those last seven years that
you really get a bit of a trot going, and
it feels great because you, oh, finally it's finally starting
(21:18):
to come down.
Speaker 3 (21:20):
Until you get your investment property in your back.
Speaker 4 (21:22):
On that, I guess the investment property we think of
that as productive debt, so it sits outside of the home,
which is largely unproductive.
Speaker 2 (21:30):
How do you how do you view the investment property
market at the moment, given you know the catality formerly
core logic. I can't keep up with these name changes anyway.
They said they've got a stat that says, in terms
of real terms, that property is going to be worth
less than twenty thirty one by twenty percent real value.
(21:51):
But there's not a lot of headlines around. Remember when
we first met, I mean property was it did seem
there was a real boom going on and when we
were when I was first doing the show with Tim
Rocksborough and we've ed you on the show for few years,
but it feels that things are very more dull drummy
at the moment.
Speaker 3 (22:09):
What are your thoughts on.
Speaker 4 (22:10):
That, Well, I think that we need to work out
what we're buying the property for. If it's to create
a capital gain that's going to plug a gap for
your retirement savings, Well, it's understand what is the growth
rate we need to get to solve that problem, and
then what is the region that's likely to give us
that growth rate, either because people are moving there or
(22:31):
because they just aren't enough of the right properties there,
there's a shortage of rental properties. And then let's make
sure that the property we buy is giving us the
yield we need and so that we can afford to
hold the property long enough to get the game that
we wanted.
Speaker 3 (22:46):
So that.
Speaker 4 (22:48):
Takes time to work that through. So as a general rule, no,
I wouldn't say buying property for the sake of it
makes sense, because I don't think it does. I think
that probably only two or three percent of properties on
the market would solve the relevant problems for different households.
The comment if i'm if I know the article that
you're looking at, where they basically said property values will
(23:10):
flatline and you'll only get maybe it was a three
percent growth or growth in line with inflation, I think,
was the comment. And that's where leverage borrowings against the
property can become a really effective way of creating growth
because over time, you know, if you have three percent inflation,
(23:33):
well that's eroding three percent of the value of your debt.
You certainly want the property to go up by the
same amount. But it's when you're looking at your wealth
with the property, it's not just the value of the property,
it's your the value of the debt, and the difference
in between is equity. So your equity grows when inflation hits,
even if the asset value is not going up by
(23:53):
more than inflation. Your debt values going down by inflation,
and so you've created a gain for yourself. So sure,
there are.
Speaker 2 (24:01):
Investors whose goal is actually to get a rental yield
onultimately they're not looking. I mean there are people have
different goals with property investments. Some buy in the heady
markets of a market that's going bonkers and they realize
a capital gain and they go who I know, people
have made a lot of money out of that. But
then we've had experts on the show who are more conservative,
but their goal is to build their investment based so
(24:24):
in the end they've got a rental return.
Speaker 3 (24:26):
That is.
Speaker 4 (24:27):
But you're looking at different properties to solve different problems, right,
So if you needed to grow wealth, you probably need
to be able to benefit from leverage, so by default
you're going to be going more down the residential investment route.
If you're looking for a yield, you're probably going to
link more towards commercial properties. But that suggests that you've
got a whole lot of cash to invest, so you
don't need to get a mortgage so you can benefit
from that return.
Speaker 2 (24:46):
Speaking of cash, just going back to what we were
talking about before the break, would you say that would
be the number one way of getting on top of
your expenses.
Speaker 3 (24:53):
Is to be de cash use cash.
Speaker 4 (24:55):
Absolutely.
Speaker 3 (24:55):
Cash is can.
Speaker 4 (24:56):
It's the fastest hack because it's your behavior that's the problem.
It's not really the cost of anything, it's that you're
just not in tune with what things are costing and
how that adds up over the week. So that cash
is the easiest way because you don't then need to
look at your bank account. It's like, do you have
the money in your wallet? If not, well, how else
are you going to trigger yourself to assess can I
(25:17):
afford that this week?
Speaker 2 (25:19):
And immediately reminds me just of the days when I
as a student, we all put twenty twenty five thirty
bucks cent in the kitty and whoever is doing the
shopping took that cash and you walk around. I don't
remember ever taking off any major list, but it was like, Okay,
we've got the meat for the week. Now let's see
what bread and Sarah or we can afford them butter
and there.
Speaker 4 (25:36):
Must have been and you choose right because you don't
have access to this unlimited facility. And I think we
do have access to more of an unlimited facility, well
enough for you to spend without really knowing what you're spending,
through the virtue of credit cards or buy now, pay later,
(25:57):
or overdraft facilities or revolving credits that they are designed
to disconnect you from your spending and who makes money
from that?
Speaker 2 (26:05):
Yeah, it's quite funny, you know you talk about the
looking at the shopping trolley. I had literally that moment.
It wasn't it, And it wasn't for the big shop.
It was just my wife said, look, honey, I've forgotten
a couple of things. Can you pick go into the
supermarket and pick up a couple of things, like as
in a handful of things? And it was eighty bucks,
I mean, And I was like, okay, bread, got such
(26:28):
and such. Okay, that cost a bit, But I.
Speaker 3 (26:29):
Was like, how do we get to eighty bucks?
Speaker 2 (26:32):
That's just something where you think in the old days
you pop down to the dairy with ten bucks. But anyway,
I'm exaggerating a bit, but there we go. Right, let's
take some calls.
Speaker 3 (26:40):
Don Hello, Don, Hi, Hello, Yeah, good a. How are
you excellent things?
Speaker 7 (26:49):
Hey?
Speaker 4 (26:49):
Done?
Speaker 6 (26:50):
Excellent?
Speaker 7 (26:51):
Hi.
Speaker 8 (26:51):
Just a quick question for Hannah. I just turned the
radio on, so I haven't heard the whole conversation.
Speaker 6 (26:57):
But my question is I.
Speaker 8 (26:59):
Heard you mentioning around the interest component when you're paying
off mortgage. Obviously doesn't really kick into or the principle
doesn't kick it into the last minute. If I was
fixing or taking on a mortgage shortly, am I better
to set the mortgage structure up for let's say fifteen years,
(27:19):
but I know I can pay it off in eight am,
Am I better to set that at the start? Or
am I better to set it up longer with the
bank knowing that I can pay off a lot more
and then just pay it off at much greater rates.
Speaker 4 (27:33):
So this is going to come down a little bit
to your tendencies on. But if I was looking at
it from a pure financial perspective, I'd be wanting you
to set it up over the maximum amount of term possible,
so to lower your fixed requirements and the excess amount
that you can afford to pay as a result of
(27:54):
that and your available savings, I'd be putting that onto
a revolving credit facility that you pay off faster. So
what that you won't I don't want you to have
credit card access to that revolving credit facility. It's simply
a way of giving you building in some financial resilience
(28:14):
to your strategy. So the problem with when you shorten
the term is that you are required to maintain that
even if there's the odd month where it just was
impossible to do or creates a whole lot of stress.
For most people, their progress isn't it's sort of undulating
over the course of the year, and the revolving credit
can be a really nice way to mop up your
(28:36):
games without putting pressure on you for those downtimes within
the year. But you have to be able to maintain that.
And that's so I say I suggest that route on
the assumption that you would be very disciplined in paying
that revolving credit off. If you thought that there was
more of a concern that if you didn't have the
(28:58):
fixed requirement to pay each month, that you're not going
to do it, even in a voluntary basis. Will then
maybe the shorter term is how you force your own
behaviors to submit.
Speaker 6 (29:10):
Yeah, no, uncomfordable the behavior.
Speaker 8 (29:13):
Oh the best strategy around how to move forward?
Speaker 4 (29:17):
Yeah, Well, the revolving credit's going to be nice because
that gives you the opportunity to maximize your wealth opportunities
whilst you're paying that mortgage down faster. Because I don't
I think one of the days where you just do
one thing at a time, certainly pay that mortgage off,
but that's creating equity. Let's put that equity to use,
and we are able we reserve the option of doing
(29:38):
that if you've got already baked into the structure through
the revolving credit.
Speaker 3 (29:42):
Good stuff. Hey, thanks, we called on.
Speaker 2 (29:45):
Actually tell me what We've got a bunch of interesting
texts we're going to dig into straight after this. But
it is twenty one minutes to six on Newstalk z B.
Are you worried about funding a comfortable retirement?
Speaker 3 (29:54):
Well you're not alone.
Speaker 2 (29:55):
The cost of living crisis is heading home for a
lot of people, so it's no surprise people are looking
for ways to make the most of their savings and
get a little bit more income to supplement the New
Zealand super One interesting solution is to invest in an
income fund like the Harbor Income Fund. It works by
holding a mix of interest paying securities and shares that
have been designed to generate a steady and sustainable income
(30:18):
no matter the market. The Harbor Income Fund is actively
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in monthly installments. To find out more about Harbor's Income Fund,
just head to their website or speak with your financial advisor.
This is not intended as personalized advice. The product distogure
(30:39):
Statement for Harbor Investment Funds issued by Harbor Asset Management
is available at Harbor Asset dot co dot Nz.
Speaker 1 (30:49):
Tim Beverage on the weekend collective called on eight hundred
eighty ten eighty News DOGZB.
Speaker 2 (30:55):
Back with You with Hannah McQueen. This is a smart
money talking about saving money. Your money hacks and maybe
restructuring your mortgages crept into the conversation as well, or
doing your best to pay their off as quickly as possible.
Speaker 3 (31:04):
Mark, Hello, heyday you go after You're going good?
Speaker 7 (31:08):
Thanks, O hell you.
Speaker 5 (31:10):
I just wanted to call up and we're talking about
money saving tips and looking after our money and stuff,
and I'm currently working with enable Me and I just
think it's it's great, it's amazing thing.
Speaker 6 (31:24):
I'm walking working with.
Speaker 5 (31:25):
My coaches actually water Maine and Waterman, and yeah, I
just wanted to ring up and say that if anyone
wants to get tips and stuff about saving money, enable
me is a good way to go.
Speaker 3 (31:37):
Well, I'm sure Michael, Michael is sef. Hannah's very happy
with you. Michael, how long are you been? How long
you been under the wing of Enable Me.
Speaker 5 (31:51):
I've been with them a year so I'm currently just
building my first rental property down in Macargoll and I
just yeah, I just I can't speak highly enough of
them and my Cha Chash. They're things really clear for
you and makes you really aware of the money that
you spending. Everything can categorize, and yeah, I just think.
Speaker 2 (32:13):
It's a great way to go good stuff. Hey, thanks
for your cor mate, really appreciate it. Hey got a
question here Hannah and the Text High team, just wondering
if Hannah has any tips on survival where one partner
is a spender and the other is a saver in
a relationship.
Speaker 4 (32:27):
Yeah, we have quite a few combos like that, and
sometimes I feel we become more marriage counselors than anything else.
It's hard when your tendencies are different, but you've got
to start with where do where do your goals overlap?
Because there will be things that are important to both
of you and we've got to get on the same page.
But if you don't have shared goals or shared values,
(32:50):
that can be really tricky. So normally you need a
big goal. So savers, if we think about them, they
tend to they're not they're more risk adverse that they
need a reason to spend, and they're quite happy not
to spend, which is very different than a shopper, right,
who needs a reason not to spend, and in the
absence of that reason, is quite happy to spend. That
(33:13):
can be quite challenging when you just programmed different ways.
And also shoppers tend to be more naturally ambitious with money.
In fact, if you want them to pay attention to
the detail, give them a goal that they're focusing on
where that's kind of a byproduct of achieving that goal.
But if the goal is just to focus on the detail,
they'll tap out before they even engage. It's tricky, yeah,
(33:37):
But when we work with couples like that, we always
start with what are the goals and is there anything
we can get to float your boat for both of you?
But often, I mean, you've got the shopper savior, but
you've also got the optimistic person and the person who
can be quite pessimistic with money, and that's another kind
of combo that can be unsettling for both.
Speaker 2 (33:57):
Mind I think we would have think that if you've
got them both in the room for a start, then
they're at least on the same page to some extent
because they've both come to see you, haven't they.
Speaker 4 (34:06):
Well, yeah, I think it's a romantic view. I mean
for some people it's well, you come to this meeting,
otherwise I'm out, like I don't know what the conversation
is behind the scenes.
Speaker 3 (34:16):
Good point.
Speaker 4 (34:16):
And for like twenty percent of those meetings, they are
revealing a degree of financial infidelity or costs debt that
the other partner doesn't know. So I can see why
no one's that excited to come to those meetings, but
they want to be ambitious. It's it's quite liberating having
someone who can just navigate those challenges, so you just
take the emotion out of what is a very emotional topic.
Speaker 2 (34:41):
One person's a couple of bits of advice before we
got to a next caller. One said, we found motivation
and paying the mortgage when we broke the mortgage into
to one into two, one small amount that we could
pay three years. It gave us a goal we could understand.
Coupled with this using our phone, if we had had
the when we could easily just add more for one
week even just forty bucks.
Speaker 3 (35:01):
Still working on it.
Speaker 2 (35:02):
It's going down faster and faster, and I aren't really
compute the large numbers. It's a small target, says Sean.
But yeah, one way of doing it.
Speaker 4 (35:12):
Yeah, and I think that it helps if Sean's partner
is on board with that, right, But if they're not,
how do we navigate that?
Speaker 7 (35:18):
Then?
Speaker 3 (35:19):
Another person says hack.
Speaker 2 (35:20):
When refixing my mortgage, I asked my bank if that's
really the best rate they could do, and they knocked
off zero point zero four percent, which is three hundred
bucks a year. Small victory for Simon. Actually sometimes this
small question, come on, seriously, is that the best you
can do? And all of a sudden, I don't know,
you've saved Yeah, or.
Speaker 4 (35:39):
I'll take my business elsewhere could be a stronger phrase.
Speaker 3 (35:45):
Yeah.
Speaker 4 (35:46):
I like the idea of it. And speaking of just
those small things adding up ten percent of your spending
is just lazy tax that you're paying. So subscriptions, you're
still you haven't canceled. It's things that you're choosing to
pay off in set of paying upfront. But ten percent
of your outgoings can be saved if you were managing
your money kind of more again deliberately.
Speaker 2 (36:06):
Right, Well, you're going to take a quick moment be
back in just to tickets eleven and a half minutes
to six news talks.
Speaker 3 (36:11):
It'd be news talks. I thought we had a tune
coming in here for some reason. Yeah, but we don't.
Speaker 2 (36:16):
We're going to readily disappoint that, Hannah McQueen. Now let's
take some more. Callse Matt, Hello, Hi, how are you?
Speaker 7 (36:23):
Hey?
Speaker 4 (36:23):
Matt?
Speaker 8 (36:24):
Hi are you?
Speaker 7 (36:25):
Hannah? August August eighty eight. I had a twenty year
mortgage paid off for three years, seven months and twenty
one days, and went on to purchase rentals. What I
did was I had a part time job used to
at eight o'clock in the morning till mid I had
two jobs, and the second job used to get paid
in the brand envelope way back then, and I left.
(36:48):
I left most of the mortgage on floating. Every payday
from my part time job at the service station in Napier,
I would drive to the bank and pay it off.
The principle So.
Speaker 4 (36:59):
And I love that.
Speaker 7 (37:00):
Yeah.
Speaker 2 (37:01):
Actually, I think that's the thing is people realizing, if
you what the benefits are of doing that extra bit
of work or saving that extra bit of money, isn't it?
Speaker 7 (37:12):
And the only way to have a mortgage is principal
plus interest. It's an old Westpac system. The other bank's
probably had a lot. I had to teach one person
at west Pac the print, the how it worked, because
so my principal, howd of your understand this was a
lot higher to begin with, So most of it was principal,
(37:34):
and I paid off the interest every fortnight. The interest reduced,
but the principle remained the same. So then I left
most of it on floating. So once I paid this
mortgage off, twenty year mortgage of three years, seven months,
that included getting glandular fever and being off work for
three months, but I had an emergency fund. Then I
purchased my first rental, and I could have had a
(37:57):
lot more of that. I'm quite risk a. Versus went
on to what owns six.
Speaker 2 (38:02):
Religious good stuff? Matt, Hey, Matt, we're but short of
but thank you for your call. I got one.
Speaker 3 (38:08):
They have, We got time for another call. You have
to be very quick, Rob, Well, I have it going.
Speaker 6 (38:14):
I've got some money and a termined deposit and it's
coming maturing about a month. I just wondering what's a
good it's about seven hundred grand. I just wondering what's
a good thing to look at. I don't really want
to get into a rental again.
Speaker 2 (38:27):
Without giving a specific financial advice or any observations and thoughts.
Speaker 4 (38:31):
Hanner, Well, we need to know what the future goal
is like are we trying to prepare for retirement. To
determine is that capital enough to stretch or do we
need it to start working harder? And how hard does
it need to work? And that will determine whether we
need to use leverage and go into the rental market
or not. If we don't go into the rental market,
then you're looking at your managed funds and your shares,
(38:53):
which can serve a purpose. But we've got to understand, well,
what's the volatility that you can stomach financially and also physically.
Gosh it with that, so there's a little bit to it,
rob but we just there don't think that you have
to go into investment property. But let's work out what
the problem is we're trying to solve, and then we'll
determine what's the right strategy for you.
Speaker 2 (39:13):
What's your goal you're trying to solve their b I
just have a bit of like income for retirement, you know,
a year or two.
Speaker 4 (39:21):
Sure, Yeah, so you go if you kind of ratchet
it up. You start at your savings, and then you
go to your term deposits, and you go to your
managed funds, then you go to your property, and then
you go to shares. That's sort of the level of risk.
I guess with them. If you had seven hundred thousand
dollars and you bought a property and it was giving
you a yield of six percent of residential and let's
(39:42):
say one and a half percent of that is property
related costs, So you're still making about four and a
half percent, which is probably better than a term deposit,
and you're getting capital gain that might be better than
leaving it in a term deposit. But if you don't,
if you have your eyes set on avoiding going back
into that market, then we need to look at your
managed fund and kind of take you through what that's
(40:05):
going to feel like, because it can feel quite uncomfortable
when Donald Trump decides to introduce a tariff.
Speaker 2 (40:12):
Say, oh gosh, hasn't the NASDAC been through a roller coaster?
But it's like they're paying less attention to what he
says about tariffs and stuff at the moment. But it
certainly has been a turbulent period, isn't it It has? Yeah,
one person says the high time I just brought an
investment property. My bank being z turned us down. We
went to a broker, got two banks, drop of finance,
(40:32):
went to it and blah blah blah. Anyway, it's been
the best thing we've done for cutting frivolous spending. Cut
out about one thousand bucks a month of back and
too hard, and it could have saved a fortune by
doing this a year ago.
Speaker 3 (40:43):
So thank you to that text. Look anyway, Hannah.
Speaker 2 (40:46):
With not very much time to go, I look forward
to catch up with you again and in news of
the next marathon.
Speaker 3 (40:52):
Ha ha.
Speaker 4 (40:54):
Anyway, I can help you with your marathon mortgage. Maybe
that's where we focus on.
Speaker 2 (40:57):
Hey, thanks everyone, thanks for listening, Go and check out
the podcast.
Speaker 3 (41:01):
Thanks to us.
Speaker 2 (41:01):
Are a great job today, and we'll look forward to
your company next weekend.
Speaker 3 (41:05):
Sunday at six is next.
Speaker 1 (41:11):
For more from the Weekend Collective, listen live to neth
Talk SEDB weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News TALKSB.
Speaker 2 (00:26):
Well, well, well, well ah, yes, I kind of let
that roll for a while.
Speaker 3 (00:33):
Love a little bit of Bond Jovi, Levin on a Prayer.
Speaker 2 (00:35):
It's actually on my on my sort of regular rotate anyway.
But that's got nothing to do with the Does.
Speaker 3 (00:41):
It have something to do with this hour?
Speaker 2 (00:42):
Yes, it probably does, actually, because I think a lot
of people when it comes to money sort.
Speaker 3 (00:47):
Of just sweet issue.
Speaker 2 (00:49):
Yeah, Livin on a Prayer, sweet the issue under the
bed and all that sort of thing. So this is
smart money. By the way, if you've missed any of
the previous two hours, we had a couple of interesting
interviews for Politics Central. One was with Winston having come
back from the Asian Meeting, and also with Tim Tuatini,
who is the team leader for this massive military exercise
(01:10):
that's happening in Australia with thirty five thousand personnel and
seven hundred including seven hundred from New Zealand. You can
go back and listen to those conversations and interviews if
you look up the Weekend Collective on iHeartRadio News Talk
seid B and the previous hour with Andy Johnston. He
is an orthopedic on cologist, and we're talking about sarcoma,
(01:31):
which was a rare ish cancer but highly dangerous to
especially to young people. But if you want to have
a listen to that's a fascinating discussion because it's sarcoma
awareness month. So go and listen to that. That was
just last hour. That's gone. But guess what right now,
as I mentioned, we're living on a prayer. Who's living
on a prayer? Smart money? And look, it's been a
(01:53):
while since we've seen her. I sort of want to
wonder where she's been. She's from Enable Me, you might
call her a financial force of nature, founder of financial
strategy and coaching side Enable Me, and she's back in
the studio with me. She also has run, somewhat smugly
the Odd Marathon, I think, And it's Hannah McQueen. You
have done, You've done the whole marathons.
Speaker 3 (02:14):
Did you do you something? No?
Speaker 4 (02:15):
I just did London, Oh just a couple of months ago.
Speaker 3 (02:18):
Oh just did London a couple of months ago. Just
a quick job, haven't you no? How was it?
Speaker 4 (02:26):
It was horrible?
Speaker 3 (02:30):
Thank you for your honesty? Tell why was it horrible?
Speaker 4 (02:33):
It was hot, also known as a beautiful day when
you're running. I like to run it kind of twelve degrees.
It's sort of the perfect This was like mid twenties.
Speaker 3 (02:45):
It doesn't sound too bad now.
Speaker 4 (02:46):
It was going well. My first half I was great.
I was trying to do four and a half hours
and got over the halfway market just over two and
about maybe two five. I'm okay, great, I'm pacing really well.
And then I looked down at my watch and it
said my heart rate was on one hundred and seventy.
Speaker 3 (03:03):
Oh my goodness, and I.
Speaker 4 (03:04):
Didn't even feel like it was. And so I'm like, oh,
I really don't want to die today. So I tried
to just take it down and go. I mean, when
you're running four and a half hour marathon, you're not
running particularly fast to start with. So I was trying
to get back and in the end I had to
walk for a few ks just to try and get
it under control. And I was annoyed, and I got
(03:26):
to the end and I just didn't want to be there.
It was one of those things you know where it's
going really well and then it doesn't, and there's no
hope of you getting what you wanted, and I tend
to be a high achiever and very systematic and how
I go about things, and it was just it was horrible.
And I got to the end and my husband had
run obviously ahead of me, and he finished earlier. And
(03:51):
one of the things I don't tell you about international
events is there's no queueing at the end, so you
don't see anyone. You just kind of get shuffled along.
And I got to the end and he was there,
and he had waited for me at the end, and
he grabbed me and he gave me a hug, and
I burst into tears, and I was thinking, oh, I'm
such a this is just the worst day ever. So
just see people know because we will have these this
(04:12):
approach to money, I'm sure. And then I'm thinking, you're
not going to be able to say anything that's going
to make me feel better, So don't even bother saying that.
That's what I'm internalizing to belief, And really said, have
you heard of David Goggins, The yes he trains Navy Seals,
is sort of this crazy, incredible athlete and he's got
(04:34):
the saying when they are training the Navy Seals, it's
all about trying to break them right, and trying to
a's part of their training to see how far they
can go without breaking. And apparently there's this event or
this thing where they row boats or they're out in
the ocean on a boat, and people are getting fatigued
and they're stopping rowing, and so the people who are
left who still have the energy are rowing for everyone.
(04:54):
So they are really exhausted. They've got all this heavy
weight and they're rowing for other people. And he says
to those people, he's yelling at them, you're carrying the boat.
You're carrying the boats about his phrase for you, you're
getting the job done. And I got to the end
and after I cried, Billy said, you carried the boat
hand perfect, perfect, you know what.
Speaker 2 (05:17):
Look, I can't remember who we had. We had someone
on our health habit some time ago. I think it
might have been Kent John's and was talking I was
talking about running marathons. I think it was Kent, but
someone and that was if you're running your first mouth
and don't worry about your time, just do just get
the job done, get the job done. And you got
(05:38):
the job done. So and I think probably that the
highs and lows of emotions. That's a physiological response to
the extremes of what you went through.
Speaker 3 (05:46):
Good on you, rock on, Hannah.
Speaker 4 (05:49):
Yeah, well I got it done, and I'm still waiting
for the endorphins eight weeks later. I don't think they're
gonna come. I think I have just like whatever, You'll
be fine.
Speaker 2 (05:58):
So what happens to the what happens to the running?
Speaker 5 (06:00):
Now?
Speaker 3 (06:00):
Then is it? Do you think that you'll take some
time and then go.
Speaker 4 (06:04):
I think I start back in the next few weeks.
Speaker 3 (06:07):
Maybe you'll be like a seal and do some rowing instead.
Speaker 4 (06:11):
I've rowed already.
Speaker 2 (06:13):
Navy seals, should I say seals themselves don't row, they swim.
Speaker 3 (06:16):
Yeah.
Speaker 4 (06:18):
No, I've done my rowing, my rowing days or whatever.
Speaker 2 (06:20):
Somebody texted me who's who's it's who's going to carry
the boats? Who's going to carry the boats?
Speaker 4 (06:25):
Kennah's going to carry the boats? Thank you?
Speaker 3 (06:27):
There we go.
Speaker 2 (06:29):
Now let's we better talk about money. I guess because
I've managed it, we've managed to spend a few minutes
talking about running. But good to hear that news. Though,
I'm delighted I'd filed you a wunder the New York
Marathon for some reason. But anyway, there we go. Anyone
who does a marathon.
Speaker 3 (06:44):
Now, look, it's it's.
Speaker 2 (06:47):
Interestingly the pit for me and a lot of other people.
You know, there's been a lot of talk about inflation
and the cost of living going up, and I for
a while wasn't sort of noticing it too much because
you just have different bills that come in and maybe
over the holidays, and then suddenly the school year kicks in,
(07:08):
and you have in mind you're covering a few costs
here and there, and then all of a sudden, it's
probably only about a few weeks ago, I thought, bloody hell,
the cost of living's got really expensive.
Speaker 3 (07:19):
Have you noticed it yourself?
Speaker 4 (07:21):
And if so, when look, I think most of us
when we go to the supermarket, we thank goodness that
was three hundred or four hundred dollars, and I don't
feel like I've got anything in my trolley. It seems
to be a standard theme. Look, I think for a
lot of us, some costs certainly have increased, but the
biggest cost of all, which is mortgages. For most households
that accounts for fifty percent of their outgoings. That's coming down, right,
(07:45):
So I think it's I think it's that we're not
feeling the mortgage reduction as much as we should because
other costs are absorbing it. But I don't know if
overall of everything's a lot higher. I think that I
think we're just waiting for some positive news. And I
think until the feeling of this economy starting to move
(08:08):
forward and it doesn't feel like it is. And I think,
I don't know about you. I'm so I'm sick to
death about talking about the cost of living. It is
what it is, and.
Speaker 2 (08:19):
Yeah, I know, I mean, I think, I guess we're
actually not going to be talking about so much the
cost of living. But if you are noticing whatever cost
you've got in life, let's not call them the cost
of living. Let's call it something else. You can take
stuff you've got no expression for the cost of living,
the cost of existing.
Speaker 3 (08:34):
Perhaps, but.
Speaker 2 (08:38):
Money saving hacks things where people can easily save money.
And I guess the opposite side of that question is
where is the place that people waste money way too easily?
Speaker 4 (08:50):
Oh, I can tell you those things very easily.
Speaker 3 (08:52):
Got here we go.
Speaker 4 (08:53):
The main area where people waste money is on things
and not even links to their happiness, which is how
they structure their mortgages, how they structure their insurances, and
possibly even their key wei savers. So it's things that
account for so much a great proportion of your total
income is just tends to be quite inefficiently structured. There
isn't say for your mortgages, there isn't a strategy to
(09:15):
pay it off faster or to structure it to enable that.
And that adds up to thousands of dollars a year
of wastage.
Speaker 2 (09:22):
That's later on though, isn't it. So you've got a mortgage, Yeah,
but I mean if you are looking to pay your
mortgage off quicker, that's going to cost you more. If
you're worried about not being able to meet your expenses
and you want to save money. Now are we talking
about different.
Speaker 3 (09:35):
Things on well sort of.
Speaker 4 (09:37):
I mean, if you're saying people living within their means, well,
you need to be able to save. If you want
to make progress, you really need to be able to
save twenty percent of your income. And that's sort of
the starting point. And I think the thing with New
Zealanders is we're not naturally deliberate about these things. We think, well,
we're earning enough. We're certainly working hard enough. That should
be enough to stretch for our cost of existence. But
(09:59):
if there's none left over, you're still not getting ahead.
You can sort of dress it up however we want,
and we can talk about hard it is, but you're
still not getting ahead. So what are we going to
do differently? And some of it is to do with
you need to be more structured around how you spend.
You need to have a budget. The most common areas
where people overspend as food. You spend a little bit
(10:20):
more than what you think, more often than you realize.
Across the spectrum of things to do with food and drinks,
whether it's your groceries or your subscription boxes, eating out coffees.
I mean, I don't even care what you call them,
but they add up and you will be spending more
than what you think.
Speaker 3 (10:36):
I'm absolutely sure you do.
Speaker 2 (10:38):
It's even like for a simple issue that I thought
of the other day with it's chatting with my wife
about I mean, look and look, we are not as
hard up as some people, but we've got a long
way to go. But we were talking about we takeaways,
you know, because we just got back from holiday and
things and we didn't have much time, and I thought,
and I actually did the sums in my head. I thought, okay,
(10:58):
well we can spend probably what one hundred bucks or
something around that, maybe a bit less on takeaways. And
I just said to her, want to just go get
some burgers from the supermarket and I'll make burgers. And
we did, and that probably saved what we saved a
whack on that. And I think it's just a highlighted
to me how easily it is to just go takeaways.
Speaker 3 (11:19):
Sounds so innocuous, obnoxious. I was going to say.
Speaker 2 (11:25):
Innocuous and look, there's a time to get it, but
I just thought, I'm going to save myself sixty or
eighty bucks here done.
Speaker 4 (11:31):
I think that. I mean, it's what, it's just the
creep of the lifestyle, right, Like you've consciously, probably because
you got back from holiday and probably because you're overspent
on holiday, there is a willingness to make some concessions
in that moment, which is great. But for the rest
of the week or the month, we don't make those
(11:52):
concessions and we're not deliberate, and it's innate. We're allowed
to not be deliberate because of how we pay for things.
We tend to use our credit cards and that fuels
and overspend. And I can even talk to that with
my clients. I'm very particular around what they're allowed to
use your credit cards for. But it has been proven
that it is easier to spend when you have a
(12:14):
credit card, that the pain of the purchase is disconnected
from the purchase from and so the further away the
pain is from the purchase, the more likely you will
overspend without clocking it. Like, there's just countless studies on that.
Speaker 2 (12:28):
But even just it's easy to explain because I just
sort of think, I mean, it's easy to understand. I
think because I can imagine if I hand had to
hand over what wadds of fifty dollars bills or twenty
dollar bills just to pay for the supermarket shop, I'd
probably be looking in the trolley going really I talked to.
Speaker 4 (12:45):
That point because I canceled my credit card because I
couldn't find it, and I was like, oh, oh, this
is frightening. So I canceled it a hu and you know,
it takes a week or so a week for them
to the next one to get to you. So I
had to use cash for that week, and it was
stressful going to the supermarket. I was never so aware
of what I was spending. Then I'm like, well, it
(13:05):
was kind of fun. I was saying to my kids, well,
you better put that back.
Speaker 3 (13:08):
Don't sufferable.
Speaker 4 (13:09):
I don't think we could afford that. And that's great,
it was good for the soul, but a rigor and
I think, well, that's how we used to do it,
certainly when I know that when I was a student,
I only had thirty dollars for food.
Speaker 2 (13:22):
A week back then, and we all put it into
a we'll put it into the kitty and somebody here
and that person who is in charge of the shopping with.
Speaker 4 (13:29):
An image of your life, right, and we don't have
that connection to a credit card. You just don't because
there's always going to be more money. So I think
that it's a combination of things. We don't have goals
that are ambitious enough for us to aim for. They're
not lofty enough, and they should be. Our day to
day structures and systems are week and it's all kind
(13:51):
of glued together with a really an effective or effective
if you're a credit card company, way of managing our money.
Speaker 2 (13:57):
Because actually one of the things I think that you've
not inadvertently touched on but mentioned implicitly. It's about you've
got to find that motivation for it. So, for instance,
we are towards the We're not towards the end of
our mortgage, but we it's in sight. And I did
a bit of a calculation about if I paid an
(14:18):
extra such and such extra on my mortgage, that's going
to In fact, I even got chat GPT to do
it for me. I said, chat GPT, this is what
I could potentially pay off. How much will I save
and how quickly? And what will this mean financially. It's
quite good at that because you can literally ask it
a plain English question, if I pay an extra few
(14:39):
hundred bucks a month off on my.
Speaker 3 (14:40):
Mortgage or whatever.
Speaker 2 (14:42):
And it suddenly made me think, oh my goodness, this
really makes a difference, and oh my goodness, the end
is in sight. So what I'm the reason I mentioned
it and what I mean the end is in sight.
I don't mean tomorrow but a few years time. But
that gave that that does help the motivation because I
think there are a lot of people who would get their mortgages,
you know, they bought their home, and despite the fact
(15:04):
people say, look the marketers, you know, it's affordable right now.
It's a great opportunity for first time buyers. We're chatting
with brad Olsen Yest and I just said, you know,
probably is still expensive, isn't it?
Speaker 3 (15:15):
And he said, god, yeah. And so I think when people.
Speaker 2 (15:18):
Get a thirty year mortgage, the motivation that they that
I've got they don't necessarily have because they just see
this massive amount of money going out and they're just
strugging to make it in meet. So how do you
find the motivation long way of asking a question about
finding the motivation to save money.
Speaker 4 (15:33):
Well, it has to be closer than thirty years.
Speaker 6 (15:37):
You know.
Speaker 4 (15:38):
It needs to be ambitious, and you need to believe it,
and you need to want something. Not everyone is motivated.
I mean, they want to be mortgage free, but the
idea of that isn't necessarily their goal. They're happy if
that would be kind of a result of something else
as opposed to what they are seeking.
Speaker 3 (15:55):
For grandma to pass away.
Speaker 4 (15:57):
Yeah, well, no, they might be more motivated by Look,
it's really more important for me to help my kids
through university or to help my kids onto a property
letter that is pulling me harder than wanting to be
mortgage free. Right, So you've sort of got mutually. They're
all good goals, but what one's going to be the
one to motivate you. That's interesting, And it's sort of
(16:19):
like a marathon.
Speaker 3 (16:21):
It is, and where we can all end up in tears.
Speaker 4 (16:24):
Well yeah, and you think that, well, it's not long
to go therefore, and it's downhill, so I should be okay.
But that's when a lot of people get injured, or
they get distracted, or it just feels hard. And no
matter how close you are to the end, for many
people trying to get mortgage free, they are crawling to
the end to do it. And when they've got this
(16:44):
shortened runway because maybe they're going to be retiring in
a few years, it's a bit of a pilon. So
we've got to be able to navigate that. And I think
that the goal for everyone should be to be mortgage
free in under ten years. Whether you have just got
your mortgage or not, it should be under ten years.
And if you're already on track to be mortgage free
in ten years, then we should be trying to make
it five years. Get a giddy up going here so
(17:07):
that you you are prepared to try harder, You are
prepared to be more conscious and deliberate, because the trade
off feels big enough and juicy enough to justify it.
Speaker 2 (17:16):
Funly, though, I look AT's even without our pathway to
paying hours off, and then you suddenly think, well, hang
on a minute, my car is getting towards the end
of its legs, and oh god.
Speaker 3 (17:24):
How much is that going to cost?
Speaker 2 (17:26):
And it's just the other expenses which I don't know,
they're just do I flog my car till it's dead?
Speaker 3 (17:32):
Basically that sort of question.
Speaker 2 (17:35):
Actually, we'll come back on that because we need to
take a break, blave of not because we've flogged that
one for way longer than we should have. But we
want your calls on No. E one hundred and eighty
ten and eighty as well. Is where is the first
place you can save money? And what's your money saving hack?
What is the place that you looked at yourself, you
looked at your lifestyle. Maybe you did have the motivation
you thought, hang on a minute, I'm spending way too
(17:55):
much on other things. I should be paying my mortgage
job for I should be saving from a first deposit.
Where did you save money easily? Or is there no
such thing as easy? He's saving them money. Give us
a call eight text twenty five past five. My guest
is Hannah McQueen. We'll be back in just a moment.
Speaker 3 (18:49):
Oh, by the way up.
Speaker 2 (18:51):
My laughter is because we always offer our guests a
chance to choose a song, and Hannah McQueen, my guest
for Smart Money, suggested another song other than that.
Speaker 4 (19:01):
Definitely even got.
Speaker 2 (19:05):
Time to just bang out Welcome to the Jungle, and
Hannah's face when she had.
Speaker 3 (19:09):
Like, this is not my request, that's just the best.
Speaker 4 (19:12):
Basically, over promise, under deliver.
Speaker 3 (19:15):
Hey.
Speaker 2 (19:15):
One of the things we were talking about when it
comes to motivations to save money is that there is
a point when people, you know, in the early stages
of their mortgages, it's just you know, you're paying off
a fraction of your principle.
Speaker 3 (19:27):
And whack and interest.
Speaker 2 (19:29):
And I think what I was honing in on with
what I was saying before was that the kick for
me is that when you start really seeing that you
are paying down the principle because the interest is you've
got to that point where the bulk of your payments
off principle and it's like, hellolujah.
Speaker 7 (19:46):
I know.
Speaker 4 (19:46):
So when I actually first started to enable me, I
did some analysis on that. And because you can pay
between two and three times back to the bank. So
if you borrowed five hundred thousand, well my first mortgage
was three hundred thousand, and I was going to pay
close to a million dollars back to the bank. And
kind of interest rates move around, but let's assume that
interest rates remain this same for that thirty years. You
(20:07):
make these monthly repayments every month, and a portion of
that is principal and a portion is interest. And I
thought that at year fifteen, or halfway through the mortgage,
you would start paying more principal than interest. So I
understood that you paid interest made up the large whack
of it to start with. It's not actually until year
twenty three. So not only are you going to pay
(20:28):
back to the.
Speaker 3 (20:29):
Bank, and that's where two times you are paying more
principal than interest. Simply you've just.
Speaker 4 (20:33):
Got within within that monthly a portion, yes more than
fifty percent, is going towards the principle. So it's a
great business model for the banks, right, pay them a
lot and pay it all pay them back first essentially, actually.
Speaker 3 (20:47):
How much of the how much of them?
Speaker 2 (20:50):
There would be some sort of bell curve, wouldn't there
where you'd just be paying interest interest, interest in test
and very little principle.
Speaker 4 (20:55):
It's not a bell curve. It's kind of like a
hockey stick where you paid that a flat your flat
line for about twenty three years, and then it starts
to come down very quickly. I mean, it's gradually coming
down for those first twenty three years, but nothing to
write home about. But it's those last seven years that
you really get a bit of a trot going, and
it feels great because you, oh, finally it's finally starting
(21:18):
to come down.
Speaker 3 (21:20):
Until you get your investment property in your back.
Speaker 4 (21:22):
On that, I guess the investment property we think of
that as productive debt, so it sits outside of the home,
which is largely unproductive.
Speaker 2 (21:30):
How do you how do you view the investment property
market at the moment, given you know the catality formerly
core logic. I can't keep up with these name changes anyway.
They said they've got a stat that says, in terms
of real terms, that property is going to be worth
less than twenty thirty one by twenty percent real value.
(21:51):
But there's not a lot of headlines around. Remember when
we first met, I mean property was it did seem
there was a real boom going on and when we
were when I was first doing the show with Tim
Rocksborough and we've ed you on the show for few years,
but it feels that things are very more dull drummy
at the moment.
Speaker 3 (22:09):
What are your thoughts on.
Speaker 4 (22:10):
That, Well, I think that we need to work out
what we're buying the property for. If it's to create
a capital gain that's going to plug a gap for
your retirement savings, Well, it's understand what is the growth
rate we need to get to solve that problem, and
then what is the region that's likely to give us
that growth rate, either because people are moving there or
(22:31):
because they just aren't enough of the right properties there,
there's a shortage of rental properties. And then let's make
sure that the property we buy is giving us the
yield we need and so that we can afford to
hold the property long enough to get the game that
we wanted.
Speaker 3 (22:46):
So that.
Speaker 4 (22:48):
Takes time to work that through. So as a general rule, no,
I wouldn't say buying property for the sake of it
makes sense, because I don't think it does. I think
that probably only two or three percent of properties on
the market would solve the relevant problems for different households.
The comment if i'm if I know the article that
you're looking at, where they basically said property values will
(23:10):
flatline and you'll only get maybe it was a three
percent growth or growth in line with inflation, I think,
was the comment. And that's where leverage borrowings against the
property can become a really effective way of creating growth
because over time, you know, if you have three percent inflation,
(23:33):
well that's eroding three percent of the value of your debt.
You certainly want the property to go up by the
same amount. But it's when you're looking at your wealth
with the property, it's not just the value of the property,
it's your the value of the debt, and the difference
in between is equity. So your equity grows when inflation hits,
even if the asset value is not going up by
(23:53):
more than inflation. Your debt values going down by inflation,
and so you've created a gain for yourself. So sure,
there are.
Speaker 2 (24:01):
Investors whose goal is actually to get a rental yield
onultimately they're not looking. I mean there are people have
different goals with property investments. Some buy in the heady
markets of a market that's going bonkers and they realize
a capital gain and they go who I know, people
have made a lot of money out of that. But
then we've had experts on the show who are more conservative,
but their goal is to build their investment based so
(24:24):
in the end they've got a rental return.
Speaker 3 (24:26):
That is.
Speaker 4 (24:27):
But you're looking at different properties to solve different problems, right,
So if you needed to grow wealth, you probably need
to be able to benefit from leverage, so by default
you're going to be going more down the residential investment route.
If you're looking for a yield, you're probably going to
link more towards commercial properties. But that suggests that you've
got a whole lot of cash to invest, so you
don't need to get a mortgage so you can benefit
from that return.
Speaker 2 (24:46):
Speaking of cash, just going back to what we were
talking about before the break, would you say that would
be the number one way of getting on top of
your expenses.
Speaker 3 (24:53):
Is to be de cash use cash.
Speaker 4 (24:55):
Absolutely.
Speaker 3 (24:55):
Cash is can.
Speaker 4 (24:56):
It's the fastest hack because it's your behavior that's the problem.
It's not really the cost of anything, it's that you're
just not in tune with what things are costing and
how that adds up over the week. So that cash
is the easiest way because you don't then need to
look at your bank account. It's like, do you have
the money in your wallet? If not, well, how else
are you going to trigger yourself to assess can I
(25:17):
afford that this week?
Speaker 2 (25:19):
And immediately reminds me just of the days when I
as a student, we all put twenty twenty five thirty
bucks cent in the kitty and whoever is doing the
shopping took that cash and you walk around. I don't
remember ever taking off any major list, but it was like, Okay,
we've got the meat for the week. Now let's see
what bread and Sarah or we can afford them butter
and there.
Speaker 4 (25:36):
Must have been and you choose right because you don't
have access to this unlimited facility. And I think we
do have access to more of an unlimited facility, well
enough for you to spend without really knowing what you're spending,
through the virtue of credit cards or buy now, pay later,
(25:57):
or overdraft facilities or revolving credits that they are designed
to disconnect you from your spending and who makes money
from that?
Speaker 2 (26:05):
Yeah, it's quite funny, you know you talk about the
looking at the shopping trolley. I had literally that moment.
It wasn't it, And it wasn't for the big shop.
It was just my wife said, look, honey, I've forgotten
a couple of things. Can you pick go into the
supermarket and pick up a couple of things, like as
in a handful of things? And it was eighty bucks,
I mean, And I was like, okay, bread, got such
(26:28):
and such. Okay, that cost a bit, But I.
Speaker 3 (26:29):
Was like, how do we get to eighty bucks?
Speaker 2 (26:32):
That's just something where you think in the old days
you pop down to the dairy with ten bucks. But anyway,
I'm exaggerating a bit, but there we go. Right, let's
take some calls.
Speaker 3 (26:40):
Don Hello, Don, Hi, Hello, Yeah, good a. How are
you excellent things?
Speaker 7 (26:49):
Hey?
Speaker 4 (26:49):
Done?
Speaker 6 (26:50):
Excellent?
Speaker 7 (26:51):
Hi.
Speaker 8 (26:51):
Just a quick question for Hannah. I just turned the
radio on, so I haven't heard the whole conversation.
Speaker 6 (26:57):
But my question is I.
Speaker 8 (26:59):
Heard you mentioning around the interest component when you're paying
off mortgage. Obviously doesn't really kick into or the principle
doesn't kick it into the last minute. If I was
fixing or taking on a mortgage shortly, am I better
to set the mortgage structure up for let's say fifteen years,
(27:19):
but I know I can pay it off in eight am,
Am I better to set that at the start? Or
am I better to set it up longer with the
bank knowing that I can pay off a lot more
and then just pay it off at much greater rates.
Speaker 4 (27:33):
So this is going to come down a little bit
to your tendencies on. But if I was looking at
it from a pure financial perspective, I'd be wanting you
to set it up over the maximum amount of term possible,
so to lower your fixed requirements and the excess amount
that you can afford to pay as a result of
(27:54):
that and your available savings, I'd be putting that onto
a revolving credit facility that you pay off faster. So
what that you won't I don't want you to have
credit card access to that revolving credit facility. It's simply
a way of giving you building in some financial resilience
(28:14):
to your strategy. So the problem with when you shorten
the term is that you are required to maintain that
even if there's the odd month where it just was
impossible to do or creates a whole lot of stress.
For most people, their progress isn't it's sort of undulating
over the course of the year, and the revolving credit
can be a really nice way to mop up your
(28:36):
games without putting pressure on you for those downtimes within
the year. But you have to be able to maintain that.
And that's so I say I suggest that route on
the assumption that you would be very disciplined in paying
that revolving credit off. If you thought that there was
more of a concern that if you didn't have the
(28:58):
fixed requirement to pay each month, that you're not going
to do it, even in a voluntary basis. Will then
maybe the shorter term is how you force your own
behaviors to submit.
Speaker 6 (29:10):
Yeah, no, uncomfordable the behavior.
Speaker 8 (29:13):
Oh the best strategy around how to move forward?
Speaker 4 (29:17):
Yeah, Well, the revolving credit's going to be nice because
that gives you the opportunity to maximize your wealth opportunities
whilst you're paying that mortgage down faster. Because I don't
I think one of the days where you just do
one thing at a time, certainly pay that mortgage off,
but that's creating equity. Let's put that equity to use,
and we are able we reserve the option of doing
(29:38):
that if you've got already baked into the structure through
the revolving credit.
Speaker 3 (29:42):
Good stuff. Hey, thanks, we called on.
Speaker 2 (29:45):
Actually tell me what We've got a bunch of interesting
texts we're going to dig into straight after this. But
it is twenty one minutes to six on Newstalk z B.
Are you worried about funding a comfortable retirement?
Speaker 3 (29:54):
Well you're not alone.
Speaker 2 (29:55):
The cost of living crisis is heading home for a
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get a little bit more income to supplement the New
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(30:18):
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(30:39):
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Speaker 1 (30:49):
Tim Beverage on the weekend collective called on eight hundred
eighty ten eighty News DOGZB.
Speaker 2 (30:55):
Back with You with Hannah McQueen. This is a smart
money talking about saving money. Your money hacks and maybe
restructuring your mortgages crept into the conversation as well, or
doing your best to pay their off as quickly as possible.
Speaker 3 (31:04):
Mark, Hello, heyday you go after You're going good?
Speaker 7 (31:08):
Thanks, O hell you.
Speaker 5 (31:10):
I just wanted to call up and we're talking about
money saving tips and looking after our money and stuff,
and I'm currently working with enable Me and I just
think it's it's great, it's amazing thing.
Speaker 6 (31:24):
I'm walking working with.
Speaker 5 (31:25):
My coaches actually water Maine and Waterman, and yeah, I
just wanted to ring up and say that if anyone
wants to get tips and stuff about saving money, enable
me is a good way to go.
Speaker 3 (31:37):
Well, I'm sure Michael, Michael is sef. Hannah's very happy
with you. Michael, how long are you been? How long
you been under the wing of Enable Me.
Speaker 5 (31:51):
I've been with them a year so I'm currently just
building my first rental property down in Macargoll and I
just yeah, I just I can't speak highly enough of
them and my Cha Chash. They're things really clear for
you and makes you really aware of the money that
you spending. Everything can categorize, and yeah, I just think.
Speaker 2 (32:13):
It's a great way to go good stuff. Hey, thanks
for your cor mate, really appreciate it. Hey got a
question here Hannah and the Text High team, just wondering
if Hannah has any tips on survival where one partner
is a spender and the other is a saver in
a relationship.
Speaker 4 (32:27):
Yeah, we have quite a few combos like that, and
sometimes I feel we become more marriage counselors than anything else.
It's hard when your tendencies are different, but you've got
to start with where do where do your goals overlap?
Because there will be things that are important to both
of you and we've got to get on the same page.
But if you don't have shared goals or shared values,
(32:50):
that can be really tricky. So normally you need a
big goal. So savers, if we think about them, they
tend to they're not they're more risk adverse that they
need a reason to spend, and they're quite happy not
to spend, which is very different than a shopper, right,
who needs a reason not to spend, and in the
absence of that reason, is quite happy to spend. That
(33:13):
can be quite challenging when you just programmed different ways.
And also shoppers tend to be more naturally ambitious with money.
In fact, if you want them to pay attention to
the detail, give them a goal that they're focusing on
where that's kind of a byproduct of achieving that goal.
But if the goal is just to focus on the detail,
they'll tap out before they even engage. It's tricky, yeah,
(33:37):
But when we work with couples like that, we always
start with what are the goals and is there anything
we can get to float your boat for both of you?
But often, I mean, you've got the shopper savior, but
you've also got the optimistic person and the person who
can be quite pessimistic with money, and that's another kind
of combo that can be unsettling for both.
Speaker 2 (33:57):
Mind I think we would have think that if you've
got them both in the room for a start, then
they're at least on the same page to some extent
because they've both come to see you, haven't they.
Speaker 4 (34:06):
Well, yeah, I think it's a romantic view. I mean
for some people it's well, you come to this meeting,
otherwise I'm out, like I don't know what the conversation
is behind the scenes.
Speaker 3 (34:16):
Good point.
Speaker 4 (34:16):
And for like twenty percent of those meetings, they are
revealing a degree of financial infidelity or costs debt that
the other partner doesn't know. So I can see why
no one's that excited to come to those meetings, but
they want to be ambitious. It's it's quite liberating having
someone who can just navigate those challenges, so you just
take the emotion out of what is a very emotional topic.
Speaker 2 (34:41):
One person's a couple of bits of advice before we
got to a next caller. One said, we found motivation
and paying the mortgage when we broke the mortgage into
to one into two, one small amount that we could
pay three years. It gave us a goal we could understand.
Coupled with this using our phone, if we had had
the when we could easily just add more for one
week even just forty bucks.
Speaker 3 (35:01):
Still working on it.
Speaker 2 (35:02):
It's going down faster and faster, and I aren't really
compute the large numbers. It's a small target, says Sean.
But yeah, one way of doing it.
Speaker 4 (35:12):
Yeah, and I think that it helps if Sean's partner
is on board with that, right, But if they're not,
how do we navigate that?
Speaker 7 (35:18):
Then?
Speaker 3 (35:19):
Another person says hack.
Speaker 2 (35:20):
When refixing my mortgage, I asked my bank if that's
really the best rate they could do, and they knocked
off zero point zero four percent, which is three hundred
bucks a year. Small victory for Simon. Actually sometimes this
small question, come on, seriously, is that the best you
can do? And all of a sudden, I don't know,
you've saved Yeah, or.
Speaker 4 (35:39):
I'll take my business elsewhere could be a stronger phrase.
Speaker 3 (35:45):
Yeah.
Speaker 4 (35:46):
I like the idea of it. And speaking of just
those small things adding up ten percent of your spending
is just lazy tax that you're paying. So subscriptions, you're
still you haven't canceled. It's things that you're choosing to
pay off in set of paying upfront. But ten percent
of your outgoings can be saved if you were managing
your money kind of more again deliberately.
Speaker 2 (36:06):
Right, Well, you're going to take a quick moment be
back in just to tickets eleven and a half minutes
to six news talks.
Speaker 3 (36:11):
It'd be news talks. I thought we had a tune
coming in here for some reason. Yeah, but we don't.
Speaker 2 (36:16):
We're going to readily disappoint that, Hannah McQueen. Now let's
take some more. Callse Matt, Hello, Hi, how are you?
Speaker 7 (36:23):
Hey?
Speaker 4 (36:23):
Matt?
Speaker 8 (36:24):
Hi are you?
Speaker 7 (36:25):
Hannah? August August eighty eight. I had a twenty year
mortgage paid off for three years, seven months and twenty
one days, and went on to purchase rentals. What I
did was I had a part time job used to
at eight o'clock in the morning till mid I had
two jobs, and the second job used to get paid
in the brand envelope way back then, and I left.
(36:48):
I left most of the mortgage on floating. Every payday
from my part time job at the service station in Napier,
I would drive to the bank and pay it off.
The principle So.
Speaker 4 (36:59):
And I love that.
Speaker 7 (37:00):
Yeah.
Speaker 2 (37:01):
Actually, I think that's the thing is people realizing, if
you what the benefits are of doing that extra bit
of work or saving that extra bit of money, isn't it?
Speaker 7 (37:12):
And the only way to have a mortgage is principal
plus interest. It's an old Westpac system. The other bank's
probably had a lot. I had to teach one person
at west Pac the print, the how it worked, because
so my principal, howd of your understand this was a
lot higher to begin with, So most of it was principal,
(37:34):
and I paid off the interest every fortnight. The interest reduced,
but the principle remained the same. So then I left
most of it on floating. So once I paid this
mortgage off, twenty year mortgage of three years, seven months,
that included getting glandular fever and being off work for
three months, but I had an emergency fund. Then I
purchased my first rental, and I could have had a
(37:57):
lot more of that. I'm quite risk a. Versus went
on to what owns six.
Speaker 2 (38:02):
Religious good stuff? Matt, Hey, Matt, we're but short of
but thank you for your call. I got one.
Speaker 3 (38:08):
They have, We got time for another call. You have
to be very quick, Rob, Well, I have it going.
Speaker 6 (38:14):
I've got some money and a termined deposit and it's
coming maturing about a month. I just wondering what's a
good it's about seven hundred grand. I just wondering what's
a good thing to look at. I don't really want
to get into a rental again.
Speaker 2 (38:27):
Without giving a specific financial advice or any observations and thoughts.
Speaker 4 (38:31):
Hanner, Well, we need to know what the future goal
is like are we trying to prepare for retirement. To
determine is that capital enough to stretch or do we
need it to start working harder? And how hard does
it need to work? And that will determine whether we
need to use leverage and go into the rental market
or not. If we don't go into the rental market,
then you're looking at your managed funds and your shares,
(38:53):
which can serve a purpose. But we've got to understand, well,
what's the volatility that you can stomach financially and also physically.
Gosh it with that, so there's a little bit to it,
rob but we just there don't think that you have
to go into investment property. But let's work out what
the problem is we're trying to solve, and then we'll
determine what's the right strategy for you.
Speaker 2 (39:13):
What's your goal you're trying to solve their b I
just have a bit of like income for retirement, you know,
a year or two.
Speaker 4 (39:21):
Sure, Yeah, so you go if you kind of ratchet
it up. You start at your savings, and then you
go to your term deposits, and you go to your
managed funds, then you go to your property, and then
you go to shares. That's sort of the level of risk.
I guess with them. If you had seven hundred thousand
dollars and you bought a property and it was giving
you a yield of six percent of residential and let's
(39:42):
say one and a half percent of that is property
related costs, So you're still making about four and a
half percent, which is probably better than a term deposit,
and you're getting capital gain that might be better than
leaving it in a term deposit. But if you don't,
if you have your eyes set on avoiding going back
into that market, then we need to look at your
managed fund and kind of take you through what that's
(40:05):
going to feel like, because it can feel quite uncomfortable
when Donald Trump decides to introduce a tariff.
Speaker 2 (40:12):
Say, oh gosh, hasn't the NASDAC been through a roller coaster?
But it's like they're paying less attention to what he
says about tariffs and stuff at the moment. But it
certainly has been a turbulent period, isn't it It has? Yeah,
one person says the high time I just brought an
investment property. My bank being z turned us down. We
went to a broker, got two banks, drop of finance,
(40:32):
went to it and blah blah blah. Anyway, it's been
the best thing we've done for cutting frivolous spending. Cut
out about one thousand bucks a month of back and
too hard, and it could have saved a fortune by
doing this a year ago.
Speaker 3 (40:43):
So thank you to that text. Look anyway, Hannah.
Speaker 2 (40:46):
With not very much time to go, I look forward
to catch up with you again and in news of
the next marathon.
Speaker 3 (40:52):
Ha ha.
Speaker 4 (40:54):
Anyway, I can help you with your marathon mortgage. Maybe
that's where we focus on.
Speaker 2 (40:57):
Hey, thanks everyone, thanks for listening, Go and check out
the podcast.
Speaker 3 (41:01):
Thanks to us.
Speaker 2 (41:01):
Are a great job today, and we'll look forward to
your company next weekend.
Speaker 3 (41:05):
Sunday at six is next.
Speaker 1 (41:11):
For more from the Weekend Collective, listen live to neth
Talk SEDB weekends from three pm, or follow the podcast
on iHeartRadio.
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