August 25, 2024 • 39 mins
New Zealand has seen several iconic and well-known businesses close in recent months, especially those in hospitality.
Is the economy to blame, or are people choosing the wrong business?
Financial author Martin Hawes joins Tim Beveridge on The Weekend Collective to discuss.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks
ed be Welcome back to the Weekend Collective. I'm Tim
Beverage And if you're missing in the previous hours, I
would recommend going to check out the podcast Fantastic Chat
with Alex Flint there just about getting your exercise habit
started and and all of that should I say about anyway,
you can check out the Weekend Collective podcast at iHeartRadio.
(00:26):
Right now, it is time for Smart Money and my guest,
well he needs no introduction really, Martin Wores. How you doing?
Speaker 2 (00:34):
Yeah, very well?
Speaker 1 (00:35):
Thinked if you got a business card, that's one who
has a business card. But you could probably just write
financial guru, couldn't you.
Speaker 2 (00:42):
I don't have a big business card, and I if
I had one, what would probably financial writer and financial speaker.
Speaker 1 (00:50):
Oh well, that's not as much fun as guru. I
like guru.
Speaker 2 (00:53):
Yeah, yeah, I like as well.
Speaker 1 (00:55):
Maybe it's promising too much. It's a little bit SI. Yeah,
it could be reminded of how many books have you written.
Speaker 2 (01:01):
I've written twenty three books. I've actually written twenty four
because I handed the manuscript of my twenty fourth book
into the publishers a couple of weeks ago and doing
their thing on it. At the moment. It won't be
out till next year or so, but that'll been number
twenty four.
Speaker 1 (01:20):
What how I can look. I can imagine someone going,
I've got a book in me and I'm going to
start writing it. And you've done twenty three. And now,
as you say, twenty four is not out yet, but
you've written it. Yeah, what motivated number twenty four?
Speaker 2 (01:35):
About five years ago I had a real old disruption
of my life and I left Queenstown, where I'd live
for twenty odd years, and moved to christ Church, which
is where I live now. And you know, whenever you
have a big disruption in your life, you meant to
go through your finances, aspect by aspect, all the different things.
And I did that, and I made a new will,
(01:55):
I wound up the family trust that I've had, I
got my investments managed by someone else. And it was
such an interesting process which happened over two or three
years that I thought I would be writing up. So
the book is partly biographical, but it's partly also advice.
Here are the things that I did, and here are
(02:17):
the thing here's how it worked out warts and all. Wow,
made a few mistakes and doing that, well, they weren't
really mistakes. One of the things I did was I
canceled my health insurance to self insure, and I put aside,
you know, quite a sizeable some of money. And the
(02:40):
idea was that I would pay what had used to
be the equivalent of the premiums into.
Speaker 1 (02:45):
A get ahead of it yep, yep.
Speaker 2 (02:48):
And within three months of doing this, I was under
the knife, having having an operation, and then a month
after that I had another operation.
Speaker 1 (02:57):
So did you spend it all?
Speaker 2 (03:00):
No? No, I haven't spent I've still still got a
bit of back up there and I can afford to
self insurance. I mean, it would be a disaster for
somebody who hadn't put the money aside and such like.
And you know, I'm of an age retirement age where
I see a lot of people who ask questions about
health insurance because getting as you get older, it gets
(03:23):
really really expensive.
Speaker 1 (03:24):
That is a problem, Isn't it actually funny? As you
were talking about that and saving it, I have you
still got it? And I was thinking of that black
added quote when somebody stolen some money from Baldrick and
he goes, what about that tuppence? It was under my
pillow and he goes, seen it, pinched it, spent it.
I was wondering, if you're about to deliver that line
on your health insurance.
Speaker 2 (03:42):
No, no, no, there's still some money there. So and
you know, health insurance, you know it's important to some people,
but it's mostly about Q jumping. I've had a bit
of experience now in both the public and the private system,
and the public system is slow to get into it.
Speaker 1 (04:00):
But it's fantastic when you're in.
Speaker 2 (04:01):
But it's fantastic once you're in there.
Speaker 1 (04:03):
Well, I didn't realize that the really good surgeons. I've
learnt this probably in the last few years, but the
really good surgeons have a public They work in public.
It was to be the public, you have to be
the best. And so if you're looking for a private surgeon,
look for one who's also in the public system. And
you're you're away. But it is Q jumping. Yes, you're right,
but if you've got a dodgy knee, then you know.
Speaker 2 (04:24):
Then you want it done. Yeah yep.
Speaker 1 (04:27):
Hey, Actually you have distract me with that talk about
health insurance because we're going to talk about small businesses
and we will do it. But I just wanted to ask,
when you are paying for it yourself, do you have
do you try and haggle? You know? It's like when
they say you've got to go into this private hospital
and they say it's going to be so much a night,
and you're like, oh, come on, give me a break.
(04:48):
I'll give you such and such. I don't.
Speaker 2 (04:51):
I don't think there's any haggle room in there whatever.
I'd love to say, yeah, wouldn't. I got fifteen percent off,
But they just presented me with the price that here's
the surgeons for the this fee, here's the hospital fee,
here's the theater fee.
Speaker 1 (05:09):
That's it.
Speaker 2 (05:11):
They never said take it. They never said take it
or leave it?
Speaker 1 (05:13):
But was it did? Do you look at it and go, yeah.
Speaker 2 (05:17):
It's well they warned me it was, but it's a
fair bit of money, you know. One well they were
both about fourteen thousand dollars each, so you know I
took a thousand dollars.
Speaker 1 (05:28):
That sounds like a hip and a knee.
Speaker 2 (05:30):
No, it wasn't either of them.
Speaker 1 (05:32):
Okay, no, no, no's going on. Don't don't don't tell
us we do. I'm not going to ask. I'm not
going to you know, we're not going to push it
any further. Hey, I wanted to have a chat about
suffening about small businesses. And when I say small businesses,
I mean I don't know how we define a small business.
There is a particular definition, isn't it. In fact for
some people. If you some small businesses, if you described
(05:55):
it to the average punter, that they'd be like that
sounds like a pretty big deal to me. And there
have been a lot of headlines around recently about the
number of businesses that are folding. We've seen the very
public ones, of course, when people just notice that their
favorite restaurants no longer there. We've seen some fairly well
known establishments that have suddenly disappeared. But of course there
(06:16):
will be people who set up small businesses at times
like this, because if you've got a good idea, then
you don't want to wait around. Have you Are there
some basics when it comes to small businesses on what
you can absolutely get right and what you can absolutely
get wrong. And sometimes I don't know if it's just
(06:38):
a question of luck either, because I've spoken to small
people who just about every small business person I've ever
spoken to will say, in fact, I've even done a
couple of things myself where I've looked back and gone, well,
thank goodness X didn't happen because I wouldn't have been
ready for it. And a lot of them will say, oh,
my goodness, if I'd known, if I had known how
(06:59):
hard it was, I never would have even done it,
And yet here I am a success. So can we
just still that into some basic dos and don'ts for
small business big Core Martin.
Speaker 2 (07:09):
Yeah, yeah, it is actually, and you're right about the
definition of a small business. There are definitions. I think
in New Zealand it's under maybe fifty staff something something
like that.
Speaker 1 (07:20):
If you have forty staff, that's massive.
Speaker 2 (07:24):
But I may I may have that wrong. It might
be twenty, but it's something like that, whereas in the
US it's it's five hundred and so forth. But you know,
a lot of them to a pretty marginal sort of operations,
and a lot of them, I would argue, aren't really
businesses at all, paid directly that it was paid hobbies. Yeah,
(07:44):
and that's one of the don'ts. You know, it's not
not necessarily a thing that you've got to love. But
it's largely self employment, you know. So if you imagine
a trade or myself I was self employed, I wasn't.
Really I didn't have a business. You know, I could
have had a business, and I could have built up
a financial advisory practice with fifty staff and so on,
(08:08):
but I quite deliberately and consciously decided not to because
I want a better lifestyle than that. I'd argue a
lot of a lot of small business owners don't have
great lifestyle. That is, you know, they not only have
to carry on with their trades, but they've also got
a market that they've got to give quotes, they've got
to do the books, they've got to do all those
(08:30):
other other aspects, and they actually find they have very
little life at all. I think the number one bit
of advice I would give to people is to start
with the end in mind, so to start thinking about
how is this going to play out? And ideally you
want to be able to sell your business for preferably
(08:51):
serious money. So you build something, you take all the risks,
you live, eat and breathe your small but business and
most small business people do. You want a really good
payoff at it, so you've got to think about who's
going to buy this business, and what are these people
who are going to buy the business, what are they
(09:11):
going to be looking for? And the answer to that,
in almost all cases is that they will seamlessly keep
the profit going. That is, from day one when you're
the owner. Today too, when the other person is the owner,
the profits keep flowing. And that means that you don't
have your name on the door. You're not you know,
(09:31):
the business is not dependent on you. You don't have
your name online, so that you're the number one person
in whatever the field is. The Other thing I'd say
is that hospo is something that a lot of people
go into. Somebody described that about thirty years to me,
they have this little vision of themselves standing around the
(09:52):
bar at lunch time with a five ounce glass of beer.
This is when we had five hour glasses of beer.
And they see themselves as being mine host and that
sort of thing. Most hospo is bloody hard work actually, and.
Speaker 1 (10:10):
That you've got all the stuff and that your mind
host and you're going around the table saying hi, and
everyone's going, hey, hey, are you going Martin, And I'm loving, loving,
loving your chef's work today, and as opposed to.
Speaker 2 (10:21):
Yeah there's a there's a snail in my cello, so
so and so hasn't turned up again. Very difficult businesses
to run, and I know they're quite high profile and
you really do notice when your local cafe closes. But
I suspect I've never seen numbers on it, but I
suspect that more hospital hospitality businesses cease to be help
(10:47):
we polite, and then most other business SIPs.
Speaker 1 (10:52):
Yeah, it's interesting that you you would an unsurprising I
guess that you'd say you have a think about the
endgame where do you want to end up? Because there'd
be many people who end up. Maybe I should also
include myself employed, but that's usually just only responsible to yourself.
But let's say small business that a lot of people's
motivation would simply start from I want to be my
(11:13):
own boss and nothing more. That would be very common,
I managed, wouldn't it.
Speaker 2 (11:18):
Yeah, yeah, it's very common, And yes you might be
your own boss. But the staff not turning up are also,
in a funny sort of way, you're your boss as well.
They certainly motivate you to do things. It's it's a
tough road to hoe. I love you know. I mean,
(11:39):
there are used to be lots of figures around about
seventy percent small businesses failing within the first five years.
And I don't know whether that right or not.
Speaker 1 (11:48):
There are those spectacular figures though there that there's so
many do fail, aren't they I don't know what the
stats are either. I could probably look up a meme
somewhere there'll be.
Speaker 2 (11:56):
I'm not sure I trust them all that much. I
wouldn't know where to where where they come from. But
it's for a lot of people. It is very, very
hard work. It's sixty hours a week, it's seventy hours
a week. Being your own boss often comes at a price.
And the other thing tim is there if you go
(12:16):
into business and you put capital into that business, whether
whether it's a relatively small amount because you know it's
for tools and that sort of thing, or whether it's
a big amount and you take on a lease for
the hospitality business and so forth, you need to get
a return on both your time and your capital. Yeah,
and a lot a lot of small businesses don't get
(12:38):
a return on either. Actually, they're not often terribly profitable.
Speaker 1 (12:44):
Well, that's the other thing. If you speak to small
business owners, they might tell you. And that's what often
comes up when they're when the government's sticking another responsibility
on employers, and how employers will say, well, listen, everyone
thinks I'm living on the pig's back, but I haven't
paid myself a wage for eighteen months. I think we
heard a lot of that obviously through COVID.
Speaker 2 (13:02):
Yeah, yeah, I've been pretty negative to them. But the
other side of it, you know, there are there are
joyous examples of people A making a lot of money
and b having a very very good lifestyle.
Speaker 1 (13:18):
So what, okay, is there a simple reason why why
so many fail? And and what's the difference between the
ones that become a roaring success? Is it just that
they've had a great idea.
Speaker 2 (13:31):
I think there's a lot about that. I think that,
you know, it's it's what they go into, it's how
they manage it, it's how they manage to staff it.
It's how they manage the staff that they have, it's
how they market it. You know, I look around the
place and I do see a lot of very successful
small small businesses. And then of course you know Apple,
(13:52):
the computer people, you know, Steve Jobs, they started as
a micro business as the Juti pack up quite now.
Garret trade me started in Sam Walken's garage. So all
these people have an idea and we only know it's
a good idea with the passing of time.
Speaker 1 (14:12):
One of them is one of the mistakes that you
might make in a small business is if you've started
it with your own ambition in mind, is a stubbornness
to share the to share it around. So if if
you've got an idea for a business, you might not,
for instance, have all the money or the capital you need,
but then it's like, my idea, why should I give
(14:34):
it to someone who's simply going to stump up with
a bit of money to make it a bit easier
for me? Is that one of the mistakes small businesses
make that they go in a bit undercooked on the
financial side, but simply because they're unwilling to share in
their genius.
Speaker 2 (14:48):
Yes, of course, taking on a partner and a business
is like a second marriage to triumph of hope over experience.
So it's you know, that doesn't always work out. But
I always say to people that I think that you're
better to have fifty percent or sixty percent of a
thriving large business than one hundred percent of something which
(15:11):
is struggling and a lack of capital. You know, after
people have more into the house to put money in
and managed to beg borrow of steel, bits of other
other money from finance companies and things like that. After that,
the capital drives up. And where do you get the
expansion from. I think you've got to bring staff and
(15:32):
to turn a small business into a medium size. To
turn a medium size into a large one, you really
do need capital, and that means bringing other people on.
Speaker 1 (15:42):
If somebody was to I mean, I don't know how
much how much time you would spend advising people in
small business and things, because that's a specific area of expertise,
isn't it. But what would if you had a family member,
for instance, he said, look, I've got a great idea.
This is what I want to do. I want to
enter into business. Would there be a small checklist you'd
run through them, or a list of you know, absolute
(16:03):
musts before they even sort of take step one? Well
step one to be talking to you, I guess.
Speaker 2 (16:09):
Not or somebody somebody like me and I do see
I have seen over the years an awful lot of
small business owners. No, I wouldn't really have a checklist.
I think you'd have to work through. They all tend
to be quite different. But I would keep coming back
to that. Start with the end in mind. Who's going
(16:30):
to buy your business, what are they going to look like,
what are are they going to look for? And what
are you going to build where you can sell your
business for two million dollars and fifteen years time.
Speaker 1 (16:41):
Oh that sounds nice, doesn't it?
Speaker 2 (16:44):
Look?
Speaker 1 (16:44):
We'd like to hear from you as well, because it's
been well, it's just from my own point of view've
always been curious about setting out small businesses and what
it takes because I think a lot of the time
when it comes to discussions around politics and things, people
like to have a crack at business owners without having
an inkling on it, absolutely on how incredibly difficult challenging
(17:05):
it is. So if you're one of those small business
owners that has either made a great fist of your
business and you're doing very well, where did you go right?
But also if you feel like sharing experience on something
where you went wrong, because many successful business owners will
probably say, look, you know, I might be successful now,
but about a few failings. It give us a court
we'd love to hear your experience with Martin Hawes. This
(17:27):
is smart money and news talk, said b. It's twenty
four the number is oh, eight hundred and eighty ten
eighty of course in text on nine two nine two.
But we'd love love your input. It's twenty four past five. Yes,
and we're with Martin Hawes. This is smart money talking
about the dos and don'ts of setting up a small business,
but of a bandwidthm with Martin. But joining us is
ivor good day. A bit of a delay on the
(17:51):
line there either.
Speaker 3 (17:52):
Hello, Yeah, I'll just put you. I'll just take your
speaker mm hmm, okay, right right, you're on phone. Good Yeah, yeah,
So you're just you're just mentioning that if you started
a small business and you're not very successful, you'd like
(18:15):
to hear from us.
Speaker 1 (18:16):
Yeah, sure, is that you?
Speaker 3 (18:20):
Yes, yes, yes, I started a lolly importing company with
about five thousand dollars from a second man vati bike
in nineteen eighty eight and sold it to my brother,
he's a couple of years older. Million two thousand and
(18:40):
five for you know that part of the deal. It
had a million dollars in the bank.
Speaker 1 (18:46):
Oh really, and where do you consider went right?
Speaker 3 (18:49):
Yeah, well, hiring staff, hiring staff, yeah, yeah, yeah, lots
and lots of stuff.
Speaker 1 (19:04):
Yeah, what did you have to hire a lot because
you also had to fire a lot? What did you
distill your if you had a couple.
Speaker 3 (19:10):
Of I think they only fired two people. Yeah, I
had about I had about twenty workers at one stage,
and then talking them on a fifty fifty partner and
he sort of turned it back to ten, but not
(19:33):
firing them, just that just saying I don't need to
and afford it, but then actually fired not two people.
Speaker 1 (19:39):
Yeah. Hey, there's a bit of a delay on the
line either. Unfortunately, I don't think we can because we're
about five seconds behind each other. So it's going to
be a bit of a different bit of a difficult conversation,
which is a shame. But I guess, you know, hiring
the right stuff, as you say, Martin, that's the bleeding obvious,
isn't it. You know, if you hire bad stuff, you're.
Speaker 2 (19:57):
Screwed, and it's one of the hardest things as well,
you know, and management by yelling doesn't work anymore. Yeah,
you probably won't. It was certainly a thing in the past.
I think there's too probably fundamental barriers for a lot
of small businesses want to be staff. The other would
(20:19):
be marketing, marketing, marketing slash sales. I guess that people
often have an expertise, and it may be an expertise
and plumbing or or you know, some sort of trade
or something like that. What they don't necessarily have an
expertise and it's hard to buy in is marketing slash
sales and staff.
Speaker 1 (20:40):
Yeah. Actually, did you see there was There was a
case that not particularly any particular reason, but was there's
a report in the Herald about a company in Dunedin
that's gone well. They're no longer a small business, they're
quite big. Who started these guys decided they could design
their own coffee roaster and they were One of them
was software sort of expert. I can't remember the details.
(21:01):
But now that they've gone global, they've made manufacturing thousands
of coffee machines and selling them around the world.
Speaker 2 (21:08):
I did see something like that. It never ceases to
amaze me. The little niches like you know, somebody important lollies,
no doubt, bagging them up into different bags and putting
a different label on them or whatever, and being able
to make good money out of that. Similarly, with coffee roasting,
you would have thought that that was a market that
was pretty well penetrated and catered forth, and then somebody
(21:34):
makes a coffee roaster.
Speaker 1 (21:35):
Yeah, I just I guess. And that was actually one
of the story that made me ask you the question
around getting capital investment on board and getting other people
and stakeholders. And I think that would be one of
the mistakes that people make when they're getting for successes
to go no thanks, hey, look on that side, because
these guys made us. I think one of the guys
who was behind it was a software engineer. One of
(21:56):
your interests that we're going to talk about today as
well was tech investments. That's my clumsy segue talking about tech.
But I've been asking about this because we did see
some dramatic headlines with the amount of money that the
share price for Nvidia at one station. It generally has
gone through the roof, hasn't it. Yeah, And so that
(22:19):
would attract a lot of intention attention. Are you quite
curious about the teach investment market.
Speaker 2 (22:25):
I'm heavily weighted to it on my own portfolio. Now
that my own portfolio is not exclusively tech, but it's
it's certainly got a favor deteck at it and it
most definitely has en Video and that's the company that
makes most of the chips for right AI.
Speaker 1 (22:43):
When did you know?
Speaker 2 (22:47):
I think it's been in the portfolio for three or
four years on you Martin, Yeah, but it should have
been twenty years ago, because over twenty twenty year period
in videos returned thirty eight percent per annum. How much
so thirty yeah, this is on average over twenty years
thirty eight. If you invested an twenty years ago, you
(23:12):
put your money in on listing, you have had thirty
eight percent per random gains. I'll tell you another one,
which I think if anything's even even better is Amazon.
Speaker 3 (23:24):
Now.
Speaker 2 (23:24):
Amazon listed on the USAir market twenty seven years ago.
And if you'd come to me and you said, oh, look,
you know do you know do you know Amazon? I
would have said, yeah, yeah, yeah, I get a box
of their books most weeks.
Speaker 1 (23:38):
And they started off as books, didn't they.
Speaker 2 (23:41):
That was a bookseller, yeah, basically, And you know I
would have said, well, you know, they're a bookseller by
a few shares shares if you like. But they expanded
into just about everything known that you can buy and sell.
It happens on Amazon now. But also they've gone into
(24:01):
I think about a decade ago, cloud computing as well,
which is a hugely profitable part of their business. They
for twenty over twenty seven years, they've given a thirty
three percent thirty three point five percent return per anim
so just an absolutely stunning performance. I know, I know
(24:23):
nothing nothing like that for such a long long period
of time. But there's lots of others as well. You know,
Apple twenty one percent over thirty four years, Google twenty
three percent over twenty years. You know, the tek is
not just beginning to tech has been around probably since
the Enlightenment. That actually, but this curve is ever steepening,
(24:45):
and there is so much disruption now and tech is
becoming so front of mind that the returns are just
getting astonishing, and that you know, it's not going to
go away, it's going to people can keep them.
Speaker 1 (25:01):
Somebody's just messaged me now saying I'm vested in Tesla
in twenty eighteen and it paid for most of my
house deposit in four years. Yes, And I think the
problem is there's there's a problem with with these stories
though is that it leads to this mentality that you
can just pick the right spot stock you got it made.
So if you bought Amazon shares in twenty in two thousand,
(25:23):
you could have bought them for ten cents, you know,
or twelve cents, and even in two thousand and five,
I can see you could have well two dollars right,
and now they're worth what a couple of hundred bucks
and hundred and seventy dollars? Yeah, yeah, so yeah, not
a bad not a bad return if you get on
the ground level. But how many people really spot what?
(25:46):
How do you spop the next mover?
Speaker 2 (25:48):
No? Nobody and tim you've got in front of me,
Because that was one of the things I was going
to make that I think was John Bogle said, don't
go looking for a needle in a haystack. You're not
going to find the one company if you if you're
really interested in AI, for example, as an investor, you
can't just sit back and say, so who's the leader
in IAI Well it's Microsoft, okay, so I'll put all
(26:10):
my money in Microsoft. It's probably not going to work
because Google could leap for them tomorrow. Instead. I think
you've got to think about well, you say, who are
the producers of AI? And that's the like some Microsoft,
from Google and a whole host of others. Who's enabling
it in vera am the various other companies, And who
(26:31):
are the users? And that's like Amazon and the banks
and lots and lots of different different businesses. And then
you've got to you probably own thirty odd companies to
get your exposure properly to AI. So you're not just
going to pick one.
Speaker 1 (26:49):
What makes tech so good? I mean is it a
sector that and are there vulnerabilities that if you look
to the future, Because some people do like to specialize
just in a particular investment sector, don't they. Yes, I
mean look at New Zealand. I mean the number of
people who put everything into property for instance. But I
mean if you'd start all your money into in video
into tech stocks, you probably be doing all right. But
(27:10):
what are the risks and how do you sort of
how do you sort the wheat from the chaff when
you're putting together a tech portfolio.
Speaker 2 (27:17):
I don't think you put together a tech portfolio. I
think you do it through managed funds. They give you
the exposure generally in that market and are.
Speaker 1 (27:27):
So unexciting because I want that two thousand percent gain.
Speaker 2 (27:32):
Yeah, so the returns might be only one thousand percent
or five hundred percent or something like that, they will
still be very good. I think that's you're you're going
to look for the needle in the haystack, and if
you find the needle, you'll you'd be absolutely delighted. But
the chances are you're not going to find it. So
I think you're much better to get wide exposure over
(27:55):
thirty companies or even fifty companies or even one hundred
companies who are associated in the in the area investing
in that in that area, it's very Unless you're going
to spend all day every day, yeah, trying to study this,
you're very unlikely to pick the winner.
Speaker 1 (28:12):
Okay, look, I want to dig it. We're going to
dig into this a little more. Actually, if you have
any questions on the tech stock industry, because Martin's quite
into it, and so I tend to think while we've
got the guy who's into it, who knows a little
bit about finance, having written his twenty fourth book. Oh,
by the way, have you got a title for it?
Speaker 2 (28:26):
No, I haven't. It's probably going to be entitled something
like Retirement Ready, because one of the things I was
really concerned about was that being oft retirement age, that
I could quickly and easily push the button and become retired,
if that's what I wanted to be.
Speaker 1 (28:44):
Pushing the retirement button.
Speaker 3 (28:45):
Yeah.
Speaker 1 (28:46):
Yeah, that's not a bat bee. You go. You can
have that. You can have that for nothing. I'll be
back in just a moment. It's twenty minutes to Sex
News Talks. He'd be welcome back to Smart Money on
the weekend, Collective ont and Beverage. My guest, Martin Hawes,
author of twenty four twenty three coming on twenty four books.
I was always about to say twenty five because I
was chatting with my producer that I have an idea
(29:07):
for your twenty fifth book mark and it as actually
it's a corker, and we'll talk about it later. Anyway, Let's,
by the way, with one bit of advice on small business,
just to text here before we go to our call
a Ross. This is probably quite good advice here from
the small business owner says we have a small business
that we're about to wind up. In fact, they're seeking
(29:27):
some legal advice which we won't be able to help with.
But it says we put our house under family a
family trust to protect it in case the business failed.
Probably not a dumb move, is it, Martin.
Speaker 2 (29:38):
Now, A lot of people would do that, and you
know a lot of people would be advised to do
that when they're going into business by their lawyers and accountants.
Speaker 1 (29:46):
But Sue's asking, how do we go about unwinding it?
But I think we'll leave legal advice to other people. Yeah, okay,
let's take some calls Ross.
Speaker 4 (29:53):
Hello, Yeah, you true? It mean that? Just ranked it
mean that you said before that.
Speaker 1 (30:02):
We're a bad connection.
Speaker 4 (30:04):
Oh you did?
Speaker 1 (30:05):
Yeah, you know we had a bad connection. You're talking
about the one we were talking about.
Speaker 4 (30:08):
Oh yeah, yeah, yeah, the guy that said that he
made god At deposit from his house from an American
seer market. That be an awful lot of money, because
you know, the shear market, the currency at the moment's
only sixty one dollars. Sixty one dollars through one hundred
New Zealand you've got in. So they reason, I won't
(30:32):
put a lot of money into epple because yeah, it
is quite a big rest posed to something that's but lower.
You can get more for a better price, you know.
Speaker 2 (30:43):
Yeah, but ross that there. I mean that that person
was just lucky. That person speculated that person wasn't. It
was an investing. It was just a very short term
play and he managed to get the timing right. Forget
about whatever about the exchange rate, whatever about anything else.
There was that fear better playing old luck.
Speaker 1 (31:04):
And they actually, you know what, she's given me permission
to say this, But it was my producer, Tyra. That wasn't.
It wasn't anyone from overseas Ross. It was Tyra. She
invested in Tesla, thought she liked the idea, and boomfa.
She's brought her first house. But she would acknowledge it
was like I was looking at it. I said, can
I out you now? Can I assert to you Tyrann? She goes, yeah,
all right, and she just said it was She said,
(31:26):
I was seventeen. Look at this. I was seventeen. It
was pure luck and I had no idea what I
was doing. And you know what, good on you.
Speaker 2 (31:35):
Yeah, but kids don't try this at home. I would
not be suggesting that somebody puts, you know, all the
money that they've got for the house to pulse up
on some tech stock or any other stock.
Speaker 1 (31:50):
No, I guess at least if you do it when
you're seventeen, you're going to recover. But anyway, so I
hope that was a nod of the head I could
out you, Tyra, because now we've done it on nationwide radio.
I think there's a slight sense of like, I know
I was lucky, but I feel quite smu and good
on you. Anyway. Hey, sorry, let's get onto the tech thing.
(32:12):
What's so the managed funds thing? I guess you know
when you mentioned the way to get into the tech
industry and tech investments is through the managed funds because
they are spending all their life and their time on it.
The only thing that some people will have this sort
of thing. As soon as you have a managed fund,
it always feels like the returns you get are always
(32:33):
a bit muted. But is that the case when an
industry goes gangbusters?
Speaker 2 (32:39):
Yes, it will be because they are owning not only
the one as, they're owning the losers. And you know,
diversification comes with it takes the volatility out of it,
and tech stops are volatile. You know, I ought to
make that warning, right, you know, they are very volatile,
they're ups and downs. You asked before what the risks
(32:59):
of this is. It isn't the tech industries will all
just go away or stop doing whatever it is they're doing.
It's that the shares will be volatile, and if you
end up being rattled out of the market in a
big downturn, then you no longer have your money in
that when the upturn comes and tim The other thing
(33:20):
to say is that when we're talking about tech, it's
not just AI, and it's not just robotics or automation,
or it's gene therapies. It's blockchain, it's battery storege it's
clean tech. There's a whole bunch of different of different
technologies that you can invest in.
Speaker 1 (33:41):
So you can choose. You can choose, like if you
like the certain area of technology and an area of
science which you think is really rocking and rolling, you
can look for a fund that specializes in that part
of that industry, can.
Speaker 2 (33:53):
You, Yes, you can. So you can buy a managed fund,
for example, that invests only in medical devices. And as
somebody who's had two operations in the last week, while
medical devices is something close to my heart, but you yes, literally,
but you know there are you know, lots and lots
of medical devices that are being invented. Some come to
(34:17):
market and they don't they don't work properly, or they
don't sell properly. Others will be incredibly successful, and if
somebody owns the patent for that, they make a large
amount of money.
Speaker 1 (34:27):
Do most large I mean the most credible investment fund
managers will they have that ability to Will they have
a fairly broad portfolio where you can go, look, I'm
interested in tech, but I really am interested in medical devices,
and that they should have something for you.
Speaker 2 (34:45):
Yes, you know there well, a lot of fund managers
or a lot of financial advisory houses will have, you know,
the ability to point those out. The other thing to
say is that most people who are listening to this
will have key we Save accounts and keep we Save.
You know, most key we Saver providers now will have
(35:05):
exposures to technology, possibly quite big ones, some more, some
more than others. I personally, well, with my own portfolio,
it's reasonably heavily weighted towards technology.
Speaker 1 (35:19):
Yeah, is there a part of you He mentioned medical
devices just as a throwaway, but is there just getting
to know Martin Hawes A little bit more, is there
a part of Martin Hawes that has spent some of
that money you set aside for medical procedures and you're thinking,
you know what, I'm going to go get some of
that money back. So I'm going to tell me, I'm
going to go for looking for a fund that specializes
medical devices because I want some money out of you. Guys.
Speaker 2 (35:41):
No, no, no, but I I'm not sure. I don't
manage my own money now, somebody else manages for me.
And there was a fund in there which was a
medical device's fund. I don't think there was, okay.
Speaker 1 (35:59):
I just thought there was a slightly revenge investment sort
of thing, like, well, I've had to spend thousands on
this operational go get some of it back. Hey, Martin,
just hold there, because we'll be back in a moment.
Because the one final question I want to ask Martin
is about how do you find that investment fund manager?
And because everything involves research, doesn't it or does some
of it involve just a little bit of blind luck?
When you buy Tesla shares at the age of eighteen
(36:20):
and buy a house as a result, it's ten to six. Yes,
welcome back to smart money. When my guess is. Martin
Hawes actually just had a clarification from my young producer
Tyra about because some think she's worried. People think that
she thinks she had a lot of money and shoved
it into Tesla. She literally had a job at McDonald's
and every spare sense she actually shoved into Tesla and
it just happened to work out quite well for her.
(36:42):
She said, her story is about just dumb luck. But
I tell you what, if it's good on you for
at least being in the game. Hey, Martin, So if
you're looking for a fund manager and someone is listening
and thinking, you know what, Actually I didn't realize you
can invest in specific injury in industry, so specifically any
Obviously you can't recommend. You're not going to recommend any
(37:04):
particular fund man. But how would people do their research
on that aspect?
Speaker 2 (37:09):
I think one of the key key things there were
two things to think about. One is you might be
looking for fund management. You might also be looking for
a financial advisor, because financial advisors, you know, run people's money,
you know, and they invested for them. A fund manager,
I would be tending to look for somebody who's been
around and had good performance for a fairly long period
(37:32):
of time.
Speaker 1 (37:32):
Yeah, so not just sort of like twelve months. Look
at me, I'm the miracle kid.
Speaker 2 (37:37):
No, there's a very good story from a woman called
Kathy wood Ark Investments. She's still investing in technology out
of the US. But in her first year, which was
about five five years ago, maybe seven, she produced one
hundred and fifty percent and just billions of dollars flooded
than to that fund.
Speaker 1 (37:58):
Wow.
Speaker 2 (37:59):
She's never performed any good ever since.
Speaker 1 (38:03):
So don't go for the one hit wonders. No, exactly excellent.
Hey Martin, thanks so much for your time and stuff,
and now that time's flown by. Yeah. Then my only
disappointment was I really wanted you to say that you
bought in medical investment funds as a revenge for your procedures.
But hey, so when's the book out?
Speaker 2 (38:23):
Probably March.
Speaker 1 (38:24):
I think it is excellent. Okay, well, good luck we're
finding that title pushing the retirement button. That's my suggestion. Anyway,
Thanks Martin, good to see you, mate, and thanks you Jim.
There we go. Hey, that wraps up the show. Thank
you so much for your companies, and thank you very
much to my producer Tyra Roberts for looking after me
so well and actually sharing her little story there about
a bit of luck on the old Tesla. She is
(38:46):
good on your Tira job at McDonald's, put everything in
at the age of eighteen and to Tesla got her
house deposit. By the way, that's not the moral of
the story. The moral of the story is diversification and
fund managers, not just luck, but enjoyed hearing that story. Hey,
Sunday Out six is next, so stick around for Petra
(39:06):
and Frank and we'll be back the same time next weekend.
And as you know, you can check out the podcast.
There's some great material on there. Look for The Weekend
Collective on iHeartRadio. Have a fabulous evening, or catch again
soon for more from the Weekend Collective. Listen live to
News Talk ZEDB weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks
ed be Welcome back to the Weekend Collective. I'm Tim
Beverage And if you're missing in the previous hours, I
would recommend going to check out the podcast Fantastic Chat
with Alex Flint there just about getting your exercise habit
started and and all of that should I say about anyway,
you can check out the Weekend Collective podcast at iHeartRadio.
(00:26):
Right now, it is time for Smart Money and my guest,
well he needs no introduction really, Martin Wores. How you doing?
Speaker 2 (00:34):
Yeah, very well?
Speaker 1 (00:35):
Thinked if you got a business card, that's one who
has a business card. But you could probably just write
financial guru, couldn't you.
Speaker 2 (00:42):
I don't have a big business card, and I if
I had one, what would probably financial writer and financial speaker.
Speaker 1 (00:50):
Oh well, that's not as much fun as guru. I
like guru.
Speaker 2 (00:53):
Yeah, yeah, I like as well.
Speaker 1 (00:55):
Maybe it's promising too much. It's a little bit SI. Yeah,
it could be reminded of how many books have you written.
Speaker 2 (01:01):
I've written twenty three books. I've actually written twenty four
because I handed the manuscript of my twenty fourth book
into the publishers a couple of weeks ago and doing
their thing on it. At the moment. It won't be
out till next year or so, but that'll been number
twenty four.
Speaker 1 (01:20):
What how I can look. I can imagine someone going,
I've got a book in me and I'm going to
start writing it. And you've done twenty three. And now,
as you say, twenty four is not out yet, but
you've written it. Yeah, what motivated number twenty four?
Speaker 2 (01:35):
About five years ago I had a real old disruption
of my life and I left Queenstown, where I'd live
for twenty odd years, and moved to christ Church, which
is where I live now. And you know, whenever you
have a big disruption in your life, you meant to
go through your finances, aspect by aspect, all the different things.
And I did that, and I made a new will,
(01:55):
I wound up the family trust that I've had, I
got my investments managed by someone else. And it was
such an interesting process which happened over two or three
years that I thought I would be writing up. So
the book is partly biographical, but it's partly also advice.
Here are the things that I did, and here are
(02:17):
the thing here's how it worked out warts and all. Wow,
made a few mistakes and doing that, well, they weren't
really mistakes. One of the things I did was I
canceled my health insurance to self insure, and I put aside,
you know, quite a sizeable some of money. And the
(02:40):
idea was that I would pay what had used to
be the equivalent of the premiums into.
Speaker 1 (02:45):
A get ahead of it yep, yep.
Speaker 2 (02:48):
And within three months of doing this, I was under
the knife, having having an operation, and then a month
after that I had another operation.
Speaker 1 (02:57):
So did you spend it all?
Speaker 2 (03:00):
No? No, I haven't spent I've still still got a
bit of back up there and I can afford to
self insurance. I mean, it would be a disaster for
somebody who hadn't put the money aside and such like.
And you know, I'm of an age retirement age where
I see a lot of people who ask questions about
health insurance because getting as you get older, it gets
(03:23):
really really expensive.
Speaker 1 (03:24):
That is a problem, Isn't it actually funny? As you
were talking about that and saving it, I have you
still got it? And I was thinking of that black
added quote when somebody stolen some money from Baldrick and
he goes, what about that tuppence? It was under my
pillow and he goes, seen it, pinched it, spent it.
I was wondering, if you're about to deliver that line
on your health insurance.
Speaker 2 (03:42):
No, no, no, there's still some money there. So and
you know, health insurance, you know it's important to some people,
but it's mostly about Q jumping. I've had a bit
of experience now in both the public and the private system,
and the public system is slow to get into it.
Speaker 1 (04:00):
But it's fantastic when you're in.
Speaker 2 (04:01):
But it's fantastic once you're in there.
Speaker 1 (04:03):
Well, I didn't realize that the really good surgeons. I've
learnt this probably in the last few years, but the
really good surgeons have a public They work in public.
It was to be the public, you have to be
the best. And so if you're looking for a private surgeon,
look for one who's also in the public system. And
you're you're away. But it is Q jumping. Yes, you're right,
but if you've got a dodgy knee, then you know.
Speaker 2 (04:24):
Then you want it done. Yeah yep.
Speaker 1 (04:27):
Hey, Actually you have distract me with that talk about
health insurance because we're going to talk about small businesses
and we will do it. But I just wanted to ask,
when you are paying for it yourself, do you have
do you try and haggle? You know? It's like when
they say you've got to go into this private hospital
and they say it's going to be so much a night,
and you're like, oh, come on, give me a break.
(04:48):
I'll give you such and such. I don't.
Speaker 2 (04:51):
I don't think there's any haggle room in there whatever.
I'd love to say, yeah, wouldn't. I got fifteen percent off,
But they just presented me with the price that here's
the surgeons for the this fee, here's the hospital fee,
here's the theater fee.
Speaker 1 (05:09):
That's it.
Speaker 2 (05:11):
They never said take it. They never said take it
or leave it?
Speaker 1 (05:13):
But was it did? Do you look at it and go, yeah.
Speaker 2 (05:17):
It's well they warned me it was, but it's a
fair bit of money, you know. One well they were
both about fourteen thousand dollars each, so you know I
took a thousand dollars.
Speaker 1 (05:28):
That sounds like a hip and a knee.
Speaker 2 (05:30):
No, it wasn't either of them.
Speaker 1 (05:32):
Okay, no, no, no's going on. Don't don't don't tell
us we do. I'm not going to ask. I'm not
going to you know, we're not going to push it
any further. Hey, I wanted to have a chat about
suffening about small businesses. And when I say small businesses,
I mean I don't know how we define a small business.
There is a particular definition, isn't it. In fact for
some people. If you some small businesses, if you described
(05:55):
it to the average punter, that they'd be like that
sounds like a pretty big deal to me. And there
have been a lot of headlines around recently about the
number of businesses that are folding. We've seen the very
public ones, of course, when people just notice that their
favorite restaurants no longer there. We've seen some fairly well
known establishments that have suddenly disappeared. But of course there
(06:16):
will be people who set up small businesses at times
like this, because if you've got a good idea, then
you don't want to wait around. Have you Are there
some basics when it comes to small businesses on what
you can absolutely get right and what you can absolutely
get wrong. And sometimes I don't know if it's just
(06:38):
a question of luck either, because I've spoken to small
people who just about every small business person I've ever
spoken to will say, in fact, I've even done a
couple of things myself where I've looked back and gone, well,
thank goodness X didn't happen because I wouldn't have been
ready for it. And a lot of them will say, oh,
my goodness, if I'd known, if I had known how
(06:59):
hard it was, I never would have even done it,
And yet here I am a success. So can we
just still that into some basic dos and don'ts for
small business big Core Martin.
Speaker 2 (07:09):
Yeah, yeah, it is actually, and you're right about the
definition of a small business. There are definitions. I think
in New Zealand it's under maybe fifty staff something something
like that.
Speaker 1 (07:20):
If you have forty staff, that's massive.
Speaker 2 (07:24):
But I may I may have that wrong. It might
be twenty, but it's something like that, whereas in the
US it's it's five hundred and so forth. But you know,
a lot of them to a pretty marginal sort of operations,
and a lot of them, I would argue, aren't really
businesses at all, paid directly that it was paid hobbies. Yeah,
(07:44):
and that's one of the don'ts. You know, it's not
not necessarily a thing that you've got to love. But
it's largely self employment, you know. So if you imagine
a trade or myself I was self employed, I wasn't.
Really I didn't have a business. You know, I could
have had a business, and I could have built up
a financial advisory practice with fifty staff and so on,
(08:08):
but I quite deliberately and consciously decided not to because
I want a better lifestyle than that. I'd argue a
lot of a lot of small business owners don't have
great lifestyle. That is, you know, they not only have
to carry on with their trades, but they've also got
a market that they've got to give quotes, they've got
to do the books, they've got to do all those
(08:30):
other other aspects, and they actually find they have very
little life at all. I think the number one bit
of advice I would give to people is to start
with the end in mind, so to start thinking about
how is this going to play out? And ideally you
want to be able to sell your business for preferably
(08:51):
serious money. So you build something, you take all the risks,
you live, eat and breathe your small but business and
most small business people do. You want a really good
payoff at it, so you've got to think about who's
going to buy this business, and what are these people
who are going to buy the business, what are they
(09:11):
going to be looking for? And the answer to that,
in almost all cases is that they will seamlessly keep
the profit going. That is, from day one when you're
the owner. Today too, when the other person is the owner,
the profits keep flowing. And that means that you don't
have your name on the door. You're not you know,
(09:31):
the business is not dependent on you. You don't have
your name online, so that you're the number one person
in whatever the field is. The Other thing I'd say
is that hospo is something that a lot of people
go into. Somebody described that about thirty years to me,
they have this little vision of themselves standing around the
(09:52):
bar at lunch time with a five ounce glass of beer.
This is when we had five hour glasses of beer.
And they see themselves as being mine host and that
sort of thing. Most hospo is bloody hard work actually, and.
Speaker 1 (10:10):
That you've got all the stuff and that your mind
host and you're going around the table saying hi, and
everyone's going, hey, hey, are you going Martin, And I'm loving, loving,
loving your chef's work today, and as opposed to.
Speaker 2 (10:21):
Yeah there's a there's a snail in my cello, so
so and so hasn't turned up again. Very difficult businesses
to run, and I know they're quite high profile and
you really do notice when your local cafe closes. But
I suspect I've never seen numbers on it, but I
suspect that more hospital hospitality businesses cease to be help
(10:47):
we polite, and then most other business SIPs.
Speaker 1 (10:52):
Yeah, it's interesting that you you would an unsurprising I
guess that you'd say you have a think about the
endgame where do you want to end up? Because there'd
be many people who end up. Maybe I should also
include myself employed, but that's usually just only responsible to yourself.
But let's say small business that a lot of people's
motivation would simply start from I want to be my
(11:13):
own boss and nothing more. That would be very common,
I managed, wouldn't it.
Speaker 2 (11:18):
Yeah, yeah, it's very common, And yes you might be
your own boss. But the staff not turning up are also,
in a funny sort of way, you're your boss as well.
They certainly motivate you to do things. It's it's a
tough road to hoe. I love you know. I mean,
(11:39):
there are used to be lots of figures around about
seventy percent small businesses failing within the first five years.
And I don't know whether that right or not.
Speaker 1 (11:48):
There are those spectacular figures though there that there's so
many do fail, aren't they I don't know what the
stats are either. I could probably look up a meme
somewhere there'll be.
Speaker 2 (11:56):
I'm not sure I trust them all that much. I
wouldn't know where to where where they come from. But
it's for a lot of people. It is very, very
hard work. It's sixty hours a week, it's seventy hours
a week. Being your own boss often comes at a price.
And the other thing tim is there if you go
(12:16):
into business and you put capital into that business, whether
whether it's a relatively small amount because you know it's
for tools and that sort of thing, or whether it's
a big amount and you take on a lease for
the hospitality business and so forth, you need to get
a return on both your time and your capital. Yeah,
and a lot a lot of small businesses don't get
(12:38):
a return on either. Actually, they're not often terribly profitable.
Speaker 1 (12:44):
Well, that's the other thing. If you speak to small
business owners, they might tell you. And that's what often
comes up when they're when the government's sticking another responsibility
on employers, and how employers will say, well, listen, everyone
thinks I'm living on the pig's back, but I haven't
paid myself a wage for eighteen months. I think we
heard a lot of that obviously through COVID.
Speaker 2 (13:02):
Yeah, yeah, I've been pretty negative to them. But the
other side of it, you know, there are there are
joyous examples of people A making a lot of money
and b having a very very good lifestyle.
Speaker 1 (13:18):
So what, okay, is there a simple reason why why
so many fail? And and what's the difference between the
ones that become a roaring success? Is it just that
they've had a great idea.
Speaker 2 (13:31):
I think there's a lot about that. I think that,
you know, it's it's what they go into, it's how
they manage it, it's how they manage to staff it.
It's how they manage the staff that they have, it's
how they market it. You know, I look around the
place and I do see a lot of very successful
small small businesses. And then of course you know Apple,
(13:52):
the computer people, you know, Steve Jobs, they started as
a micro business as the Juti pack up quite now.
Garret trade me started in Sam Walken's garage. So all
these people have an idea and we only know it's
a good idea with the passing of time.
Speaker 1 (14:12):
One of them is one of the mistakes that you
might make in a small business is if you've started
it with your own ambition in mind, is a stubbornness
to share the to share it around. So if if
you've got an idea for a business, you might not,
for instance, have all the money or the capital you need,
but then it's like, my idea, why should I give
(14:34):
it to someone who's simply going to stump up with
a bit of money to make it a bit easier
for me? Is that one of the mistakes small businesses
make that they go in a bit undercooked on the
financial side, but simply because they're unwilling to share in
their genius.
Speaker 2 (14:48):
Yes, of course, taking on a partner and a business
is like a second marriage to triumph of hope over experience.
So it's you know, that doesn't always work out. But
I always say to people that I think that you're
better to have fifty percent or sixty percent of a
thriving large business than one hundred percent of something which
(15:11):
is struggling and a lack of capital. You know, after
people have more into the house to put money in
and managed to beg borrow of steel, bits of other
other money from finance companies and things like that. After that,
the capital drives up. And where do you get the
expansion from. I think you've got to bring staff and
(15:32):
to turn a small business into a medium size. To
turn a medium size into a large one, you really
do need capital, and that means bringing other people on.
Speaker 1 (15:42):
If somebody was to I mean, I don't know how
much how much time you would spend advising people in
small business and things, because that's a specific area of expertise,
isn't it. But what would if you had a family member,
for instance, he said, look, I've got a great idea.
This is what I want to do. I want to
enter into business. Would there be a small checklist you'd
run through them, or a list of you know, absolute
(16:03):
musts before they even sort of take step one? Well
step one to be talking to you, I guess.
Speaker 2 (16:09):
Not or somebody somebody like me and I do see
I have seen over the years an awful lot of
small business owners. No, I wouldn't really have a checklist.
I think you'd have to work through. They all tend
to be quite different. But I would keep coming back
to that. Start with the end in mind. Who's going
(16:30):
to buy your business, what are they going to look like,
what are are they going to look for? And what
are you going to build where you can sell your
business for two million dollars and fifteen years time.
Speaker 1 (16:41):
Oh that sounds nice, doesn't it?
Speaker 2 (16:44):
Look?
Speaker 1 (16:44):
We'd like to hear from you as well, because it's
been well, it's just from my own point of view've
always been curious about setting out small businesses and what
it takes because I think a lot of the time
when it comes to discussions around politics and things, people
like to have a crack at business owners without having
an inkling on it, absolutely on how incredibly difficult challenging
(17:05):
it is. So if you're one of those small business
owners that has either made a great fist of your
business and you're doing very well, where did you go right?
But also if you feel like sharing experience on something
where you went wrong, because many successful business owners will
probably say, look, you know, I might be successful now,
but about a few failings. It give us a court
we'd love to hear your experience with Martin Hawes. This
(17:27):
is smart money and news talk, said b. It's twenty
four the number is oh, eight hundred and eighty ten
eighty of course in text on nine two nine two.
But we'd love love your input. It's twenty four past five. Yes,
and we're with Martin Hawes. This is smart money talking
about the dos and don'ts of setting up a small business,
but of a bandwidthm with Martin. But joining us is
ivor good day. A bit of a delay on the
(17:51):
line there either.
Speaker 3 (17:52):
Hello, Yeah, I'll just put you. I'll just take your
speaker mm hmm, okay, right right, you're on phone. Good Yeah, yeah,
So you're just you're just mentioning that if you started
a small business and you're not very successful, you'd like
(18:15):
to hear from us.
Speaker 1 (18:16):
Yeah, sure, is that you?
Speaker 3 (18:20):
Yes, yes, yes, I started a lolly importing company with
about five thousand dollars from a second man vati bike
in nineteen eighty eight and sold it to my brother,
he's a couple of years older. Million two thousand and
(18:40):
five for you know that part of the deal. It
had a million dollars in the bank.
Speaker 1 (18:46):
Oh really, and where do you consider went right?
Speaker 3 (18:49):
Yeah, well, hiring staff, hiring staff, yeah, yeah, yeah, lots
and lots of stuff.
Speaker 1 (19:04):
Yeah, what did you have to hire a lot because
you also had to fire a lot? What did you
distill your if you had a couple.
Speaker 3 (19:10):
Of I think they only fired two people. Yeah, I
had about I had about twenty workers at one stage,
and then talking them on a fifty fifty partner and
he sort of turned it back to ten, but not
(19:33):
firing them, just that just saying I don't need to
and afford it, but then actually fired not two people.
Speaker 1 (19:39):
Yeah. Hey, there's a bit of a delay on the
line either. Unfortunately, I don't think we can because we're
about five seconds behind each other. So it's going to
be a bit of a different bit of a difficult conversation,
which is a shame. But I guess, you know, hiring
the right stuff, as you say, Martin, that's the bleeding obvious,
isn't it. You know, if you hire bad stuff, you're.
Speaker 2 (19:57):
Screwed, and it's one of the hardest things as well,
you know, and management by yelling doesn't work anymore. Yeah,
you probably won't. It was certainly a thing in the past.
I think there's too probably fundamental barriers for a lot
of small businesses want to be staff. The other would
(20:19):
be marketing, marketing, marketing slash sales. I guess that people
often have an expertise, and it may be an expertise
and plumbing or or you know, some sort of trade
or something like that. What they don't necessarily have an
expertise and it's hard to buy in is marketing slash
sales and staff.
Speaker 1 (20:40):
Yeah. Actually, did you see there was There was a
case that not particularly any particular reason, but was there's
a report in the Herald about a company in Dunedin
that's gone well. They're no longer a small business, they're
quite big. Who started these guys decided they could design
their own coffee roaster and they were One of them
was software sort of expert. I can't remember the details.
(21:01):
But now that they've gone global, they've made manufacturing thousands
of coffee machines and selling them around the world.
Speaker 2 (21:08):
I did see something like that. It never ceases to
amaze me. The little niches like you know, somebody important lollies,
no doubt, bagging them up into different bags and putting
a different label on them or whatever, and being able
to make good money out of that. Similarly, with coffee roasting,
you would have thought that that was a market that
was pretty well penetrated and catered forth, and then somebody
(21:34):
makes a coffee roaster.
Speaker 1 (21:35):
Yeah, I just I guess. And that was actually one
of the story that made me ask you the question
around getting capital investment on board and getting other people
and stakeholders. And I think that would be one of
the mistakes that people make when they're getting for successes
to go no thanks, hey, look on that side, because
these guys made us. I think one of the guys
who was behind it was a software engineer. One of
(21:56):
your interests that we're going to talk about today as
well was tech investments. That's my clumsy segue talking about tech.
But I've been asking about this because we did see
some dramatic headlines with the amount of money that the
share price for Nvidia at one station. It generally has
gone through the roof, hasn't it. Yeah, And so that
(22:19):
would attract a lot of intention attention. Are you quite
curious about the teach investment market.
Speaker 2 (22:25):
I'm heavily weighted to it on my own portfolio. Now
that my own portfolio is not exclusively tech, but it's
it's certainly got a favor deteck at it and it
most definitely has en Video and that's the company that
makes most of the chips for right AI.
Speaker 1 (22:43):
When did you know?
Speaker 2 (22:47):
I think it's been in the portfolio for three or
four years on you Martin, Yeah, but it should have
been twenty years ago, because over twenty twenty year period
in videos returned thirty eight percent per annum. How much
so thirty yeah, this is on average over twenty years
thirty eight. If you invested an twenty years ago, you
(23:12):
put your money in on listing, you have had thirty
eight percent per random gains. I'll tell you another one,
which I think if anything's even even better is Amazon.
Speaker 3 (23:24):
Now.
Speaker 2 (23:24):
Amazon listed on the USAir market twenty seven years ago.
And if you'd come to me and you said, oh, look,
you know do you know do you know Amazon? I
would have said, yeah, yeah, yeah, I get a box
of their books most weeks.
Speaker 1 (23:38):
And they started off as books, didn't they.
Speaker 2 (23:41):
That was a bookseller, yeah, basically, And you know I
would have said, well, you know, they're a bookseller by
a few shares shares if you like. But they expanded
into just about everything known that you can buy and sell.
It happens on Amazon now. But also they've gone into
(24:01):
I think about a decade ago, cloud computing as well,
which is a hugely profitable part of their business. They
for twenty over twenty seven years, they've given a thirty
three percent thirty three point five percent return per anim
so just an absolutely stunning performance. I know, I know
(24:23):
nothing nothing like that for such a long long period
of time. But there's lots of others as well. You know,
Apple twenty one percent over thirty four years, Google twenty
three percent over twenty years. You know, the tek is
not just beginning to tech has been around probably since
the Enlightenment. That actually, but this curve is ever steepening,
(24:45):
and there is so much disruption now and tech is
becoming so front of mind that the returns are just
getting astonishing, and that you know, it's not going to
go away, it's going to people can keep them.
Speaker 1 (25:01):
Somebody's just messaged me now saying I'm vested in Tesla
in twenty eighteen and it paid for most of my
house deposit in four years. Yes, And I think the
problem is there's there's a problem with with these stories
though is that it leads to this mentality that you
can just pick the right spot stock you got it made.
So if you bought Amazon shares in twenty in two thousand,
(25:23):
you could have bought them for ten cents, you know,
or twelve cents, and even in two thousand and five,
I can see you could have well two dollars right,
and now they're worth what a couple of hundred bucks
and hundred and seventy dollars? Yeah, yeah, so yeah, not
a bad not a bad return if you get on
the ground level. But how many people really spot what?
(25:46):
How do you spop the next mover?
Speaker 2 (25:48):
No? Nobody and tim you've got in front of me,
Because that was one of the things I was going
to make that I think was John Bogle said, don't
go looking for a needle in a haystack. You're not
going to find the one company if you if you're
really interested in AI, for example, as an investor, you
can't just sit back and say, so who's the leader
in IAI Well it's Microsoft, okay, so I'll put all
(26:10):
my money in Microsoft. It's probably not going to work
because Google could leap for them tomorrow. Instead. I think
you've got to think about well, you say, who are
the producers of AI? And that's the like some Microsoft,
from Google and a whole host of others. Who's enabling
it in vera am the various other companies, And who
(26:31):
are the users? And that's like Amazon and the banks
and lots and lots of different different businesses. And then
you've got to you probably own thirty odd companies to
get your exposure properly to AI. So you're not just
going to pick one.
Speaker 1 (26:49):
What makes tech so good? I mean is it a
sector that and are there vulnerabilities that if you look
to the future, Because some people do like to specialize
just in a particular investment sector, don't they. Yes, I
mean look at New Zealand. I mean the number of
people who put everything into property for instance. But I
mean if you'd start all your money into in video
into tech stocks, you probably be doing all right. But
(27:10):
what are the risks and how do you sort of
how do you sort the wheat from the chaff when
you're putting together a tech portfolio.
Speaker 2 (27:17):
I don't think you put together a tech portfolio. I
think you do it through managed funds. They give you
the exposure generally in that market and are.
Speaker 1 (27:27):
So unexciting because I want that two thousand percent gain.
Speaker 2 (27:32):
Yeah, so the returns might be only one thousand percent
or five hundred percent or something like that, they will
still be very good. I think that's you're you're going
to look for the needle in the haystack, and if
you find the needle, you'll you'd be absolutely delighted. But
the chances are you're not going to find it. So
I think you're much better to get wide exposure over
(27:55):
thirty companies or even fifty companies or even one hundred
companies who are associated in the in the area investing
in that in that area, it's very Unless you're going
to spend all day every day, yeah, trying to study this,
you're very unlikely to pick the winner.
Speaker 1 (28:12):
Okay, look, I want to dig it. We're going to
dig into this a little more. Actually, if you have
any questions on the tech stock industry, because Martin's quite
into it, and so I tend to think while we've
got the guy who's into it, who knows a little
bit about finance, having written his twenty fourth book. Oh,
by the way, have you got a title for it?
Speaker 2 (28:26):
No, I haven't. It's probably going to be entitled something
like Retirement Ready, because one of the things I was
really concerned about was that being oft retirement age, that
I could quickly and easily push the button and become retired,
if that's what I wanted to be.
Speaker 1 (28:44):
Pushing the retirement button.
Speaker 3 (28:45):
Yeah.
Speaker 1 (28:46):
Yeah, that's not a bat bee. You go. You can
have that. You can have that for nothing. I'll be
back in just a moment. It's twenty minutes to Sex
News Talks. He'd be welcome back to Smart Money on
the weekend, Collective ont and Beverage. My guest, Martin Hawes,
author of twenty four twenty three coming on twenty four books.
I was always about to say twenty five because I
was chatting with my producer that I have an idea
(29:07):
for your twenty fifth book mark and it as actually
it's a corker, and we'll talk about it later. Anyway, Let's,
by the way, with one bit of advice on small business,
just to text here before we go to our call
a Ross. This is probably quite good advice here from
the small business owner says we have a small business
that we're about to wind up. In fact, they're seeking
(29:27):
some legal advice which we won't be able to help with.
But it says we put our house under family a
family trust to protect it in case the business failed.
Probably not a dumb move, is it, Martin.
Speaker 2 (29:38):
Now, A lot of people would do that, and you
know a lot of people would be advised to do
that when they're going into business by their lawyers and accountants.
Speaker 1 (29:46):
But Sue's asking, how do we go about unwinding it?
But I think we'll leave legal advice to other people. Yeah, okay,
let's take some calls Ross.
Speaker 4 (29:53):
Hello, Yeah, you true? It mean that? Just ranked it
mean that you said before that.
Speaker 1 (30:02):
We're a bad connection.
Speaker 4 (30:04):
Oh you did?
Speaker 1 (30:05):
Yeah, you know we had a bad connection. You're talking
about the one we were talking about.
Speaker 4 (30:08):
Oh yeah, yeah, yeah, the guy that said that he
made god At deposit from his house from an American
seer market. That be an awful lot of money, because
you know, the shear market, the currency at the moment's
only sixty one dollars. Sixty one dollars through one hundred
New Zealand you've got in. So they reason, I won't
(30:32):
put a lot of money into epple because yeah, it
is quite a big rest posed to something that's but lower.
You can get more for a better price, you know.
Speaker 2 (30:43):
Yeah, but ross that there. I mean that that person
was just lucky. That person speculated that person wasn't. It
was an investing. It was just a very short term
play and he managed to get the timing right. Forget
about whatever about the exchange rate, whatever about anything else.
There was that fear better playing old luck.
Speaker 1 (31:04):
And they actually, you know what, she's given me permission
to say this, But it was my producer, Tyra. That wasn't.
It wasn't anyone from overseas Ross. It was Tyra. She
invested in Tesla, thought she liked the idea, and boomfa.
She's brought her first house. But she would acknowledge it
was like I was looking at it. I said, can
I out you now? Can I assert to you Tyrann? She goes, yeah,
all right, and she just said it was She said,
(31:26):
I was seventeen. Look at this. I was seventeen. It
was pure luck and I had no idea what I
was doing. And you know what, good on you.
Speaker 2 (31:35):
Yeah, but kids don't try this at home. I would
not be suggesting that somebody puts, you know, all the
money that they've got for the house to pulse up
on some tech stock or any other stock.
Speaker 1 (31:50):
No, I guess at least if you do it when
you're seventeen, you're going to recover. But anyway, so I
hope that was a nod of the head I could
out you, Tyra, because now we've done it on nationwide radio.
I think there's a slight sense of like, I know
I was lucky, but I feel quite smu and good
on you. Anyway. Hey, sorry, let's get onto the tech thing.
(32:12):
What's so the managed funds thing? I guess you know
when you mentioned the way to get into the tech
industry and tech investments is through the managed funds because
they are spending all their life and their time on it.
The only thing that some people will have this sort
of thing. As soon as you have a managed fund,
it always feels like the returns you get are always
(32:33):
a bit muted. But is that the case when an
industry goes gangbusters?
Speaker 2 (32:39):
Yes, it will be because they are owning not only
the one as, they're owning the losers. And you know,
diversification comes with it takes the volatility out of it,
and tech stops are volatile. You know, I ought to
make that warning, right, you know, they are very volatile,
they're ups and downs. You asked before what the risks
(32:59):
of this is. It isn't the tech industries will all
just go away or stop doing whatever it is they're doing.
It's that the shares will be volatile, and if you
end up being rattled out of the market in a
big downturn, then you no longer have your money in
that when the upturn comes and tim The other thing
(33:20):
to say is that when we're talking about tech, it's
not just AI, and it's not just robotics or automation,
or it's gene therapies. It's blockchain, it's battery storege it's
clean tech. There's a whole bunch of different of different
technologies that you can invest in.
Speaker 1 (33:41):
So you can choose. You can choose, like if you
like the certain area of technology and an area of
science which you think is really rocking and rolling, you
can look for a fund that specializes in that part
of that industry, can.
Speaker 2 (33:53):
You, Yes, you can. So you can buy a managed fund,
for example, that invests only in medical devices. And as
somebody who's had two operations in the last week, while
medical devices is something close to my heart, but you yes, literally,
but you know there are you know, lots and lots
of medical devices that are being invented. Some come to
(34:17):
market and they don't they don't work properly, or they
don't sell properly. Others will be incredibly successful, and if
somebody owns the patent for that, they make a large
amount of money.
Speaker 1 (34:27):
Do most large I mean the most credible investment fund
managers will they have that ability to Will they have
a fairly broad portfolio where you can go, look, I'm
interested in tech, but I really am interested in medical devices,
and that they should have something for you.
Speaker 2 (34:45):
Yes, you know there well, a lot of fund managers
or a lot of financial advisory houses will have, you know,
the ability to point those out. The other thing to
say is that most people who are listening to this
will have key we Save accounts and keep we Save.
You know, most key we Saver providers now will have
(35:05):
exposures to technology, possibly quite big ones, some more, some
more than others. I personally, well, with my own portfolio,
it's reasonably heavily weighted towards technology.
Speaker 1 (35:19):
Yeah, is there a part of you He mentioned medical
devices just as a throwaway, but is there just getting
to know Martin Hawes A little bit more, is there
a part of Martin Hawes that has spent some of
that money you set aside for medical procedures and you're thinking,
you know what, I'm going to go get some of
that money back. So I'm going to tell me, I'm
going to go for looking for a fund that specializes
medical devices because I want some money out of you. Guys.
Speaker 2 (35:41):
No, no, no, but I I'm not sure. I don't
manage my own money now, somebody else manages for me.
And there was a fund in there which was a
medical device's fund. I don't think there was, okay.
Speaker 1 (35:59):
I just thought there was a slightly revenge investment sort
of thing, like, well, I've had to spend thousands on
this operational go get some of it back. Hey, Martin,
just hold there, because we'll be back in a moment.
Because the one final question I want to ask Martin
is about how do you find that investment fund manager?
And because everything involves research, doesn't it or does some
of it involve just a little bit of blind luck?
When you buy Tesla shares at the age of eighteen
(36:20):
and buy a house as a result, it's ten to six. Yes,
welcome back to smart money. When my guess is. Martin
Hawes actually just had a clarification from my young producer
Tyra about because some think she's worried. People think that
she thinks she had a lot of money and shoved
it into Tesla. She literally had a job at McDonald's
and every spare sense she actually shoved into Tesla and
it just happened to work out quite well for her.
(36:42):
She said, her story is about just dumb luck. But
I tell you what, if it's good on you for
at least being in the game. Hey, Martin, So if
you're looking for a fund manager and someone is listening
and thinking, you know what, Actually I didn't realize you
can invest in specific injury in industry, so specifically any
Obviously you can't recommend. You're not going to recommend any
(37:04):
particular fund man. But how would people do their research
on that aspect?
Speaker 2 (37:09):
I think one of the key key things there were
two things to think about. One is you might be
looking for fund management. You might also be looking for
a financial advisor, because financial advisors, you know, run people's money,
you know, and they invested for them. A fund manager,
I would be tending to look for somebody who's been
around and had good performance for a fairly long period
(37:32):
of time.
Speaker 1 (37:32):
Yeah, so not just sort of like twelve months. Look
at me, I'm the miracle kid.
Speaker 2 (37:37):
No, there's a very good story from a woman called
Kathy wood Ark Investments. She's still investing in technology out
of the US. But in her first year, which was
about five five years ago, maybe seven, she produced one
hundred and fifty percent and just billions of dollars flooded
than to that fund.
Speaker 1 (37:58):
Wow.
Speaker 2 (37:59):
She's never performed any good ever since.
Speaker 1 (38:03):
So don't go for the one hit wonders. No, exactly excellent.
Hey Martin, thanks so much for your time and stuff,
and now that time's flown by. Yeah. Then my only
disappointment was I really wanted you to say that you
bought in medical investment funds as a revenge for your procedures.
But hey, so when's the book out?
Speaker 2 (38:23):
Probably March.
Speaker 1 (38:24):
I think it is excellent. Okay, well, good luck we're
finding that title pushing the retirement button. That's my suggestion. Anyway,
Thanks Martin, good to see you, mate, and thanks you Jim.
There we go. Hey, that wraps up the show. Thank
you so much for your companies, and thank you very
much to my producer Tyra Roberts for looking after me
so well and actually sharing her little story there about
a bit of luck on the old Tesla. She is
(38:46):
good on your Tira job at McDonald's, put everything in
at the age of eighteen and to Tesla got her
house deposit. By the way, that's not the moral of
the story. The moral of the story is diversification and
fund managers, not just luck, but enjoyed hearing that story. Hey,
Sunday Out six is next, so stick around for Petra
(39:06):
and Frank and we'll be back the same time next weekend.
And as you know, you can check out the podcast.
There's some great material on there. Look for The Weekend
Collective on iHeartRadio. Have a fabulous evening, or catch again
soon for more from the Weekend Collective. Listen live to
News Talk ZEDB weekends from three pm, or follow the
podcast on iHeartRadio.
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