Ed McKnight: Brutally honest money advice you need to hear

Ed McKnight has been working in personal finance for a fair few years and although he typically tries to be encouraging when giving advice, he does have some more brutal truths to tell. 

He joined Jack Tame to offer up the three brutally honest pieces of money advice that most Kiwis will need to hear. 

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Episode Transcript

Speaker 1 (00:07):
You're listening to the Saturday Morning with Jack Teams podcast
from News Talks, that'd be.

Speaker 2 (00:12):
Time to catch up with our personal finance expert. E
McKnight is here from Opie's Partners this morning.

Speaker 3 (00:17):
Good morning, Great to be here, Jack, Great.

Speaker 2 (00:20):
To be speaking with you. Although I'm shaking in my
boots this morning. You have brutally honest advice, brutally honest
money advice for kiwis who want to get ahead this morning.

Speaker 3 (00:29):
Well, here's the thing. I often try and be very
encouraging when I'm on this show, but someone reached out
to me and said, oh, caep, be a bit more brutal.
Tell us what you're scared that we might get offended at.
And so I've come up with three things that I
think are brutally honest that people really need to know.
And I think the first thing when it comes to
money is that you are not destined to be wealthy,

(00:51):
which sounds quite quite sad and shocking, But the thing
is a lot of us have this patron in our
heads about what our lives are going to be like,
and you almost feel sometimes like it's destined to happen.
The truth of the matter is wanting to be wealthy
or to have a batch or a nice is not
going to make it happen. And I read a really
interesting study recently out of the University of New York,

(01:13):
and it found that even if you really really want something,
that only explains about twenty percent of whether it's going
to happen or not. Because even if you really want something,
we get distracted, or we give up when we're bored,
or it gets a bit hard. And so the first
thing is, you know, even if you want a lot
of money, wanting it is not enough. We've got to

(01:33):
do some other things to make it happen. As obvious
as that actually sound.

Speaker 2 (01:37):
Yeah, I mean that Actually that is a very good point, right,
because a lot of us kind of you know, have
these kind of loose dreams about the kind of lives
or lifestyles that we want to have. But actually breaking
down the kind of steps that you need to go
through in order to get there is, you know, is
something that many of us wouldn't necessarily do. So that
does make a lot of sense. What's another bit of

(01:59):
brutal advice you've got for.

Speaker 3 (02:00):
Us, Well, if you really care about earning more through
your job, it doesn't actually matter how valuable your skills are.
That matters a bit, But what really matters is how
rare the skills are. And I think a lot of
people do not focus enough on this. So the way
I always think about it is, how is it that
you can have two people who both go to university,

(02:21):
they study for four years, but a decade after they graduate,
one of the moons call it ninety thousand dollars and
another earns one hundred and ninety thousand dollars, like an
extra one hundred thousand dollars. Because that is the reality
of what happens. And if you think about, say a teacher. Now,
teachers have such an incredibly valuable job to do. They

(02:42):
are raising the next generation, and everybody would say that
is an incredibly valuable job for society. And yet after
a few good years in the job, some of them
end up on about ninety thousand dollars, And a lot
of us would say, oh, that's not much for that
hard job that they do, that valuable job that they do.
And yet if you look at some people, not everyone
in the bank, but some people who work for the

(03:05):
bank and sit in their spread cheats, they could earn
one hundred and ninety thousand dollars, and all of us
would say, would you really miss it if you didn't
have an extra spreadsheet person sitting in the bank, And
yet they earned so much more. And what I want
Keevish to focus on is not just how valuable the
skill is, but how rare is it. There are a
lot of kids who grow up wanting to be teachers.
There are not many kids who grow up saying I'd

(03:27):
love to sit at a bank with a spreadsheet. And
so don't just think about how much demand there is
for your skill, but how rare the skill is as well,
because if there aren't many people being actuaries or any
of those boring jobs, then it's much easier to get
businesses to bid your salary or what you get paid up.

Speaker 2 (03:46):
Yeah, that's a very good point. And then, you know,
I think you make a really good point around teachers, like,
no one's disputing the value of the job, right, but
it is. It's the scarcity thing, and you know, it's
at the end of the day, it's a kind of
a you know, kind of the rules of supply and demand.
Said listen, and I suppose to be people who say, well,
actually you know I'm not, like, the reason I work

(04:07):
isn't solely to make money. But the truth is, to
go back to your first point, if you do aspire
to a certain life or lifestyle, then at some point
you do need to address the income side of things.
And then that brings you to your third bit of
brutal advice this morning.

Speaker 3 (04:22):
Ed, which is that most people are not going to
make a significant amount of wealth through their work, and
so you've got to find ways to build wealth outside
of the job you do. Because I know for most
Kiwi's listening, you go to work, you get your pay,
you spend most of it, and often there's not that
much left over. And so a lot of us are
not going to get rich through our jobs unless we're

(04:43):
CEOs or we are those bankers with the spreadsheets. So
we've got to think, how are we going to build
wealth outside of work? Now, the obvious answer is investing,
and you can do that in lots of ways. I'm
a property guy, but you could invest in shares, or
build businesses or at a lot of other ways. But
if we are investing effectively, we've got to take money
that we would otherwise spend today and use it to

(05:05):
buy property or shoes or something else, and that can
be hard and boring. So you've just got to have
it in your mind. Why am I doing this because
I need to build wealth outside my work. Do you know?

Speaker 2 (05:15):
Once upon a time I had a conversation with a billionaire,
as you do, like I, just a very casual conversation.
It was very very interesting, and one thing that this
person said to me was, you don't get rich working
for someone else. And so if that is something you
do aspire to, if you aspire to great riches or
to a certain kind of life and lifestyle, I think

(05:35):
at the end of the day that the way that
most people might get to that level of wealth is
not through being an employee. It's through being an employer.

Speaker 3 (05:45):
I think that's definitely the case for a lot of
people personally. I've found that myself.

Speaker 2 (05:49):
Thanks you, Timed, appreciate it. Ed McKnight from Opie's Partners
with Us This Morning.

Speaker 1 (05:53):
For more from Saturday Morning with Jack Tame, listen live
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