Why Kiwis are bad with money and what we can do about it

For the last 3 years, I’ve been working at a Kiwi Wealth backed startup called Hatch. We created Hatch for people like us: Kiwis who want to do better with their money, without having to deal with the jargon, complexity and distrust the investing industry can be known for.

As part of my job, I’ve been doing a lot of research into our money habits. After talking to hundreds of Kiwis, I agree that many of us are clueless and deluded about money. I think we’re forced to be.

Lack of quality financial education aside, look around: what options do you actually have for your money? Independent advice is scarce (and expensive!), the share markets feel like an old boys club, finance companies have a reputation for going bust, and property continues to become less affordable. The only option we seem to have left is to put our heads in the sand, our money in a savings account, and assume somehow she’ll be right mate.

We’re saving ourselves poor

A lot of us have far too much money sitting in savings. The word ‘saving’ is probably inaccurate as well – these days it’s really ‘storage’. Interest rates are so low that inflation wipes out the pitiful interest we earn – as the cost of living rises every year, the money we’re diligently saving is simply not keeping up. If you are earning 1.5% interest and inflation sits at 2%, you’re literally saving yourself poorer.

Savings accounts do play a valuable role – they are a great place to store money you may need in the near future. The problem is, we’re using them as a one-size-fits-all solution, and it’s costing us.

It’s extremely hard work to be bad with money.

Here’s the kicker: we’re working harder than ever, for longer than we should. We sacrifice quality time with our families, struggle to balance work and life, and spend sleepless nights worrying about the future. It’s stressful, it takes up too much brain space, it causes fights and leaves us stuck in jobs we don’t love.

And yet, somewhat ironically, the idea of getting our hard earned money working hard for us is the thing that feels, well, hard.

Change starts with access to quality investment options

When we launched Hatch 2 years ago, our initial goal was to give New Zealanders access to quality ways to put their money to work. We were the first to allow everyday Kiwis to become shareholders in some of the world’s most innovative companies. Since then, over 50,000 people have signed up and own shares in companies from Tesla, to Apple, Berkshire Hathaway, Google, Beyond Meat and 3,000 or so other businesses we know and use every day.

Access is great, but what we really want is to help New Zealanders make a real difference to their futures. That life you imagine after winning lotto? That’s what investing your money can help you achieve. We like to think of it as getting rich slow.

Good returns, bad reputation

Phrases like “only invest money you can afford to lose” drive me crazy. Our KiwiSaver accounts are full of money we can’t afford to lose, and most of it is probably invested in shares. That’s a good thing! Over the last 100 years, the share markets have grown investor’s money by an average of 10% a year. That growth is why your KiwiSaver balance goes up far more than the amount you put into it. It’s also why your balance sometimes drops – an average of 10% a year isn’t the same as 10% every year.

It’s time to stop thinking about investing money you can afford to lose, and start investing money you won’t need for 5-10 years.

The share markets are not a casino

These days, discount share trading platforms are cropping up all over the show – making it very easy and very cheap for people with no experience to dive in and start buying shares. Good? Bad? No one knows yet, but the 1980s give us a bit of an idea.

Because Hatch is part of Kiwi Wealth, we’re not trying to maximise short term revenue, or attract new funding rounds, we are trying to solve a big problem. It’s easy to see why the share markets appear to be another outlet for gambling. Chucking $50 in to buy shares in a company just because the price is rocketing up, well I can see why it feels like betting on black.

But that’s not putting your money to work, it’s a lottery.

Two straightforward ways to start putting your money to work

Here’s the conundrum: You make buying shares sound like an effort, and a lot of people will never get started. You make it sound too easy, and it feels like gambling. Fortunately, there is a middle ground – straightforward ways to start, without acting like a drunk at a Blackjack table:

Learn by doing

A lot of Hatch investors take a small amount (say $100) from their savings and use it to buy their first shares. They don’t think of their first purchase as an investment, instead, it’s an affordable education in the mechanics of buying them – which incidentally is just like online shopping. $100 is not going to get you rich, but it may change your life. Once you own shares in a quality company, everything changes. It’s amazing how more interested you become in learning about good money habits when you become a shareholder in a business you believe in.

Start by learning

If you’re like many other Kiwis and prefer to get your head around the basics before beginning, Hatch makes that easy too. We’ve created a free online course so you can learn everything you need to know to buy shares. We deliberately made it easy to fit around real life – you can complete it in just 10 minutes a day, over 10 days. We break down the concepts into bite sized chunks and let you take one small action a day so, by day ten, buying shares feels like a small step to take.

Take ownership over your money

A focus on education is a weird path to forge in an industry that’s having a glamour moment. It would be much easier to jump on the bandwagon of ‘buy now, the going is good!’, but we’re doing it for a reason. I genuinely believe the best time to start is today, but I also know the best way to start is by taking real ownership over your money. And that means knowing what you’re doing with it.

Hatch investors tend to be over 30 – savvy, ambitious Kiwis who know that investing their coffee money won’t lead to their dream lifestyle. So turning that first $100 investment into a serious portfolio is the next step. The good news is we spend a lot of time creating straightforward, entertaining and educational information to help you grow your nest egg in a way that works for you. When you understand what you’re doing, it doesn’t feel like gambling, it feels like a sensible investment in your future – one that doesn’t require a scarified lifestyle today.

Be better with money

The reason people stick with savings is because they feel like they know how it works. My feeling is they don’t. Your money is still being put to work, but the bank is the one benefitting. We should change that.

Not by gambling on share prices, but by taking a little time – probably less than what you already spend thinking about money, and learning about shares. Not throwing your life savings into the markets, but drip feeding amounts in and building up a quality nest egg over time.

We get messages from people every day about how investing in shares has changed their lives. Mortgages have been paid off, holidays have been had, families have started learning together and confidence has grown. None of these people got there by having insider knowledge, or day trading their way to success. They just put in place a seriously straightforward plan that worked around their own lives, and stuck with it.

If you’ve made it this far and want to give Hatch a try, our Wellington based team are on hand to help with any questions (nothing is too hard or dumb!). I also have a referral code too, which will give you (and me) a $10 NZD top-up when you sign up and make an initial $100 NZD deposit.

Getting out of our seats and off the boat

The man who opened the Women of Influence Awards last night spoke about how our earliest Wahine sat through their journeys to New Zealand. Only males were allowed to row.

He looked out at an audience full of trail blazers, misfits, disruptors and survivors and said “look at you now, you are the navigators of our country”.

Of course, because it’s 2018, New Zealand and an event celebrating women, another man finished the night by telling a top female executive that ‘the problem with women is they lack the ability to lead’.

In these crazy times, it really shouldn’t be surprising that with these two, unintentionally profound statements, it was men who got to the heart of the issue of women and leadership. Michelle Duff puts it this way:

“The ultimate end-game of feminism was not and has never been to simply slot women into all the positions of power currently held by men. The idea is not to uphold the structures that already exist.

It is to tear them down.”

It’s been 125 years since Kate Sheppard secured the signatures of a quarter of all women in New Zealand and made us the first country in the world to give women the vote. I suppose the hidden detail in this story is that it happened in a time when courier pigeons were considered an efficient mode of communication, when there were literally no women in parliament to get on the team. Damn right, it was a powerful display of leadership. But when Kate threw out the playbook, she gave us a much more powerful lesson in what happens when women lack the ability to lead like men do.

Of course some people struggle to see women as leaders, our approach is virtually unrecognisable. And it has been unrecognised, even by us, for far too long. Thank god we can finally say goodbye to the days women felt they had to ‘act like men’ to get to the top and embrace everything that happens when women lead like women.

A revolution is happening and when you know where to look, you’ll see it everywhere.

You’ll see our Governor General acknowledging the failures of her generation to fully grasp the gender battle they were fighting. “We thought things would change – it was just a matter of time. We now know that we were wrong – or at least too optimistic”. Female leaders don’t see failure as a sign of weakness, they get strength from talking openly about the lessons they learned along the way.

You’ll see an award winner walking onto the stage arm in arm with two friends. Her name is on the trophy but the success is shared. I can’t think of a better showcase of how women lead through lifting each other in the good times up and holding each other up in the bad.

You’ll mistake vulnerability for a lack of confidence. You’ll judge a woman for being too emotional, then watch her change the entire atmosphere of a board room using those same emotions.

Yes there is a problem with women and leadership, but the problem isn’t with women, it’s with leadership. That narrow definition we’ve all subscribed to for far too long is being forcibly expanded and traditional leadership structures are finally starting to collapse under the weight of women doing things their own way.

The problem with women and leadership is this: We don’t want to take over the navigation of this boat. We want to build a new one.

An ode to Hilary

From day one, it seems like Clinton saw herself as president.

She worked harder than most of us could understand, she helped her less capable husband take on the role, she took on jobs that showcased her ability, she did more, for longer to prove that she had what it takes. Continue reading

What IS Sexist?

I think that a clear and comprehendible message is vital to the achievement of any lasting social change – give those you are fighting a chance to pass you off as crazy, and they will. When we throw around terms like ‘sexist’, it’s very easy to sound hysterical and politically correct to the point of ridiculousness and to me, this is quite a big deal. Continue reading

Share the freaking footpath!

As Ive become older and less patient (it’s true kids, it happens to the best of us), I’ve launched a personal vendetta against footpath hogs. To save me from public meltdown, I’ve chosen the keyboard warrior route, because if you walk on footpaths and haven’t noticed any of this, you are probably DOING IT.

If you can’t multitask, don’t TOUCH your phone

There’s a lot of research that suggest no one can multitask… However it’s a special breed who still believe in their unique power to stumble along the street, eyes glued to their phone. You probably don’t even realise its an issue because everyone else is dodging and weaving to avoid your path of destruction.

It especially annoys me when I’m running UP HILL, at death’s door, hating every second, and IM the one who has to veer off course so some idiot can focus on selecting which Miley Cyrus song to listen to next.

I call for an uprising! Instead of dodging these people, stay on path. After a few shoulder barges, they may learn a life lesson.

Think of the footpath like a two-lane road

Those family groups who plan their saunter down main streets in rush hour, all in a row KILL ME. Want to walk in a row? Pay attention to your surroundings. Want to live like you own the place? Single file is for you.

Because my brain can’t help but extrapolate things out, when I see people doing this I reach all sorts of conclusions about how they live life… None of them good. Don’t be that group.

Please don’t stop for no reason

When rush hour hits and the streets are crowded with tired people trying to get home, I can’t for the life of me understand the brain connections that need to happen for someone to just pause on the street. Why stop? I genuinely can’t believe you can be on a busy street and not understand that if there are people all around you, chances are, someone is JUST BEHIND YOU. When you randomly stop, you create a human-sized domino effect of people trying to avoid ramming you.

Foot traffic is traffic. It goes two ways down a street and sudden stops or entering the flow without EVEN LOOKING is less dangerous but just as rage inducing as doing it on the roads.

So much psychology…

My brain has a huge disorder where it turns things like this into symptoms of a wider issue. Maybe it’s a loss of community, maybe (as a friend mentioned the other day) our brain sizes have shrunk as specialisation has enabled us to be dumber, maybe its because everyone is so angry.

Whatever your issue, keep it to yourself. Unless it’s the brain size thing. If you suspect that you are dumber than a caveman, REALLY focus when you walk down the street, it really is quite an easy task.

What to do about our animals?

After hearing about Facebook’s emotion manipulation study, I have to wonder if they’ve gone into overdrive.

Every second picture on my Facebook feed is of another travesty of human nature. From pig farming to duck and rabbit plucking, to elephant chaining, to every imaginable torture that we do to animals in order to clothe, feed and prettify ourselves.

Amongst the collective consciousness that seems to have suddenly come about in regards to what we are willingly ignoring is (for me at least), a total sense of helplessness.

I consider myself pretty up with the play. I remember refusing to eat non-free range eggs while friends and family tried to convince me it would never be economically viable, I went through several years where I was dirt poor, yet scoured the supermarket aisles and only bought toiletries that weren’t tested on animals. I wont even begin on all the other animal derived products that also contribute to the misery, but needless to say, I did a fair bit of research into how things are made.

It was hard.

Over time, I came to a level of comfort with the idea that it’s ok to eat meat, but *wherever possible*, it should be free range (not ‘legally’ free range, but marked by an independent authority like the SPCA as free range). If I can get cruelty free products within a reasonable additional price and quality, Ill go for them. If I’m out for dinner, I won’t bother. I relaxed on my morals for many reasons that Im still not entirely comfortable with. I am comfortable knowing that every time I break my old rules I do it with the full knowledge of what I am doing.

What really annoyed me in the last few days is that it seems like Im surrounded by similar people, and yet our very basic attempts to live a little bit better are thwarted at every step by a system that is legally allowed to hide the true reality of the situation. As with cigarette marketing, I think it’s about time we take a ‘an informed decision needs a dose of reality’ approach. And I do believe our Government should play a role.

‘Free range is a marketing term’

How is this even possible. How is it that in New Zealand, “There is no formal or compulsory auditing system for free-range egg farming.” How is it that consumers with a conscience are being routinely tricked and instead of improving the situation, harming it even further?

To me, this seems like a pretty easy thing to change. It shouldn’t be up to the likes of the SPCA to promote the fact that their stamp is the only auditing system (or lack thereof) we really have.

Same with animal testing. Why is it that it’s up to cruelty free providers to add it to their labels, rather than the opposite. Why do we legally make it easy for companies to cover up the cruelty?

Its just not economically viable

Well, lets give it a shot. Once again, I hate middle class people reverting immediately to the ‘poor people can’t afford it’ line. Sure, cool. Im also aware of economic disparity. That’s no reason why the rest of us shouldn’t sacrifice a little more of our plentiful cash to change these industries for the better. Lets just give it a shot and see huh? Eat less meat, stop throwing out leftovers, cut out a coffee. Prioritise becoming the sort of person who can still focus on things that they cannot see.

As a secondary economic argument. New zealand is tiny. While I dont think we live up to our ‘clean green’ image as much as we pretend, why not become the cruelty free marketplace of the world? We’re never going to be big enough to do it all, so lets become world leaders in a wonderful niche.

All our meat comes from NZ

In the middle of one recent debate, someone mentioned that we’re all so up in arms about NZ pig farming, while blissfully unaware that a lot of our Pork doesnt even come from here… And who knows the conditions those animals live in. Once again, packaging makes it easy to hide this and leave the onus on New Zealand brands to push their point rather than visa versa.

How do we fix this?

As much as Facebook has become a painful place to be and it’s so frustrating to look around and see a non-stop, overwhelming level of cruelty, it must be a sign of improvement?

Normally I’m not a fan of the ‘spreading the word leads to change’ philosophy, but in this case I think it works. Most of us have enough exposure to domestic pets to struggle to not connect the dots regularly. Obviously the public pressure is making an impact and I know that world over, countries are starting to ban testing for cosmetics.

The tragedy is, as one of my friends pointed out, it seems unlikely we can fix anything. A certain amount of willful ignorance is vital to surviving this world without falling into a deep depression. Because we can ban factory farming, we can ban animal testing we can do all the comparatively easy things, but we’ll still wind up with a 50% newborn chick death rate, a horrific end to the life of every cow taken to an abattoir and a group of people who just can’t live without their Mink coats.