New Zealand Mustache

[enpower]

Hi,

I’ve recently come across Mr Money Mustache and have read all of the blog posts that interest me. They way of living in the blogs and forums is something I have been pursuing for some time. I’ve seen lots of people put their information to share so thought I’d do the same.

A little bit about me:
- Male
- 25 years old
- Live in Auckland, New Zealand
- Live in shared accommodation during the week close to work and then live with my fiancé in her shared accommodation in the weekend. Work in a 2hr+ commute daily if I lived full time with my fiancé so decided to live closer to work.
- Work in logistics/supply chain
- Enjoy living minimal living
- Hobbies are triathlon, hiking, mountain climbing, investing and reading books

Income & Expenses (monthly):
Salary $3010
Weekday accommodation (including water, electricity, internet) $670
Weekend accommodation (I supplement my fiancés expenses as I share the room) $125
Petrol $170
Other car expenses, car insurance $60
Medical expenses $50 (doctor, physiotherapist, vitamins, minerals, etc)
Food (gluten/dairy free and on triathlon diet, so eat lots) $390
Triathlon coaching/swim fees $110
Travel, hiking, triathlon, dinners, fun activities, etc $325
Monthly savings $1110
Monthly expenses $1900

Assets & Liabilities:
$25,000 stock portfolio
$14,000 cash
$11,000 superannuation (contribute 3% of salary which employer matches 100% and government subsidy of $521 per year)
$21,000 student loan (interest free, paying off approximately $4300 from automatic salary deduction annually)
$5000 possessions including car, road bicycle, bed,

My goals are to build my career and earning potential, increase my stock/investment portfolio and build up to a house deposit in my late 20’s. I’m also planning to propose next year on our trip to Sydney, Australia. My partner enjoys saving as much as I do. Since she doesn’t have as larger food, petrol or triathlon related expenses as me, she saves more money than me. We keep our finances separate but if we bought a house or got married we will share the bank accounts.

I have no desire to purchase any material things apart from our own home and rental properties further down the track. A nicer car, boat, beach house, etc are nothing I aspire to. I enjoy being an employee and the company and the industry I work for. Retiring early could be something I look into once we start a family but for now I’m very happy to continue working.

What I would like to build savings for would be to travel the world extensively and do overseas endurance races. I would also like to get more into mountain climbing, which can get fairly expensive with hiring mountain guides, etc. I would like to find a balance between saving and building my assets as well as enjoying myself in my spare time.

Thanks,
Elliot.

[gooki]

Welcome Elliot, looks like you're off to a good start.

[nz]

Welcome. I have a son 3 years younger than you. I wish he had your financial nous.

[enpower]

Hi,

Just saying well done doesn't particularly help me.

Anything constructive? Pull my plan apart and analyse all the faults or kinks :)

[Scrooge McDuck]

Hi eliot,
I'm from NZ too and new to the forum.  I'm wondering if you don't need that $14,000 of cash if it is better to put it elsewhere to get a better return.  Maybe a TD?
Also - although a crowd favourite for investment in NZ, have you thought about jumping on the property ladder sooner rather than later.  With limited other investment options in NZ it has many advantages (not to mention leveraged 10% capital growth per annum).  We bought a place a couple of months back in ChCh and its been relatively hassle free to date.
Scrooge.

[This_Is_My_Username]

Triathlon - I used to do that, and it can get expensive.  It can seem like the latest Zipp 404 Firecrest can become a "must have". 

Do you really need a rear disc wheel to make you 3 minutes quicker in an ironman? (unless you are a pro).

Coaching: you should be able to learn how to coach yourself, and eliminate that cost.  (again, unless you are a pro)

vitamins/minerals: these can sometimes be overpriced placebos.  Generally, you should only take these if a doctor advises you of a deficiency.  Self-prescribed vitamins usually have no effect.

Car insurance: $720p.a.?  That seems like a lot for third-party personal injury and third-party property damage.  You should not have comprehensive insurance for a $3000 car.

[nz]

Constructive feedback, here goes.

Your financial strategy seems sound.

Your lifestyle expenses however would be very different if you were not living in Auckland.
Is it essential that you live in NZs most expensive city?

[Ishmael]

I have no familiarity with New Zealand prices (I'm hoping to visit one day though!), but the weekday accommodations seem really high, and a potential target. I have to do something similar, as my house is a 2.5 hr drive from my workplace. I got frustrated paying the expenses for a place that was, quite literally, simply a place to sleep for me, and only required because I needed to work. I focused on bringing that cost down, and ended up finding a family member with a rural property who didn't mind me putting a tiny cabin (8'x8') on their property.

I also negotiated a telecommute option with my employer, so things are working pretty well now. My gas(petrol)/commuting costs are stupid, but I'm looking at bringing them down (thinking about an electric bike).

If something like that isn't an option, what about finding a campground reasonably close to your work and having a vehicle that you could sleep/live in? $25/night * 4 nights * 4 weeks = $400/month, and you might be able to negotiate with the campground owner?

[enpower]

I'm wondering if you don't need that $14,000 of cash if it is better to put it elsewhere to get a better return. 

Also - although a crowd favourite for investment in NZ, have you thought about jumping on the property ladder sooner rather than later.

The $14,000 cash is sitting there while I wait for the companies on my stock market watchlist to get a bit cheaper. I have a big interest in investing, particularly value investing on the NZ and Australian stock exchange.

House prices are far too expensive for me in Auckland. With my job, I'm moving all around the country so would look to buy a few rental properties before I buy my own home.

But good questions and advice, thanks.

[enpower]

Triathlon - I used to do that, and it can get expensive.  It can seem like the latest Zipp 404 Firecrest can become a "must have". 

Do you really need a rear disc wheel to make you 3 minutes quicker in an ironman? (unless you are a pro).

Coaching: you should be able to learn how to coach yourself, and eliminate that cost.  (again, unless you are a pro)

vitamins/minerals: these can sometimes be overpriced placebos.  Generally, you should only take these if a doctor advises you of a deficiency.  Self-prescribed vitamins usually have no effect.

Car insurance: $720p.a.?  That seems like a lot for third-party personal injury and third-party property damage.  You should not have comprehensive insurance for a $3000 car.

I have a mid range road bike I bought off Trade Me (similar website to Ebay, Craigslist, etc) for $800 NZD. It was a real bargain. I had a triathlon bike for a season but hated having two bikes. I sold a lot of my excess related stuff about 12-18 months ago and have the bare minimum gear for triathlon these days.

I've tried being self coached, but I'm training for my first ironman race in March 2014 so had a coach to offer me advice. I was self coached in shorter races, but since this is the first time I've attempted this distance, thought a coach would be handy the first time through.

The $60 per month also includes my car registration for the year which is around $250. I also have to pay for a warrant of fitness and any minor repairs or maintenance. My yearly insurance premiums are $220 for third party. My car was bought for $4700 2 years ago. Had 110,000kms on the clock and was about 7 years old. Nissan Wingroad so a great little car to transport my bike and all my gear to my partners in the weekend.

[enpower]

Your lifestyle expenses however would be very different if you were not living in Auckland.
Is it essential that you live in NZs most expensive city?

My immediate family of 5 lives here. My partner and her family live here. All my friends are here. I grew up here.

I went to university in Palmerston North (for those outside of NZ, Auckland has over 1 million people and Palmerston North has 50,000 roughly) and really didn't enjoy living in a small town. I enjoy all the sporting events on in and around Auckland over the summer.

I really love Auckland. I can't see myself living elsewhere for some time.

Great idea though, I hadn't thought of this before to live more frugally.

[enpower]

I have no familiarity with New Zealand prices (I'm hoping to visit one day though!), but the weekday accommodations seem really high, and a potential target. I have to do something similar, as my house is a 2.5 hr drive from my workplace. I got frustrated paying the expenses for a place that was, quite literally, simply a place to sleep for me, and only required because I needed to work. I focused on bringing that cost down, and ended up finding a family member with a rural property who didn't mind me putting a tiny cabin (8'x8') on their property.

I also negotiated a telecommute option with my employer, so things are working pretty well now. My gas(petrol)/commuting costs are stupid, but I'm looking at bringing them down (thinking about an electric bike).

If something like that isn't an option, what about finding a campground reasonably close to your work and having a vehicle that you could sleep/live in? $25/night * 4 nights * 4 weeks = $400/month, and you might be able to negotiate with the campground owner?

My rent is actually quite cheap for Auckland. $155 per week for my flat including expenses is a pretty good deal. The $190 excluding expenses for a double room which I share with my partner in the weekend is a bit more. But it is essentially her room and we enjoy the house and the location. It is close to her work, shops, parks, beaches. We walk or bike everywhere in the weekends.

[limeandpepper]

Whose idea was it for you to pay for your "weekend accommodation"? Was it yours, your partner's, or her housemates'? Is it because you make a big dent on utilities when you are over there, or you eat a lot of the food she has already paid for, from the pantry and fridge? Or did she specifically get a larger room just to accommodate you which she otherwise wouldn't have if she was single? I'm sure it's something you've both worked out happily to be equitable, and it's not a huge sum anyway, but I'm just curious. Most couples I know split the rent when they live together, but not if they live apart and just stay over on the weekends.

[enpower]

Whose idea was it for you to pay for your "weekend accommodation"? Was it yours, your partner's, or her housemates'? Is it because you make a big dent on utilities when you are over there, or you eat a lot of the food she has already paid for, from the pantry and fridge? Or did she specifically get a larger room just to accommodate you which she otherwise wouldn't have if she was single? I'm sure it's something you've both worked out happily to be equitable, and it's not a huge sum anyway, but I'm just curious. Most couples I know split the rent when they live together, but not if they live apart and just stay over on the weekends.

It was my idea. I use my partners accomodation so I only felt it fair to pay some money each week towards it. We both lived in the room prior to me moving out to my current job 40km away so she has lived there coming up 3 years. I have only lived seperately from her for the last 6 months and used to live in that same room for 2.5 years with her.

[gooki]

Should have paid down that student loan when the government was offering 9% discount - fucking hard to beat a guaranteed 9% return on your money. But that does little good to you now.

I'd focus on growing you income. $36k a year after tax isn't a lot for Auckland living. What field of work are you in?

[enpower]

Should have paid down that student loan when the government was offering 9% discount - fucking hard to beat a guaranteed 9% return on your money. But that does little good to you now.

I'd focus on growing you income. $36k a year after tax isn't a lot for Auckland living. What field of work are you in?

But once you paid back and got the 9% discount, your money was gone, unable to compound. If you work it out that way, not paying it off works out better.

I'm on $50,000 salary before tax. I work in logisitcs/supply chain. I've been working full time since graduating 4 years ago. I've worked 5x jobs in that time. A few of them have been shorter term contracts. I've worked in fruit exports, customer service at a retail bank, a shipping line, a shipping department in a retailer and now the distribution centre/transport division at a retailer.

$50,000 is an ok salary for a 25 year old. I can see myself working for the company I'm in and there is plenty of growth potential in my salary as I'm on a 2 year graduate/internship type role at the moment. At the end of the 2 years, my salary should jump up to $60,000+

[lysistrata]

Hey Elliot – fellow Auckland (about your age) here. I just wanted to pipe in and say I think you're doing really well!

A few thoughts:

Insurance: to me, $220 per year for third party is really expensive, but I know this varies a lot because of personal situations. My husband and I had an old car, ($2k, ex company car), which cost us $120 a year for 3rd party. I'm blind though, so he's the only one who drives it. For all insurances, I recommend going through an insurance broker – they shaved $80 a month off ours with no trouble at all, and it was super easy to do. I'd be happy to send you the details of my broker – she's a hoot.

Regarding rental properties, when you look, don't forget to look OUTSIDE of Auckland. You don't have to have a property in the city you live in – Whangarei, Hamilton, Hawke's Bay, Palmy … even places like Helensville will give you better value for money and offer decent returns (at least, they do for the  folk I know in property – the only people I know who aren't doing so well are those who've brought rentals in Auckland). Also, when you do this, again, I advise talking to a broker - save a lot of time, hassle and MONEY.

Your living arrangement is a great idea, and you're right in that it's a great rate for Auckland. We live rurally (South Head) and my husband does a 2 hour commute every day, and trust me when I say YOU DON'T WANT TO DO THAT.

And, also, out of curiousity, who are your investments with? It sounds like you're an active investeor rather than using passive funds. Have you thought of moving some of your cash into passive funds? I use Superlife – their fees are the lowest in NZ and they're excellent to deal with.

And Auckland is a great city – I love it here, as well :)

[enpower]

Hey Elliot – fellow Auckland (about your age) here. I just wanted to pipe in and say I think you're doing really well!

A few thoughts:

Insurance: to me, $220 per year for third party is really expensive, but I know this varies a lot because of personal situations. My husband and I had an old car, ($2k, ex company car), which cost us $120 a year for 3rd party. I'm blind though, so he's the only one who drives it. For all insurances, I recommend going through an insurance broker – they shaved $80 a month off ours with no trouble at all, and it was super easy to do. I'd be happy to send you the details of my broker – she's a hoot.

Regarding rental properties, when you look, don't forget to look OUTSIDE of Auckland. You don't have to have a property in the city you live in – Whangarei, Hamilton, Hawke's Bay, Palmy … even places like Helensville will give you better value for money and offer decent returns (at least, they do for the  folk I know in property – the only people I know who aren't doing so well are those who've brought rentals in Auckland). Also, when you do this, again, I advise talking to a broker - save a lot of time, hassle and MONEY.

Your living arrangement is a great idea, and you're right in that it's a great rate for Auckland. We live rurally (South Head) and my husband does a 2 hour commute every day, and trust me when I say YOU DON'T WANT TO DO THAT.

And, also, out of curiousity, who are your investments with? It sounds like you're an active investeor rather than using passive funds. Have you thought of moving some of your cash into passive funds? I use Superlife – their fees are the lowest in NZ and they're excellent to deal with.

And Auckland is a great city – I love it here, as well :)

Great to see there are lots of other Kiwi's on this website! I'm with Tower insurance and just bought it online. I looked around at a few other insurance companies that I knew the name of and went for the one I thought was the best value for money.

I wasn't aware you could go to a broker for car insurance, I thought it was only for health, life, etc insurance that you went to a broker. If you could send the info through on this, that would be great.

I've looked around at investment properties in all parts of Auckland and am just starting to look outside of Auckland now. I am familiar with Palmerston North and Hamilton so am starting to look there for options.

My kiwisaver is with superlife and I think they are pretty good too. Lowest fees and I get to choose my investment allocation rather than just "growth" "balanced" "conservative" etc. I've chosen 50% Australian shares and 50% overseas shares as my allocation and I'll leave it as is. I see no reason to change this as they are a passive index tracker type fund.

Regarding my own investments outside of kiwisaver, I don't use a fund. I invest directly into companies on the NZ and Australian stock markets.

[Scrooge McDuck]

Hey Elliot – fellow Auckland (about your age) here. I just wanted to pipe in and say I think you're doing really well!

A few thoughts:

Insurance: to me, $220 per year for third party is really expensive, but I know this varies a lot because of personal situations. My husband and I had an old car, ($2k, ex company car), which cost us $120 a year for 3rd party. I'm blind though, so he's the only one who drives it. For all insurances, I recommend going through an insurance broker – they shaved $80 a month off ours with no trouble at all, and it was super easy to do. I'd be happy to send you the details of my broker – she's a hoot.

Regarding rental properties, when you look, don't forget to look OUTSIDE of Auckland. You don't have to have a property in the city you live in – Whangarei, Hamilton, Hawke's Bay, Palmy … even places like Helensville will give you better value for money and offer decent returns (at least, they do for the  folk I know in property – the only people I know who aren't doing so well are those who've brought rentals in Auckland). Also, when you do this, again, I advise talking to a broker - save a lot of time, hassle and MONEY.

Your living arrangement is a great idea, and you're right in that it's a great rate for Auckland. We live rurally (South Head) and my husband does a 2 hour commute every day, and trust me when I say YOU DON'T WANT TO DO THAT.

And, also, out of curiousity, who are your investments with? It sounds like you're an active investeor rather than using passive funds. Have you thought of moving some of your cash into passive funds? I use Superlife – their fees are the lowest in NZ and they're excellent to deal with.

And Auckland is a great city – I love it here, as well :)

Hey Lysistrata,
I see you mentioned some index funds.  I haven't been able to find any in NZ that aren't in NZ currency and offer low fees.  Can you tell me more about Superlife?

Scrooge

[enpower]

Follow advice from Gooki,

I've decided to go full steam ahead and aim to pay off my student loan by April 19th 2014. This is the date when my partner an I leave to go to Sydney on our holiday. I think it is a worth-while goal to aim towards. I've worked it out with my current savings, selling off a few things around the house and also my salary deductions, I can make it work to have it paid off with about a week to spare.

I'm also cleaning out a few odds and ends that I've held onto at home in storage but have decided to put them all up for sale on trade me (similar to ebay).

[TygerTung]

G'day Enpower.

I have some constructive critisism.

$250 a year for insurance is too much, especially seeing as you're 25. I was only paying about $80 a year when I was 19 for third party, so $250 seems like too much, even with inflation.

Also $170 a month for petrol is WAY too much. Seeing as you're into triathalons, you should be using almost no petrol, as you should be biking everywhere. Not only will you save money, but you can get heaps more training in. I'm not training for anything in particular myself, but I can still get an hour and a half of training in biking to work and back etc. If you have errands to do, you can easily get in 50 to 80k as well as working 8 hours. I do 30-50k every day. It's good for the health, good for the environment, saves heaps of money, more peaceful as you don't get stuck in any traffic. It's a win win situation! I don't like getting cold and wet, so I wear a jacket if it's raining. You really need to consider becoming a more hardcore cyclist. Use a trailer or big backpack for carting large loads.

I reckon I am saving maybe $7000 a year by not driving (my wife has a car that I can use if I need to move somthing really big) and with compound interest, that adds up to $100k over ten years, nothing to sneeze at! She usually rides her 250cc motorbike, so the car doesn't really get used.

If you don't want to ride your good bike daily, just get an old steel racing bike, they're really cheap, and you don't have to worry about them. They're pretty much just as fast too. I ride singlespeed/fixed, but then I live in Christchurch. I don't know how hilly it is in your area, but just gear it suitably and you should be fine. High cadence work will do you good.

I'm concentrating on smashing out my mortgage as fast as possible at the moment, then I'll have to find out how to invest in this country.

Good luck!

Sam

[gooki]

Follow advice from Gooki,

I've decided to go full steam ahead and aim to pay off my student loan by April 19th 2014.

I just want to clarify, my advice to pay down the student loan was if/when they were offering a 9% discount for early repayment. I there is no incentive, and you are on 0% interest, then is think there are more productive uses of your money.

Still clearing debt is always good.