All in Smart
If you’ve ever listened to a money podcast, read a finance blog or chatted with that one friend who’s suddenly “really into investing”, you’ve probably heard a whole bunch of money words thrown around. People nod. No one wants to look dumb. And quietly, many think: I should probably understand what that means… So this post is for you. Here are plain-English explanations of the money words that come up again and again, using New Zealand examples and my common sense logic.
At the start of every year, I open one spreadsheet that tells the story of a decade of choices. Updating our net worth spreadsheet helps me see where we’ve been, and where we might be heading. These annual check-ins matter, and I genuinely enjoy this process. 2025 was a good financial year for us, driven primarily by consistent investing in the share market through our ETF and, to a lesser extent, our KiwiSaver. Once again, we prioritised investing, never missing a month, and it paid off.
Our daughter is leaving home, off to Otago University. I’m so looking forward to her finding her next steps, but I will miss her terribly. She is ready to go! And, I’m not going to lie, I am looking forward to a tidier house. As we adjust to a new phase of long-distance parenting, I’m pretty determined to make one last push to get her as financially ready as we can for the big, wide world. I’ve always put a lot of time into making sure she understands how money works, long before she leaves home. In many ways, it all comes down to this moment: can she leave home and be fully financially capable? Without a doubt, I’m pleased to say the answer is yes. So today I’m sharing exactly how we have managed to, I hope, successfully let her financially set sail from home.
Invest first. Pay your bills second. Spend what remains. I recently watched a video featuring a group of people in their 80s discussing money. One of their biggest regrets? Not investing small amounts consistently throughout their lives. I meet many people who feel they have “done everything right”: paid their bills, avoided debt, managed a mortgage, and contributed to KiwiSaver. Yet when it comes time to step away from work at 65, they’re confronted with too many outgoings and not enough invested assets to cover their retirement. Invested money grows. Compounding growth builds the wealth you will rely on later. Those in the video I watched didn’t work this out until it was too late. One of the easiest mistakes to make is to spend first and invest second.
Well, the moment has arrived. The tiny five-year-old who started Primary School back in 2012 has just turned 18 and completed her final day of Year 13 at High School. Just. Like. That! I was warned that time would pass quickly, and it has. She has a few exams to get through, then she is done with school for good and can enjoy a few well-deserved weeks of R&R. Once the weather heats up, she will launch into full-time summer work for a local cherry packhouse. Going to university is expensive. Most of the cost is in the accommodation. We have always explained to her that we will financially assist her through university, provided she also contributes. She has done that. It’s going to be a family effort to get her through her degree debt-free.
Trying something for the first time can be confusing, especially for those managing their investments on their own. I encourage you to take the plunge and buy and manage your own investments. I understand that, although I know you have the skills to buy, hold, and eventually sell your own investments, the initial experience can be overwhelming. However, there's no need to worry; it's not as difficult as it may seem. It just requires learning a new process and becoming familiar with it. I often receive emails asking how to invest using Smart, which is the provider I use to purchase my Exchange-Traded Fund. I’d like to clarify the process for anyone interested.
Let’s talk about how Exchange Traded Funds (ETFs) are taxed in New Zealand. Exciting stuff. Creating this blog post gave my brain quite the workout, I can assure you! I’ve written specifically about tax a few times over the years, but rules change, companies come and go, and the tax questions keep arriving in my inbox. This post was inspired by Susan, who asked about overseas ETFs, the FIF rules, and even whether you pay tax if your investment makes a loss. Tax is complicated, which is why I keep my investing simple. I want you to read what I’ve written and then research, discover and learn for yourself. If you keep your investing simple, you should not need an accountant or tax professional. When the topic of taxes comes up, I’ve often noticed that people can get themselves quite worked up. But for me, someone who has invested for many years, paying tax on investments has always been relatively straightforward.
The content I’ve created on applying The Barefoot Investor book to New Zealand remains some of the most regularly viewed on The Happy Saver, with collectively close to 100,000 views. I continue to gift his book to others because I believe it’s a perfect guide to getting on top of your finances. If you were to combine his book with Rebel Finance School’s free online course, you could pretty much call yourself “financially literate.” Since The Barefoot Investor remains so popular, it's time for me to update the March 2020 blog post I wrote, so that all those people reading the book for the first time, as well as those following along with The Barefoot Investor principles, have a reliable New Zealand resource to turn to.
Every June, I check in with our KiwiSaver accounts to make sure we’re on track to receive the annual government contribution. If you put in at least $1,042 by the 30th of June 2025, the government will deposit $521 into your KiwiSaver account; a welcome little bonus for those of us thinking ahead to retirement. But from 1 July 2025, that bonus will be cut in half, dropping to just $260 a year. With the government’s contribution shrinking, yet again, it’s time for me to rethink my strategy. In my recent fortnightly email, I mentioned that I was considering ceasing payments into my KiwiSaver. My friend Wayne questioned that move, so I wanted to explain a bit more about what I’m planning on doing with my KiwiSaver, and what Jonny and I are planning as a couple, especially given we will be retiring in our fifties.
