Curt Koto, Welcome to Shared Lunch on Garth Bray. Every week we're all about enabling people to make better wealth choices, and so this week we're with someone who's a fellow traveler on that journey, someone else who's just as pumped about helping other people work out whether at where they need to get to next and how to take action on that next step.
If I can plant seeds for people, they might be able to see a future that they couldn't see. I think we get ourselves caught in these like we want to time everything perfectly and we don't want to be the one that's lost a bit of money or whatever it may be.
It's Luke Kemmi's the people's accountant, the host of Keep the Change. Before we get to him, though, some important information you should always consider when investing.
Investing involves the risk you might lose the money you start with. We recommend talking to a licensed financial advisor. We also recommend breading product disclosure documents before deciding to invest. Everything you're about to see and here is current at the.
Time of recording.
Keevy's Welcome to the Chasi's Dojo. You no stranger to the mix and no stranger to the topics when I checked. So you're a podcast host, a business strategist, and you're also a fellow charted accountant. Yeah, congratulations, I think what is that? What is a fellow charted accountant? And maybe more?
Why? Yeah, thank you. So I got into accounting.
I enjoyed math and numbers and the economy and therefore accounting when I was at school, and yeah, I've sort of built out a career in that space. And then the fellowship comes when you use your charted accounting experience and knowledge to give back to the community and go a bit above and beyond and really apply yourself, so to speak. So one of the youngest to receive it, which is pretty cool.
Because that sounds like something you do towards the end of the career when you've made away your bucks, you've made all your decisions, you've set yourself up for success, but you've kind of done it all at once.
Yeah, along the way, well part of it.
You know, often you'll see accountants will go out and they might be on boards, they might be helping out in school environments and bought of trustee roles and things like that. I was kind of looking at it, going how can I take my skill set and apply it to the here and now? And part of that for me is education and trying to help people with some of the things that I've learned. So yeah, I could probably see it coming at some stage, but probably Yeah, pretty lucky to be recognized early on.
So I guess that's a lot of what Cheesy's is trying to do, right. It's all about trying to empower people to make better wealth choices and give them the access to opportunities to sort of weigh them up. Is that a little bit about what you've been trying to do with how you're advising people.
Yeah, So for me, I look at it as Okay, if I can plant seeds for people, they might be able to see a future that they couldn't see before reading something, before listening to the podcast, watching the video. And you know, we talk a bit about role modeling and needing more role models in the country, And I don't mean I need to be that role model. I mean can we find people and tell their stories that other people can learn from and go, oh, well, I
could be doing that. So a very quick example today, for instance, I spoke to somebody who went down the property route and got rent to properties and things like that, and they've decided to actually, you know, get out of that route and go down the business route. So they've built up equity and now they're going to buy a business, and now they're looking for education and how.
Do I do this better? How do I get it right? How do I protect my investment?
And they decided to do that off of the back of listening to some of the Keep the Change podcasts where they're like, oh, okay, that's an avenue that I hadn't even considered. So wherever anybody is that in their journey, I hope they can take a lesson and then apply.
It to their life.
Keep the Change tell me about that.
So I used to go and get breakfast in the morning after the gym, and I had a twenty dollar note most of the time, and I would say, can I be SA have postdiggs on toast with salmon, And it was nineteen dollars. It sounds like it's nineteen eighty, but I promise it wasn't. That's how bad Infati's been. And I would get the dollar back and I would think, right, I would say, keep the change and I'd let them
keep the dollar, and it just stuck with me. It was I was trying to teach myself abundance that you know, i'd probably gone through and lived it in an upbringing of like, Okay, you've got to hold on to every penny tight and be very careful and things like that. I was trying to teach myself a bit of you know what, there's plenty of money in the world. If you do good things, if you add value, it'll come back.
So sort of almost forcing myself to let go of a little bit of it to then trust myself that I could get it back, and so that didn't have as much of a hold over me.
And that's where, yeah, the name came.
From thinking about that and thinking about how people maybe can be more financially empowered in someone. What do you think of some of the strongest forces that hold people back from that?
Well, honestly, and this sounds really tough, but I think it's a lack of action. So we don't actually want to do the things that we inherently know we probably need to be doing them, so we will instead of saving a dollar of a week a dollar a week to create a savings habit. We'll say I don't have enough money to save or to invest, and so then we tell ourselves that we are not an investor. But it's very easy for me to say because he's now
got a lot of money or whatever. So you know, we don't lean into the actions that we know we need to take. And I think life has become so easy for us in so many different ways now, which sounds very tough in an economic environment like this, that people have gone before us and broken down these barriers. Set up key we saver, set up sheers e's, set up platforms for us to sell things online, set up ways for us to be able to lease our properly out for a long weekend and make a bit of
extra money. Everyone's coming and doing this for us, and we're sitting there going, ah, can't be me, And so I don't know what that is. Why don't we step to our start line and run our race, not keep comparing ourselves to other people running their race and think, oh, well, you know, I could never achieve what they're doing. Therefore I'm not going to start my own.
Because I've heard of like analysis paralysis for almost like you're standing in the shop which sort of cereal or whatever, you know, you kind of there are so many choices, so many possible courses of action. Some people get into that kind of trap too, where they're just wanting to make a better decision and they never quite get to one. Right, But you're saying it's more fundamental people just they learn the learnings, but they don't actually follow through and do the do.
Yeah, yeah, I think for a lot of people. Yeah, but part of it probably is that analysis paralysis. We are part of it too. I think is then goes back to psychology of if I make this choice, I make this choice and I get it wrong. A, you've got to live with that. B. If you believe money's hard to come by, well, you know, do you want to take a risk? Because A you've got to own that you made the decision to do it. And then secondly, you know, how do you get it back if you
do get it wrong? And I think a lot of us are pretty risk averse.
How do you break down the risks for people so that they can actually take a risk that's the right size for them. Is that part of it?
Yeah?
I think you've got to individually understand how much risk you're willing to take. So whether you're doing a mundy personality type test and googling those and learning a bit more about yourself. You know.
I was talking to a good friend yesterday.
He's at the stage of his journey where he is going to be doing debt recycling, so he's borrowing money to invest into the stock market, and he's like, I'm going in at all time high as you know, what's going to happen. I'm going to copy twenty percent, you know, fall in it. And so who's already worrying about this? And I said, well, mate, let's say it's one hundred grand. Let's be honest. If that one hundred becomes eighty, is your life going to be dramatically different? And you know
it's a good point. I said, that's the same thing. If that one hundred becomes one hundred and twenty, is your life going to be dramatically different to how it is? And no, Mike, So just zoom out from it and think, Okay, what is the risk that I'm taking at the moment, and can I make more sense of that over a longer time period, Because I think we get ourselves caught in these like we want to time everything perfectly, and we don't want to be the one that's lost a
bit of money or whatever it may be. But you've got to you know where you are on that journey. I think for a lot of people, if they're getting starting started with investing, they are you know, if say you're investing, I'll say to someone you know they might invest.
Five hundred dollars.
If that's five point fifty and you've got a ten percent return at the end of this twelve months, is that fifty dollars is going to change your life?
No, let's be honest.
So the risk and even the reward isn't as big as we make it out to be. So then don't then take that and go okay, well, then don't do anything.
What happens.
I think when you start investing a larger number, then that increment increases or decreases have more meaning to us, and then we really start to take it seriously. But it's and that's why there's so much content about that first one hundred thousand dollars and like getting to that and seeing it snowball.
It's great to say, have a plan for the first hundred k, but if you're worried about the price of butter, and a lot of people seem to be. And if you're worried about the cost of living, if you're really focused on how much rent you're paying rather than your income, how do you bridge that gap?
Well, firstly, there's a word in there that doesn't help us, right, worry. Nothing good comes when we're constantly worried about something. So as part of the change, I've gone and found people that might help us understand what's going on up here right, And you know, you see things like ninety percent of our thoughts are the same as yesterday and then the day before that, and eighty percent of them are negative as well. So your brain is fighting against you with
negative information constantly. So I think even just acknowledging that and going, oh, it's okay to keep thinking about this. However, action is the antidote to anxiety. So what are we going to have to do. We're actually going to have to do something, and that's tough because I think we
don't want it to be in our control. But a big part of my teaching is basically, you're going to have to find ways to increase your income because there's only so much like, okay, review your subscriptions and find the cheapest provider and whatnot you can do, and that should be you know, a yearly practice.
Stop handing back that dollar to the people that just sold you the very cheap salmon and eggs.
Yeah, and then focus on Okay, we're too from here, what's my plan? What resources do I have? What options do I have? But you know, if you're stuck in that survival mode, it's a tough place to be. And I think a lot of us have probably been there where, you know, trying to pay off a credit card or just get buying things, but you know it's a bit brutal,
but no one's coming to do it for you. And I think I had to have that realization too, if I could see my life could look a lot different to what it was, but I was getting in the way, and a lot of it was my unwillingness to take that action as well. And again, like I know that that can sound very frustrating and hard hitting, but we don't have to do it straight away, Like we.
Can go on a journey.
It could take a year, it could take two years, it could take five, but it's better than staying on the same path and just getting more worry, anxiety and kind of you know, fear that we can't get in control of these things.
How much of that do you think is early years for you? Because you did a very bold thing. You got your mum on your podcast recently, Yeah, which I thought was kudos to you. But that's diving back into your own money history as well and your own upbringing. So how much of that is given you an insight into how it might shape other people's views of money and their agency, their ability to actually take an action.
Yeah, massively for me, and like and I acknowledge that, and I can see that, and I think I grew up in a very resourceful household, so because there wasn't a lot, it was like, how do we stretch this further? And then the journey I was going on as I got older, I'm like, oh, wow, there's an abundance out there. I can learn from my past, but I can you know, take it and change it to achieve things that I once you know, never thought possible or wouldn't be possible
if I didn't take those actions. So I've sort of had to go on that June as well. The thing that I see a lot of this is a whole, big subsection of Kiwi people that could and will have.
A very different life.
They just needed a bit of education like I got from sixteen studying economics, accounting. Then, you know, doing two decades of talking to people in this space and you go oh, like all of a sudden, it becomes you're a lot more in control of it, and it becomes simpler. And now that I'm five years in to keep the change, I'm starting to see these people come out and go, oh, I applied what you said and it's working. I was saying to people, hey, if you know unemployment's going to increase,
I tell you a great thing to do. Show up beyond time. You know, old school. Put your hand up so you're here to do. You're willing to do anything extra. Get a message from young lady this morning. She's like, hey, company, why pay increases three percent? I've been given eight because I put my hand up and said, hey, I'm willing to go.
Above and beyond. I'm willing to do mixture and whatnot.
Like Epic, you know, they've been acknowledged for and rewarded for their initiative and their attitude and that's a micro decision that.
Can effectively change the trajectory of their life.
Because what if they now take that five percent difference between the eight and the three and they start dolo cost averaging that into a sheer ETF that they've been learning about, and all of a sudden, twelve eighteen months later, you know, their life is very different.
That's so interesting that people are reaching out to you with those examples, you're obviously connecting with them. What are some other things that you're consistently hearing that people are either doing to get past it, or maybe there are obstacles that they're really struggling with.
Well, I think the narrative out there at the moment is that it's really tough, there's no money out there. But I'm constantly reminding people there is so much money out there, and what has changed is that it's accumulated at the older demographic right because they've been here for longer.
But what do they do with it?
Term deposits bank accounts, thus sitting on it? Now, what are they Well, we're running out of time because we're getting older. Therefore we're valuing convenience, and the world's become more convenient if you go and offer services to people like hey, I'll split your fireward, Hey, I'll paint your fence, whatever, mow your lawns for you. There are people every week
miss to me. We're like, hey, I didn't believe you, but honestly, I've just picked up, you know, thirty grand worth the work in my neighborhood and whatnot.
This is crazy.
I didn't realize that all this money has been sitting there the whole time. But that starts with the belief that that's even possible, right, because if you look outward at the moment, you've basically been told no, like unemployment's high, there's no money out there, everything's hard, the economy's broken. You probably should move to Australia. I'm fighting the tide being like, I don't want you to move to Australia. I'm trying to give you some skills where you can
get in control of your own income. So I think that's probably become something I've been really passionate about because I've learned more about making money and how it exchanges hands, and I don't think people learn about that. So then we do default to the cheaper subscription, cheaper power et cetera, and don't explore, oh, how can I put another ten thousand dollars into the family household? And there are when you give yourself a goal and set it there and go, right, what if we did.
Over twelve months?
You start to realize there's so many different ways that you can actually increase your house on income. But first you need someone to tell you that it's possible, I think.
And then there's that great wealth subscription that kiwis love, which is just buy a house and subscribe to a mortgage and make regular installment payments and you'll come out of it at the ends fine, right, And that's how that older generation have built up quite a lot of capital, and they've wound up in a position where they actually have a fair chunk of you know, of wealth to put around. Right, But is that a path you think that is there for everybody? Now?
Still for everybody? Probably not? What about you?
I can talk about you for a second.
Well, I guess yeah, I'm a good example.
At the other end, I could have five rental properties probably six, and service those I have zero?
Now why not?
I find it boring to be honest, Like, I'd rather plug my money into you know shares and then just get back to focusing on the things that I love doing.
But you know, I talk to probably people like what are you doing? Man like leverage? Leverage, I'm like, there's leverage is one. There are many ways to leverage things.
You can leverage skills, your time, audience, experience, like it can go wider. So I, yeah, I probably just don't find property that interesting for me. And what I often do have all decisions is like walk down the path. Okay, if I invest into this company and it goes to zero, can I live with that?
Like yep, Okay, I can own that decision.
Make it faster, carry on. Okay, if I buy a property, what does that look like? Okay, then I'm going to have a tenant. Well, I'll be frustrated if something does break you so probably will because I can't fix things. Look at these hands. So I'm not a DIY guy. So then I'm gonna have to pay for that. That's going to decrease my returns on that. But I'm not saying that, you know, people shouldn't be investing into property.
I just think maybe we got a little bit too flippant with the advice that that was the way to do it, and now we've got to pay the price for a little bit where house prices are really high and people aren't then educated as to the other options that they could have.
Do you, though, look at that property journey that other people are on and get a bit of fomo or you a no fomo guy, you've already walked down the road and go, look I'm fine.
This or not at the moment, obviously with how flat it is. But I mean in twenty twenty one, I was thinking, oh, maybe I should having you build, and you know what, yeah, so yeah, I fall into the same traps that other people do. I think what I've seen and observed across businesses, across personal investments, as soon as you start leveraging yourself with you're like in need of every dollar.
Of your income.
I look at that and go ooh, you're like now you're compromised and life gets harder because you need something to work out. And I think we saw that with people, you know, leveraging right up in twenty twenty one, like we should think back and go The will was closing down because of a pandemic, and what were we doing? We were going to open homes like that seems pretty
bizarre looking back, right, what was it all about? And so I think fomo was so high and now it's kind of gone back the other way, and I think I would like to just see it stay there for a bit so that people aren't as pressured to sort of get on the ladder make the decision quickly. You'll be left behind. You're gonna miss out, and you've got this natural wave. Okay, well maybe I'm not as successful in society if I'm not doing it and whatnot. I think at the moment we get a chance to redo
that conversation and go Actually, that doesn't define success. That it's very important to have somewhere to live, obviously, don't get me wrong, But it's not. You know, it's not the be all and end all of life.
You took before about people taking a big risk and buying businesses. That seems like a really really high risk strategy, right, because you're not. It's a little bit like buying your own home and living in it and hoping that it's going to improve. But you've now put a lot of eggs into this basket, into this particular set of circumstances, working out it's not going to be for everyone.
Right, but you're more in control of it and that's what I like about it. But again, that won't be for everyone. The good thing of property that people like is that you can kind of buy in and then go, Okay, well, I'll sit back and log onto homes or whatever.
And see what it's worth.
Business you've got to turn the screws, you've got to improve the asset value, and you're directly getting rewarded.
For the work that you do.
So there's a large demand for businesses to be purchased. At the moment, big wave of that one and two business owners is over the age of fifty. We've got a becoming I wouldn't want to call it a crisis, but I think we're ignoring how big of an issue that's going to be as a country.
Do they shut down? Do they sell?
So?
Asia Pacific average is twenty eight percent of businesses over the age of fifty.
We're one and two.
So what does an older demographic of business owners do. Well, they're least likely to export, they're least likely to innovate, and they're least likely to implement technology. Now, what think three things that the politicians tell us are amazing for a country export innovation and technology. So we lag behind in the Asia Pacific region. In those areas, we were ranked tenth and eleventh in the survey that they do
each year. And why would they be risk one when it's been so tough for the last five years and they get into the end of their journey. Now, the positive to that is it creates a massive opportunity. I spoke to a business owner this morning. They've gotten out of the properly jouney. They've got into the business journey. I see, what's the database? Like, oh yeah, I've got about three and a half thousand customers in a Excel spreadsheet. I'm like, okay, But at least we've got the data there,
like they can ever CRM. They can use that to run ads to those people. We can start doing some analysis on who they are, we can start emailing them. There is opportunity in that database. And if you are getting tighter by the end of your business, junior, you're probably not going to be pushing harder as somebody who's a bit younger. So that's going to be fascinating for
us to watch play out. But there's more opportunity there then people probably realize but you've got to be the right sort of person.
People talk about the interview enerational great wealth transfer. This is a part of that from the sound of it.
Yeah, And are they going to pass it to their kids or are they gonna like close that wealth down. It's going to I think some wealth will effectively be deleted because people just go, we're gonna we're gonna wind this up. But maybe a few years ago that business was worth something. And you know, even back to property as well, you've got property in business that people have used as their retirement plan. But now they're getting to that time and going, okay, well our property are sorry,
our capital is now stuck. So we might see the mvent and should have new finance products, you know, reverse mortgages that people are more accepting of. I was reading in France they have something called it is a voyager or something. You buy the property from the person in the here and now, but they continue to live there, and you negotiate the price and so you unlock some of your capital. So and then you know vendor finance
in the business space. So yes, the business owner might stay on and have to be well paid out over the next five years or whatever the dealer is. So it's going to be more work for the AI lawyers or the lawyers, depending if the lawyers don't get wiped out by AI.
Change the tech a little bit. I mean, what do you see here?
I see billions of dollars of yellow paper, and they hopes and dreams of people every Saturday Wednesday. And one of the things that I learned reading their angle report is the higher that jackpot, the more people will go and buy it, which sounds very simple. So for them to do a lot of turnover, they want a number of high jackpots in a financial year because the big number drags everybody to play.
All right, the national disparation indexes. Some people around my way call it anyway, this is not a winning ticket.
Sorry, you're going to get it to man, how many were you are welcome to?
Because it's not worth a penny.
I look at lotto as actually like a voluntary redistribution of wealth. Like people willingly go and take their money and probably know, well, I'm not going to get this back, but I can't remember this percentage that stays and goes into community groups and stuff like that. But I'm surprised because New Zealand seems a little bit anti gambling but very accepting of lotto.
There was a story it caught my eye. I think might have been one of the radio stations R and Z. We're talking about how if you're spending twenty five bucks a week, well, I guess that's two twelve dollars tickets and you do that over forty five years something like fifty eight grand. That's not even counting appreciation or anything like that that you could have saved if you chuck it in, you know, and after tax, after fee return four and a half percent, it's compounding, it's going to
be like one hundred and eighty nine thousand dollars. That starts to sound like a really substantial amount of money, and yet so many people would still rather just go, oh, we have a flutter or you know, got to be in it to win. Is that a healthy thing? Is that just human nature? Or is that something we have to change? What's going on there?
Well, I think it just shows our delayed gratification, right versus our instant gratification. And to risk twenty five dollars to potentially win twenty million, it probably sounds like to psychology epic. I've got to have a go at that I've watched my parents do it for you know, a
lot of their life. And you know, now we've probably got a generation of people that are like gambling in a different format, whether it is actually like online doing something, or like gambling with their future income.
So I E. I will use a payment.
Provider this is what we'll call it, which is effectively a form of credit, and I'll pay it back over the next six installments or whatnot. So I think we're just seeing like instant gratification turn up in our lives, like easier and easier and just about.
Everywhere we look.
But all these things that are easy in our life normally come at a cost eventually.
Right, Yeah, fair point. Crypt I don't know what your thoughts are on Crypto. It seems like one of those things that five minutes ago everybody said was a terrible idea, and now suddenly everybody's woken up and gone, hang on, this actually could be something. I mean, is that a conversation that the people that you relate to and make content to and talk to, is that something they're talking about. Is it in their mindset? Or is it not something that they're even on about.
I think it's another good example where some people are seeing forms of crypto as gambling, and so they won't be interested in lotto or a casino or something, but they go, oh, I've heard about this thing, and if we all get into it, and it could pop off and I put my thousand dollars and it's going to become worth six, but your thousand could be come worth zero as well. Like how much do we really know
about it? I think there's a big difference between bitcoin and the people who really get into that space and crypto. I don't know a lot about crypto, but you know, I've kind of focused my understanding on bitcoin and why people are so interested in bitcoin over this last five years. What I've noticed is that there's a massive increase in understanding of how the purchasing power of our dollar is
losing its value. So we might not go on the Reserve bank inflation calculator and run the numbers, but when someone says, oh, butter's now cost this, we go there is crap, how can this happen? And so people have gone, well,
what can I do? And I think those people are seeing bitcoin as a store of wealth in a way to kind of exit some of the impact that they're feeling on the other side, where they're watching money get created and then lose its value, and they go, Okay, this looks like a life raft they might call it, or a different form of technology and solution. I'm going to learn more about it. I'm going to back my education.
I'm going to put some money into bitcoin to protect myself from the losing value of the New Zealand dollar or whatever. Right, But you could also argue, but that's why people brought property, and that's why people invest in shares, because we're all trying to beat inflation and so that our dollar that we do have that will work so hard for isn't becoming worth even less. And maybe bitcoin and crypto is just the new wave of people understanding
there and learning about that. Now, if it helps increase education, amazing. Will people be scammed and taken advantage of and whatnot?
Yeah?
Probably because you know, humans were looking for a quick win or whatnot. So you know, that's the dangerous side of it that I think people need to accept the decisions that they're making or be very educated before hitting transfer money somewhere.
I guess that trust part is hugely important, right is who are you dealing with and how can you trust that? Because people will know, okay, you can buy a house, and there are the these are the ways that it could fall apart. These are the reports you can get. You know, if you're dealing with a real estate agent, they've got a history, you can check that out. There's
a trust path you can follow. For the crypto part, it seems like maybe there are fewer trust paths around, or maybe maybe I'm just not across all of them.
Well, when I first brought crypto, it was twenty twenty, but I'll take your back.
So it was twenty seventeen.
I was working in an accounting office and bitcoin is bubbling again, and a client came in and said, oh, hey, I got given a bitcoin when I was traveling in Europe. I need to cash it in. I was like, oh, my mates are talking about that, and said to my boss and he's like, oh, I see if they'll buy it.
And next thing they are in the car drive into the accounting practice and they've got a group of them pulled together their cash and like it, we'll bite off the client I'm like, what the hell just happened?
What did they just buy?
How? What is this twenty twenty? I start kind of thinking, oh, what's happening in the world. Maybe I should be buying some gold, and I'm self managing my KEYWI save and I'm like, hey, I'm going to allocate some to gold, and they're like, oh, we don't advise that.
I'm like, dah, the world's going to fall over.
I've seen this before, I need to And then I start learning about bitcoin. I'm like, these people talking about this again, I might buy some. So I go through to learn the process and I think, you know, then I and I go in my mind, I go, money follows attention. If this gets more attention, it will probably increase some price. I'm willing to take some risk on it. And then I start, you know, just getting back to
my normal life. And then I see more and more we're talking about it, but really intelligent and smart people, and I stop and go, why is this thing attracting so many bright minds? Like why are some of the cleverest people in the world working on this? They either aren't, And the whole thing's gonna pop and it's going to be like, what were they thinking or they know something? And I'm like, I'm not intelligent enough to figure that
argument out. But I'm going to go along for the ride and put some money into bitcoin and understand more about it, and if it goes to zero and the whole thing pops, I'm going to go, Wow, Okay, maybe there's a really good life lesson in there for me. If not, at least I backed my own judgment.
Money makes it matter.
Eh, Maybe you.
Put a little skin in the game there and you're actually paying a little bit more focused attention. Yes, Wow, fantastic. Look, I feel like we've covered a huge amount of ground and I just want to pull you for the week you're doing and I hope you carry on trying.
To keep you change.
Yeah, thank you, thank you, Luke Kemy's for that. Action is the antidote to anxiety. Love that thought. We hope you found something from that for yourselves. Perfect know who you think we should be talking to next and about what's to get in touch for us though. Komat