My Money: My plan to be work-free by 45
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Tyren Temple, Hatch employee.
We’re asking Kiwis how they manage their finances for success. Tyren Temple, 24, already has a house deposit, but has struggled to buy. Now he has a plan for early retirement and financial freedom.
Salary band: $65k-$75k
Employment status: Full time
Living situation: Renting
Belong to KiwiSaver: Yes, Simplicity
Have a student loan: Yes, currently over $35k
Have a credit card: No, never had one (although I probably should?)
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What’s your financial goal and how do you plan to get there?
Being financially free by the age of 45. By free, I mean not needing to work in order to live. Short term goals are to stick to an investing and savings plan to maximise my chances of reaching my long term goal.
Tell us how you divvy up your paycheck:
I’ve learnt to pay myself first. I invest and save before I spend anything on wants or needs. Rather than having a strict budget for spending, I have a strict budget for savings and investing. This works for me because I divvy up my pay as it comes in, and I make do with what I have left to spend until next pay. I generally split my paycheck like this: Spending (rent, food, entertainment, transportation, clothes etc): 60 per cent Back up (emergency fund): 3 per cent Travel: 6 per cent Investing: 25 per cent Gifting: 1 one per cent Low risk ‘conservative’ fund: 5 per cent
The great student debt experiment began in 1992. Supporters say it has increased participation in education. Critics say it has loaded young people with debt ata time when house prices and the cost of living have gone through the roof.
Your best financial tip?
Set up an automatic payment from your bank account each business day (say, $5 – the cost of a coffee) into an account (e.g., a conservative fund with Simplicity or any other similar company). It goes unnoticed and before long, you’re automatically saving $25 a week without seeing that saving within your bank account. It makes it easier to forget about it when the money doesn’t just get shifted into another bank account for you to easily see. I did this throughout uni until I gained more control over my savings and investing behaviour.
Your biggest financial risk or financial mistake?
When I first started investing, I put all of my eggs into one basket. The investment hasn’t been a big mistake, but it was poor judgement and I wish I had known to diversify my investments when I started.
Your biggest financial win?
I saved up enough for a deposit on a house with my friends, until housing prices in Wellington shot through the roof. So not a ‘win’ because we’ve been kicked out of the property market due to prices, but still an achievement for not only myself, but my friends to have saved up some money that can now be used in other ways.
Your money philosophy?
Save and invest until my money works harder than I do.
How have you learned about personal finances?
My grandfather taught me about the importance of investing. From there, I developed a strong interest in how money works and how I can make it work for me. Reading, listening and learning from others. I always recommend that people at least read Rich Dad, Poor Dad to understand the basics of time and money – it should be a book everyone is told to read in school.
Your biggest money lesson?
Don’t let emotion control your investing behaviour because it’ll lead you down a path of constantly looking back in hindsight and with the thought of “what if…”
What did you learn about money from your parents?
My parents taught me the value of earning money by encouraging me to get my first job when I was 14.
What do you see as the biggest challenge when it comes to achieving your financial goals?
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Read More: My Money: My plan to be work-free by 45