Meet Andrew Ritchie, a marathon-running, independent consultant from Auckland! Andrew shares the story of his first investment after university, and what he would’ve done all those years ago if he’d had the same investment opportunities that he has now...
Can you tell us about your first investment?
My first investment was to start saving for my first long overseas trip. I realised it needed some serious commitment if I was going to make it happen! I set up a fixed amount to transfer into a simple savings account on payday, so that I never saw the money. Interest rates were higher then, so I could also see some growth while I was putting money away each month. I’d studied business and had some (not great!) advice when I started work. I got told I had to save an amount that, fresh out of university, was so large it scared me off to the point that I did nothing for years. Even later on when I looked seriously at share funds, there were minimum fixed amounts to start a fund and minimum monthly contributions. It all felt like too big a commitment, so I took the easy option with the lowest risk—a simple savings account.
Outside of that, my first real ‘investment’ was about ten years ago, in a share portfolio fund, similar to Sharesies.
What would you do differently, if anything?
I’ve been a huge fan of Sharesies from the beginning. Having Sharesies available when I first started investing would have changed my options and decisions for the better.
If I could start again I would have got into the share market as early as possible and made the commitment. This is why I recommend to everybody to get started with Sharesies. The small amounts do add up and if you start as early as possible, it's the best decision you can make.
What do you like about having an investment?
I like the fact that I’m taking responsibility for my own future and freedom. I also enjoy seeing the growth on top of my own contributions. When you invest, you’re benefiting from other people’s efforts as well as your own. They’re growing their companies and their value, so you get to ‘leverage’ those efforts. It’s the best way to set yourself up for future success.
How did you feel after becoming an ‘investor’ for the first time?
I enjoy seeing myself get closer to a goal that I’m aiming for. It gives me purpose and also focuses my attention on my spending decisions. Do I really need a new shirt, or technology upgrade? Will that help with where I want to be in ten years or more? I felt more responsible for my own future once I started investing.
You mentioned that you’re investing towards the 2020 Olympics, and to achieve the goal of visiting more countries than your age—how's this going?
My first ever investment was to fund some long-term travel. Since then, travel has become a very important part of my life. I love adventure and exploring. Learning about different cultures and people has taught me so much about life and given me experiences that give me a sense of wonder and satisfaction. I’m a big sports fan and the Olympics is such a huge event—it’s always been on my bucket list. We have never been to Japan, so when the announcement of Japan as host was made, my wife and I made the decision on the spot. We are confident we’ll get to see some Kiwi gold!
How has investing helped you work towards your goal so far?
I’ve benefited from the leverage of my investments, but it has also kept me disciplined. It is harder to take your money out of an investment than it is to take money out of a savings account. This makes you think twice before you decide to spend the money. Most of the time if we delay a spending decision, we end up not actually going ahead with it.
Discipline is a big part of investing, and it allows me to make these goals happen.
What tips would you give to everyday people who might not think it’s possible to get started, or feel like it’s too late?
Find a way of making investing fun, as well as easy! Here are three savings tactics I use:
I drink the instant coffee in the office and bring a ‘packed lunch’, while colleagues come in with their flat whites and go out for noodles and dumplings. I have a transfer set up where each month my ‘lunch money’ goes straight into my investment on payday. It has been a standing joke at work and people find it hilarious. But I’m going to the Olympics—and they aren’t!
With my bank I have an option to ‘top up’ a savings account every time I use my EFTPOS card. At the end of each day it rounds my spending up to the next $5 and transfers it into my savings. So if I spend $4 on my card, at the end of the day, $1 goes into my savings. Every little bit helps and it couldn’t be easier.
If I go out with the intention of buying something and it is on sale, I transfer the discount to my investments. I’d have spent the full value anyway, so it is effectively ‘free savings’. This might not be much when I add up my weekly savings at Pak N Save, but on a big weekend at Briscoes it makes a difference. It all adds up when you top up your Sharesies account in this way.
What is the best piece of advice you’ve given (or been given) about investing?
Pick a goal and start investing towards it, as small as you have to but as early as you can.