Millennials have copped their fair share of grief over the last while; the most famous insult coming from a disgruntled millionaire who decided that they were failing to buy homes due to their predilection for avocado on toast. Thankfully, discussions have become more nuanced since then.
After a terrible spate of anti-millennial propaganda from a cohort of boomers, we’ve been seeing plenty of positive news coming out about millennials' financial habits. But there are, nonetheless, still things that anyone within the famed group can do better. To try to understand the financial plights and flights of the most discussed generation of the last decade, we decided to speak to one.
Meet Kieran, a 30-year-old public researcher.
When we speak of millennials, they couldn’t come a lot more so than Kieran. At 30 years old, he’s smack bang in the middle of the age group, loves going out for a drink with friends, and just minted his first major house purchase with his partner in Auckland.
Travelling and investing aren’t mutually exclusive
Five years ago if you asked Kieran about buying a house he might have laughed out loud.
Making $60,000 a year, Kieran was flying by the seat of his pants. As far as he was concerned, he was making just enough to cover the basics — savings were destined for his main passion.
“All my money when I was younger went towards travel, which I don’t regret,” said Kieran.
Even a little bit?
“It’s difficult to think of it that way. Travel is an important part of growing up and exploring the world. Investments weren’t at all on my radar; I thought that stuff was only for wealthy people”
Hindsight is, as they say, 20:20. If he could wind the clock back, Kieran realises that there were some small savings that could have been shovelled into the investment department.
“I wish that between trips I had put some of it away towards savings or investments. If you start earlier setting aside money it can really build up.”
Today, making $100,000 a year, Kieran has the breathing room to take a more holistic view of his finances.
“Recently I started looking into shares and managed funds. It’s really in the last couple of years I felt comfortable enough”
He’s realised that by putting away 10% of his income toward a diverse investment portfolio, it’s a powerful way to gain long term wealth.
KiwiSaver saves the day
As Kieran admits, he wasn't the best saver five years ago. So thank his lucky stars that he became a KiwiSaver member at 18 years old.
Over a 12 year period, including minimum wage gigs cleaning pools while he was at uni, he was putting a consistent 3% of his income toward his KiwiSaver balance.
As most readers know by now; it all adds up.
Kieran’s KiwiSaver account joined him on the story arc of his young adulthood, from late teens through to where he is today. It hitched a ride with him on his travels and watched on in horror as he emptied cash reserves into Croatian yachts and maxed out his credit card out at a bed bug-ridden Mongolian hostel.
KiwiSaver money, thankfully, can’t be touched, no matter how much the next trip beckons.
A year ago, Kieran was finally able to reap the rewards of his early good decision making. He emptied out his KiwiSaver balance to buy a freshly built apartment right in Auckland city.
Watching the purchase go through and getting the keys to the new place was enough to push him even further on his KiwiSaver journey.
“One goal ticked off the list, it’s time to think about the next goal which is retirement. I changed the settings of my KiwiSaver plan from a Conservative allocation to Growth as I have much more time and can take more risk.”
The experience has also helped the young millennial to see the broader picture of his financial future. He’s cut the daily lunches in the city and started to take his investments seriously.
“I’m realising you need to do more with your money than just putting it in savings. Recently I have been trying to look into planning a wedding, which started me on the journey to look into how to make my money work better for me.”