Speaker 1: You're listening to the Weekend Collective podcast from News Talks
Speaker 1: ed be Welcome back to the Weekend Collective. I'm Tim
Speaker 1: Beverage And if you're missing in the previous hours, I
Speaker 1: would recommend going to check out the podcast Fantastic Chat
Speaker 1: with Alex Flint there just about getting your exercise habit
Speaker 1: started and and all of that should I say about anyway,
Speaker 1: you can check out the Weekend Collective podcast at iHeartRadio.
Speaker 1: Right now, it is time for Smart Money and my guest,
Speaker 1: well he needs no introduction really, Martin Wores. How you doing?
Speaker 2: Yeah, very well?
Speaker 1: Thinked if you got a business card, that's one who
Speaker 1: has a business card. But you could probably just write
Speaker 1: financial guru, couldn't you.
Speaker 2: I don't have a big business card, and I if
Speaker 2: I had one, what would probably financial writer and financial speaker.
Speaker 1: Oh well, that's not as much fun as guru. I
Speaker 1: like guru.
Speaker 2: Yeah, yeah, I like as well.
Speaker 1: Maybe it's promising too much. It's a little bit SI. Yeah,
Speaker 1: it could be reminded of how many books have you written.
Speaker 2: I've written twenty three books. I've actually written twenty four
Speaker 2: because I handed the manuscript of my twenty fourth book
Speaker 2: into the publishers a couple of weeks ago and doing
Speaker 2: their thing on it. At the moment. It won't be
Speaker 2: out till next year or so, but that'll been number
Speaker 2: twenty four.
Speaker 1: What how I can look. I can imagine someone going,
Speaker 1: I've got a book in me and I'm going to
Speaker 1: start writing it. And you've done twenty three. And now,
Speaker 1: as you say, twenty four is not out yet, but
Speaker 1: you've written it. Yeah, what motivated number twenty four?
Speaker 2: About five years ago I had a real old disruption
Speaker 2: of my life and I left Queenstown, where I'd live
Speaker 2: for twenty odd years, and moved to christ Church, which
Speaker 2: is where I live now. And you know, whenever you
Speaker 2: have a big disruption in your life, you meant to
Speaker 2: go through your finances, aspect by aspect, all the different things.
Speaker 2: And I did that, and I made a new will,
Speaker 2: I wound up the family trust that I've had, I
Speaker 2: got my investments managed by someone else. And it was
Speaker 2: such an interesting process which happened over two or three
Speaker 2: years that I thought I would be writing up. So
Speaker 2: the book is partly biographical, but it's partly also advice.
Speaker 2: Here are the things that I did, and here are
Speaker 2: the thing here's how it worked out warts and all. Wow,
Speaker 2: made a few mistakes and doing that, well, they weren't
Speaker 2: really mistakes. One of the things I did was I
Speaker 2: canceled my health insurance to self insure, and I put aside,
Speaker 2: you know, quite a sizeable some of money. And the
Speaker 2: idea was that I would pay what had used to
Speaker 2: be the equivalent of the premiums into.
Speaker 1: A get ahead of it yep, yep.
Speaker 2: And within three months of doing this, I was under
Speaker 2: the knife, having having an operation, and then a month
Speaker 2: after that I had another operation.
Speaker 1: So did you spend it all?
Speaker 2: No? No, I haven't spent I've still still got a
Speaker 2: bit of back up there and I can afford to
Speaker 2: self insurance. I mean, it would be a disaster for
Speaker 2: somebody who hadn't put the money aside and such like.
Speaker 2: And you know, I'm of an age retirement age where
Speaker 2: I see a lot of people who ask questions about
Speaker 2: health insurance because getting as you get older, it gets
Speaker 2: really really expensive.
Speaker 1: That is a problem, Isn't it actually funny? As you
Speaker 1: were talking about that and saving it, I have you
Speaker 1: still got it? And I was thinking of that black
Speaker 1: added quote when somebody stolen some money from Baldrick and
Speaker 1: he goes, what about that tuppence? It was under my
Speaker 1: pillow and he goes, seen it, pinched it, spent it.
Speaker 1: I was wondering, if you're about to deliver that line
Speaker 1: on your health insurance.
Speaker 2: No, no, no, there's still some money there. So and
Speaker 2: you know, health insurance, you know it's important to some people,
Speaker 2: but it's mostly about Q jumping. I've had a bit
Speaker 2: of experience now in both the public and the private system,
Speaker 2: and the public system is slow to get into it.
Speaker 1: But it's fantastic when you're in.
Speaker 2: But it's fantastic once you're in there.
Speaker 1: Well, I didn't realize that the really good surgeons. I've
Speaker 1: learnt this probably in the last few years, but the
Speaker 1: really good surgeons have a public They work in public.
Speaker 1: It was to be the public, you have to be
Speaker 1: the best. And so if you're looking for a private surgeon,
Speaker 1: look for one who's also in the public system. And
Speaker 1: you're you're away. But it is Q jumping. Yes, you're right,
Speaker 1: but if you've got a dodgy knee, then you know.
Speaker 2: Then you want it done. Yeah yep.
Speaker 1: Hey, Actually you have distract me with that talk about
Speaker 1: health insurance because we're going to talk about small businesses
Speaker 1: and we will do it. But I just wanted to ask,
Speaker 1: when you are paying for it yourself, do you have
Speaker 1: do you try and haggle? You know? It's like when
Speaker 1: they say you've got to go into this private hospital
Speaker 1: and they say it's going to be so much a night,
Speaker 1: and you're like, oh, come on, give me a break.
Speaker 1: I'll give you such and such. I don't.
Speaker 2: I don't think there's any haggle room in there whatever.
Speaker 2: I'd love to say, yeah, wouldn't. I got fifteen percent off,
Speaker 2: But they just presented me with the price that here's
Speaker 2: the surgeons for the this fee, here's the hospital fee,
Speaker 2: here's the theater fee.
Speaker 1: That's it.
Speaker 2: They never said take it. They never said take it
Speaker 2: or leave it?
Speaker 1: But was it did? Do you look at it and go, yeah.
Speaker 2: It's well they warned me it was, but it's a
Speaker 2: fair bit of money, you know. One well they were
Speaker 2: both about fourteen thousand dollars each, so you know I
Speaker 2: took a thousand dollars.
Speaker 1: That sounds like a hip and a knee.
Speaker 2: No, it wasn't either of them.
Speaker 1: Okay, no, no, no's going on. Don't don't don't tell
Speaker 1: us we do. I'm not going to ask. I'm not
Speaker 1: going to you know, we're not going to push it
Speaker 1: any further. Hey, I wanted to have a chat about
Speaker 1: suffening about small businesses. And when I say small businesses,
Speaker 1: I mean I don't know how we define a small business.
Speaker 1: There is a particular definition, isn't it. In fact for
Speaker 1: some people. If you some small businesses, if you described
Speaker 1: it to the average punter, that they'd be like that
Speaker 1: sounds like a pretty big deal to me. And there
Speaker 1: have been a lot of headlines around recently about the
Speaker 1: number of businesses that are folding. We've seen the very
Speaker 1: public ones, of course, when people just notice that their
Speaker 1: favorite restaurants no longer there. We've seen some fairly well
Speaker 1: known establishments that have suddenly disappeared. But of course there
Speaker 1: will be people who set up small businesses at times
Speaker 1: like this, because if you've got a good idea, then
Speaker 1: you don't want to wait around. Have you Are there
Speaker 1: some basics when it comes to small businesses on what
Speaker 1: you can absolutely get right and what you can absolutely
Speaker 1: get wrong. And sometimes I don't know if it's just
Speaker 1: a question of luck either, because I've spoken to small
Speaker 1: people who just about every small business person I've ever
Speaker 1: spoken to will say, in fact, I've even done a
Speaker 1: couple of things myself where I've looked back and gone, well,
Speaker 1: thank goodness X didn't happen because I wouldn't have been
Speaker 1: ready for it. And a lot of them will say, oh,
Speaker 1: my goodness, if I'd known, if I had known how
Speaker 1: hard it was, I never would have even done it,
Speaker 1: And yet here I am a success. So can we
Speaker 1: just still that into some basic dos and don'ts for
Speaker 1: small business big Core Martin.
Speaker 2: Yeah, yeah, it is actually, and you're right about the
Speaker 2: definition of a small business. There are definitions. I think
Speaker 2: in New Zealand it's under maybe fifty staff something something
Speaker 2: like that.
Speaker 1: If you have forty staff, that's massive.
Speaker 2: But I may I may have that wrong. It might
Speaker 2: be twenty, but it's something like that, whereas in the
Speaker 2: US it's it's five hundred and so forth. But you know,
Speaker 2: a lot of them to a pretty marginal sort of operations,
Speaker 2: and a lot of them, I would argue, aren't really
Speaker 2: businesses at all, paid directly that it was paid hobbies. Yeah,
Speaker 2: and that's one of the don'ts. You know, it's not
Speaker 2: not necessarily a thing that you've got to love. But
Speaker 2: it's largely self employment, you know. So if you imagine
Speaker 2: a trade or myself I was self employed, I wasn't.
Speaker 2: Really I didn't have a business. You know, I could
Speaker 2: have had a business, and I could have built up
Speaker 2: a financial advisory practice with fifty staff and so on,
Speaker 2: but I quite deliberately and consciously decided not to because
Speaker 2: I want a better lifestyle than that. I'd argue a
Speaker 2: lot of a lot of small business owners don't have
Speaker 2: great lifestyle. That is, you know, they not only have
Speaker 2: to carry on with their trades, but they've also got
Speaker 2: a market that they've got to give quotes, they've got
Speaker 2: to do the books, they've got to do all those
Speaker 2: other other aspects, and they actually find they have very
Speaker 2: little life at all. I think the number one bit
Speaker 2: of advice I would give to people is to start
Speaker 2: with the end in mind, so to start thinking about
Speaker 2: how is this going to play out? And ideally you
Speaker 2: want to be able to sell your business for preferably
Speaker 2: serious money. So you build something, you take all the risks,
Speaker 2: you live, eat and breathe your small but business and
Speaker 2: most small business people do. You want a really good
Speaker 2: payoff at it, so you've got to think about who's
Speaker 2: going to buy this business, and what are these people
Speaker 2: who are going to buy the business, what are they
Speaker 2: going to be looking for? And the answer to that,
Speaker 2: in almost all cases is that they will seamlessly keep
Speaker 2: the profit going. That is, from day one when you're
Speaker 2: the owner. Today too, when the other person is the owner,
Speaker 2: the profits keep flowing. And that means that you don't
Speaker 2: have your name on the door. You're not you know,
Speaker 2: the business is not dependent on you. You don't have
Speaker 2: your name online, so that you're the number one person
Speaker 2: in whatever the field is. The Other thing I'd say
Speaker 2: is that hospo is something that a lot of people
Speaker 2: go into. Somebody described that about thirty years to me,
Speaker 2: they have this little vision of themselves standing around the
Speaker 2: bar at lunch time with a five ounce glass of beer.
Speaker 2: This is when we had five hour glasses of beer.
Speaker 2: And they see themselves as being mine host and that
Speaker 2: sort of thing. Most hospo is bloody hard work actually, and.
Speaker 1: That you've got all the stuff and that your mind
Speaker 1: host and you're going around the table saying hi, and
Speaker 1: everyone's going, hey, hey, are you going Martin, And I'm loving, loving,
Speaker 1: loving your chef's work today, and as opposed to.
Speaker 2: Yeah there's a there's a snail in my cello, so
Speaker 2: so and so hasn't turned up again. Very difficult businesses
Speaker 2: to run, and I know they're quite high profile and
Speaker 2: you really do notice when your local cafe closes. But
Speaker 2: I suspect I've never seen numbers on it, but I
Speaker 2: suspect that more hospital hospitality businesses cease to be help
Speaker 2: we polite, and then most other business SIPs.
Speaker 1: Yeah, it's interesting that you you would an unsurprising I
Speaker 1: guess that you'd say you have a think about the
Speaker 1: endgame where do you want to end up? Because there'd
Speaker 1: be many people who end up. Maybe I should also
Speaker 1: include myself employed, but that's usually just only responsible to yourself.
Speaker 1: But let's say small business that a lot of people's
Speaker 1: motivation would simply start from I want to be my
Speaker 1: own boss and nothing more. That would be very common,
Speaker 1: I managed, wouldn't it.
Speaker 2: Yeah, yeah, it's very common, And yes you might be
Speaker 2: your own boss. But the staff not turning up are also,
Speaker 2: in a funny sort of way, you're your boss as well.
Speaker 2: They certainly motivate you to do things. It's it's a
Speaker 2: tough road to hoe. I love you know. I mean,
Speaker 2: there are used to be lots of figures around about
Speaker 2: seventy percent small businesses failing within the first five years.
Speaker 2: And I don't know whether that right or not.
Speaker 1: There are those spectacular figures though there that there's so
Speaker 1: many do fail, aren't they I don't know what the
Speaker 1: stats are either. I could probably look up a meme
Speaker 1: somewhere there'll be.
Speaker 2: I'm not sure I trust them all that much. I
Speaker 2: wouldn't know where to where where they come from. But
Speaker 2: it's for a lot of people. It is very, very
Speaker 2: hard work. It's sixty hours a week, it's seventy hours
Speaker 2: a week. Being your own boss often comes at a price.
Speaker 2: And the other thing tim is there if you go
Speaker 2: into business and you put capital into that business, whether
Speaker 2: whether it's a relatively small amount because you know it's
Speaker 2: for tools and that sort of thing, or whether it's
Speaker 2: a big amount and you take on a lease for
Speaker 2: the hospitality business and so forth, you need to get
Speaker 2: a return on both your time and your capital. Yeah,
Speaker 2: and a lot a lot of small businesses don't get
Speaker 2: a return on either. Actually, they're not often terribly profitable.
Speaker 1: Well, that's the other thing. If you speak to small
Speaker 1: business owners, they might tell you. And that's what often
Speaker 1: comes up when they're when the government's sticking another responsibility
Speaker 1: on employers, and how employers will say, well, listen, everyone
Speaker 1: thinks I'm living on the pig's back, but I haven't
Speaker 1: paid myself a wage for eighteen months. I think we
Speaker 1: heard a lot of that obviously through COVID.
Speaker 2: Yeah, yeah, I've been pretty negative to them. But the
Speaker 2: other side of it, you know, there are there are
Speaker 2: joyous examples of people A making a lot of money
Speaker 2: and b having a very very good lifestyle.
Speaker 1: So what, okay, is there a simple reason why why
Speaker 1: so many fail? And and what's the difference between the
Speaker 1: ones that become a roaring success? Is it just that
Speaker 1: they've had a great idea.
Speaker 2: I think there's a lot about that. I think that,
Speaker 2: you know, it's it's what they go into, it's how
Speaker 2: they manage it, it's how they manage to staff it.
Speaker 2: It's how they manage the staff that they have, it's
Speaker 2: how they market it. You know, I look around the
Speaker 2: place and I do see a lot of very successful
Speaker 2: small small businesses. And then of course you know Apple,
Speaker 2: the computer people, you know, Steve Jobs, they started as
Speaker 2: a micro business as the Juti pack up quite now.
Speaker 2: Garret trade me started in Sam Walken's garage. So all
Speaker 2: these people have an idea and we only know it's
Speaker 2: a good idea with the passing of time.
Speaker 1: One of them is one of the mistakes that you
Speaker 1: might make in a small business is if you've started
Speaker 1: it with your own ambition in mind, is a stubbornness
Speaker 1: to share the to share it around. So if if
Speaker 1: you've got an idea for a business, you might not,
Speaker 1: for instance, have all the money or the capital you need,
Speaker 1: but then it's like, my idea, why should I give
Speaker 1: it to someone who's simply going to stump up with
Speaker 1: a bit of money to make it a bit easier
Speaker 1: for me? Is that one of the mistakes small businesses
Speaker 1: make that they go in a bit undercooked on the
Speaker 1: financial side, but simply because they're unwilling to share in
Speaker 1: their genius.
Speaker 2: Yes, of course, taking on a partner and a business
Speaker 2: is like a second marriage to triumph of hope over experience.
Speaker 2: So it's you know, that doesn't always work out. But
Speaker 2: I always say to people that I think that you're
Speaker 2: better to have fifty percent or sixty percent of a
Speaker 2: thriving large business than one hundred percent of something which
Speaker 2: is struggling and a lack of capital. You know, after
Speaker 2: people have more into the house to put money in
Speaker 2: and managed to beg borrow of steel, bits of other
Speaker 2: other money from finance companies and things like that. After that,
Speaker 2: the capital drives up. And where do you get the
Speaker 2: expansion from. I think you've got to bring staff and
Speaker 2: to turn a small business into a medium size. To
Speaker 2: turn a medium size into a large one, you really
Speaker 2: do need capital, and that means bringing other people on.
Speaker 1: If somebody was to I mean, I don't know how
Speaker 1: much how much time you would spend advising people in
Speaker 1: small business and things, because that's a specific area of expertise,
Speaker 1: isn't it. But what would if you had a family member,
Speaker 1: for instance, he said, look, I've got a great idea.
Speaker 1: This is what I want to do. I want to
Speaker 1: enter into business. Would there be a small checklist you'd
Speaker 1: run through them, or a list of you know, absolute
Speaker 1: musts before they even sort of take step one? Well
Speaker 1: step one to be talking to you, I guess.
Speaker 2: Not or somebody somebody like me and I do see
Speaker 2: I have seen over the years an awful lot of
Speaker 2: small business owners. No, I wouldn't really have a checklist.
Speaker 2: I think you'd have to work through. They all tend
Speaker 2: to be quite different. But I would keep coming back
Speaker 2: to that. Start with the end in mind. Who's going
Speaker 2: to buy your business, what are they going to look like,
Speaker 2: what are are they going to look for? And what
Speaker 2: are you going to build where you can sell your
Speaker 2: business for two million dollars and fifteen years time.
Speaker 1: Oh that sounds nice, doesn't it?
Speaker 2: Look?
Speaker 1: We'd like to hear from you as well, because it's
Speaker 1: been well, it's just from my own point of view've
Speaker 1: always been curious about setting out small businesses and what
Speaker 1: it takes because I think a lot of the time
Speaker 1: when it comes to discussions around politics and things, people
Speaker 1: like to have a crack at business owners without having
Speaker 1: an inkling on it, absolutely on how incredibly difficult challenging
Speaker 1: it is. So if you're one of those small business
Speaker 1: owners that has either made a great fist of your
Speaker 1: business and you're doing very well, where did you go right?
Speaker 1: But also if you feel like sharing experience on something
Speaker 1: where you went wrong, because many successful business owners will
Speaker 1: probably say, look, you know, I might be successful now,
Speaker 1: but about a few failings. It give us a court
Speaker 1: we'd love to hear your experience with Martin Hawes. This
Speaker 1: is smart money and news talk, said b. It's twenty
Speaker 1: four the number is oh, eight hundred and eighty ten
Speaker 1: eighty of course in text on nine two nine two.
Speaker 1: But we'd love love your input. It's twenty four past five. Yes,
Speaker 1: and we're with Martin Hawes. This is smart money talking
Speaker 1: about the dos and don'ts of setting up a small business,
Speaker 1: but of a bandwidthm with Martin. But joining us is
Speaker 1: ivor good day. A bit of a delay on the
Speaker 1: line there either.
Speaker 3: Hello, Yeah, I'll just put you. I'll just take your
Speaker 3: speaker mm hmm, okay, right right, you're on phone. Good Yeah, yeah,
Speaker 3: So you're just you're just mentioning that if you started
Speaker 3: a small business and you're not very successful, you'd like
Speaker 3: to hear from us.
Speaker 1: Yeah, sure, is that you?
Speaker 3: Yes, yes, yes, I started a lolly importing company with
Speaker 3: about five thousand dollars from a second man vati bike
Speaker 3: in nineteen eighty eight and sold it to my brother,
Speaker 3: he's a couple of years older. Million two thousand and
Speaker 3: five for you know that part of the deal. It
Speaker 3: had a million dollars in the bank.
Speaker 1: Oh really, and where do you consider went right?
Speaker 3: Yeah, well, hiring staff, hiring staff, yeah, yeah, yeah, lots
Speaker 3: and lots of stuff.
Speaker 1: Yeah, what did you have to hire a lot because
Speaker 1: you also had to fire a lot? What did you
Speaker 1: distill your if you had a couple.
Speaker 3: Of I think they only fired two people. Yeah, I
Speaker 3: had about I had about twenty workers at one stage,
Speaker 3: and then talking them on a fifty fifty partner and
Speaker 3: he sort of turned it back to ten, but not
Speaker 3: firing them, just that just saying I don't need to
Speaker 3: and afford it, but then actually fired not two people.
Speaker 1: Yeah. Hey, there's a bit of a delay on the
Speaker 1: line either. Unfortunately, I don't think we can because we're
Speaker 1: about five seconds behind each other. So it's going to
Speaker 1: be a bit of a different bit of a difficult conversation,
Speaker 1: which is a shame. But I guess, you know, hiring
Speaker 1: the right stuff, as you say, Martin, that's the bleeding obvious,
Speaker 1: isn't it. You know, if you hire bad stuff, you're.
Speaker 2: Screwed, and it's one of the hardest things as well,
Speaker 2: you know, and management by yelling doesn't work anymore. Yeah,
Speaker 2: you probably won't. It was certainly a thing in the past.
Speaker 2: I think there's too probably fundamental barriers for a lot
Speaker 2: of small businesses want to be staff. The other would
Speaker 2: be marketing, marketing, marketing slash sales. I guess that people
Speaker 2: often have an expertise, and it may be an expertise
Speaker 2: and plumbing or or you know, some sort of trade
Speaker 2: or something like that. What they don't necessarily have an
Speaker 2: expertise and it's hard to buy in is marketing slash
Speaker 2: sales and staff.
Speaker 1: Yeah. Actually, did you see there was There was a
Speaker 1: case that not particularly any particular reason, but was there's
Speaker 1: a report in the Herald about a company in Dunedin
Speaker 1: that's gone well. They're no longer a small business, they're
Speaker 1: quite big. Who started these guys decided they could design
Speaker 1: their own coffee roaster and they were One of them
Speaker 1: was software sort of expert. I can't remember the details.
Speaker 1: But now that they've gone global, they've made manufacturing thousands
Speaker 1: of coffee machines and selling them around the world.
Speaker 2: I did see something like that. It never ceases to
Speaker 2: amaze me. The little niches like you know, somebody important lollies,
Speaker 2: no doubt, bagging them up into different bags and putting
Speaker 2: a different label on them or whatever, and being able
Speaker 2: to make good money out of that. Similarly, with coffee roasting,
Speaker 2: you would have thought that that was a market that
Speaker 2: was pretty well penetrated and catered forth, and then somebody
Speaker 2: makes a coffee roaster.
Speaker 1: Yeah, I just I guess. And that was actually one
Speaker 1: of the story that made me ask you the question
Speaker 1: around getting capital investment on board and getting other people
Speaker 1: and stakeholders. And I think that would be one of
Speaker 1: the mistakes that people make when they're getting for successes
Speaker 1: to go no thanks, hey, look on that side, because
Speaker 1: these guys made us. I think one of the guys
Speaker 1: who was behind it was a software engineer. One of
Speaker 1: your interests that we're going to talk about today as
Speaker 1: well was tech investments. That's my clumsy segue talking about tech.
Speaker 1: But I've been asking about this because we did see
Speaker 1: some dramatic headlines with the amount of money that the
Speaker 1: share price for Nvidia at one station. It generally has
Speaker 1: gone through the roof, hasn't it. Yeah, And so that
Speaker 1: would attract a lot of intention attention. Are you quite
Speaker 1: curious about the teach investment market.
Speaker 2: I'm heavily weighted to it on my own portfolio. Now
Speaker 2: that my own portfolio is not exclusively tech, but it's
Speaker 2: it's certainly got a favor deteck at it and it
Speaker 2: most definitely has en Video and that's the company that
Speaker 2: makes most of the chips for right AI.
Speaker 1: When did you know?
Speaker 2: I think it's been in the portfolio for three or
Speaker 2: four years on you Martin, Yeah, but it should have
Speaker 2: been twenty years ago, because over twenty twenty year period
Speaker 2: in videos returned thirty eight percent per annum. How much
Speaker 2: so thirty yeah, this is on average over twenty years
Speaker 2: thirty eight. If you invested an twenty years ago, you
Speaker 2: put your money in on listing, you have had thirty
Speaker 2: eight percent per random gains. I'll tell you another one,
Speaker 2: which I think if anything's even even better is Amazon.
Speaker 3: Now.
Speaker 2: Amazon listed on the USAir market twenty seven years ago.
Speaker 2: And if you'd come to me and you said, oh, look,
Speaker 2: you know do you know do you know Amazon? I
Speaker 2: would have said, yeah, yeah, yeah, I get a box
Speaker 2: of their books most weeks.
Speaker 1: And they started off as books, didn't they.
Speaker 2: That was a bookseller, yeah, basically, And you know I
Speaker 2: would have said, well, you know, they're a bookseller by
Speaker 2: a few shares shares if you like. But they expanded
Speaker 2: into just about everything known that you can buy and sell.
Speaker 2: It happens on Amazon now. But also they've gone into
Speaker 2: I think about a decade ago, cloud computing as well,
Speaker 2: which is a hugely profitable part of their business. They
Speaker 2: for twenty over twenty seven years, they've given a thirty
Speaker 2: three percent thirty three point five percent return per anim
Speaker 2: so just an absolutely stunning performance. I know, I know
Speaker 2: nothing nothing like that for such a long long period
Speaker 2: of time. But there's lots of others as well. You know,
Speaker 2: Apple twenty one percent over thirty four years, Google twenty
Speaker 2: three percent over twenty years. You know, the tek is
Speaker 2: not just beginning to tech has been around probably since
Speaker 2: the Enlightenment. That actually, but this curve is ever steepening,
Speaker 2: and there is so much disruption now and tech is
Speaker 2: becoming so front of mind that the returns are just
Speaker 2: getting astonishing, and that you know, it's not going to
Speaker 2: go away, it's going to people can keep them.
Speaker 1: Somebody's just messaged me now saying I'm vested in Tesla
Speaker 1: in twenty eighteen and it paid for most of my
Speaker 1: house deposit in four years. Yes, And I think the
Speaker 1: problem is there's there's a problem with with these stories
Speaker 1: though is that it leads to this mentality that you
Speaker 1: can just pick the right spot stock you got it made.
Speaker 1: So if you bought Amazon shares in twenty in two thousand,
Speaker 1: you could have bought them for ten cents, you know,
Speaker 1: or twelve cents, and even in two thousand and five,
Speaker 1: I can see you could have well two dollars right,
Speaker 1: and now they're worth what a couple of hundred bucks
Speaker 1: and hundred and seventy dollars? Yeah, yeah, so yeah, not
Speaker 1: a bad not a bad return if you get on
Speaker 1: the ground level. But how many people really spot what?
Speaker 1: How do you spop the next mover?
Speaker 2: No? Nobody and tim you've got in front of me,
Speaker 2: Because that was one of the things I was going
Speaker 2: to make that I think was John Bogle said, don't
Speaker 2: go looking for a needle in a haystack. You're not
Speaker 2: going to find the one company if you if you're
Speaker 2: really interested in AI, for example, as an investor, you
Speaker 2: can't just sit back and say, so who's the leader
Speaker 2: in IAI Well it's Microsoft, okay, so I'll put all
Speaker 2: my money in Microsoft. It's probably not going to work
Speaker 2: because Google could leap for them tomorrow. Instead. I think
Speaker 2: you've got to think about well, you say, who are
Speaker 2: the producers of AI? And that's the like some Microsoft,
Speaker 2: from Google and a whole host of others. Who's enabling
Speaker 2: it in vera am the various other companies, And who
Speaker 2: are the users? And that's like Amazon and the banks
Speaker 2: and lots and lots of different different businesses. And then
Speaker 2: you've got to you probably own thirty odd companies to
Speaker 2: get your exposure properly to AI. So you're not just
Speaker 2: going to pick one.
Speaker 1: What makes tech so good? I mean is it a
Speaker 1: sector that and are there vulnerabilities that if you look
Speaker 1: to the future, Because some people do like to specialize
Speaker 1: just in a particular investment sector, don't they. Yes, I
Speaker 1: mean look at New Zealand. I mean the number of
Speaker 1: people who put everything into property for instance. But I
Speaker 1: mean if you'd start all your money into in video
Speaker 1: into tech stocks, you probably be doing all right. But
Speaker 1: what are the risks and how do you sort of
Speaker 1: how do you sort the wheat from the chaff when
Speaker 1: you're putting together a tech portfolio.
Speaker 2: I don't think you put together a tech portfolio. I
Speaker 2: think you do it through managed funds. They give you
Speaker 2: the exposure generally in that market and are.
Speaker 1: So unexciting because I want that two thousand percent gain.
Speaker 2: Yeah, so the returns might be only one thousand percent
Speaker 2: or five hundred percent or something like that, they will
Speaker 2: still be very good. I think that's you're you're going
Speaker 2: to look for the needle in the haystack, and if
Speaker 2: you find the needle, you'll you'd be absolutely delighted. But
Speaker 2: the chances are you're not going to find it. So
Speaker 2: I think you're much better to get wide exposure over
Speaker 2: thirty companies or even fifty companies or even one hundred
Speaker 2: companies who are associated in the in the area investing
Speaker 2: in that in that area, it's very Unless you're going
Speaker 2: to spend all day every day, yeah, trying to study this,
Speaker 2: you're very unlikely to pick the winner.
Speaker 1: Okay, look, I want to dig it. We're going to
Speaker 1: dig into this a little more. Actually, if you have
Speaker 1: any questions on the tech stock industry, because Martin's quite
Speaker 1: into it, and so I tend to think while we've
Speaker 1: got the guy who's into it, who knows a little
Speaker 1: bit about finance, having written his twenty fourth book. Oh,
Speaker 1: by the way, have you got a title for it?
Speaker 2: No, I haven't. It's probably going to be entitled something
Speaker 2: like Retirement Ready, because one of the things I was
Speaker 2: really concerned about was that being oft retirement age, that
Speaker 2: I could quickly and easily push the button and become retired,
Speaker 2: if that's what I wanted to be.
Speaker 1: Pushing the retirement button.
Speaker 3: Yeah.
Speaker 1: Yeah, that's not a bat bee. You go. You can
Speaker 1: have that. You can have that for nothing. I'll be
Speaker 1: back in just a moment. It's twenty minutes to Sex
Speaker 1: News Talks. He'd be welcome back to Smart Money on
Speaker 1: the weekend, Collective ont and Beverage. My guest, Martin Hawes,
Speaker 1: author of twenty four twenty three coming on twenty four books.
Speaker 1: I was always about to say twenty five because I
Speaker 1: was chatting with my producer that I have an idea
Speaker 1: for your twenty fifth book mark and it as actually
Speaker 1: it's a corker, and we'll talk about it later. Anyway, Let's,
Speaker 1: by the way, with one bit of advice on small business,
Speaker 1: just to text here before we go to our call
Speaker 1: a Ross. This is probably quite good advice here from
Speaker 1: the small business owner says we have a small business
Speaker 1: that we're about to wind up. In fact, they're seeking
Speaker 1: some legal advice which we won't be able to help with.
Speaker 1: But it says we put our house under family a
Speaker 1: family trust to protect it in case the business failed.
Speaker 1: Probably not a dumb move, is it, Martin.
Speaker 2: Now, A lot of people would do that, and you
Speaker 2: know a lot of people would be advised to do
Speaker 2: that when they're going into business by their lawyers and accountants.
Speaker 1: But Sue's asking, how do we go about unwinding it?
Speaker 1: But I think we'll leave legal advice to other people. Yeah, okay,
Speaker 1: let's take some calls Ross.
Speaker 4: Hello, Yeah, you true? It mean that? Just ranked it
Speaker 4: mean that you said before that.
Speaker 1: We're a bad connection.
Speaker 4: Oh you did?
Speaker 1: Yeah, you know we had a bad connection. You're talking
Speaker 1: about the one we were talking about.
Speaker 4: Oh yeah, yeah, yeah, the guy that said that he
Speaker 4: made god At deposit from his house from an American
Speaker 4: seer market. That be an awful lot of money, because
Speaker 4: you know, the shear market, the currency at the moment's
Speaker 4: only sixty one dollars. Sixty one dollars through one hundred
Speaker 4: New Zealand you've got in. So they reason, I won't
Speaker 4: put a lot of money into epple because yeah, it
Speaker 4: is quite a big rest posed to something that's but lower.
Speaker 4: You can get more for a better price, you know.
Speaker 2: Yeah, but ross that there. I mean that that person
Speaker 2: was just lucky. That person speculated that person wasn't. It
Speaker 2: was an investing. It was just a very short term
Speaker 2: play and he managed to get the timing right. Forget
Speaker 2: about whatever about the exchange rate, whatever about anything else.
Speaker 2: There was that fear better playing old luck.
Speaker 1: And they actually, you know what, she's given me permission
Speaker 1: to say this, But it was my producer, Tyra. That wasn't.
Speaker 1: It wasn't anyone from overseas Ross. It was Tyra. She
Speaker 1: invested in Tesla, thought she liked the idea, and boomfa.
Speaker 1: She's brought her first house. But she would acknowledge it
Speaker 1: was like I was looking at it. I said, can
Speaker 1: I out you now? Can I assert to you Tyrann? She goes, yeah,
Speaker 1: all right, and she just said it was She said,
Speaker 1: I was seventeen. Look at this. I was seventeen. It
Speaker 1: was pure luck and I had no idea what I
Speaker 1: was doing. And you know what, good on you.
Speaker 2: Yeah, but kids don't try this at home. I would
Speaker 2: not be suggesting that somebody puts, you know, all the
Speaker 2: money that they've got for the house to pulse up
Speaker 2: on some tech stock or any other stock.
Speaker 1: No, I guess at least if you do it when
Speaker 1: you're seventeen, you're going to recover. But anyway, so I
Speaker 1: hope that was a nod of the head I could
Speaker 1: out you, Tyra, because now we've done it on nationwide radio.
Speaker 1: I think there's a slight sense of like, I know
Speaker 1: I was lucky, but I feel quite smu and good
Speaker 1: on you. Anyway. Hey, sorry, let's get onto the tech thing.
Speaker 1: What's so the managed funds thing? I guess you know
Speaker 1: when you mentioned the way to get into the tech
Speaker 1: industry and tech investments is through the managed funds because
Speaker 1: they are spending all their life and their time on it.
Speaker 1: The only thing that some people will have this sort
Speaker 1: of thing. As soon as you have a managed fund,
Speaker 1: it always feels like the returns you get are always
Speaker 1: a bit muted. But is that the case when an
Speaker 1: industry goes gangbusters?
Speaker 2: Yes, it will be because they are owning not only
Speaker 2: the one as, they're owning the losers. And you know,
Speaker 2: diversification comes with it takes the volatility out of it,
Speaker 2: and tech stops are volatile. You know, I ought to
Speaker 2: make that warning, right, you know, they are very volatile,
Speaker 2: they're ups and downs. You asked before what the risks
Speaker 2: of this is. It isn't the tech industries will all
Speaker 2: just go away or stop doing whatever it is they're doing.
Speaker 2: It's that the shares will be volatile, and if you
Speaker 2: end up being rattled out of the market in a
Speaker 2: big downturn, then you no longer have your money in
Speaker 2: that when the upturn comes and tim The other thing
Speaker 2: to say is that when we're talking about tech, it's
Speaker 2: not just AI, and it's not just robotics or automation,
Speaker 2: or it's gene therapies. It's blockchain, it's battery storege it's
Speaker 2: clean tech. There's a whole bunch of different of different
Speaker 2: technologies that you can invest in.
Speaker 1: So you can choose. You can choose, like if you
Speaker 1: like the certain area of technology and an area of
Speaker 1: science which you think is really rocking and rolling, you
Speaker 1: can look for a fund that specializes in that part
Speaker 1: of that industry, can.
Speaker 2: You, Yes, you can. So you can buy a managed fund,
Speaker 2: for example, that invests only in medical devices. And as
Speaker 2: somebody who's had two operations in the last week, while
Speaker 2: medical devices is something close to my heart, but you yes, literally,
Speaker 2: but you know there are you know, lots and lots
Speaker 2: of medical devices that are being invented. Some come to
Speaker 2: market and they don't they don't work properly, or they
Speaker 2: don't sell properly. Others will be incredibly successful, and if
Speaker 2: somebody owns the patent for that, they make a large
Speaker 2: amount of money.
Speaker 1: Do most large I mean the most credible investment fund
Speaker 1: managers will they have that ability to Will they have
Speaker 1: a fairly broad portfolio where you can go, look, I'm
Speaker 1: interested in tech, but I really am interested in medical devices,
Speaker 1: and that they should have something for you.
Speaker 2: Yes, you know there well, a lot of fund managers
Speaker 2: or a lot of financial advisory houses will have, you know,
Speaker 2: the ability to point those out. The other thing to
Speaker 2: say is that most people who are listening to this
Speaker 2: will have key we Save accounts and keep we Save.
Speaker 2: You know, most key we Saver providers now will have
Speaker 2: exposures to technology, possibly quite big ones, some more, some
Speaker 2: more than others. I personally, well, with my own portfolio,
Speaker 2: it's reasonably heavily weighted towards technology.
Speaker 1: Yeah, is there a part of you He mentioned medical
Speaker 1: devices just as a throwaway, but is there just getting
Speaker 1: to know Martin Hawes A little bit more, is there
Speaker 1: a part of Martin Hawes that has spent some of
Speaker 1: that money you set aside for medical procedures and you're thinking,
Speaker 1: you know what, I'm going to go get some of
Speaker 1: that money back. So I'm going to tell me, I'm
Speaker 1: going to go for looking for a fund that specializes
Speaker 1: medical devices because I want some money out of you. Guys.
Speaker 2: No, no, no, but I I'm not sure. I don't
Speaker 2: manage my own money now, somebody else manages for me.
Speaker 2: And there was a fund in there which was a
Speaker 2: medical device's fund. I don't think there was, okay.
Speaker 1: I just thought there was a slightly revenge investment sort
Speaker 1: of thing, like, well, I've had to spend thousands on
Speaker 1: this operational go get some of it back. Hey, Martin,
Speaker 1: just hold there, because we'll be back in a moment.
Speaker 1: Because the one final question I want to ask Martin
Speaker 1: is about how do you find that investment fund manager?
Speaker 1: And because everything involves research, doesn't it or does some
Speaker 1: of it involve just a little bit of blind luck?
Speaker 1: When you buy Tesla shares at the age of eighteen
Speaker 1: and buy a house as a result, it's ten to six. Yes,
Speaker 1: welcome back to smart money. When my guess is. Martin
Speaker 1: Hawes actually just had a clarification from my young producer
Speaker 1: Tyra about because some think she's worried. People think that
Speaker 1: she thinks she had a lot of money and shoved
Speaker 1: it into Tesla. She literally had a job at McDonald's
Speaker 1: and every spare sense she actually shoved into Tesla and
Speaker 1: it just happened to work out quite well for her.
Speaker 1: She said, her story is about just dumb luck. But
Speaker 1: I tell you what, if it's good on you for
Speaker 1: at least being in the game. Hey, Martin, So if
Speaker 1: you're looking for a fund manager and someone is listening
Speaker 1: and thinking, you know what, Actually I didn't realize you
Speaker 1: can invest in specific injury in industry, so specifically any
Speaker 1: Obviously you can't recommend. You're not going to recommend any
Speaker 1: particular fund man. But how would people do their research
Speaker 1: on that aspect?
Speaker 2: I think one of the key key things there were
Speaker 2: two things to think about. One is you might be
Speaker 2: looking for fund management. You might also be looking for
Speaker 2: a financial advisor, because financial advisors, you know, run people's money,
Speaker 2: you know, and they invested for them. A fund manager,
Speaker 2: I would be tending to look for somebody who's been
Speaker 2: around and had good performance for a fairly long period
Speaker 2: of time.
Speaker 1: Yeah, so not just sort of like twelve months. Look
Speaker 1: at me, I'm the miracle kid.
Speaker 2: No, there's a very good story from a woman called
Speaker 2: Kathy wood Ark Investments. She's still investing in technology out
Speaker 2: of the US. But in her first year, which was
Speaker 2: about five five years ago, maybe seven, she produced one
Speaker 2: hundred and fifty percent and just billions of dollars flooded
Speaker 2: than to that fund.
Speaker 1: Wow.
Speaker 2: She's never performed any good ever since.
Speaker 1: So don't go for the one hit wonders. No, exactly excellent.
Speaker 1: Hey Martin, thanks so much for your time and stuff,
Speaker 1: and now that time's flown by. Yeah. Then my only
Speaker 1: disappointment was I really wanted you to say that you
Speaker 1: bought in medical investment funds as a revenge for your procedures.
Speaker 1: But hey, so when's the book out?
Speaker 2: Probably March.
Speaker 1: I think it is excellent. Okay, well, good luck we're
Speaker 1: finding that title pushing the retirement button. That's my suggestion. Anyway,
Speaker 1: Thanks Martin, good to see you, mate, and thanks you Jim.
Speaker 1: There we go. Hey, that wraps up the show. Thank
Speaker 1: you so much for your companies, and thank you very
Speaker 1: much to my producer Tyra Roberts for looking after me
Speaker 1: so well and actually sharing her little story there about
Speaker 1: a bit of luck on the old Tesla. She is
Speaker 1: good on your Tira job at McDonald's, put everything in
Speaker 1: at the age of eighteen and to Tesla got her
Speaker 1: house deposit. By the way, that's not the moral of
Speaker 1: the story. The moral of the story is diversification and
Speaker 1: fund managers, not just luck, but enjoyed hearing that story. Hey,
Speaker 1: Sunday Out six is next, so stick around for Petra
Speaker 1: and Frank and we'll be back the same time next weekend.
Speaker 1: And as you know, you can check out the podcast.
Speaker 1: There's some great material on there. Look for The Weekend
Speaker 1: Collective on iHeartRadio. Have a fabulous evening, or catch again
Speaker 1: soon for more from the Weekend Collective. Listen live to
Speaker 1: News Talk ZEDB weekends from three pm, or follow the
Speaker 1: podcast on iHeartRadio.