Don’t miss your chance when opportunity knocks

Hannah McQueen is a financial adviser, chartered accountant fellow, personal finance author, and the founder of enable.me – financial strategy and coaching, now part of AdviceFirst.

OPINION: The New Zealand property market has been quite the rollercoaster lately, but it’s promising to see it now heading upwards after a bit of a tough patch earlier this year, potentially leading toward an optimistic 2024.

A key lesson I’ve learned over the years is that financial progress shouldn’t wait for perfect conditions. When life gets uncertain and throws you a curveball, that’s the exact time financial opportunities tend to reveal themselves – ironically, at the least opportune moment.

So the question becomes: If financial opportunity presented itself, would you see it for what it is?

Would you be equipped with the knowledge to identify its potential, and would you have the confidence to act on it? Or, would it simply pass you by, because you were unable to see it for what it was?

The latest research by Te Ara Ahunga Ora Retirement Commission would suggest the latter, revealing that a staggering 98% of New Zealanders aren’t on track for retirement. Some of those who aren’t on track have genuine reasons for the retirement savings gap. But a chunk of us have no adequate excuse.

It is often a case of you simply not knowing where to start, or what you should do in the process. You usually can’t pinpoint where things are going wrong, beyond this gut feeling of: “We are not making the progress I would expect us to be making, for the income levels we are earning.”

We want it to be easy to get ahead, because it seemed easier for our parents and grandparents – so why not us as well – not realising that the conditions we need to succeed in are much harder, brought on predominantly by the size of mortgages relative to income, poor mindsets, weak goal setting, weaker strategies and no ability to identify where the opportunity sits for you, based on the hand of cards you have been dealt.

Recent market data from the Real Estate Institute of New Zealand has shown a steady increase in house prices since April, hinting at a possible phase of recovery.

While returning to peak levels is unlikely to happen in the next year, values are still expected to lift by 2.5% (per ASB, August) or 7.7% (per Westpac, November).

Against this backdrop of growth, we have higher living costs and interest rates impacting many families. Understandably, mortgage costs are going to be uncomfortably high for the next year, but does that mean you “pause” on your own financial progress simply because the conditions are hard? Again, some will have to, but many will not.

So how do we get you ready to take advantage of the opportunity?

With my clients, we start by understanding the hand of cards they have been dealt. This will showcase the trump cards you have, and help us determine how to play your hand, so that you win the round. Trump cards change depending on the situation we are working with and what financial life stage you are at – whether it’s being able to live cheaper than most, your income being higher than average, or the fact you and your partner actually agree on your financial goals.

Trump cards are supposed to give you an advantage, like playing poker and always knowing you’ll be dealt a pair of Aces.

Too often people think that if they simply had more income they would make more progress, not realising that the more money you have the less you seem to achieve because you simply worry less about money, instead of doing the smartest thing with your money.

There is a science to making financial progress. Understanding how you deal with money, your mentality and your approach to it, how you spend when you are stressed or relaxed – whether you’re a saver, spender, or a bit of both – can have a significant impact on your financial plan.

Don’t assume because you can’t see a way forward that no path exists. The pathway that exists before you is a pathway of opportunity and potential, it just requires a different mindset. You need to be more deliberate in your pursuit of financial success. Lifting your capability, aiming higher with your goals, and intentionally growing your wealth while conditions are uncertain or rough, will ensure that you reap the rewards when the upswing does arrive. A financial coach can help you with this.

Having worked alongside thousands of clients through the good times and bad – this is what I know to be true. When conditions are harder, you need to be better. The financial sun will shine on you and then it won’t, and then it will again. Make sure you have positioned your household for the good times, so that when opportunity presents itself, you can jump ahead instead of missing out altogether.