Income Streams for Last Year (2016)

I’ve ranted about this before. You are not wealthy, you are not rich, you haven’t made it if you are living pay cheque to pay cheque with no savings or investments. MONEY IN THE BANK is what makes you wealthy and only money invested can make you that sweet sweet passive income.

Passive income is what you need to have money independent of a job (so you can stick it to the “man”) and there are lots of ways to generate it. Here’s what I got up to over 2016

Stones of Weath in the flow of a  money stream

Last years (2016) income streams

Peer to Peer Lending $159 (Squirrel) +$75 (Harmoney)
Renting out a room $6500
Dividends $1760
Rental Properties tax refund $5200
Casual work/side hustle income $1067

So the part time work wasn’t passive, obviously I had to trade some of my life force (time and energy) for money. However I only side hustle things I enjoy and things I can learn from so its a win for me. This is work I would quite happily continue if I was retired from my main job. If you can find something you love, that adds value to your life and pays a bit of cash then this is the low barrier way to earn extra income. Other methods like investing require cash up front, side hustles just demand your time. The strain from working so much can take it’s toll so I recommend investing that extra money in income producing assets or paying down debt.

Annnnnnd on to the tax refund, technically that means we made a loss on the rental properties. Ouch. Some of it is a loss on paper only as we had a bit of depreciation this year. Some of it is real loss as the rent doesn’t quite cover the costs of holding (mortgage, repairs and maintenance). I’m still happy with the investments as the properties have increased substantially in value and we should be able to sell one this year and pay down the mortgages on the other properties to the point where we are able to generate actual income.

The renting out a room income comes from a friend of the family staying with us. A youth of 19 years trying to make their way in the big city (well the biggest in NZ anyway). So we have offered a low cost place to stay, all expenses (full board) for only $125 a week. I’m thinking over time we may have to increase that amount so its inline with what they would pay out in the “real” market so that we can encourage them to become self sufficient and manage a budget that reflects the real cost of living in Auckland. We’re just waiting for a little more success on their part with employment. It’s very tough out there for young people just starting out.

Alternative income for 2016 was way higher than 2015 thanks to having a full time boarder. I’m doing my best to invest all that extra income because they will definitely move out at some stage. I’m hoping to add more funds to the P2P lending this year as Squirrel is working out very well with no defaults and an excellent caliber of borrowers. So hopefully 2017 will see another increase in passive income, stay tuned!

Are You Shafting Your Partner on Retirement Savings?

I keep coming across families and couples where one partner is not working. That’s cool, life happens, we’re not obliged to be non stop working machines. They are not working due to disability, other responsibilties to family (like taking care of elderly relatives) or they’ve taken years out of their career to raise young children. For whatever reason your partner is out of the workforce you cannot afford to neglect their retirement accounts.

At the very least you need to work out how you can contribute the $20.06 a week to Kiwisaver to at least get the full $521.43 member tax credit for the non-working partner. This is a guaranteed 50% return on investment and it would be foolish to ignore the chance to collect this.

Lets be honest, in New Zealand its most often woman who undertake the full-time care of children. But regardless of who takes on the responsibility those years not contributing to kiwisaver can really cripple your retirement savings. Looking after a family is unpaid work. Long hours, no financial compensation and sometimes the clients like to vomit all over you.

In New Zealand women live longer than men and need more funds to service their retirement yet so many families are neglecting retirement savings for non working women (not to mention when they are working they are often earning less so even more of a reason to make sure those retirement accounts are contributed to!!)Mothers need retirement savings too

Living off one income is hard but there are lots of ways to find an extra $20 in the budget. You owe it to person giving up their income to care for the family, you owe it to yourself and you owe it to your children. Assuming you are still together when you retire there will be more in the pot for the both of you, more money will mean a less stressful retirement.  You also taking care of your children by saving properly for your retirement, you wont be a burden to them, you wont cripple them financially by having to ask them to pay for any of your expenses in your old age.