Build wealth by being lazy!

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When it comes to money, it's valuable to distinguish between making wealth and growing wealth.

Making wealth relates to saving, and accumulating assets to invest.

Growing wealth relates to investing those assets you've accumulated.

It's easy to focus on investing and growing wealth. But in a lot of ways, investing is the easy part. Most people can't go wrong investing in low-fee, index-based managed funds, like those managed by Simplicity or SuperLife or one of the funds on the InvestNow platform. 

For most people, making wealth is where it's at. Having a decent savings rate. Accumulating assets that can be invested.

There are loads of blogs that talk about the benefits of minimalism and the hows and whys of frugality. I see the value of that, and I understand it drives a lot of traffic, but I'll leave those topics to other blogs. (Most of the time.)

Instead, I want to talk about taking advantage of laziness (or, to put it more charitably, inertia). Here are some ways we can automate the process of building wealth ("setting and forgetting"):

  • Contribute more than "the minimum" to KiwiSaver. Sure, you don't get a lot of tangible benefits for doing so. And there are downsides associated with investing in KiwiSaver, including not being able to access the funds until you're in your sixties. But you can think of this as a feature, rather than a flaw. You never miss the money you never see. And you're never tempted to spend the money that you can't actually access.

If you can't afford to increase your contributions to KiwiSaver right now, consider pre-committing to increasing your contributions the next time you have a pay increase (for example, if you get a new, higher-paying job). There's a lot to be said for the peace of mind of putting away money for retirement.

For a lot of people, the idea of "smashing" debt can be really motivating. The sooner you can pay off your debts - especially your mortgage - the sooner you'll be in a position to accelerate your retirement savings. 

  • Set up an investment account and make automatic contributions. This is similar to my comments relating to KiwiSaver. Small amounts can really add up. For example, if you're 30 years old, and decide to save an extra $20 a week and let it accumulate at a constant, inflation-adjusted, after-tax return of 6% per year, you'll be $115,000 better off at the age of 65. Increase it to $50 a week, and you're getting close to $300,00 at age 65.

Use inertia to your advantage

One of the most universal, reliable predictors of human behaviour is inertia. We live in behavioural grooves and it can take a lot of effort to change our habits. 

It takes a little effort to make these changes. Much less than you'd probably think, but even the mental barrier is a barrier.

I'm not saying you need to do any of these things right away. But if you're reading this you're human, so I know another thing about you. You ocassionally have "motivational waves". Sometimes you have the get-up-and-go to do something different. 

When that happens, make one of these changes, so that "normal you" doesn't have to do anything.

Ask your employer to increase your contributions to KiwiSaver.

Bump up your loan repayments (after you check that there are no penalties for doing so).

Set up an investment plan and make some automatic payments into it.

Then sit back. And enjoy some peace of mind. Because inertia - nay, laziness! - will do the rest.

What changes will you make, to take advantage of inertia?


Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.