Face Value: Saving habit started early
ASB Bank's executive general manager of technology and innovation Russell Jones works at the intersection of the finance and technology industries in charge of a team of about 600 staff and contractors.
Previously he spent 25 years in the forestry industry with the likes of Carter Holt Harvey and International Paper in Tennessee.
Right now he is working on putting better banking and payment tools into the hands of smartphone owners, a far cry from his first job earning $2 a day at a theatre in Harare, Zimbabwe.
How did your upbringing in Zimbabwe shape your attitude to money?
Money was tight and I had to learn to get by with a little and that also meant I started working quite early. From the age of 12 I worked in a theatre that did a lot of musicals, in a job paying $2 a day.
Somebody discovered I could read music and I used to work with the stage manager before drifting into stage management.
It was a country in the middle of a civil war at the time, so there wasn't much of a male labour force. I worked for the whole Christmas holidays and earned about $50.
Do you think people in the banking industry have a more responsible attitude to money than most?
I would hope so. I would think it rubs off, although I don't have data to support that.
Are there any inside tips on the common mistakes people make managing their finances?
The only theme is a lack of planning and people doing things reactively. It is important to know what your whole financial position is before you decide how to go off and invest. If you have still got debt then there is an argument that says you should be paying that down before you go off and invest in other opportunities. Against that "leverage" can be a good thing in certain circumstances; I think you need to take advice.
People need a picture of their overall financial position, and then planning to get to a goal is really the key. If you know where you are heading, you can put the right things in place.
What's been your best ever investment?
Probably some shares I bought a long time ago in a mining trust in Britain and then forgot about. They have gone up 600 to 700 per cent in the eight years since I bought them and had great dividends which were reinvested as well. All in all it has been pretty impressive investment.
And the worst?
That's easy - no doubt on that one. It would be a company called Web Methods which did an IPO at $18, opened at $32 and hit $205 on the same day. I think it went up to over $300 and then crashed down to about $1. I bought in at the IPO and I still own them, so I managed to shrink my money by a factor of 10 I think.
It is easier not to trade shares now I am with the bank, just because of the perceived conflicts you could get into, so I don't at the moment - it is all done either through funds or Kiwisaver.
When you did invest directly in the sharemarket, did you have a method?
Nothing scientific. The only method I had was to accumulate. I have never been a big advocate of market timing, so the things that have worked have just been the things I have accumulated over time.
Do you think it makes sense for "mums and dads" to invest directly in the sharemarket?
It depends so much on circumstances and how much you have got. If I have learned anything it would be to take advice and do it as part of an overall financial management strategy.
Have you started planning for retirement; when did you begin?
My wife would like to think so. Yes I have. I started probably the day I started working professionally with a salary. I was lucky in that the company I started working with in South Africa had a very structured pension scheme so I got used to saving a percentage of my salary from early on.
Since I came to New Zealand I have always tried to put aside a proportion of my salary every month. That proportion has probably gone up as I've got older. I think a good percentage is between 8 and 12 per cent.
There's a lot of talk about people investing too much in property in New Zealand. Is there a good level in terms of the multiple of your income you should spend on a home do you think?
What's most interesting to me in that debate is how much the view changes over time, but also how, in the four different countries I have lived in, how that proportion has been relatively consistent, with the exception of the US.
In South Africa, where I bought my first house, it cost less than my salary. But it accelerated quite markedly and a multiple of three to four times became common. In Britain, the multiple was three to four outside London, but seven to eight in London.
In New Zealand it is very different between Auckland and the rest of the country. Auckland is up at seven, eight or nine times and you would argue on that basis that the housing market is overpriced.
The one that stands out as being way different is the US which has incredibly low interest rates. It was amazing how cheap prices were in Tennessee but amazing how expensive housing-related costs were; things like insurance, county and city taxes and especially utilities. It is quite interesting looking at how much you spend on "housing" as opposed to a home.
New Zealanders don't have the air-conditioning running five months of the year and heating five months of the year. We used to have utility bills in the US that were between US$600 and US$1000 a month. In Memphis you could only get by two months a year without running something.
How have your attitudes to money changed over time?
Has my attitude changed? No. I've always been a bit of a saver and that probably goes back your first question. I've never wanted to end up in a position where I can't do the things I want to do.
Sunday Star Times