DIY wealth

To get ahead in business, you're supposed to sell your secrets, not give them away. Amanda Morrall talks to financial adviser and money writer Liz Koh about her new trilogy of free e-books and the road less travelled to building wealth.

Book writing is not a lucrative business in New Zealand but when it comes to books about making money one might expect profit to play as big on the writer's mind as it does in print.

Liz Koh quickly dispels this notion.

"You don't write books to get rich," says the affable financial adviser, author and mother of three, elucidating on the economics of the publishing industry from the writer's perspective.

It is easy maths.

With average author royalties at $2 per book, and average book sales in the 2000 range, profits - even for bestsellers - are slim.

In a market as small as New Zealand, writing books, if not a pursuit of passion, is more a marketing tool for small business, the lifeblood of the nation's economy.

Koh admits her motive for writing a trilogy of books available free is not entirely selfless. She hopes they will generate some interest in her growing business and help attract clients.

And yet the books - a precis on property investing, an introductory guide to investing and a step-by-step plan for financial independence - come from wanting to help others help themselves.

Like broom closets and junk drawers, Koh says personal finance tends to be one of the most neglected and unstructured parts of people's lives. She says it is perfectly understandable how they get to be such a jumble.

"You sort of get caught up in this treadmill of life where you go to university, you graduate, you get a job then start a family, then you're on the treadmill and because you are working so hard you have no time beyond that. It's like being in a trap."

Most often, it is not until mid- life, or some other type of intervening personal crisis, that people wake up to that fact, then in desperation begin looking for a way out - and a means to finance the escape route.

It is this emotional well-being and complementary financial planning that Koh mines in her books and in her work with clients. She says the two are intimately connected but people tend to treat them as separate entities. As a result, many end up stymied in their efforts to get ahead in either sphere.

In talks that she gives to the public on personal finance, Koh uses her own life as an example of how self-determination, powered by the dual forces of emotional prosperity and financial aplomb, is that much stronger.

A decade ago, in her mid-40s, Koh went through a life crisis that ultimately put her on the path to fulfillment.

While she was pulling in a six- figure salary as a general manager in charge of 120 staff, the travel, hours and demands of the job were taking their toll. On top of that, she was stuck in a troubled marriage.

The money, while good, was poor recompense for her personal unhappiness. Koh says the situation required dramatic action.

"I started by getting rid of the man, then I threw in my job, then I sold my house and then I thought 'well, now what am I going to do'?"

The line of questioning led her back to school where she retrained to become a certified financial planner while living off the equity from the sale of her house.

"I broke free of my past, set up my own business. I had three daughters to support and no income coming in but it was the only way I was going to get a chance in my life."

The redirection was not without its own trials. With the dot.com crash triggering an equities markets collapse in the early years of her business, Koh says there were some years of sweat and self-doubt.

Persistence paid off. In 2004, she was recognised for her work as an investment writer and also for portfolio products sales with AXA. And 10 years since she started MoneyMax, her earnings are back at what they were when she left the corporate world behind.

Her bold career change, profiled in the Kiwi book, Before you leap, take a big gulp, is an inspiration for mid-lifers stuck in jobs they no longer care for.

Proof positive that it is never too late to change, Koh admits to having a soft spot for the younger set. Not only because because they have age on their side financially, but because of a wish to see them hit their stride sooner rather than later in life.

"I think it's really important for young people to get on the right track early in life. I wish I'd got on the right track early on in my life."

Firmly on path at 54, Koh says she is embracing the rewards of self- employment and also the satisfaction she gets from helping others find their way financially through a process of self-discovery. Her book Your Money Personality cultivates this theme, exploring four fundamental personality traits and their relationships with money.

The book was singled out this month as part of New Zealand Book Month.

It was among the top 25 picks by Kiwi celebrities who were asked to nominate their favourite books. Your Money Personality was named by New Zealand netballer Katrina Grant one of the top five for the DIY category.

Koh, under pressure from her publisher at Awa Press to write another, says she opted to focus on her e-books as a free resource for interested parties and clients.

The books, entitled 8 Steps to Financial Freedom, The Six Secrets of Successful Investing and Creating Wealth Through Property Investment are short, easy to understand and to the point.

"They cover the basic building blocks. You've got to get your foundations right before you go onto other things," says Koh, who plans to follow them up with two more; one on managing your money, and another on retirement funding.

"It is a low-cost way of me saying 'Here is my approach, here are my thoughts' and hopefully from that they'll come back and do more business with me," she says of her latest publications.

Koh is also invested at industry level.

In August, she was asked to join a nine-member committee charged with developing competency and best practice standards for financial advisers on behalf of the industry's new commissioner, Annabel Cotton. The code of conduct will come into effect in October 2010 as part of new regulations aimed at raising industry standards in New Zealand.

Koh says she is an enthusiastic participant. She believes strongly that the financial advising community needs restore public confidence and its reputation.

"There have been a few advisers who have made some bad decisions with their clients' money but they are a minority. Unfortunately it has created the perception that all financial advisers are in the same boat. It's just not true."

Still, Koh maintains the public has not been as well served by the industry as it could be and for that reason wants to see the bar raised for practitioners who are not up to scratch.

"I'm all in favour of raising standards at the same time as raising public confidence."

By the same token, individuals also need to do some emotional stock-taking to make the most of their financial situation, she adds.

Based on her own experience and those of her clients, Koh maintains that personal happiness plays a pivotal part in creating and retaining wealth.

Happy people, she reasons, "place less emphasis on income and wealth and more emphasis on relationships and are content without being complacent."

As a consequence, she says they tend to spend less, save money and build up their bank accounts faster than most.

If the emotionally satisfied individual stands a better chance of getting rich, Koh also believes fortune is found in taking the road less travelled. She says those who resign themselves to habituated patterns of thinking and a 9 to 5 income stream will invariably consign themselves to the status quo.

"People need to realise that they have unlimited ability to create wealth. People don't understand that concept but to do that you have to step outside the box. Selling your hours at an hourly rate definitely puts a cap on what you can earn. The only way you're going to have unlimited earnings is if you get out of that way of earning."

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