Elizabeth Kerr says it all takes a bit of EFFORT but the DELAY while your machine is brewing is absolutely worth it

Elizabeth Kerr says it all takes a bit of EFFORT but the DELAY while your machine is brewing is absolutely worth it

By Elizabeth Kerr

After reading today’s column you might be the lucky sod who is celebrating being $27,000 richer!!! You can see how from the examples contained  further down the article.

If it’s not you then don’t despair as somewhere hidden in the words and my bad grammar there may be a few dollars for you as well.

To start with this week I’m going to write about two words which I think are just as essential for financial independence as ‘compounding’ and ‘interest’.

They are two powerful little words which can make all the difference to our money machine goals and our lifestyle design.

But unfortunately, they are being sabotaged by our demanding consumer culture and easy access to debt.

They are:

1. Delay

2. Effort

That’s right – delay and effort. Or more to the point - the putting in of effort and managing one's emotions for delay.


First up let’s look at delay.

My favourite quote said by St Teresa is: “Patience attains all that it strives for.” Those who know me personally can testify I say it all the time.

I know that the art of delay is easier said than done and that in our present “Have-It-Now-No-Payment-Down” consumer world, going without something - even if it has no real impact on your personal health or safety - is akin to deprivation and an injustice.

Those who actually achieve their money machines are experts at delay for two reasons:

Firstly, they understand that delay is like a muscle; at first it’s really hard to introduce delay to your wants but then after a few goes you get better at it. The really good ones actually derive as much pleasure from waiting and thinking about their purchases as they do from the actual purchase.

The second thing is that they understand delay is one of the ingredients needed to get a money machine up and working in the first place because of the way that compound interest works over time. So, they are careful not to interfere with their investments or their non-negotiables list and so they are confident that if they continue to save regularly and keep their expenses in check that they will eventually get where they want to be.

Most importantly they understand that delay is not deprivation!!!


Imagine a world where anything you need or want can be purchased and if you don’t have the money there is someone only too willing to lend it to you provided you sell your soul and commit to working until whichever gives out first – your body or your brain.

Oh hold on…. that’s our world today.

That doesn’t sound like a fair trade to me, when it just takes a bit of forethought and some planning and then chances are you can have what you want by just providing for it yourself.

Nowadays the easy option is just to purchase what we want in our lives. But doing so is not sustainable for very long, unless there is a money machine in the background ready to pick up the costs when we can no longer work for ourselves.

Cutting your own lawns and cleaning your own home instead of outsourcing to others requires effort.

Cooking at home, teaching your own kids to swim and turning off the TV requires effort.

Organising your commute to include a workout takes effort, as does sitting down with a pen and paper and actually mapping out your financial goals -  and planning your lifestyle design takes effort.

One persons’ effort might be another persons’ “cheap” but who cares? It doesn’t matter what other people think in the slightest.

Like I’ve said before, when you’re milking your financial independence I bet they are going to be wishing they followed your lead and taken the radically different approach to their own lifestyle design before they became indebted to entitlement.

Is there something you are considering purchasing that you could do without if you just put in some effort or embraced a bit of delay?

Some low hanging fruit...

Following on in the “stupid things the middle squeeze do to stay poor” theme there are a couple of expenses that more often than not appear in people’s budgets that I want to set an example with, by illustrating how some good ol’ effort and delay could be used for your money machine instead.

Gym Memberships

When it comes to gym memberships I am not a fan at all!

Everything you need to have a kicking, good looking, and strong body is already attached to your bones. Your own weight is perfect for performing resistance weight-bearing exercises and there is no cardio machine that a good run around the block won’t replace (effort).

Let’s illustrate with an average gym membership inclusive of a personal trainer at $45 per week. That comes to $2,340 per year and over 5 years is $11,700. If that money was invested at just 5% instead of given to a gym you would have $12,292 in just 5 short years (delay).

If you stopped then this money machine alone would spit out about $550 every year for the rest of time. But the thing is you can’t stop because you haven’t put in the effort in to learn how to exercise your body efficiently at home for free, so you are either out of shape or committed to still paying for a gym membership for the rest of your life.

There are some excellent free resources online and training videos on YouTube which can take you through exercising at home. Just a bit of effort combined with some commitment and then it’s: “Hello hamstrings – you’ve never looked so damn good”!!!

Yes, it is ironic that the one thing that makes this reoccurring expense go away is effort – which is the same thing you need to have that kicking, strong, body in the first place, and it is this same brand of effort that all those who make it to financial independence possess too.

Subscription TV

Subscription TV is next on my chopping block. This is anything other than the free stuff you get on your local Freeview or TVonDemand Apps.

If you’ve read my column last month about TV then you’ll know I that I think watching TV is the number one tool for sabotaging your ability to be different from the rest of the herd; and let’s face it being financially independent is being different. So when I see people paying for it I think that creeps into pure lunacy.

Let’s take the popular MySky+ with sports and movies and delivery of the monthly magazines, which total $123.34 per month. (According to their website and this does not include the joining fee, if any.)

Over one year that is $1480 and over 10 years that is almost FIFTEEN THOUSAND DOLLARS. Someone with a real hourly wage of $21 per hour would have to work for an entire two weeks for every year, or a scary five months over that 10 year period just to pay for TV.

If given the option to take five months off every 10 years - do you think they would cancel the TV subscription? Given the way people covet their long service leave I think we all know the answer is a resounding “hell yes!”

If you choose to invest that TV money instead at just 5%, after 10 years you would have $19,232 spitting out an average of $1000 every year. At that point if you still really wanted to pay for TV then sure go ahead – it’s free money and just an opportunity cost at that stage.

So, what I’m saying this week is unless you have a money machine spitting out free money, don’t go wasting your hard earned dollars on things like gym memberships and TV subscriptions until you do.

In the meantime you could use this time to brush up on the DIY, brew some beer, do your workouts, upgrade your skills to get a higher paying job, or why not just pick up the phone and talk to people instead.

Sure it all takes a bit of 'effort' but the 'delay' while your money machine is brewing is absolutely worth it.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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El, now you are talking soo much common sense that 95% of the populace in the "developed" world would not know what you are on about.
Good article.

Thanks Jake.  I expected a barage of criticism this week because no one likes to be told to put in more effort and embrace delay - so it's nice to see you comment first up.


Gyms/ mirrors freak me out.  The vibe is like speed dating combined with public self pleasuring....Absolutely horrendous.
Give me a run around the block with the dog any day.

Your dog will cost you $15,000 over 5 years if you invested that money ...................

Ha. That will be the day. More than that. Much more. There's the mortgage on the quarter acre Auckland section we bought him. I often tell my wife we'll have to sell the house if the dog needs expensive health care. Nevertheless my dog's up there with the best investments I've ever made. Happiness has a price.


I think i may have been better joining a gym than running around the block with my dog.Last year he cost over 3k and now his nemisis has returned and it's looking like a further huge outlay coming up.Pretty tough when your unemployed/able.

Most effortless thing anyone can do to prevent a drain on their income, is to not procreate.

lol. Another thing would be to stop being alive, no ongoing costs once the funeral bill is paid. Good thing people don't have kids to make money.

Wel.....nobody buys a car to make money out of it, either, but that was the focus of the previous article.
If the one abiding thing you shouldn't do to obtain the holy grail of financial independence, is get into debt, then not having children is pretty good place to start.
Life can be enjod for its own sake, it doesn't have to have 'need to spread my genes around' component to it....

Children don't lead to debt. Bad planning and bad habits do. Don't have them until you can afford them.

oh - yes they do.
At least half of NZ households would not be able to afford children if they were honest about it.
If the median household wage is 60K, then there is no way a family could service a mortgage, live a decent life, and be able to afford a child or two, as well.
Government subsidies is outsourced debt, and renting instead of buying, is deferred debt.

I have rented and saved enough to buy a house for cash. No deferred debt for me. No handouts, no subsidies, no bank of mum and dad just good discipline (or effort as our Liz states above).

"just" good discipline? Excuse me while I raise my eyebrows in disbelief.
Not that many people earn enough money to be able to do that, in fact, at least half of the population doesn't.
Not these days, when both houses and raising a child are prohibitively expensive.
You must have been earning a handsome wage, or have got a leg up through an early inheritance, or been able to buy before house prices ran rampant. or a combination of all 3.

No leg-ups, two reasonable salaries now but started at the bottom and no property. We always saved 50%+ of what we earned and invested it into shares. Always avoided debt. Never spend money to show off to others. Then had two kids in our mid thirties.
It's uncommon but certainly not impossible. 15 years of saving and investing adds up to a tidy sum. Next stop is retirement at 45.

I used to think along your lines.  Just work hard, save 50% of what you earn, avoid debt and delay kids as long as possible.

Turns out that when everybody else uses is using leveraged debt to bid up the price of housing you just end up worse off and without kids.

Oohh this is a bear i wasn't ready to poke yet..... so without going into too much detail and denying myself the opportunity to write a column on this one day...... instead i'll just say we have two children and so far they have proven to not need/want/enjoy nearly as much as marketing companies work hard to have me believe.  
Yes not having children may result in having more of your income to invest/spend and with some discipline bring forward retirement.  
However the key to financial independence in this equation isn't what you earn it is what you spend .   
Having children is not a automatic ticket for the back of the line; it can be an opportunity to see how financially creative you can be whilst still staying true to your values and investment goals though.

Yes not a bad idea on the face of it, till you run into women's biological clocks.

The tickin of that clock is not as loud as most men are lead to believe.
25% of my generation (X) in Europe, are childless/childfree - I'm talking women, only.

For those who don't know Generation X are people born between approximately 1965 and 1982....  
Those towards the later years are only mid to late 30s so still might decide to have kids, hopefully after achieving early retirement from reading these columns <wink>

So true, but then GDP growth will suffer and we will have all sorts of opinions on that.

Who would be paying tax to fund your National Super if no one had children DFTBA? Every generation needs to procreate to keep the world going.
Personally I have trying to help two twenty eight year olds into their first home. She has always chosen to work part time and he has substantial car debt and credit card debt and interest rates close to 30 per cent. The bank has turned them down . This couple need to get their priorities right and save more money from now on and get rid of the bad debts. They should be sailing into their first home but instead have had a big wake up call.

Gordon - where did I argue in favour of nobody having children? i didn't argue that having children is a bad idea - just that they will get their parents in debt.
And as debt is the thing we're discussing here, I just pointed to the most effortless thing anyone could do not to incur it: don't have children.
The example you've given: a couple of 28 year old, bought a house with the help of mum and dad, been working part time, buying expensive cars? What wake up call was that exactly? The fact that you were able to help them out?
What do you think this has taught them? That they'll be able to afford having children?
Yes, in order to keep the humanity going, children have to be had.
That being said - I'm not that convinced there will be a government super when I retire.....(but that's a whole other debate)

Two words that spell finanacial independence, I would have thought would be, "financial" and "independence"

<laughs>..... I knew someone would take that line eventually....

Elizabeth, whilst the gym thoughts sound good,  I'm one that it doesn't work for. I'm good at delaying gratification and avoiding those early purchases (and now reaping the rewards from that in later life), but not so good at the personal discipline of convincing myself that a run in the winter bitter cold is a good thing. But I have done the numbers to figure out that if I don't do the exercise, sickness is bloody expensive and quickly wipes out the financial benefits of no gym membership. So I fall into the camp of someone who knows myself well, and that my gym membership in truth is really value for money, be it half the price you quoted :-)

Parks and beaches are free to walk in/on, a bike won't set you back that much, nor will a pair of running shoes - certainly not as much as a gym membership.
Staying fit needn't cost that much money......

Stop going to the gym and mow your own lawns, wash the car, trim the hedges, dig a vege garden, rake the leaves etc. My house is surrounded by gym-like activities. They say cleaning the house is a good work out too, but I wouldn't know about that.

Spot on Elizabeth. I cancelled pay tv and gym memberships many years ago. I must have saved a small fortune.

Grant A - Even if it is half the price i quoted - its still more than good quality winter workout gears which you could invest in instead to keep you protected from the elements, and a set of kettlebells and skipping rope for home.   After 10 mins of focussed movement you'll be enjoying your own personal summer temperatures anyways.
However, i see what you are saying so in response i'll say that if you are comfortable with the figures and how this might impact on your investment goals - then sure, go for it !!   But if you're ever bemoaning the pace of your investments or the costs of your lifestyle and how many hours you need to work each year just to pay for it all; then you at least know where you can start to trim back.
Also for all readers, remember that exercise is something that you should ideally be doing for the rest of your life ....so unless you learn to exercise another way, you are essentially committing to a gym membership forever!!

HI  forget the gym memebership Was helping a friend with financial planning  She went out every morning for breakfast...just eggs toast and a coffee Plus one take out coffee per day  
10,000 dollars per year  I suggested save these for treats not eevery day items and you will retire a lot happier
thanks once again for your column enjoy the content!

Ouch - toast and eggs and 2 coffees a day is going to have a big impact !!    You are right; there is a place for this spending, it's not all about depravation all the time.  
Most people spend without thinking about the impact it has on their investment planning because very few people take the time to sit down and work out what they want to achieve financially.
You are a good friend for helping her by pointing it out. 

This is a rational article applied to irrational times.  
Trimming your spending won't make any difference to your life that matters at all in comparison to the timing of your house purchase.  Houses earn more money than people.  Every day you haven't bought a house you are hundreds of dollars (compounding) worse off.  Gym memberships and television subscriptions are chicken feed in comparison.


Think about what you just wrote. If houses continue to earn more money than people, who is going to buy the houses?
In the long-term houses track with wage inflation (currently running about 2%). So even if prices levelled off and returned to this trend (a big assumption given their massive historic overvaluation) then you would make $750,000*2% = $15,000/year. Hardly a way to get rich especilly if it is your family home as you would have to downsize or move somewhere cheaper to release the capital.

Totally agree with you in theory. But logic has been thrown out the window on the matter all my working life.

The price to earnings ratio (market price/net rent) of my current rental is 35 which is more than double the long-term average of 16. The US stock market only got to 33 before the crash of 1929. Caveat emptor.

PE ratio for my latest buy in P.N is 13.6 

The "irrational times" argument is repeated generationally. Don't be a grumblebum - It is no use whinging and whinning about it, you can only use it to your advantage by going against the grain.
What you spend compared to what you earn is the formula. Those are the only two variables you can manipulate (before starting to look at investment options).
Gym memberships and pay TV are a common part of those variables! This weeks column was to raise peoples awareness of their impact.

I agree with you on the formula and sure, you will have a little extra pocket money cutting back on this and that and it will add up to bit over a decade or so.
But it is valid a valud point that whatever cutbacks you make will amount to diddly squat in comparison to the $90,000 difference in cost between a 2014 and 2015 house purchase.  It's a little unfair to be dismissive of that fact.

You're absolutely right, of course, but what does that matter to a journalist churning out a lazy repeat of the same 'financial advice' stream of cliches that every media outlet on earth has been running for at least the last 30 years.  Gym membership cliche, check.  Pay TV, check. Save a little bit over time and it'll add up, check.  May have avoided the fancy coffee every day adds up sentence, but hasn't moved with the times enough to include the iPod cliche.  Go to Yahoo articles, 1980s issues of Cleo magazine, summer newspapers from 1992 with space to fill, and you'll find exactly this same article. There was a slightly blander version on this site about 3 years ago. It's a perennial.  Just as when journos for Cosmopolitan mag drag out 'Why Doesn't He Call' for the 400th time since 1962, they may remove some antiquated reference to waiting by the phone with curlers in your hair, but essentially it's unchanged.

Your comment just reiterates that the basics never change.  
If you have 1980s issues of Cleo you may be sitting on a small fortune!!!
Im humbled that you think im a journalist.
PS: I love my coffee and i can tell you exactly why they never call. <wink>

Yeah, xelnaga, don't protest the status quo, or do anything to change it.  Shut up, tug your forelock, eat your gruel, and be thankful for it.

Well sorry ,would i cut my lawns if i was earning $1000 an hour ? no, its more about using your time to its maximum potential,working and thinking smart,if you are on minimum wage and paye do as Liz suggests, or cut your own lawns because you enjoy doing so.
I am always interested to know how wealthy the people who give others advice are themselves,since being in New Zealand the financial advisors i have encountered are anything but wealthy perhaps with the very odd exception. I think Garth Mc Vicar would be a man worth listening to.
If people don't know the basic day to day stuff they ain't going far anyway.