Saturday, July 26, 2014

Grow Movie- A Great Documentary Which Outlines Young Urbanites Turning To Farming

I watched the Grow Movie the other night. 

It's a documentary that tells the story of how young urban people are being attracted to farming.

The movie follows a few young farmers in the US state of Georgia. We learn how they found themselves farming & why they love it.

Most of the people were highly educated with degrees in finance, engineering & soil science etc, but they have chosen the small scale rural lifestyle.

The documentary focuses on, what we in New Zealand we would call "market gardeners". 

GROW! Movie Trailer (2:09) from Anthony-Masterson on Vimeo.

Two things stood out for me:

Most of these people started with no knowledge of growing vegetables or farming. Most had no money or land. But they started working with a farmer and in some cases simply agreed to work in exchange for accommodation and knowledge. One thing led to another and they now run their own farming businesses.

I found it interesting how one person explained that he got into farming because of his ideological beliefs. He said he now had to balance his ideology with the need to run a viable business.

I found that interesting considering, there are many people in New Zealand giving farmers plenty of advice (including me). It's one thing to talk about how you should farm & another thing to actually do it and stay viable.

Saturday, July 12, 2014

Don't Laugh At Wheedle, Good On Them For Having A Crack

The demise of the trading web site Wheedle, is no real surprise. The web sites aim was to take on trade me which is the New Zealand version of ebay.

I'm certainly no business expert, but I've been thinking about it this morning as I did some housework, and there are two aspects of the businesses failure that have crossed my mind.

Firstly, lots of people are bagging Wheedle and its founder Neil Graham. Neil didn't need to start Wheedle, he founded the Mainfreight transport company which is an international success. He's worth an estimated $75 Million, so money is not a motivation. He's also no longer a young man & he has had health problems.

But he did it anyway, he used his own money and he took a risk and he gave it a crack. That deserves respect in my book.

I'm sure that the reason he is successful is because he has backed himself and taken risks in the past.

The second point, is that this is another example of a successful person trying to start a business in an area that they are not experts in. Neil's background is transport & logistics. I think a technology company is very different to a trucking company. The things that make a tech business successful are very different to what makes a trucking company successful.

Some signs of this are that Wheedle seemed to rely on traditional marketing like sponsoring the Crusaders rugby team and TV adverts. When we look at successful tech companies, they don't do traditional advertising. You don't see Twitter, Facebook, Xero or Vend advertising on TV, radio or sponsoring a sports team.

Suzanne Paul is another example of a very successful person who turned to a different area of business. She made her fortune via informercials & sales but then took her money and invested it into a tourism venture which didn't end well & she lost the lot. She is now back doing what she does best, which is informercials.

Richard Branson is a unique example of someone who has been successful in many different categories, such as music, airlines, trains and mobile services to name just a few. It would appear that he is an exception.

The third aspect I find interesting is that most people don't have a problem with the current online auction site. Wheedle were promising lower sales fees. Saving a few dollars on my trade is not enough of a motivation for me to change.
Wheedle wasn't different enough.

So I think it is great to see people backing themselves and taking risks but I think it's really important to stick to your area of expertise & if you are going to take on the big players in the market, you really need to be substantially different & offer something really unique.

Monday, July 7, 2014

You Can Afford A House in NZ, Despite What People Say!

I’ve had a few conversations with people who I’d describe as being middle class New Zealanders. They are earning around $100,000/year, yet they claim they can’t afford to buy a house.

As we talk it over further, it becomes clear that they actually can’t afford a house of the required standard in the desirable area of the major city in which they live.

It’s pretty hard to buy your first house in Queenstown, Christchurch, Auckland or Wellington, especially if you are not prepared to live in the cheaper suburbs.


It occurs to me that people have priorities in their lives and when they say “we can’t afford to buy a house”, they really mean that they are not prepared to make the sacrifices required to get into home ownership.

Some Examples

I have 3 friends who live in & around Rangiora. All of these people have average jobs, they all have young children, all of the wives have chosen not to work & instead stay at home with the children.

They all own their homes.

One friend was in the army for 6 years and left as a private, he now works in forestry driving a digger. He and his wife bought a small slightly rundown house in Rangiora, which they live in. They continued to save his average wage (by NZ standards) until he had a deposit & bought another house around the corner, which he rents. I estimate these two houses are worth $250,000.

He’s now looking for his third house.

Another friend drives a forklift has a special needs child. His wife looks after their child during the day. They bought an average house in Kaiapoi right next to the motorway. It’s a comfortable house but nothing flash.

My third friend is a builder/hammer hand, he has 3 kids which his wife home schools. They managed to buy a house in Rangiora when they were first married. They recently sold it & purchased a larger house on a lifestyle block.

All these couples bought very average properties with flaws. For instance, situated right next to a motorway or slightly rundown or had a very small section. But they did it and they have gained financially as the properties have increased in value.

I just did a property search on trademe. It showed 485 properties in Canterbury under $250,000.

I bought my first house in my early twenties.

I was working as a dairy farm worker in 2001 earning $30,000/year when I saved $5,400 and purchased a property for $54,000 in Invercargill. I rented it out and it was cash-flow positive.

In 2004 my wife and I cobbled together $10,000 & purchased a house for $100,000, which we lived in. It wasn't located in a great area & it had a shared driveway. We spent the next 2 years renovating it ourselves. We sold it five years later & more than doubled our money on that property.
Renovating the laundry

It sounds so easy just writing these examples down now. But the one thing all these people have in common is they sacrificed things in order to be able to buy their properties.

In my early twenties, my friends were buying $12,000 motorcross bikes & spending their weekends racing, others were borrowing money to buy $20,000 cars, while others were travelling the world.

I missed out on all of that. My wife and I lived a very simple lifestyle. Most weekends were spent painting or hanging gib board or simply staying at home as we had no cash.

I do regret not travelling and my wife reminds me constantly about how unacceptable it was to not have a real honeymoon & rather use the money to buy our first house. 

She’s right though; it was unacceptable to not have a honeymoon. I’ll have to make it up to her. I was so focussed on getting ahead.

Money gives you options

When you are young you have no money and I think all money does is give you options. 

When you have no money you have limited options and you have to focus your limited resources.

It’s totally possible for young families to buy a house in New Zealand. The question is are people prepared to make the sacrifices required?

When I look at the people who tell me they can’t buy a house, I notice that they all eat out at restaurants regularly, there’s lots of money being spent of manicures and salons & plenty of nights out on the town & shopping trips to Australia.

The same thing applies to farming. I saw my parents move from Zimbabwe with nothing in there 30s, working as farm workers to buying their first farm 11 years later.

My first employer started dairy farming at 17 and was sharemilking 400 cows at 28 and at 40 years of age owns a large dairy farm, among other things.

These are all examples of ordinary people with ordinary intellect just getting on with it and getting ahead.

It’s all about priorities, attitude & peoples willingness to do what is required.

I'm developing a pot belly. But its not a priority for me to get rid of it and I'm certainly not prepared to make the sacrifices required to get rid of it. So, I can't complain about not having a flat stomach, if I'm not prepared to do what is required to get flat abs.