There’s no doubt that things are tough for everyone. Households are doing it tough, businesses are doing it tough, not for profit and community groups are doing it tough, the government and councils are doing it tough. For this issue we have reached out to four successful people in the community who are involved in business and the financial sector for some wisdom around tackling the tough times. We reckon that what Eric, David, John and Matt have to say is an interesting read. We particularly like the advice that we should be ready to thrive in 2025!
Eric Faesenkloet
Eric lives in Takapuna, is the owner of the Golf Warehouse, and is well-known for his generosity. At age 20, Eric established Downtown Stereo Centre, importing and selling audio, video and televisions. He went on to purchase the Bond & Bond chain which he eventually sold in 1990. Eric has been involved in property, and established Golf Warehouse from very humble beginnings, purchasing the stand-alone driving range in Takapuna. The business has grown to become New Zealand's largest and most trusted golf retail company with a dozen or more stores as well as driving ranges. In 2013 Eric became a Member of the New Zealand Order of Merit for services to business, golf and the community in the Queens Birthday Honours List.
How are you seeing the current economic conditions affecting your business and life?
We are still doing good sales but there is no doubt people are tightening their discretionary spending habits. I personally don't enjoy seeing young first home buyers being strangled by high living costs and high interest rates, but in saying that we still have difficulty in getting staff to do extra overtime to increase their savings. This was something I did many times in my life in previous tough times.
If you had one piece of personal advice for people dealing with this period what would that be?
My advice to a few of these people is to work longer hours or try and get a second job. Good times will come again so it's not permanent. These times won't be forever. Too many people have become dependent on handouts from the government and those days will also start getting harder as the funds dry up. My last bit of advice to people is not to buy something on hire purchase if you can't meet the payments.
Most businesses will be dealing with tough times at present. What would your key message be to the business people leading organisations?
It's very hard running a business now but tough times also create opportunities. Just looking at everything on sale everywhere is a good indicator that everyone is feeling the pinch. What many retailers forget is that there is still a large number of people who do have savings, or very little debt, and they continue to spend. Our staff are trained to treat every customer regardless of their wealth with utmost respect and it's amazing how many will open their wallets. I also think these times create great buying opportunities to get great savings at wholesale. We always pass these savings on and I believe that makes us stand out against the opposition.
What lessons have you learned from previous soft economic times?
We find being 100% transparent with the staff in these times is really imperative. We also gave all our staff a 10% pay rise (which was a massive cost), so that they could get through the inflationary period that we are in. The staff have all responded with their own ideas on how to improve the business. We also have had to help a few individuals who have never seen these times before. In these times it's really important to be working alongside the staff whether it's on the shop floor or warehouse. These tough times really make the hard workers and staff who want to get ahead stand out. Good times will come back. Always advertise in tough times – most of your opposition will have stopped. This way you will always stand out in the crowd. Treat your customers like god; they are paying your wages. Shop around for the best deals.
Is there anything that the government or Reserve Bank can do to help the situation for all New Zealanders? Have they got it right?
I really worry here; it frightens me that when a Finance Minister (who usually has no qualifications in economics) ignores advice from Treasury and then goes on a huge spending spree with handouts that the country can't afford causing these types of dilemmas we now face economically. Our last government did this and now New Zealand faces the highest debt levels in its history. One in every $5 that the country earns now only pays the interest on that debt. Politicians are so afraid of being voted out and they become reckless. If our current government doesn't tend to pay higher wages – for doctors, nurses and police – then we could quite easily see a massive collapse in those departments. So many younger people are looking for lucrative positions overseas now and this will also have a long-term negative effect on this country because there are talented people leaving. My advice to our government is to incentivise hard workers and make New Zealand more productive again.
Why should we all cheer up?
New Zealand is a very blessed country that bats well above its weight and size in the world arena. The media has a huge role to play for a positive outcome – if they don't, their industry could also collapse. Our news bulletins need to have one positive story a day as people need to feel good again. Young people also need to know that the elderly need help in these times as well. With all the negative stuff out there it can become very scary for a lot of these lonely people. Just making people laugh once a day would also be a good start. I try to do this with a close group of friends everyday as it is so important.
On a very positive note it’s Father’s Day on 1 September – how will you be celebrating with your family?
I love this day, spending time with your own family and their kids is definitely what makes living so special. There is no price on family or anything more important in life.
David Green
David lives in Castor Bay and is a financial adviser (FMA) with two decades' experience in financial services, and holds a Bachelor of Business (Finance & Accountancy). He is also a chartered accountant (CA) a qualification obtained while providing business advisory services at Deloitte. David founded ‘adviceHQ’ in 2018, a financial advisory firm based in Takapuna that provides independent financial advice on mortgages, insurance, KiwiSaver, business and commercial loans. Visit advicehq.co.nz for more information.
How are you seeing the current economic conditions affecting your business and life?
New business has been steady; however we have been very busy helping existing clients navigate the cost-of-living crisis, elevated interest rates, and separations/divorces. Our clients really value independent financial advice.
If you had one piece of personal advice for people dealing with this period what would that be?
The earlier you ask for help the more options you have.
Most businesses will be dealing with tough times at present. What would your key message be to the business people leading organisations?
Cash is king now more than ever. Ensure you have set aside funds for the IRD, creditors and most importantly staff. If you are short of funds, seek help early - the more time you have, the more options you have. As independent financial advisers, we can help clients with solutions from over 30 lenders, including banks, non-banks, asset lenders, and private lenders.
What lessons have you learned from previous soft economic times?
A few old sayings come to mind: prepare for the worst and hope for the best; in every crisis there is an opportunity; the harder you work the luckier you get. On a more serious note, remain positive and focus on what you can control. Do you cut back in advertising, or do you invest in advertising?
Is there anything that the government or Reserve Bank can do to help the situation for all New Zealanders? Have they got it right?
Too far, too fast. Too slow, too long. The RBNZ needs to restore credibility and I’m not sure that can be achieved with the current leadership. If this was a corporate organisation, would the executive/board still in place? The government (left, middle or right) needs to make life easier for all Kiwis and get back to basics (education, health, safety). Too often we have seen idealistic legislation intended to solve a problem that doesn’t exist, with dire consequences e.g. the CCCFA (Credit Contracts & Consumer Finance Act) amendments in 2021 froze access to credit and pushed people into difficult situations, sometimes forcing them to use lenders of last resort which was the primary target of the legislation.
Why should we all cheer up?
Next year will be better; be ready to “Thrive in 2025”. At the time of writing the RBNZ has forecast inflation will be within target range in this half year, leaving the door open for interest rate cuts.
On a very positive note it’s Father’s Day on 1 September – how will you be celebrating with your family?
I am lucky to be a father of two healthy kids so no doubt we will be supporting the local cafes along with the rest of the Shore.
John Berry
John is a Takapuna resident and the co-founder and resident wayfinder at Pathfinder Asset Management. John believes ethical investing can fund a better, more sustainable world – and deliver great financial returns. As co-founder of Pathfinder, he has embedded this belief in a series of innovative ethical funds, which in recent times have received numerous awards. John was personally recognised by the Sustainable Business Network winning the “Sustainability Superstar Award” in 2023. Outside work he helps on several advisory boards and enjoys writing and time with family.
How are you seeing the current economic conditions affecting your business and life?
In tougher economic times people often defer decision making. It’s natural to hunker down and not want to change things up. Having said that, business has been good for us. Pathfinder’s KiwiSaver just turned five years old and we’ve been having great momentum, growth and new people joining us. In business, and in life generally, I’m happy.
If you had one piece of personal advice for people dealing with this period what would that be?
Unless you’re a business owner, for most people your inflows (salary) are fixed but outflows (household expenses) aren’t. Just be mindful what you’re spending on. In particular those monthly subscriptions you put in place – they add up; are you using them all? If you’re finding these times really tough, try to stay positive because it’s true – it’s always darkest just before the dawn.
Most businesses will be dealing with tough times at present. What would your key message be to the business people leading organisations?
Businesses are ultimately about people – whether people in your team, customer relationships or suppliers. Be a leader with hope and optimism despite the difficult times. Be a business leader who can see a better future, help people work through challenges and keep up their energy and engagement.
What lessons have you learned from previous soft economic times?
We launched Pathfinder in 2009 which was “peak turmoil” for the GFC (Global Financial Crisis). You learn discipline and how to be effective in hard times. Having worked through many cycles (I was young but was invested in shares during the 1987 crash), I always remind myself that things will come good. Sometimes you just need to ride out the bad times. In the case of financial markets, things typically start ‘coming good’ well before we see evidence of it in wider economic data. Manage through the tougher times but be thinking ahead for when the cycle will turn.
Is there anything that the government or Reserve Bank can do to help the situation for all New Zealanders? Have they got it right?
No, we haven’t got it right. Our policy settings as a country were far too easy with money during Covid times and now it feels we’re at the other extreme – being too tough. At a policy level we need to be innovative – what if instead of raising interest rates by 5% since 2021 the Reserve Bank had been able to temporarily increase KiwiSaver contribution rates? Instead of households paying thousands more to banks through higher mortgage payments, households could have been paying thousands into their KiwiSaver. Rather than higher mortgage payments with no benefit, there would have been a long-term benefit. We need to get settings right – we also need to think about whether the Reserve Bank has the right targets and tools.
Why should we all cheer up?
We need to be cheerful because New Zealand is, despite current challenges, a great place to live and a great place to raise a family. Globally there’s political polarisation, geopolitical conflict, social upheaval and environmental challenges. We’re far from perfect in New Zealand but this is a great part of the world. Especially the North Shore!
On a very positive note it’s Father’s Day on 1 September – how will you be celebrating with your family?
Ange and I are blessed with two great boys (actually, they’re now young men). My perfect Fathers’ Day is simply spending time with my family, being appreciated by them and receiving a hug. Maybe also taking a quick cold plunge together at Milford Beach. A great day really is that simple for me.
Matthew Bellingham
Matt, a Coatesville resident, has over 30 years' experience in chartered accounting, starting out after university by joining a small accounting firm in Takapuna. Fast forward five years, and Matt was awarded a partnership just prior to his 26th birthday. In 2012 Matt and Aaron Wallace launched Bellingham Wallace with a vision to build an accountancy business that was truly different from the rest. Matt has extensive advisory and governance experience across a wide variety of industries and now heads up the Bellingham Wallace Transaction Advisory team. Matt thrives on getting the job done and achieving brilliant outcomes for clients. He is recognised as a speaker and presenter on financial, advisory, and governance topics. Bellingham Wallace, under the leadership of Matt, Aaron and Mike Atkinson are massive contributors to their communities.
How are you seeing the current economic conditions affecting your business and life?
There’s no doubt about it – things are tough right now. In business: demand is down, cashflow is tight and becoming increasingly tough to manage, and the future pipeline of work is lighter than I can remember – even worse than 2007/08 during and post GFC. In life, I guess I am like everyone else. Our dollar doesn’t stretch as far so spending decisions are taken carefully and discretionary spend is down. Paying the mortgage takes a much bigger chunk of disposable income month in and month out.
If you had one piece of personal advice for people dealing with this period what would that be?
This economic cycle had to happen – it is a necessary reset to the economy after years of living in a false economic candy land where lollies were passed out and people spent with no consequence. BUT, it is just a cycle and things will improve. We are already seeing inflationary pressures reduce and the latest statement from the Reserve Bank gives us hope that interest rates will be cut sooner than previously thought. If fixing your mortgage – fix short term!
Most businesses will be dealing with tough times at present. What would your key message be to the business people leading organisations?
It is easy to make money in the booms, but in reality the best opportunities come during the downturns. Use this period to your advantage, right-size the costs on your business, rationalise where necessary to focus on high margin products and services and above all manage cash flow with ruthless efficiency every single day. In the next boom, spend wisely and build resilience into your balance sheet so that when the inevitable next downturn kicks in you are better placed to deal with it.
What lessons have you learned from previous soft economic times?
That it is only a cycle, and better times will come. Never waste a good recession – use this period to reduce costs and manage non-performing areas of the business much more tightly. Never waste a good recession – if you have the balance sheet to invest, now is a great time. There will be opportunities for growth and acquisition of competitors to take market share and ready yourself for great times ahead. Remember the lessons you learn this time, and focus on building resilience in your business and balance sheets so you do not become a statistic at the next downturn.
Is there anything that the government or Reserve Bank can do to help the situation for all New Zealanders? Have they got it right?
I think we are on the right track. The government is determined to reduce spending through cutting out frivolous activities whilse still investing in critical areas that have been neglected for years – for example infrastructure, roading, education, health. We need to focus on improving our productivity and overall output. Getting more Kiwis into meaningful paid employment and getting our young Kiwis better educated is the key to long term success. The Reserve Bank has finally recognised that inflation is well on the way to being tamed, food prices have dropped and the economy is in the process of being re-set. I think they could bring forward their projections on the OCR cuts.
Why should we all cheer up?
We are an amazing little country, with a great future ahead. Yes, we are facing some tough times but so is the rest of the world and I truly believe that there is light at the end of the tunnel. Every day I’m grateful to live in such a wonderful place – there is no place globally that I would rather be.
On a very positive note it’s Father’s Day on 1 September – how will you be celebrating with your family?
I suspect it will be pretty low key – a bit of time with my four beautiful daughters, going to see my father during the day at some point (I’m 53 and lucky enough to still have him in my life) and given that is the first day of spring maybe cranking up the pizza oven in the evening for some gourmet wood-fired pizzas!’