Chapter 1: What is the main investment discussed in this episode?
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Welcome back.
You were listening to another episode of KeepTheChange.co.nz's Money Mail. It is going to be a fantastic episode today because I get to talk about something that A long time ago, I wouldn't have even been in the position to be able to do. And I get to learn a lot through this process. And part of that, I then get to take you guys on the journey with that.
So this year, I've made my first investment into a fintech or into a startup. And I've read about people doing this and I've watched people doing it. And I just haven't really been... I suppose I probably have been in a financial position to be able to have a crack with it, but something sort of came across my desk and I thought, shit, I'm going to have a go. And... I'll tell you all about that.
And I think before I do, I've got two things. One, I need to be careful not to give away too much of what I know that I can't necessarily talk about. But I've talked to the guys and there's not like a lot, which is quite cool. And
I do my best to be transparent about what I learn and what things I can talk about, but there'll probably be some things where I just can't go into all of the detail due to commercial sensitivity or just not knowing where this information goes or whose hands it gets into. But secondly as well, if you've been here for ages, you might recall me telling the story, but if not,
this may be newer to you, but many moons ago, I was in different forms of debt and credit card debt, and I would dabble in a bit of investing, but really my best return was probably actually getting myself out of credit card debt and getting back to zero and just getting on with it. And I think if you're where I was many moons ago, that is often stage one of just hiding yourself back up.
So when you hear people like me now further down their path or go on social media and see people investing in different things via shares or how their KiwiSaver is performing or anything that you then compare yourself to, just remember you don't really understand or know the full context of where they've been, their journey and in what chapter they are riding. So
If you've got things in front of you to tidy up, tidy them up. And don't skip the chapters. I wanted to be investing into Xero many, many years ago. But I couldn't. It realistically wasn't the season for me to be investing into Xero. I needed to tidy up my finances.
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Chapter 2: How did the host become involved with the Kiwi startup Feijoa?
So for me, I'm signing my cash over going, right, it's in your guys' hands now. God bless, it's some fuel, it's some capital, it's some energy, go and do your thing. And that's typically what a startup is looking for. They are looking for resource in the form of connections, access, and financial energy, i.e. money, to go further down their path.
So the lads that have built what I'm about to tell you about have done that bootstrap to start with, and then, which bootstrap is terminology for doing it with very minimal input, and then eventually you get to a funding round. I mean, this is no different to the likes of Sharesies, for instance, who have gone and done that.
Holter, I think, have done funding rounds as well, and I think Generate KiwiSaver have actually invested into Holter along those funding rounds. There's a big outfit called the Ice House that build funds where you can If you meet those investor criteria, you can put money into the fund and then the fund will go and buy different sorts of startups.
And this is what people talk about when they say, we've tied up so much money in property, we should be putting it into productive assets that are doing things. And so part of... My underlying thesis is that there's a lot of truth to that. And I see what people can do with business.
And so for me, this is another one of those, okay, I get to put some money in to help some other founders have a crack at bringing their vision to life. Could they fail? 100%. Could a competitor blow them out of the water? Also a possibility. What's my biggest downside risk? I never see my 50K again. What's my upside risk? Okay. They help a lot of people. It works really well.
People get to benefit from it. My financial gain on the other side of that is the business becomes worth more. I potentially sell out my percentage. Say I 3X it, I turn my 50 into 150. I don't pay any tax on the 100 grand profit because we don't have a capital gains tax. Kind of it in a nutshell. Can that happen? I don't know. But I get to take you on the journey with that to a degree.
So I invested 50 grand into a Kiwi Roundup app to automate wealth. If you follow me on Instagram, you will see I've been talking about this recently. And many of you have messaged to say, shit, it's pretty easy to use. And you kind of came to the same conclusion that I did. How this came about is that I was looking at it as part of a potential podcast.
And I thought, well, I like to have a go at some of the things to understand them better before having people on the podcast. And I signed up and was like, shit, that was easy. Now, I haven't even told the crew this, so it's called Fijoa. It's so simple that...
I ended up running out of storage on my phone for creating so much bloody content and saving YouTube videos, which has ended up coming to bite me in the back of the ass here. And my phone's like, oh, we could kind of close down all the apps that you don't use and sort of disinstall them. And that was one of them because I don't even go on there. Like I don't go and have a look at the summaries.
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Chapter 3: What are the risks associated with investing in startups?
But I guess... before we carry on too far too, I have to be very transparent now, and I guess I have for those first eight minutes, that I've invested into this fintech called Fijoa. So this is after being a customer and you can now 100% argue for sure that I'm very biased.
So whenever you hear me talking about this and this journey, like, of course, someone who doesn't listen to this is going to be like, oh, he's fucking talking about that because he just wants people to use it so he makes heaps of money. Even if it tripled in value 50 to 150 grand, you reckon, like, fuck, am I going to go retire in Herne Bay? Probably not. Definitely not, actually.
I've seen the highest prices over there. But someone will still have a whinge eventually. I know that that's coming. But full disclosure, I've invested into it. So yeah, I do have effectively a vested interest. But I was a customer. I ended up investing in the round once I knew that they were looking for funding. I didn't know that from the top.
But when I saw that they were looking for money, I'm like, whoa, whoa, whoa, whoa, whoa. yo, I want a piece of this action. I want to go on this journey. So I want to see where they take it. So this is my first fintech investment. And I'm looking forward to taking you on that journey of how that space works, where appropriate also.
So with that said, there's the transparency piece, but I'm still going to give it to you straight of what I think about it and also probably help you understand why I kicked some money into this because I could invest it into a thousand different things as well if I wanted to, but I chose to put money and a decent amount of money into this. So in simple terms, what is Feejo?
Well, it rounds up your everyday spending and pushes the spare change into your KiwiSaver. Now, My first thing when I looked at this was like, oh, okay, that's epic. But could it go into my Sharesies account? Could it go into my Generate Thematic Fund or my Global Fund or not? Nah, just KiwiSaver. At this stage, I'm like, huh, at this stage, I like those words.
I kind of think the limitation with this is people will go, oh, it's just KiwiSaver. But really, with anything, you start somewhere and then you innovate from there. So just as an example, I don't know if they'll do this. And this is where I can't just be like, hey, guys, I put in a small amount of money and do a funding round. You should build out all my cool ideas. But
How sick would it be if you could round up your transactions and then that roundup piece goes and clears down your mortgage slightly faster? So you might have a monthly summary of, say, $30 by the end of the month, and that's cleared down your mortgage. And then you can go in and see, you're keying your data of what's your mortgage value, what's your interest rates, what's the term.
what's your monthly repayment, it could basically run a calculation for you and update itself of how much faster you're paying off your mortgage. I started getting jazzed up about that. I'm like, okay, guys, I can't tell you how to run your business here. But I would imagine that it's going to start with KiwiSaver and it's going to go wider. And I think...
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Chapter 4: How does Feijoa's technology work to help users save?
And if people really don't want to do it, they don't have to do it. So it's been interesting to see the traction that it's got quite quickly with, I think, a very small amount of coverage of the product. This would probably be the first time a lot of you are hearing about it. But I think what I like about this the most is that it creates great behavior and habit.
Because from what I've learned studying money for so long now is that we can know to do all this shit, but we don't do it. As I bang on about month end, and I would know it would be a very small percentage of the audience that actually do month end. And those who do get a lot out of it, and they try and make it consistent and turn it into a habit, and they value doing it.
But every month I talk about it and people are, oh, can I get the template? Can I get the template? And I'm like, you've asked five times, brother. Do you need to ask for a sixth time? When are you actually going to do the thing? So what this, I guess, it's simple to sign up to. You get into it and then it creates great behavior and habit.
And I think it's not really access anymore that stops us from investing. We could say that for many moons. and say, oh, I don't have access to investing, but we've all got that now, and we're all learning more about it. So I think the behaviour problem is not so much access, it's that we don't do things consistently. So even if we're investing into our...
you know, manage funds via generate or whatever. Like we don't set up the automatic payment. I'll kick in a bit of extra if like if there's something left over at the end of the pay week. Like we've got to make money simpler for people to create ways that habits and consistency are built into it. Otherwise, people, they're not going to do it. There's so much competition for the dollar.
So you almost need to have it sucked out of your account before you have the temptation to do what marketing is going to put in front of you until your next pay round. Fijoa solves this and makes it simple.
But there are so many more use cases because you think, okay, well, cool, bro, you're fucking rounding up your 50 cents from your coffee into your KiwiSaver like, oh my gosh, mate, good, like, whoa, okay, hang on, hang on. Think of the use cases for this. And I think there are so many different ways that this could genuinely help. And it's just at the KiwiSaver level at the moment.
Should it branch out, then all these use cases change again. But one, hitting the government contribution. So every year people miss out on free money. You need to put $1,043 in there roughly going into KiwiSaver to get the full government top up. I think that's $251, is it now? Government keep cutting it back. That's a shock.
Hang on, government introducing more taxes and more costs and then taking things away.
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Chapter 5: What are the potential benefits of using Feijoa for KiwiSaver contributions?
Well, again, this creates a low-friction, easy way to start investing into an account that's pretty locked up for our kids. Now, the other piece of this that I haven't explained is that you can actually then very simply in there split it. So you might have your 50 cents going in from your transaction and you can have, say you've got multiple children, you could then split
split it up you know three kids okay 33% into each and you just provide the IID number it goes to the IID and then that goes into the KiwiSaver as long as those things are set up in the background obviously like an IID number and the KiwiSaver but again like think about that if this expands beyond going to be pretty bloody powerful. Some to you, some to your partner, some to your kids. Yeah.
So do they go down that route? I guess we'll wait and see. But there are probably a number of other things that they will be thinking about doing and will probably be a lot more advanced than just the ideas that I am coming up with. So there's the ability of splitting roundups between multiple children. And I think the cool thing that I've seen happening
This is what I found fascinating, like grandparents are doing it. So the grandparents have the app and the technology and they're rounding up their transactions And saying, hey, put your grandkids IRD numbers in and you can contribute to their Kiwi Savers. And no shit, like people are doing this and they're rounding it up to $5 increments and then splitting it between the kids.
A great way for the grandparents to be able to help out with the grandkids' wealth longer term in a pretty simple way. So I was blown away by that use case. I just thought that was really cool. The next one is business owners who forget themselves.
So all the time, my business is my retirement vehicle and business owners invest in their business but stop or don't invest into anything outside of their business. And there's, to be fair, like a really big case for what's the point of contributing to KiwiSaver if we're not getting any form of contribution. So a lot of them just don't.
However, the risk is that we don't then actually prepare for our retirement as sole traders, as contractors, or as business owners. So again, that's just four use cases. And there are many more. And as this business evolves, I'm sure there'll be a stack more as well. Now, of course, nothing in life is free. So yes, there is a fee to use the app.
And if you go on the website, you can see what that is. I didn't include the breakdown of that. Oh yeah, of course, you're trying to keep people from knowing that it actually costs like... Things cost in life, right? There is an FAQ. Anyway, I'm trying to do that on the fly. But also I guess the big risk is that this is not a silver bullet. This is...
just to supplement and expand your investing journey and to make things easy. But much like people falling into the trap of just thinking, oh, well, the government set KiwiSaver at 3%. Therefore, I've been doing that. I should have heaps of money when I'm retired. Or people not ever looking into what is superannuation, like how much is that? that becomes dangerous, right?
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Chapter 6: How can Feijoa help users during financial transitions like maternity leave?
So I think there's some stuff coming down the pipe in terms of rewards as well. Now on the app too, it'll actually at a high level calculate what your monthly roundups may be compounding to if you give it the information of the type of risk profile that you have.
So that would be the type of KiwiSaver fund that you're in and it will try and predict out for you how much you may have as you get access to it at 65. So Some people have even pointed out, okay, if this gets even bigger, if economies of scale, maybe the fees will change. Fees are always changing across everything, right?
Like look at the blowback for different investing platforms when they change their pricing. But just want to be clear, it is not free to use. There is a fee with using this. So the other piece that I mentioned before is that KiwiSaver is locked into 65. Not everybody's going to be down with that. Great technology, but I want access to my roundups. Do they change that?
I would just about guess that that would be on the roadmap for them. So this isn't going to build your wealth on your own and you don't have to do anything else. If you're just relying on roundups, you're probably playing too small and you'd be thinking bigger than that. But again, I love that it builds habit and behavior.
And I'm sure there'll be more to come from the technology like options outside of KiwiSaver, as I mentioned. The vision for the business is to automate wealth for New Zealand. So I think that they're really just getting started and this is part of why I like it and I backed it because I want to see where they can take this.
Because if there's one thing that actually creates wealth over time, it's consistency. And I think we need more companies in New Zealand building tools like this, actual tools that help everyday Kiwis save, invest, and get ahead. So if you want to check it out, www.fijoa.kiwi. It's green and blue looking colours. It's in the App Store as well. But make your own mind up.
Don't just use it because I'm saying that I liked it as a customer and invested some money into it. There's people who sign up and use it and go, you know what, this isn't for me, just like anything. But it's going to be cool to see where they take this. And I think this is... a group of guys who are building something for the better of other Kiwi, their fellow Kiwi people.
And we've got to find ways to support other people to have a crack. Just as I've spent time today doing some introductions for... people that are having a crack at what they're doing. And I thought, oh, it'd be good if they spoke to this person that might speed their journey up. What do these guys need?
Well, they needed cash and they needed resource and I tipped in 50K and I can't do that for everyone and I'm not saying that I can solve everyone's problems or solve yours if you're going to get in touch and say, hey, you're building this, can you help me with it? But I'm like, I think this is my time. This is my time to have a crack at something like this and to
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Chapter 7: What are the implications of fees associated with using Feijoa?
Shit, I should check the spelling, foray. It's like your first sort of dabble in something, first attempt. I just Googled it. That is the correct spelling. It's a short, sudden attack, raid, or a brief tentative attempt to enter a new field or activity. Shit. Hopefully it's not like brief and tentative.
Often implies stepping outside one's usual routine, such as business diversifying or a person trying a new hobby. Yeah, kind of. So this is my foray into a bit of fintech startup type investing. I haven't done it before, so I had to read some documents and sign this and do that and bloody hell, let's go. So just like anything in life, you figure it out and you get going.
But this journey will just be getting started. And I met with the crew and I said, hey, I would love to share some of the journey, if that's okay, with the Keep the Change audience so they can see a little bit behind the scenes of how this stuff works. Because
you know, like I didn't really get access to it or know much about it even as I was coming through my career, but would see people investing in things. I don't really know how it works. I'm like, oh, okay, I want to get to do that one day. And so hopefully you can learn about it too. And it might not be for you, but at least you get to understand it. And hey, this could all go pear-shaped.
And hey, that is what it is as well. Like there's been many risks and things that I've done in my life that haven't gone the way that I've thought that they will. But yeah, for me, this just felt like such a good crossover. And when I saw they were raising money, I'm like, let's try it. Let's go. What's the bank account? Whoa, slow down, man.
Read these docs and make sure you know what you're getting yourself into. And say, hey, just send me the bank account. Let's rumble. You guys just keep building. Build this thing. Anyway, I'm going to get one of the co-founders on the podcast in a May. We've got a backlog of content to get through, but we'll get that out so you can learn a bit more about it.
Maybe, yeah, maybe if you listen to this, I should get some questions that I can ask the co-founder and maybe I'll chuck something on Instagram as well before we do that so that it's not just me thinking of what the questions may be that you guys have, but I could ask the ones that you genuinely or generally do have too. So,
A reminder before we go too, if you're not getting the full government KiwiSaver contribution each year, fix that first. As I was talking about before, me investing into this, I couldn't afford to invest into things like this many years ago. Don't ignore the small wins that actually will compound over time.
If you're not getting that KiwiSaver contribution from the government, you are missing a 25% return that you are leaving on the table. Now for some quick did you know, You know, some of you would never even heard of this before, right? But some of you may have heard me talking about it on Instagram, but the team at Fejo have already done over half a million dollars of roundups.
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Chapter 8: What future developments can we expect from Feijoa?
Let's see what the team at Fijoa can build out. Stay tuned. I'll keep you posted and we'll rip a pod with one of the co-founders in the coming weeks as well. Be good out there. See you next week.
Fresh Nico Jones, not anymore.
I have a goal to help 100,000 Kiwis improve their financial literacy. Generate Kiwi Saver scheme has sponsored Keep the Change to help me reach more people and make this a reality. Cheers to Generate. Head to generatekiwisaver.co.nz forward slash change to find out more.