What property guru Nikki Connors learnt from her financial failures

Thursday, 2 January 2020

Advertising executive turned property investment adviser Nikki Connors has learned a big lesson from 'having it all and then losing it'.

Connors was a top advertising creative in the 1980s, working for Saatchi & Saatchi.

On paper, she was a millionaire at 29.

'I was earning hundreds of thousands of dollars a year and had a big house in Kohimarama and expensive foreign cars.

'But interest rates were 21 per cent for mortgages and even more for cars. All my income went into trying to maintain that level of debt.'

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In her 2016 book Connors said that by the age of 27 she was earning more than the prime minister of New Zealand.

'We earned huge amounts, we drank too much, we took white substances to keep us awake through presentations, we leased German and Italian cars, we borrowed to the hilt for bigger and better houses and we supplemented it all by juggling our finances and relying on the half-dozen or more gold credit cards dished out to us like sweets.'

Connors said she made 'many bad decisions' and 15 years ago, the one-time young high-flier had nothing after two businesses failed, she walked away from a third, and her second marriage broke down.

The big lesson was structuring her wealth.

'It's not how much you earn that is going to make you a millionaire. It's what you do with what you have,' Connors said.

'My rule of focusing on property investment gives me the security of knowing that whatever happens in the future – even if I lose it all again – I am now structured in such a way that I will always have a roof over my head and a substantial passive income to maintain the lifestyle I have now.'

Connors said she had experienced her fair share of highs and lows. 

'I've failed a lot. But the worst decision one can make is to give up.'

Connors started Propellor Property Investments in 2009, and since then has written books, become a commentator, media personality and self-proclaimed 'Queen of NZ Property'.

'It was property investment that truly brought me the rewards and the security I now enjoy.

'It's a cliché, but money certainly cannot buy happiness – but it can buy security for you and your family. It is important to have respect for money and what it can do for you, and to know how to use debt to your advantage in building wealth.'

Connors' advice to young people was simple; invest in KiwiSaver and 'enjoy your life'.

Her advice to their parents, though, was to share their equity with their children to guarantee the deposit on an investment property.

'That guarantee will only remain in place until the investment goes up in value. So 20-somethings will be able to get on the property ladder with someone else paying the mortgage.

'When the time is right it can be sold or refinanced to free up a potentially substantial sum for the deposit of a home that is closer to where they want to be or want to live.'

Connors said that although it was important to save, it was equally important to invest. Preferably in property.

'I agree with the discipline and a safety net for a rainy day, but interest rates are now less than 1.5 per cent, so even a million dollars in savings will not secure the lifestyle you want for the rest of your life once you allow for tax.

'Better to top up a brand-new property in a growth area, get a better return and enjoy a tax-free capital gain after five years.'

Connors' advice when it came to staying wealthy was to use other people's money – specifically, the banks'. 

'But spread your risks and don't rely on one bank for your mortgage borrowing. Focus on what matters to you and work towards that. 

'To start with, you will have to use a little of what you earn to supplement your property investments and when you have enough equity, use it to pay off your home mortgage in full. Once you get rid of the biggest debt you have, you then have the ability to be more aggressive in building up a passive income.'