You Can Save Thousands by Selling Your Home Privately

Passive Income NZ

A few years ago, I finished my on the job training and decided that I should find another job at a different company. After all, if you stay at the job you trained at, it will take longer for you to shake off the title of the trainee. It is far easier to move somewhere else so that you can reinvent yourself as fully qualified. But that’s another story for another day.

Since I had to move to a new city for my new job, I had to sell the house I had bought four years earlier. There was no way that I would have enough money to buy another house in the new city and keep a house in the old city I was moving out off. Never mind that if I were to keep the other one and rent it out, it would be a 5-hour drive between the two houses. Not exactly easy to rent a house out when you live 5 hours away, except if you want to pay someone else a hefty return on your investment.

I did what anyone else would do. I talked to numerous real estate agents. Listened to their pitches as to why I should list with them. That they had more buyers than the competitors and were waiting for quality houses to come onto the market if you have ever had to deal with real estate agents you will know what I am talking about.

Commission Rate of 4%

At the time, most of the agents were willing to sell my house at a commission rate of 4%.  Now if you’re like me, that 4% commission seems a bit funny.

It should sound funny because in what other industry do people provide a service for a percentage of the sale price. Sure I know they do this on auction sites like TradeMe etc. I don’t understand the difference between selling a $200k house and a $400k house? They are both houses. Both requiring advertising, both requiring open days.

The difference is $8000. So if I was the owner of the $200k house, let’s suppose that this house is in the lower end of the market.  I would be concerned that the agent would be doing less work to try to sell it. After all, they are being paid half the amount when compared to selling a $400k house.

Here is another reason why I think the % commission system is strange. Say what you want to sell your house for $400k. An offer of $380k comes in a week into the marketing campaign. The real estate agent persuade you that this is a great offer, and you should take it.

Now, why are they doing that? Persuading you to sell your house at $380k, when you know it is worth $400k. And besides, it has only been a week.

I will tell you why. Selling at $380k will bring in a commission of $15,200 for one week’s work. Now say it take 4 weeks to find a buyer who wants to pay the $400k. Now the real estate agent brings in a commission of $16,000 but had to spend an extra 3 weeks of work to get you the buyer, only receiving extra $800 for their efforts. Considering the weekly amount drops from $15,200 to $4,000, you can see exactly why the agent would want to pressure you into selling at $380k.

The agent sees a difference in the commission of $800, but you see a difference of $19,200. This fact alone should make you question your agent’s agenda. Especially when they keep saying that you should always take the first offer, as it is usually the best offer. And another thing. How do agents know this? Can they see into multidimensional timelines to determine that the first offer is the best?

Real estate online?

The second thing I don’t understand about real estate agents is the fact that it is one of the only industry that hasn’t seem to move online. Why is that? Physical stores are closing left right and centre due to the increase in spending online. Second-hand car dealerships are closing everywhere since you can just go on TradeMe to by a car. Heck, you can practically buy anything online if you know where to look for it. Everything is becoming peer-to-peer, from taxis with the likes of Uber, to accommodation with Airbnb, and even loans with the likes of Harmoney.

Selling houses privately

So why has real-estate not moved on from a commission-based system to a more online peer-to-peer system? And why on earth does it cost that much to sell a house? Thousands of dollars a week? Considering the average price of a house in NZ $670K, and the average time to sell currently is 46 days, a real estate agent working a 40 hour week will be earning around $102 per hour. For only listing one house! If the agent has 10 houses, that is $1020 per hour! What other job do you earn that kind of money?

Ok, let’s be reasonable, I have heard that half the money goes to the brand that they are associated with for expenses like advertising and admin overheads. Still, that agent selling 10 houses is earning around $500 per hour if they worked a full 40 hour week. That is absolutely insane! That puts real estate agents amongst professionals such as an anesthesiologist, commercial pilots, and even more than our prime minister!

After thinking about all this, I decided I would give selling privately a go.

* note: the example I gave above about how much a real estate agent earns are all rough ballpark figures using averages. The actual amount of money they earn probably varies widely, but still, the hourly rate at which it costs to sell your home, your biggest investment, is staggeringly high for what is actually involved.


The Most Important Thing You Will Ever Learn: Part Two

the most important concept you will ever learn

Now earlier, I wrote a post about the most important thing that you will ever learn. If you didn’t read it, I would recommend that you go back and read it. It will make this post make more sense. To really hit home the power of exponential growth let’s look at a simple example.  Think of a game of chess. The game of chess was …

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March 2018 Spending Report

Monthly spending and investment report showing you how my portfolio is going and how it can help you on your journey to financial freedom

My First Spending post! Yah!

I have been tracking my spending for a long time know, but I have never really analysed the data and made any goals to try and improve. Hopefully, these posts will allow me to do that.

So here is March’s spending.

The one thing that is good about the above graph is that nearly 50% of our expenses are the mortgage. Once we have paid that off, we can really ramp up investing and growing our passive income stream. The bad side is that the mortgage won’t be paid off for several years now. And it is time to start re-negotiating the rate.

The Pros

Investing was up

In March I opened a new account with InvestNow and deposited some money to buy some passive funds. This is because my previous managed funds with Rabobank were being migrated there anyway, as Rabobank has moved out of the fund business.

Groceries were down

Our grocery bill was down for the month of March!

Miscellaneous consumption

Miscellaneous consumption, or consumerism as I like to call it, was down for the month of March. That is great. I consciously  

The Cons

Car expenses

Car expenses always surprise me as to how large they are! A whopping 13% of my total expenses. I would be totally owned if Mr Money Mustache has a look into my expenses. Next month my car expenses should go down. There was a lot of driving going on in March and I had to do some yearly maintenance and replace a few failing parts.  

Bank fees

Bank fees are up. I don’t even know what they were until I realized that I had automatically categorized a few speeding tickets into bank fees. I don’t have a category for speeding tickets. It’s not a common occurrence for me to get them, so I will leave them there. There was a lot of driving in March. That could also explain why owning my sofa on wheels had a total expense of 13%.


The goal for April is to bring car spending down and to put that excess into investing.  In April we will also have to negotiate with the bank for a good rate. And if the rate they offer us isn’t what we expect we will go to another bank to see if they want our custom.  I use the mortgage rate page on to get a quick overview of what the current rates are. They have all the banks on there with the exception of ANZ. I think their data feed for ANZ is broken. Overall we are aiming for a low 4% for a 2 year fixed. Let’s hope we can get it

Overall, we were positive for the month!


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Anyone who wants to pursue early retirement or grow their passive income through saving and investing tracking your spending is a must. This way, once you’ve set your realistic budget ( I always see people set unrealistic budgets, unrealistic budgets have no real value as you will always fail), you can track where in your budget you are overspending. Giving you a better focus on …

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The True Cost of Your Consumption

Passive Income NZ

I like to think of money in terms of the amount of time it takes me to earn. When you need to make a consumption, and I mean need to. I tend not to go shopping for the hell of shopping. I can prove this as I commonly wear clothes that I have had for more than a decade. And only really replacing them when …

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Passive Income Report: March 2018

Passive Income report for NZ personal finance blog Passive Income NZ

There is no point in having a goal if you don’t measure whether or not you have achieved it. My current goal is to replace my income with passive income. I have decided to split my goal into steps. The first step is to achieve a passive income of $25 per week. Once I have achieved this I will push for $50 per week, $75 per week after that.  

Goal 1: Earn a passive income of $25 per week

Splitting my goal up into smaller pieces will make it easier to achieve my overall goal. Smaller chunks are always easier to swallow! So to start of with I need to know what my passive income is currently.  I have always tracked my spending, and I know my income. But I have never really calculated my passive income. So here goes

Current Goal: $25 per week of passive income

So how does it all stack up? and have I achieved Goal 1?



Total Invested $16021.67

Weekly Passive Income: $35.15

Lending Crown


Total Invested $3998.56

Weekly Passive Income: $8.75


5.10% last 3 months

Total Invested: $314

Weekly Passive Income: $0.31

Now I have a few other investments

Genesis Power

8.3% Interim Dividend

Total Invested: $4024

Passive Income: $6.42

Nikko Core Fund

29.19% Last year

Total Invested: $1492

Weekly Passive Income: $8.39

OneAnswer Fund

19.52% Last year

Total Invested: $1372

Weekly Passive Income: $5.15

Nikko Concentrated Fund

31.73% Last year

Total Invested: $1554

Weekly Passive Income: $9.48

Fisher Fund

21.38% Last year

Total Invested: $1428

Weekly Passive Income: $5.87


0.1% per annum

Total Invested: $16,000

Weekly Passive Income: >$1.00

Total Weekly Passive Income:  $80.53 pw

Wow! I have never calculated my passive income in terms of weekly return. There is no way I thought I was making $25 per week, let alone $80pw.

Goal 1: $25 per week Probably achieved 2016

Goal 2: $50 per week – Probably achieved 2016

Goal 3: $70 per week – Probably achieved 2017

Goal 4: $80 per week – Probably achieved 2017

Goal 5: $100 per week

This is the first time that I have checked the interest rate on my savings account. I really need to get on to investing this money into something that is actually earning decent interest. Currently, I think I need to diversify away from peer-to-peer lending. However, they are returning a good investment at this stage.

The main thing I have learned from this exercise is that I need to be far more active in my investing! I hope that you will take this away as well and have a closer look at your passive income, and where you stand. Breaking it all down to weekly income really gives it some meaning!

*Note: I write these reports to keep myself focused and honest on my goals.


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The 3 Things You Have to Invest

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A Story About the Progressive Tax System

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