‘Spend every cent before you die’
As part of our series on financial insights from the wealthy, James Coddington explains how he came to set up Joy Business Academy, a developer of educational games.
How did you make your first $1 million, and how old were you?
I was a ski instructor in my mid-20s living my dream on someone else’s couch, somewhere in Colorado, USA, when I met an Australian who convinced me to come back to Sydney and be part of the first dotcom business in Australia to float on the ASX – Travel.com.au. I used this money to start my own business in animal health, which I built for seven years. So sometime in my late 20s was when I made my first million (on paper).
Do you follow any personal finance rules?
Back yourself and believe in yourself.
What are two money tips you’d give to a 20-year-old who wants to become a millionaire?
Invest in yourself and never give up! Find something that you are passionate about and go after it.
Don’t follow the crowd or copy your friends. Find your authentic self and believe in yourself. The most valuable commodity in our lives today is time, so don’t waste any of it following what you think other people want you to do.
Value your money and remember how hard it was to earn it. Always leave some tucked away for an ‘‘emergency’’ as you never know when it will be required.
Any financial myths you think must be busted?
A wise person once told me: ‘‘You can’t save yourself to riches’’. Which is so true. If you want to get ahead you need to value your money and invest it wisely. That might start with investing in yourself, then when you find you have some extra, put this into a safe investment which you are confident will grow. Maybe property, maybe blue-chip shares, maybe art, maybe gold? It doesn’t matter what it is as long as it is safe. As you build your net wealth you can start being more aggressive with your investments. As you get a little bolder, only invest what you are prepared to lose – kind of like going to Vegas.
Do you give more importance to saving or investing?
As above, definitely investing. You can’t save yourself to riches.
What was worst financial decision you made?
I have made many poor financial decisions. One of my biggest was passing up on a piece of waterfront land (an acre) on the newly formed Lake Dunstan on the shores of
Cromwell (Central Otago) for $30,000, when I was in my last year of university. Instead I decided to spend the money on a three-month skiing trip in Whistler, Canada. I don’t like to reflect on how much that piece of land is worth now. But, hey, I have amazing memories of my time in Whistler and it sparked my love for the mountains and ski industry.
Do you feel rich?
No. I think it is human nature to always strive for more. I don’t necessarily chase the money – it is more the challenges that I love going after. It has never served me well chasing after money. The day I chose to let that go and focus on the physical achievements (nonmonetary) the money took care of itself.
Can money buy happiness?
It certainly helps! I know it is a cliche´ for those who have some money to say that it doesn’t but try and tell that to someone who can’t put food on the table. I believe it provides the freedom of choice and that, in my opinion, is the definition of wealth.
Do you think there is such a thing as reaching optimum wealth? If so, have you reached this point?
Optimum wealth in my opinion is when you have true freedom of choice of what you do each day. It is not just about the size of your bank account, but rather achieving a balanced life which you get to enjoy with loved ones. What is the point of finally getting to ‘‘optimum wealth’’ if you look around and you are all on your own? No friends, family or anyone to enjoy your time with. That would be sad.
So no, I have not reached my definition of optimum wealth yet. I am still loving building a fantastic tech company that helps change lives every day. My work-life balance is not good but it is a short-term sacrifice for long-term gain.
What is your advice to people to stay wealthy – getting rich is one thing, is staying rich just as difficult?
Enjoy the journey as the destination might not be as amazing as you have made it out to be. Use your money for good. There are no points in having the largest U-Haul truck loaded with all your money when you die. I am a strong advocate of living your life to the fullest and that includes enjoying amazing experiences with incredible people. Enjoy the fruits of your labour, and ensure you spend every last cent before you die, as one of the best lessons we can pass on to the next generation is to be self-sufficient and learn the necessary skills to create their own wealth and not get handouts along the way.
I am a firm believer that if you have riches that are surplus to you and your family’s needs, you have a responsibility to help provide for some of our communities’ greatest challenges. Don’t bury your head in the sand and live in a bubble, see where you can help our communities and make it happen.