From bakery owner to real estate mogul
In this series, Stuff talks to millionaires about how they got there. This week it’s property expert and Re/Max New Zealand owner and chief executive Don Ha.
In 1995, Don Ha was selling homes in South Auckland for $49,000. In 2020, he controls more than $1 billion worth of housing developments, apartments and land throughout New Zealand.
How did you make your first $1 million? How old were you?
I was 27 when I made my first million. I came to New Zealand as a migrant from Vietnam at 12, and I had set the goal to become a millionaire by age 30. I was self-employed from the time I left school.
The funny thing is that I formally got into real estate at 26 but had actually been investing in property before that, when I was the owner of two bakeries. I was working 72 hours a week in the bakery trade, and I thought if I got into real estate properly I would learn about investment. I also figured the harder I worked, the more I would earn.
I realised later that my first million might have been a technicality; I met a man who had been divorced three times, and he told me I was only half a millionaire because my wife would take the other half! This motivated me to make my second million, which I achieved two years later.
Making the first million is the hardest, but once you know how it gets easier from there.
Do you follow any personal finance rules?
Since the global financial crisis, one of the best rules you can apply is to focus on building equity in your property. Most people revalue their property to borrow more money, but when a crisis hits, the value drops so you lose equity and are left with debt. The rule I follow now is have more equity and less debt – so you can sell a property to keep your business going if you need to.
Another, related, rule is you have to have enough money to keep your family functioning no matter what happens. As we’ve seen in the Covid crisis, many Kiwis now don’t have enough savings for even a few weeks, which is a wake-up call.
What are two money tips you’d give to a 20-year-old who wants to become a millionaire?
A 20-year-old has youth on their side, and time is more valuable than money. My first tip is use your energy wisely. Work hard first and party later – if you work first, by the time you’re 30 you’ll be in a position to employ all your friends.
My second tip is act like you own the company. Go to work one hour earlier and go home one hour later than anyone else. When I was getting into real estate I applied the principle that if the No 1 agent worked 50 hours a week and I worked 72 hours, I would take over as No 1. And that happened within a year.
Any financial myths you think ought to be busted?
Every time a crisis happens everyone predicts the property market will slump or crash, and that’s a myth. In fact, history shows that every time it drops, it bounces back to a point three times greater than the value of the initial decline. You only lose when you sell in a down market; if you are in it for the long haul, you will see a long-term increase in value.
Another myth is that the bank will always be there for you when you are in trouble. As we are seeing now, the Government is having to step in to support some sectors and businesses when banks are not.
Do you place more importance on saving or investing?
I give 20 per cent to 30 per cent weight to saving and 70 per cent to 80 per cent to investing. In my younger days I would have said 100 per cent investing, but you need liquidity in case of emergency.
What was the worst financial decision you made?
When I took out a loan. The bank gave me millions in advance and I couldn’t understand why.
My lawyer at the time did not explain to me about the general security agreement, or GSA. This means if anything goes wrong with your financial position the bank can put your company in receivership and take full control, which happened in my case. (Interestingly, the Business Finance Guarantee Scheme has changed the policy to remove this option for banks.)
Do you feel rich?
Yes. You are rich when you have a career you’re passionate about; you can’t wait to go to work; you have terrific people around you; you can provide for your family; you have financial security and are happy.
Can money buy happiness?
Well, right now, would you rather have money or no money? The answer is both yes and no.
For instance, if you’re a billionaire but you have an addiction and demons you cannot control you will always be unhappy. However, if you’re wealthy and you create employment for people, you are sharing your wealth and creating stability and good fortune in other people’s lives, which is a very satisfying way to use money.
In my case, I am very happy in my position because I have a great team of people I work with, and my team and I attract like-minded people who want to do business with me.
Is there such a thing as optimum wealth? If so, are you there yet?
Optimum wealth is everything that comes with the feeling of ‘‘being rich’’ – when you are truly happy with yourself and where you’re going in life, you have created financial security for your family and you are bringing happiness to people’s lives. That is what I feel I have.
Getting rich is one thing. Is staying rich just as difficult?
There are lots of people and institutions who claim they will teach you how to get rich, but no-one teaches how to stay rich. Look at all the lottery winners and some of the world’s highest-paid sportspeople who lose everything because they were never taught the basics.
To stay rich you have to educate yourself and be humble enough to learn from your mistakes and from those of the people who have gone before you. Don’t be over-confident or arrogant and think that having money makes you powerful. Money and power are two different things.