How To Build Wealth In New Zealand
If you ask 100 New Zealanders why they are buying lottery tickets, most will say some version of:
"God it would just be so nice to be rich."
Behind that word "rich" there is usually something specific - freedom to stop working, travel when you like, help kids with housing, not worry about every bill.
So the real question is not just "how do I get rich?"
It is:
"How do I build enough ownership so that my money works harder than I do?"
Because that is the bedrock of wealth in New Zealand or anywhere else: ownership.
Ownership of productive assets
Ownership of your time
Ownership of your decisions
A salary is important, but a salary alone rarely makes people truly wealthy. Salaries are what you trade your time for. Ownership is what lets your money earn money while you sleep.
What Counts As "Investments"?
For this blog, when we say investments, we mean any asset that:
You expect to make you money over time, and
Does not require your constant presence to earn that money.
That might be:
A rental or commercial property
A small business you own
Shares on the NZX or overseas sharemarkets
A share of a medium or large business you have built
Units in a managed fund or ETF
Cash in a bank account is usually not an investment. It has a role, but after inflation and tax, it is mostly just stored purchasing power.
The Six Levels Of Investment Wealth
Let us define the Levels of wealth based on invested assets only. Ignore the house you live in for a moment and think purely about your investment portfolio or business equity.
Level 1 - Less than $10,000 invested
Level 2 - $10k - $100k
Level 3 - $100k - $1M
Level 4 - $1M - $10M
Level 5 - $10M - $100M
Level 6 - $100M+
These bands match how different life feels at each level.
What People Usually Mean By "Rich"
When most people say "rich", they are not talking about:
Having $200k in KiwiSaver, or
Having a $1m house with a $600k mortgage.
When people talk about being rich, they are usually picturing Level 5 wealth:
$10M+ in assets
The kind of wealth where you could spend $400k on a car and it would not meaningfully change your long term financial position
You do not need that to live a great life. But it is important to be clear:
Level 3 - Comfortable, on track if managed well
Level 4 - Financially independent, especially if spending is measured
Level 5 - Multi generational wealth territory
Who Can Reach Each Level In New Zealand?
Let us be blunt and kind at the same time.
Level 3: Widely Accessible
With sound financial management and sensible life choices, Level 3 ($100k - $1M of investments) is accessible to:
Many average income individuals over a working lifetime
Many couples who avoid major financial blow ups
It does not require spectacular luck. It does require decades of:
Spending less than you earn
Investing regularly in productive assets
Avoiding big mistakes such as speculative gambling, unmanageable debt, or chronic lifestyle creep
Level 4: Accessible For High Income Earners
Every level up to and including Level 4 ($1M - $10M) is realistically accessible for:
High income individuals in New Zealand (around $150k+ per year)
High income couples ($200k+ combined)
If they:
Maintain a high savings rate
Invest in broadly diversified assets
Avoid recurring "reset buttons" like constant car upgrades, divorces with messy finances, or failing to insure against major risks
This path is not easy, but it is straightforward.
Level 5: Why Salary Alone Is Not Enough
Level 5 ($10M - $100M) is a different game.
Could a surgeon on $500k per year get there purely on salary? It is mathematically possible, but consider what it would take:
Saving perhaps $250k per year for 20+ years
Modest lifestyle compared to peers
Exceptional investing discipline
No major financial disasters
Most people in very high earning roles:
Work long hours
Burn a lot of energy
Use some of that income to compensate for the pressure they are under
So while Level 5 can be reached from a very high salary, in practice it is rare.
In reality, Level 5 is primarily reached through business ownership or concentrated equity in a business that scales.
Why Business Ownership Creates Most Very Wealthy People
Here is the key idea:
Salaries are linear.
Business value is non linear.
The Power Of A Liquidity Event
Imagine you own a specialist business in New Zealand.
It earns $5,000,000 per year (after salaries, and costs of running the business)
You are in a niche with strong demand
In many industries, that business might be valued at 3 times earnings or more.
Value of the business: roughly $15,000,000
If someone buys it, you experience what is called a liquidity event - the value of your ownership in a business valued on paper quickly turns into cash you can use. Something liquid that can now be spread around or deployed.
That single transaction can move you from:
Level 4 to Level 5 instantly
A "well off" household to a "multi generational wealth" household
This is how many wealthy families are created.
"Why Would You Sell A Business Making $5M A Year?"
People ask this all the time. Reasons include:
Health issues or burnout
Desire to reduce stress and responsibility
Wanting to diversify risk away from a single business
Family reasons, relocation, or simply wanting a new challenge
From a wealth point of view, selling part or all of the business:
Locks in the value you have built
Lets you diversify into other assets
Turns "paper wealth" into liquid, usable capital
Not every business gets a big exit. Many never sell, some close, and some fail. That is the risk side. But when it works, this is the engine of Level 5 wealth.
The Three Main Paths To Wealth In New Zealand
Not everyone wants Level 5. Not everyone wants to build a business. So what does a realistic map look like?
Think of three main paths:
The Professional Path - salary and investing
The Property Path - using leverage sensibly
The Business Owner Path - building something saleable
Most New Zealanders will mix two or three of these at different points.
1. The Professional Path - Level 3 and 4
This is the path for most:
Build skills in a field that pays well
Increase your income over time
Keep lifestyle inflation under control
Invest consistently into high growth or aggressive diversified funds, KiwiSaver, and sometimes property
On this path:
Level 3 is expected if you do it for long enough
Level 4 is very realistic for high earners who save and invest well
Level 5 is unlikely without something extra such as equity in the firm, or a side business that becomes meaningful
2. The Property Path
In New Zealand, property is a big part of how people think about wealth.
Property can accelerate wealth when:
You use leverage responsibly
You keep enough buffers for vacancies, interest rate rises, and repairs
You treat it as a long term, business like activity
Property can also destroy wealth when:
You have too much debt applied to the property
You buy speculative assets hoping to flick them quickly
You rely on constant capital gains instead of cashflow and fundamentals
You get unlucky with a prolonged property market downturn or face a major adverse event
It can be a powerful tool, but it is still just one type of ownership.
3. The Business Owner Path
This is the most powerful and the most demanding path.
It requires:
Skills that people are willing to pay for
The ability to build systems, not just work harder
Resilience through tough years where income is uncertain
Willingness to hire, train, and manage people
When it works, you get:
Profits along the way
The possibility of a significant exit later
A chance at Level 5+ wealth
When it does not, you might end up with little to show financially, but with skills and experience that still have value.
A Simple Roadmap: From Level 1 To Wherever You Want To Go
You do not need to decide today whether you want Level 3, 4, or 5. The early steps are almost identical.
Stage 1: Foundation
Your job here is not to get rich. It is to stop going backwards.
Clear high interest consumer debt first
Build a 3-6 month emergency fund
Sort basic insurances so a disaster does not destroy your wealth
Join KiwiSaver and make sure your fund choice matches your time horizon and risk tolerance
Stage 2: From Level 1 To Level 3
You are building your first serious capital base.
Aim for a consistent savings rate - often 15% - 30% of income for those who want to move faster
Invest regularly into diversified, high-growth, low cost funds
Importantly, diversified funds falling for 1-5 years in a row is common. The solution to this issue is to continue investing into the falling prices. Most gains are made after these periods and full recovery tends to occur around 3-12 years after the first negative year.
Keep lifestyle increases smaller than income increases
Avoid major financial blow ups including speculative punting, lifestyle debt, regularly purchasing new cars
If you stick with this for long enough, Level 3 is almost inevitable. The main risk is quitting early or blowing yourself up financially along the way.
Stage 3: From Level 3 To Level 4
Now you have a real base. Your decisions start to matter more.
Intensify your focus on return on effort - ask: "What skills or moves could make my time more valuable?"
Seek ownership exposure:
Shares or units in productive businesses
Sensible property where appropriate
Equity in your own firm or a business you help grow
Start thinking in terms of systems, not just hours. How can your work scale without you doing every task?
At this stage, wealth starts to compound meaningfully. You may not feel "rich", but you will feel "safer".
Stage 4: Choosing Whether To Chase Level 5
This is where the path splits.
If your aim is:
Security
Time freedom
The ability to live well, help family, and give generously
Then Level 4 is more than enough for most New Zealand households, if managed well.
If you want Level 5 (or 6), understand clearly:
The route almost always involves concentrated ownership of a growing business or large scale property ventures
The risk is higher, the time commitment is larger, and the outcome is far less certain
You are choosing a more entrepreneurial life, not just a bigger bank balance
There is nothing morally better about Level 5 than Level 4. It is just a different game with different rules.
The Mindset Shift: From Earner To Owner
Wherever you decide to stop on the ladder, the mindset that matters is this:
Earner mindset - "How do I make more salary?"
Owner mindset - "How do I own more of the things that produce income?"
In practice that means asking questions like:
"What skills would make me more valuable and more in demand?"
"How much of each extra dollar can I keep and invest rather than spend?"
"Where can I take on sensible, calculated risk instead of avoiding all risk?"
"Am I slowly buying more ownership in productive assets, or just upgrading my lifestyle?"
Get those questions right, and New Zealand becomes a pretty good place to build wealth.
Final Thought
Getting wealthy in New Zealand is not about finding a secret product or timing the market perfectly.
It is about:
Building a strong financial foundation
Raising your income potential
Converting a portion of that income into ownership of productive assets for a long time
Deciding consciously how far up the wealth ladder you actually want to climb
You do not have to chase Level 5. But if you understand how Level 5 wealth is really built - largely through ownership and occasionally through big liquidity events - you can make clearer, calmer decisions about what "rich enough" looks like for you.