Guiding principles


4 min read

The steps to financial success Have a dream and purpose Build a pool of money Educate yourself Invest your money well Magnify your returns Where can I learn?

Financial success in the dairy industry involves five steps. First, you need a motivating dream or purpose. This will encourage you to save money, invest wisely, and work harder. Second, build a savings pool by earning more than you spend. Develop good savings habits, budget effectively, and avoid credit card debts. Third, educate yourself to maximise your money's potential. Learn from successful individuals and build a support team. Fourth, invest your money well. Focus on assets that appreciate, understand compounding interest, and be patient. Lastly, boost your returns with sensible borrowing. Make sure your investments' returns consistently outweigh the interest rate on your loans.

Why can some people grow their equity to more than a million dollars, while others, diligently working, have only a few thousand dollars and quite a few debts?

The New Zealand dairy industry offers a wonderful lifestyle, career path and wealth-creating avenue for anyone willing to work diligently and develop their knowledge, skills and attitudes. Take advantage of opportunities presented.

Financial success in the dairy industry involves five steps.

These are the five steps that lead to financial success:

Have a dream and purpose

A big dream is a great motivator to provide you with the purpose and energy to achieve financial success.

What's your dream?

Your purpose or desire must be great enough to motivate you to set up a regular savings programme, learn ways to invest wisely, further your education, or go that extra mile at work to build your reputation.

Build a pool of money - earn more than you spend

Increase your earnings as an employee or employer through budgeting, setting targets, developing good savings habits, and not using credit cards.

How much can you save?

Complete a personal budget to know where you money is going.

Develop good savings habits

Some people are savers, some are spenders. Learn savers' good habits. Decide how much you can save a week or fortnight, and get this direct debited from your pay before you see it. Give the control of this account to someone who is great with money.

Do not use credit cards or hire purchase

If you can’t pay cash for something, then don’t get it. You will never get ahead if you are trying to pay the high interest charges for credit cards or hire purchase.

Spend some money on clothes and a good hair cut

Because finding the right partner is one of those other great lifetime decisions!!

Increasing your earning potential

For employees:

  • Become more valuable as an employee - increase your skills, your experience, qualifications and attitude
  • Build your reputation, networks and contacts - make yourself in high demand

For farm owners or sharemilkers:

  • Learn what it takes to drive a strong profit from a farming business
  • Understand the key principles of a highly successful pasture-based farming system focused on profit, generated by maximising pasture growth and utilisation via cows of high genetic merit
  • Get very good at budgeting – complete an annual budget and monthly cashflow, and monitor these monthly - use DairyNZ budget tools.

Educate yourself

Once you have started building a pool of money, the next step is learning how to get that money working for you. Spend time learning how to get on the +15% investment pathway.

What will you learn?

Study successful people who have travelled the +15% investment pathway and ask them what they have done, how they got started, and for recommendations.

  • Build your knowledge, skills, interests, networks and ability to find opportunities
  • Develop your financial capability – so you are able to evaluate opportunities
  • Learn what it takes to drive a strong profit from a farming business
  • Get very very good at budgeting
  • Build a successful support team around you – including an accountant, bank manager, farm consultant, and a team of superb farmers and friends
  • Read widely

Invest your money well

Get your money growing for you on the +15% investment pathway and off the ‘going nowhere’ 5% pathway. The two keys are getting a good rate of return (e.g. 10-15%), and having time for the investment to grow.

How will you get on the +15 percent pathway?

The gap between the 5% and 15% pathways is determined by how you position yourself, the strategy you take and by the knowledge, attitude, skills, habits and opportunities you choose to build. Develop your skills to find and evaluate opportunities and make good decisions.

Learn to invest wisely on the +15% pathway

Appreciating assets 

Invest in appreciating assets or good businesses such as rearing calves, sharemilking cows, leasing cows, house rental properties, commercial property and well selected shares.

Depreciating assets 

Money spent on machinery, cars, sound systems or the latest TV or mobile phone is not an investment. These are depreciating items and they lose value.

The power of compounding interest

Compounding takes time to snowball – even after ten years there is not a huge difference in the amount invested - but the differences become enormous after 20 years.


As long as you are saving well, you can relax and take time to learn how to get onto the +15% investment pathway.  Keep your money in the bank until you know how to invest well. Too many people lose their hard earned money by rushing into an investment, rather than taking the time to do it well. It is more important to learn about getting on the +15% pathway, than rushing to get on it, and making mistakes.

Magnify your returns with sensible borrowing

If you can find an investment where the rate of return is consistently greater than the interest rate, then it might be a great idea to borrow money to invest. You then have a bigger pool of money at work for you.

What can you do to borrow sensibly?

You can leverage up or magnify your returns if you have a greater pool of invested money. If your return on asset is less than the interest rate, i.e. you pay more to borrow the money than your investment is returning, then you will magnify the losses as well. Borrowing accentuates gains or losses made.

Where can I learn?

Formal training providers

Informal learning opportunities

Last updated: Sep 2023

Related content

Advice and Support


10 min read

Business foundations


7 min read

Contract Arrangements


2 min read

Farm Owner


21 min read



20 min read