Automated Advice and What it Means for You Financial advice is on the verge of major change. There is pressure to reduce the distribution costs of financial products which will ultimately make them cheaper and more accessible for a wider range of people. This change will also potentially drive a wedge between product sales and financial advice. A recent report from NZIER, Resetting Life Insurance, found that insurers pai...

Why Renters Need a Long Term Plan The rate of home ownership in New Zealand is falling. Just under 65% of households owned their own home at the time of the last census in 2013, and this is the lowest it has been since 1951. The rapid increase in property prices since 2013 has no doubt further eroded this percentage. The flip side is of course that more people are renting and either delaying the purchase of a first home o...

Avoid Costly Property Investment Mistakes The property market is on fire. The high rate of increase in property prices makes property an attractive investment option in the light of low bank term deposit rates and the current volatility of the share market. Investors are using the increased value of property they already own as security to borrow more at historically low interest rates. Of course there is a snowball effec...

Borrow with Caution When interest rates are low and property prices are rising rapidly, it is tempting to borrow more. There is a huge psychological effect on property owners when house values rise. They feel wealthier, and more confident. This can lead them to spend more or take on risky ventures and this often means borrowing money. It is hard to get through life without borrowing, but there are some basic principles to...

Annuities for Retirement Income Retirement is something to look forward to – a new way of being, and lots of new experiences ahead. However, there is one big concern, and that is making sure there is enough money to provide a comfortable lifestyle until the end of life. Accumulating money in KiwiSaver or superannuation scheme is straightforward; it’s just a matter of setting up a regular payment into the scheme where ...

Time to Review Your Tax The beginning of the new tax year is a reminder to check that your investments are being taxed at the correct rate. You can check the tax rates that apply to you online at www.ird.govt.nz. The Resident Withholding Tax (RWT) rate used for income-producing investments should be the rate that will apply to income you earn over and above your other income. KiwiSaver members or investors in any other P...

The Win-Win Strategy for Creating Wealth Jay Abraham, a well known American business consultant, once said “The key of life is value. Value is not what you get, it’s what you give. It’s figuring out what’s important to other people not just you. The real fast track for getting everything and more than everything you want is putting others ahead of what you want and focussing on their needs, their wants, their desi...

Spending Later Let’s face it; the word ‘save’ falls in the same category as diet and exercise. It’s one of those things that most people would like to do, but not now. One day. And even then, it’s something you might attempt but give up on. The word ‘spend’ sounds so much better! Somehow the word ‘save’ seems to imply going without, living frugally, not enjoying life to the full, buying cheap, low qualit...

Eggs in Baskets Time and again, despite knowing that putting all your eggs in one basket is a bad idea, investors lose money by chasing high returns or taking a gamble on a supposed ‘sure bet’. In the current environment of low returns, it is very tempting to look for opportunities to increase returns. This particularly applies to retirees who are struggling to make ends meet having seen their interest income fall to ...

Choose to Save Getting the right balance between enjoying life now and saving is easy once you understand that saving still allows you to enjoy life, but later. Saving is just deferred spending, and it needs to be broken into time-based spending categories which reflect your goals, that is, the things in life that are really important to you. For most people, there are four categories of saving: saving for unexpected esse...