The 'As If' Principle One of the most useful techniques for planning ahead with your money is what I call the ‘As If’ Principle. It is a really simple technique that clearly identifies in advance whether a specific goal is achievable, while at the same time, helping you achieve it! The time to use this technique is when you have a future goal which has the effect of either reducing your income or increasing your expen...

Manage Your Money Better Money issues are top of mind for most people, usually in the sense of worrying about money. Just like those piles of work papers that aren’t yet dealt with or the list of things that need doing around the house, money issues can drain your energy if they are not sorted. That’s why every now and then it’s a good idea to really focus on money, address the issues and learn ways of managing it b...

Opportunity Knocks Have you ever wondered whether you have made the right choices in life? How different could your life have been if you had made different decisions, and what you are missing out on? In economics there is term called ‘opportunity cost’. It is defined as the value of the next best choice you give up when you make a decision. Imagine, for example, you win lotto and have $100,000 to spend as you choose....

Asset Rich, Cash Poor There is nothing more terrifying than the prospect of running out of money late in life. Many elderly go without in order to avoid this situation and make their savings last as long as possible. Retirees living in their own homes are often asset rich yet cash poor. When the cash runs out, there are a number of options available to avoid living in poverty: Sell the house and buy a cheaper one to free...

Are You on Track? One of questions most frequently asked of financial advisers by clients who are mid-way through life, is “Am I on track?” While it is not exactly a mid-life crisis kind of question, it seems to arise at about the time people realise they are past the half way point to retirement. Your financial journey through life is a bit like running a marathon. When you are young and carefree the retirement finis...

Shrink Your Dumb Debt One of the biggest barriers to creating wealth is dumb debt; that is, high interest, short term, avoidable debt. Last week, the Commission for Financial Literacy and Retirement Income launched a campaign to educate New Zealanders on the implications of dumb debt and how to get rid of it. Research by Colmar Brunton shows that 42% of New Zealanders with credit cards do not pay them off in full each mo...

Generous to a Fault People come under financial pressure for many different reasons. For some, it is simply that they don’t earn enough to cover their living expenses. For others it is failure of a relationship or a business. Redundancy and illness can also bring about huge financial pressures. Another common reason why people find themselves struggling financially relates to their own generosity. There are certain grou...

First Train the Teachers Financial management skills are best taught at a young age, however despite the development of a curriculum for financial education, few schools have taken up the opportunity to teach kids about money, claiming lack of resources and a crowded curriculum. There is another very significant barrier to financial education and that is the lack of financial skills in teachers themselves. Teachers at all...

Retiring on KiwiSaver A KiwiSaver milestone will be reached in July this year, five years after KiwiSaver was first introduced. When a KiwiSaver member reaches the official age of retirement (currently 65) and has been in the fund for a minimum of five years they can choose to withdraw their funds or leave them invested in KiwiSaver.   When you have access to your KiwiSaver funds, your provider or adviser should let you...

Is Your Boss Short Changing You? Financial literacy is still a major issue in this country, particularly with regard to retirement savings. A recent online survey by ASB showed a huge gap for most people between the retirement income they want and what they will actually achieve at their current rate of saving. It seems most people have little understanding of how much money they need to save for retirement. Employers are...