I have had a few people starting to ask me this question recently, so I thought I’d put something together that will help answer this for everyone. It’s a totally fair question and I understand why people are asking! We are currently in a high interest rate, and highly inflationary environment, with interest rates on term deposits just creeping over 6%. We haven’t seen returns from investment portfolios at this level for a few years now (although equity returns this year have been very good so far), so it does look attractive. This is why I’d caution against long term investors switchi ..read more

Divorce or separation can be emotionally taxing, but it doesn’t have to be financially devastating. Two primary tools at your disposal are trusts and contracting out agreements. In this article, we’ll explain the differences between these options, helping you make informed decisions about safeguarding your assets.   Trusts: A Shield for Your Assets   A trust is a legal arrangement where one party (the settlor) transfers ownership of assets to another party (the trustee) for the benefit of specified individuals (the beneficiaries). Trusts can be an effective way to protect your asset ..read more

As parents, we want the best for our children, and sometimes that means providing financial assistance when they need it most. However, concerns about protecting this money, especially from relationship property disputes, is something I often come across. There are a number of different ways parents can lend or gift money to their children during their lifetimes while considering measures to safeguard these assets.   Gifting Money One straightforward way to help your children financially is through gifting. You can gift money to your child at any time, and it’s theirs to use as they se ..read more

Those following the news will have noticed that three US banks went into a government-controlled bailout this month, Silicon Valley Bank and two rival banks. Silicon Valley Bank was relatively big being one of the top 20 largest US banks. The Silicon Valley Bank was affected by holding too many long-term government bonds (fixed interest) that lost value as interest rates have increased over the past year together with an increase in withdrawal requests from its customers. Does that ring a bell? We have all been affected by losses on our bonds as interest rates rose over the pas ..read more

  1. Set some goals Where do you see yourself in the future? What are you trying to achieve? The most important start to getting on track financially is to know where you want to get to. You may want to: Retire early Travel lots Be able to help your children more Buy a business Maintain your health Have an emergency Fund Repay your mortgage by XX years old Many goals in life need money and a plan, but you need to start with the goal. Goals can be: Short Term (in the next 3 years) Medium Term (4-9 years) and Long Term (10+ years away) Ideally, you will have at least one goal in each t ..read more

  On November 15, 2020, the New Zealand Herald ran an article titled, ‘What negative interest rates would mean for borrowers and savers’. It said that the Central Bank was seriously considering negative interest rates as an option to stimulate the economy in the post COVID recovery. A mere 18 months later, the Central Bank raised the OCR to 2.5%, and indicted further upward moves were likely as outlined in its May Monetary Policy Statement1 The Reserve Bank Governor’s comment at the time was succinct and accurate, “We’re in a different world now.” Not unsurprisingly, financial markets ha ..read more

With KiwiSaver and investment balances dropping since the start of the year, there may be the temptation to reduce or even stop your contributions. Why would you keep putting money into something that was going backwards after all? Before making any changes, it’s important to understand what’s happening. When you put money into your KiwiSaver, that money is used to buy “units” of the KiwiSaver Fund. Each unit owns a bit of everything that the KiwiSaver Fund owns. For simplicity’s sake, let’s say that the KiwiSaver funds consists of a number of units, each costing $10. When you put money into ..read more

  We’re not exactly sure of the recipe required to bake fast rising prices into the economy but we’re pretty sure of the ingredients. You will commonly need – disruptions in free-flowing trade shortages in goods surplus money in the economy, such as that provided by financial stimulus packages   Between the effects of Covid-19, logistical challenges, worldwide massive government stimulus and now the war in the Ukraine, accompanied by sanctions, we can easily see why prices are increasing. There is just too much money chasing goods that are becoming rarer and more difficult to acqu ..read more

“What is your number?” That is the catch phrase of a popular advertisement that runs and re-runs amongst financial advising companies. The premise is a good one, namely that they are going to determine how much you need for retirement and then aim to help you hit that goal. These types of campaigns are popular as many people will have a jolt of panic at some point just past mid-life, where they think, “Will I have enough for my retirement? I’d better get prepared.” Having a target ‘number’ can help you to understand just how big the mountain you must climb, really is. Recently, Massey Univers ..read more

Achieving expectations and aspirations for retirement will be very challenging for the majority of New Zealanders unless they prepare and plan. That’s one of the main conclusions of the latest Retirement Expenditure Guidelines. The guidelines have been produced by Massey’s NZ Fin-Ed Centre and are sponsored by Consilium and Financial Advice New Zealand. They say the average retired household continues to spend in excess of NZ Super, highlighting the importance of preparing for retirement. They suggest most Kiwis will need to make provision for supplementary retirement income, in addition to w ..read more