Some need to know, with a bit of WealthDesign nice to know thrown in.

Considering signing up to Airbnb?

The Airbnb ethos resonates with New Zealanders – real people, real experiences – it’s just how we roll. I stay often at Airbnb places and think it’s an awesome addition to the accommodation industry.

More and more people are signing up to Airbnb, seeing it as a way to share their little corner of paradise, whilst earning a bit of spare cash.

There are some important things to know though, if you would like to become part of the Airbnb world.

  1. The revenue is income and subject to tax. Don’t think you can do a ‘cashie’ or you could run foul of the IRD. Consider running your Airbnb like a little side business. Keep records and claim whatever expenses you are legally allowed to claim. This way, you only pay tax on the profits.
  2. Make sure your insurance company knows you are listed on Airbnb. The last thing you would want is someone burning your house down and the insurer walking away on this technicality. Most insurers don’t cover intentional damage, however theft is covered. Ask your insurer about their policy around illegal drugs. You don’t want to become ‘cook-a-batch’ (as opposed to book-a-batch!), and find you’re up for expensive clean up costs, due to contamination.
  3. Check out the automatic insurance covers offered by Airbnb, as it may pay to carry these additional covers.
  4. Be careful who you invite into your home. This way you can mitigate many of the risks. I believe people are generally reliable and caring when they use Airbnb, but not all people, unfortunately!

Enjoy the Airbnb experience, yet be prudent about how you do it!

 

John Barber
WealthDesign – a life well planned

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There are plenty of ways to buy insurance these days  – and in this fast paced world of online solutions to everyday problems, you would assume that an online insurance purchase would have you covered.

However, you could well be wrong – very wrong.  And you won’t know until it comes to claim time, unfortunately. (The very reason you’re buying the insurance for in the first place.) 

The difference between insurance companies and their products is much more than just price. Little things like having the wrong word can be the difference between having a claim paid or not. A simple example is the difference between ‘own occupation’ and ‘any occupation’ within a total and permanent disability policy. Basically if you have the ‘any occupation’ policy, you must be unable to work again in any occupation to get a claim, where as ‘own occupation’ policies are just what it says, if you can’t work in your usual occupation ever again, you can claim. ‘Own’ and ‘any’ are tiny words in and of themselves, but they have massive ramifications at claim time.

One word could cost thousands.

Insurance portfolio structure is also important. If buying insurance online, would you know which covers to have, which not to bother with, what impacts increased excesses, or length of benefits and what stand down periods they have? These all can impact the overall cost of the insurance package.

Ownership of the policies is also important and understanding how this fits in with the other estate planning tools such as wills, is vital.

On top of all this, the difference between policy wordings is enormous and getting the wrong policy wording can also cost thousands, as you lose the ability to claim on the policy.

We pay for independent research so that we can compare insurers. Not only on price, but on policy benefits.  After years of helping our clients (both setting policies up and also at claim time), we know how to get things right.

Yes I’m biased towards insurance advice, however,  there’s a very good reason for it! Find someone who knows their stuff before embarking on buying insurance.

Don’t be fooled – cost isn’t everything!

John Barber
WealthDesign – a life well planned

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Is your insurer for sale?

At present, there are two insurance companies for sale. Both OnePath and Sovereign Life are on the market. They are owned by Australian banks (ANZ and Commonwealth Bank of Australia respectively).

It isn’t surprising the banking organisations are selling these assets as insurers don’t have the return on capital, like other parts of the banking businesses (lending for example).

Banks are in the transaction business while insurance companies are in the relationship business. Insurers rely on good relationships; products that meet the clients needs both today and in the future.  Banks specialise in transactions like lending, overdrafts and mortgages (one-off transactions).

With the potential sale of these insurance companies, we don’t know who will end up owning them, or what the outcome will be. What this will mean for their existing clients is yet to unfold.

If you want to talk over the impact of your insurer being sold, give us a call as we love to catch up for a chat.

John Barber
WealthDesign – a life well planned

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John’s to-do list for millennials

After last night’s workshop in Wellington, focusing on millennials and their finances, John has put together a to-do list. It’s aimed at getting you on the right track, if you’re a millennial or not.

  1. Do a goal setting exercise – where do you want to be in five years’ time?
  2. Get a Will and an Enduring Power of Attorney (EPA).
  3. Set up an insurance portfolio.
  4. Start a savings programme.
  5. Make sure your KiwiSaver is working as hard as you are.
  6. Get ongoing advice.

 

John Barber
WealthDesign – a life well planned

 

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