WealthDesign

In life, timing counts. Who would care less if Jessie Ryder was out having a beer or two if it wasn’t for his bad timing – i.e. the night before representing his country?

In investing, timing matters.  You don’t want to put your life savings into the market on one day, just to find a week later the markets head south and you lose it all (if you needed to sell immediately).

With insurance it’s even worse. You can only buy insurance before the disaster and you never know when one will strike.  People think about a disaster as a fire or earthquake but in truth the worst disasters I’ve seen, are ones that impact on a person’s ability to work and earn on income. 

Don’t put it off – take action!  Once you’re covered, then you can forget about it and get on with enjoying your life – knowing that if a disaster did happen, you have the peace of mind of knowing you’re financially prepared.

John Barber

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Often people are confused about what a financial planner really does. They think it’s all about investing money and only the wealthy should talk to us. They think it is about getting the latest shiny investment.  This is miles from the truth. We are here to help people achieve their goals in life. This means looking at their individual situation and making suggestions of how they can make changes to create a better future, for them and their families.

Sometimes I feel that as an adviser, independent advice seems to be marginalised and the institutions want to reduce the options for the public to find good advice. Their idea of quality advice is a teller that can only sell their products, and that advice is a commodity like a cheque account, a cookie-cutter process that treats every person the same.

I believe our generation has been hoodwinked by the banks. For example we often find people in their mid fifties with large mortgages and little savings for retirement. Yes, they may be in KiwiSaver but they don’t have time to save enough to really support themselves in retirement.  Financially these people need to make some hard decisions. They may need to down size, repay debt and start serious saving for retirement.   The strategy may even include planning to work until age 70. It will often include making sure there is a back up plan if one’s health declines. It is vital to set out a strategy and stick to it and this is where having a qualified experienced adviser is vital, someone who has your back and is here for you for the long haul.

It’s not about shiny investments or selling a product. It’s not about trying to get the last inch of performance out of your money, it is about working out what is right for you and helping you taking action, over your lifetime.

Bankers are great at banking.  Financial advisers are great at giving financial advice.  Horses for courses.

John Barber

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If you have worked in the UK or moved to New Zealand and have a pension scheme in the UK, you need to take notice.

The UK pension rules are changing on the 31^st March 2014 and the tax treatment of those funds, if moved to New Zealand, will be vastly different than they are today.

There are 48 registered schemes where you can transfer your pensions into but it must be done before March. Not all of them are top quality and some are down right dodgy. The fees to the uninformed can be extortionate.

It’s best to talk to a professional. UK pension transfers are part of an overall retirement  plan, which needs managing.  Give us a call; we’re here to help.

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In my opinion education is one of the greatest gifts we can give our children. The ability to be strong, independent adults is a founding principle for their lives and having the necessary skills and education to be productive, is a vital part of this.

The fact is we now live in a world where nothing is free, including education, and unfortunately politicians and the press fail to emphasis this fact. We are following the USA system, where higher education is becoming increasingly expensive. With two daughters almost out of the university system, and seeing the level of student loans our university graduates are saddled with, I’m very aware that New Zealanders need to save for their kids’ education.

My advice to new parents today is to start a scholarship fund and put small amounts away over the next 18 years. Don’t touch it and you will have some peace of mind when you get to the expensive end of parenting!

John Barber

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 Recently in the NZ Herald, some top financial commentators have highlighted five common misunderstandings held by New Zealanders. Here’s our bite-sized overview:

To join KiwiSaver you have to have a job

No!  KiwiSaver isn’t just limited to the employed.  Anyone under 65 can join KiwiSaver – employees, self-employed, stay-at-home carers, beneficiaries, and kids.  As long as you have permanent residency in New Zealand you qualify. 

The government has your money in an account

Again – no!  It’s your money.  There are many KiwiSaver funds, operated by fund managers who are investing the funds for the members.  Only the individual members can access their funds (for first home purchase, or once they have reached 65), as the accounts are held in the members’ names only.  In essence it’s like your money in your bank account – the only difference is, you can’t take out money, you can only put it in.

You have to get out at 65

Yes it’s true that if you remain working after 65, your employer doesn’t have to contribute any longer, and you also won’t receive member tax credits from the government. However, you don’t have to shut up your KiwiSaver account, you can use it as a tool to manage your finances.

It’s a savings account

No, you can’t withdraw funds whenever you want.  You can use the money for a first home deposit, or under hardship circumstances, although neither is a guarantee that you can withdraw funds; there is fine print. If you join between the ages of 60 and 64, you need to leave your money in KiwiSaver for five years.

You get the best return in default funds

Your KiwiSaver needs managing, pure and simple.  Funds can fall in value and it’s important to seek out professional advice from a reputable, authorised financial adviser.  Once a member of KiwiSaver, you essentially become an investor.  Investors get financial advice to maximise their investments.  This isn’t an expensive process (which is perhaps another common myth held by many New Zealanders!).

We can explain KiwiSaver in a way that it’s simple and relevant to your personal situation.  Also, we believe no question is a silly question.  Give us a call!

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