WealthDesign

Over the holiday season, we have all seen the demise of another well-known brand as Dick Smith was put into statutory management.  Kids lost the value of their vouchers and the press have had a field day, but there are some important lessons to be learnt.
A well-known brand means nothing if things go wrong.  Often goodwill is valued as an asset and hidden in the balance sheet.
Don’t believe the spin doctors.  How many times have we seen companies sold off by ‘merchant banks,’ fail badly?
Always buy shares in companies with real assets, not inventory.  Real assets aren’t normally going to sell at 30 cents in the dollar.
Beware of the debt trap.  Over the past ten years, a number of companies have been taken over by the banks, and shareholders have been left with nothing.
If you are going to invest in shares, do your research.  The internet is a great place to start.  The NZX has interim reports on file.  My advice is, don’t look at the glossy pages but go looking for the bad news.  For a start, what are the debt levels of the company like, is revenue increasing and what are the company assets?
Lastly, never fall in love with one or two companies.  Diversify and be interested where your money is invested.

John Barber 

WealthDesign – a life well planned

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So here’s the deal.  People who get financial advice for their investments, make smart financial decisions more often than those who don’t get advice.

Proof?  The number of investors who switch KiwiSaver funds because the markets are volatile has increase 500% on the back of increased market uncertainty.  Why is this not so smart? Because these investors have sold out of assets at a discount, and have missed the opportunity to buy assets cheaply.

It is understandable though when you can see your KiwiSaver balance gong down on your iPhone, plus you don’t have the insight of sound financial advice.  Losing money is never fun but investors need to remember, they don’t get the money today, they may have 25 years to go!   If you understand dollar cost averaging and how KiwiSaver makes money for you in tough times, switching to a conservative fund isn’t going to be in your best interests in the long term.

Advice counts! Talk to a Certified Financial Planner today about your KiwiSaver and make some smart decisions around your investment.  Remember, we’re here for the long haul, to help navigate the obstacle course that is life.

John Barber
WealthDesign – a life well planned

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Kiwis are a mobile breed – we love to take flight and nest down in locations all over the world.  Sometimes this is on a permanent basis, other times just for a year or two.  If you or someone you know is planning to head overseas, there are some financial matters that will need some attention.

KiwiSaver – in some instances you can take it with you, but keep in mind, there is some fine print you’ll want to know about, BEFORE you leave. 

House insurance – will you rent it out or keep it unoccupied for a while?  Check out the insurance implications.

Travel insurance – definitely not just for tourists.  In fact, you won’t want to get caught in a predicament overseas without it.

Life insurance – your existing life policy probably works wherever you live,  or some policies can be ‘suspended’ while you are away.

New Zealand life insurance companies always ask questions about residency, but few people have an idea what the implications are.  For example, if you are about to head off to Afghanistan to work in the ‘security’ industry, insurers would consider that an important titbit of information.

Before hopping on that plane, give us a call to ensure your financial matters are taken care of.  An hour spent with us can avoid time, suffering and money!

Regan Thomas
WealthDesign – a life well planned

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Money makes the world go around! Today, money has never been cheaper – for example BNZ have announced their lowest two year fixed rate ever recently, of 4.39%. Awesome! But before you rush out to go borrow some, there is a trick. You need to understand the difference between good and bad debt.

Bad debt is money borrowed on depreciating assets. It is debt paid out of tax paid dollars. And the very worst bad debt is money borrowed to spend on consumption (I can feel some people’s hearts sink!).

Good debt is tax deductible debt used to buy appreciating assets and with historically low interest rates, you can borrow money to make money.

An example of bad debt we often see is property investors with personal debt on their homes and free hold rental properties. A little smart planning could save these people heaps on their taxes. With a little planning we can transform bad debt into good debt.

We often see people who could increase their monthly mortgage payments by as little as $20 a week and save thousands of dollars in interest over the term of the loan.

If you have debt and you need to discuss how you can save money or plan smarter, give WealthDesign a call.

A little time invested today could save you thousands of dollars in the long run.

John Barber
WealthDesign – a life well planned

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A bankrupt’s KiwiSaver are off limits to creditors according to a recent Court of Appeal ruling.

This was tested in court recently when an official assignee tried to access two bankrupted KiwiSaver investor’s funds. The official assignee argued that the funds should be available under financial hardship but the Court of Appeal disagreed.

The key message of this ruling is that regular payments into KiwiSaver are protected for the intended purpose and are safe from creditors. This is a very important point as investor’s KiwiSaver balances start to become significant.

KiwiSaver is a really simple process, however, there is some important information that could significantly influence how successful your KiwiSaver is, which we know about and are keen to ensure you know too!  Planning prior to life’s events can make a big difference to your experience of life.  If you want to discuss the nitty gritty around KiwiSaver, give us a call.  

John Barber

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