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

Operations are expensive!

Every week, one of our clients is unfortunately in the office organising the paperwork to claim on their health insurance, to cover their medical costs.

We’re a fan of medical insurance – as we’ve seen what happens to people without it.

Check out these examples of the current costs of some surgeries:

Cataract surgery                           $4,300 – $5,200
Endoscopic sinus surgery         $12,000 – $37,000
Wisdom teeth extraction               $3,000 – $5,000
Angioplasty                               $17,000 – $27,000
Single valve heart surgery        $48,000 – $60,000
Heart by-pass                           $35,000 – $50,000
Mastectomy                              $12,000 – $15,000
Hip replacement                       $20,000 – $27,000
Robotic prostatectomy             $30,000 – $45,000

New Zealand has an amazing health care system, but unfortunately, it is under pressure. Health insurance allows you to by-pass the waiting list, and this could be vitally important to your health at some stage in the future.

If you don’t have health insurance, give us a call. And if you do have health insurance, then let us check your premiums, to ensure they aren’t running away on you.

John Barber
WealthDesign – a life well planned

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Nothing stays as it is today – change is inevitable, and change in the global markets is on the way.

In good times, it seems investors believe that these times will always last and in bad times, investors think that things will only get worse. The problem with this is that in good times, uninformed investors don’t look at the fact that assets are becoming over valued, so happily keep investing, ignoring the risk that the market could change for the worse. In bad times, they don’t go looking for bargains.

The latest Morningstar economic briefing highlighted the fact that assets across the board now look expensive. With around $40 billion dollars invested in KiwiSaver schemes, it’s time for kiwis to concentrate on the risk that KiwiSaver portfolios could drop dramatically, if the world economy changes. Today people have KiwiSaver scheme balances that are often worth more than their car, and their KiwiSaver balance can make up a fair amount of their savings.

The markets never stay the same and turn they will. It’s been nine years since the last major economic meltdown, and today we have very high political risk, and potential military risk around the globe.

It is time to get advice. Don’t wait and hope that the scheme managers will provide you with individualised advice; they just don’t have the staff, time or reason to do so. Advice is cheap (in comparison to not getting any), believe me.

So don’t wait until you hear news that the world markets have gone pear shaped. Get individualised advice from a qualified financial adviser; one who is transparent and working on your behalf (not on behalf of the fund managers). Get yourself in the right position to take advantage of the markets, no matter what they are doing.

We invest in independent research to back our advice up. We make the complicated simple, so let’s have a chat. You’ll be surprised how we can make a difference in your life.

John Barber
WealthDesign – a life well planned

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Today’s best kept KiwiSaver secret

Today there is over $36 billion dollars invested into KiwiSaver schemes. Often investors have thousands of dollars invested in their KiwiSaver scheme, and don’t even know where their money is invested, as it isn’t right underneath their nose on a day to day basis.

As an investor, I like assets that have a capital base and a known income source, so moving my KiwiSaver scheme to a fund that invests solely in Australasian listed property, makes sense to me. The great thing is that the property stocks have pulled back in value and NOW is a great time to move into the market.

The fund I have selected isn’t widely advertised and only has $16.1 million invested, compared to the $7.4 billion invested in growth assets in various schemes. Just because people don’t know about this fund doesn’t make it wrong, it’s just that the average investor isn’t thinking about their KiwiSaver scheme balance yet.

While you can’t use past performance as a guide to the future, you can use it as a consideration. You also need to consider fees and volatility. In my opinion listed property stocks will always have less volatility than equities, as their underlying assets are real property. If you then consider currency risk, having funds in the local market again reduces this risk.

A positive thing about local listed property stocks is that you can research the sector and make your own decisions, whereas growth funds can be invested in anything and everything. There is no clarity around investing in growth funds, so if you are an ethical investor, local listed property stocks could be the answer for you.

Performance Comparison

Fund                          1 yr return      3 yr return       5 yr return  

Av. Growth Fund          3.7%                  8.5%             11.1%            
Aus. Property Fund      6.0%                13.5%             15.1%

(with fees generally being similar between the two types of funds)   

If you would like more information, contact me at WealthDesign; I’m happy to discuss this fund with you and how it would work in your situation.

john copy

John Barber
WealthDesign – a life well planned

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The shape of our families in 2017 looks somewhat different than the family shape in 1977. Today many families are blended families and often with more than just one set of children.  Blended families can make financial planning just a little complex!  Often there are issues around how assets are split if one or both partners die untimely. 

We are now seeing KiwiSaver scheme balances getting up to the stage that they need to be considered within the estate planning process too.

There are legal issues and often people don’t want to open the door and play the ‘what if game’, but from my experience, planning for the worst and expecting the best is always best done before a crisis.

Once you can articulate what you want to happen, planning requires an input from lawyers. One of the largest issues we see is that people get the first two parts right, but never finish the paperwork. The outcome can be a basket full of pain, despair and wasted money.

As financial planners, we have experience in organising this process, and understand where insurance can play an important part.

Expect the best and plan for the worst – give us a call today – we make the complicated simple. It’s just what we do.

john copy

John Barber
WealthDesign – a life well planned

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The KiwiSaver HomeStart grant is designed to help eligible first home buyers with a grant up to $5,000 per individual towards an existing home, or up to $10,000 for a new build. This, on top of the ability to access their KiwiSaver scheme balance, has helped thousands of kiwis buy their first home.  There are around 140 grant applications per week processed by Housing New Zealand.

It’s great, in fact it’s brilliant in my opinion, but there is a problem. The applications get declined – at a rate of one in twenty!  That is 28 applications per week, where potential first home owners are left bitterly disappointed.

This can be for a number of reasons such as already owning land or property, living with someone who has an interest in a property or just not getting the application in on time. It can be mistakes by lawyers not getting the paperwork into Housing New Zealand in time or just sloppy handling of a vital piece of the puzzle.  Another overlooked issue is that KiwiSaver investors have had to pay a minimum of 36 regular payments, and KiwiSaver payment holidays can mean applications are being declined.

These people may miss out and may never get the chance again. Once settlement has occurred, you can’t access your KiwiSaver balance, or the grant. There are numerous stories of people going into unconditional contracts to settle on homes, only to find they can’t access their KiwiSaver scheme balances, leaving them short of cash on settlement day. An example was a guy who had transferred his Australian superannuation to his KiwiSaver, not knowing that he couldn’t use these funds to purchase a house. He happily went unconditional, but couldn’t access all of his KiwiSaver, leaving him short on settlement day. Again, people don’t know that they can’t use their Australian superannuation to buy a first home, even if it is in their KiwiSaver scheme.

My advice is to talk to someone who knows what the rules are. Don’t leave the paperwork to your lawyer; you control the process, to ensure you don’t receive a shocking surprise on settlement day.

We are happy to help with advice – forewarned is forearmed, so give us a call, and we’ll talk you through the process.

john copy

John Barber
WealthDesign – a life well planned

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