WealthDesign

We are often asked to insure people’s assets. They always insure their homes but often forget about their largest asset – the ability to work.

Every working New Zealander is covered by ACC up to 80% of their take home pay. But are you aware of the ACC cap of $91,014 per year? High income earners are capped, so if you are earning over $109,000, you are not going to get 80% of your salary in the event of an accident.  This highlights the need to consider private income protection cover, to make up the shortfall.  Your costs will still remain the same, so having your costs covered during any health challenge will bring peace of mind.

Are you aware that different insurance policies have different policy wording relating to ACC payouts? In some cases, all of the ACC payment comes off anything that the insurance company will pay.  But this isn’t the case for all companies.  This is where having the right insurance, with the right insurance company becomes vital.

If you have income protection, you need to talk to us about checking the wording. If you don’t have income protection insurance, then you really need to talk to us!

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MTC is a great sweetener for KiwiSaver scheme members.  As long as you have saved $1,042.86 by June 30th each year, you receive a full tax credit of $521.43.  For a number of reasons, you may not have hit this target but it isn’t too late.  If you haven’t saved this amount during the year, you can still make one off payments to maximise the tax credits.  You can either send a cheque or pay IRD directly or go via your KiwiSaver provider.

If you want to talk about your KiwiSaver or do not know who it is with, do not hesitate to call the WealthDesign office. We have the latest Morningstar research on all the KiwiSaver funds so you can see if your fund is right for you.

John Barber

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It’s often overlooked because it’s not particularly sexy to mainstream investors, but there is huge opportunity in global farmland and sustainable farming.

You see, global population has increased at a staggering rate over the past century, with an increase of one billion in the past decade alone and a projected world population of nine billion people by 2050. Yet today’s global food production continues to leave over a billion people undernourished.

There has also been a proliferation of a new middle class with increased purchasing power in emerging markets, coupled with a shift in dietary trends, which has increased the demand for meat.

This global population growth and an increasing reliance of the global livestock industry on grains for feeding its livestock has, in turn, led to an increased demand for grains that will continue to trend upwards.

Add to that the millions of acres of land lost to urbanisation every year and the negative impact of extreme weather events, soil degradation, water scarcity, and rising temperatures on agricultural productivity.  Then there’s increase demand for biofuels, and the ‘finite’ nature of arable land to meet this ever-increasing global demand, and you’ll begin to understand why global farmlands — a prime asset — continue to be an attractive investment on a global scale.

On a local scale, we are starting to see a move into farm syndication that will allow investors to invest directly into land. Today farm syndication makes up 7.1% of all New Zealand farming operations. The fact is that not all syndicates are as good as another and prudent investing is wise.  If you would like to discuss what is available, and how best to take advantage of it, please do not hesitate to give me a call.

John Barber

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The world of farm business is changing. In the past, if a farmer wanted to expand, he called the bank and borrowed the cash. Today around 7.1% of all farms are some form of equity partnership. Farmers are finding it is better to be part of something rather than risk all by over exposing themselves to any lender.

These investment structures are a joint venture between groups of individuals and can range from owning just the land to being part of the land and farming business. All equity partnerships aren’t equal and investors need to be wary. One needs to understand what they are investing into. Farming is a long term investment and the asset liquidity isn’t great but it can be very profitable over a ten year period. It is important to do due diligence with an informed third party.

It is important to understand the costs, both up front and on going.  Good governance is also vital.

My background as a Lincoln graduate, farmer and a qualified financial planner, puts me in a good position to assess these opportunities.  If you want advice on how to invest into farming by direct ownership, please give me a call.

John Barber

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It’s been a while since New Zealand could boast being one of the best economies in the world, but our economy is in a sweet spot right now. It is great to be able to quote the positives and there are a number of positive factors at play.

1. Immigration and the impact of Kiwis coming home.
2. The Christchurch rebuild is solidly underway.
3. Auckland new home building is start speed up.
4. The government is focused on increasing infrastructural work.
5. Commodity prices are strong feeding which feeds a healthy rural sector.

Normally positives are off-set by some negatives but the only negative I can see at present is our strong New Zealand dollar. This has hurt some of our export sector but we are lucky that New Zealand supplies what China (our largest trading partner) wants.

Who said Aussie was the lucky country?

John Barber

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