WealthDesign

I can understand If you feel a bit over the government selling state assets.  But the fact that the government has put assets on the market in a variety of ways has been good timing and a boost for the New Zealand stock exchange. This has created a win for the New Zealand tax payer and a win for potential investors.

Genesis Energy  is a solid business. It supplies 26.8% of the total New Zealand electricity market and 43.8% of the gas market. It pays strong dividends of around 13.5%.  In my opinion this share is worth having as part of a share portfolio.

Power Companies are great assets to have in a long term ‘buy and hold’ share portfolio.  The industry has high barrier to entry, tend to be inflation proof and recession proof and pays high dividends. 

The trick is not to be over weight in any one share. Today we have an abundance of power companies. Treat them as part of the portfolio. Don’t try and pick the “winner” but hold a percentage in each.  In ten years’ time, you will look back and think the price you paid was relatively cheap, and you will have had the benefit of strong cash flows from dividends.

If you want to talk about creating a New Zealand share portfolio, please do not hesitate to give me a call.

John Barber

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Lots of parents want to give their kids what they never had.  But where do you draw the line?  I recently came across Mr Money Mustache’s website, and he makes a good point not just about lavishing your kids with all the gadgets, toys and technology available, but also in regards to paying for weddings, gifting house deposits and paying for university.  You could well choose to do all these things, but how can you do so while making sure they learn how to make good financial decisions, and also learn to appreciate the gifts, rather than learn to expect them?

As Mr M says, “It’s all noble and generous-sounding on the surface. As a parent, you want to give your kids all the advantages you didn’t have when growing up yourself. You earn much more than your parents did at this age, and so it is appropriate for a person of your economic standing to splash it out onto your offspring. Isn’t it?

The only thing is, in most cases you’re creating a double whammy of wrongness. Wrong because you’re spending more money than necessary, which means incurring more debt, working longer, and having less time to live your own life. And more importantly, you are probably programming your kids to expect handouts, and displacing their own healthy learning, effort, and growth with the leather-upholstered La-Z-Boy of your easy flowing cash.”

Makes you think really. 

Regan Thomas

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The shadows of the 2008 global financial crisis (GFC) seems almost a forgotten part of history for some investors.  But it is time to be careful as an investor.

RETURNS COMPARED TO PRE-GFC HIGHS OF 2007/08

What this means is that share markets are above their all time highs.

Investors need to be wary of the potential impact of the changes going on in the US. The slowing of the economic stimulus and the potential rise in interest rates around the world will negatively impact on share markets and stock selection will again become very important. Blindly following the market could prove to be costly.

My advice is to think about where your money is invested and what would happen to capital values and cash flows when interest rates again hit 8.5%.

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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