Blog
Get Sorted: Why KiwiSaver balances go up... and down
Posted in Kiwisaver, Savings on
Quick question: what's the difference between a savings account and a KiwiSaver account? Short answer: when you put money in, the first always goes up, but the other goes up and down. That's no small thing. And while we personal finance folks like to go on about the magic of compounding for both saving and investment, sometimes we'd be better off pointing out how different the two are. The one caveat to saying that a savings account always goes up is inflation. Savings can actually roll backwards as well, when you bring inflation into the picture. You're adding money, but its real value and how much it can buy gradually becomes less and less. This is why we need investing.
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Can you afford to retire without a house?
Posted in Retirement, Savings on
For decades, the path to a comfortable retirement for middle-income Kiwis had three key steps: buy a house, pay it off before retiring, and save hard for as long as possible to amass a decent nest egg. But soaring home prices are making it harder to get on the property ladder, putting at risk the first step in that well-trod plan.
View moreThe Truth About Earnings and Stock Valuations
Posted in Savings on
We thought this article on Bloomberg was interesting and backs up our philosophy that you should never rely on just one methodology when valuing a stock.
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Ancient Greek money lessons
Posted in Retirement, Savings on
OPINION: Let me tell you a story about an ancient Greek hero who can help you get richer. It's Ulysses, a kind of Greek Maui, though without Maui's ambition, and with a much worse sense of direction. Ulysses was one of the Greeks who destroyed the ancient city of Troy, and then got hopelessly lost sailing home.
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How to save a first-home deposit
Posted in Savings on
The deposit required to buy a house in many parts of New Zealand looks more like a Lotto win than an amount you might save. In Auckland, the lower-quartile house price is about $680,000. That means, if you want a 20 per cent deposit, you will need $136,000. In Christchurch, first-home buyers need to save about $75,000 and in Wellington City, just under $100,000. So, how do you get there?
View moreWant to have a comfortable retirement? Here's how
Posted in Kiwisaver, Retirement, Savings on
Retirement - whether it's at 65, 67 or some other age entirely - probably seems a long way off. But if you can get on track now, your future self will thank you for it. Here's how to get sorted for retirement in five easy(ish) steps.
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Women fall further behind in retirement savings race
Posted in Kiwisaver, Retirement, Savings on
New Zealand's retirement savings gender gap just keeps getting bigger, new research shows. ANZ said, on current savings patterns, women were likely to retire with almost $80,000 less in their KiwiSaver accounts than men. General manager of wealth products and marketing Ana-Marie Lockyer said it was disappointing to see women falling further behind in their retirement savings. She said the average balances of women members of ANZ's KiwiSaver scheme, the largest in the country, were 19 per cent lower than men's. Women had an average $13,333 compared to $16,527 for men. A year ago, women were only 15 per cent behind.
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Perils of the passive strategy
Posted in Kiwisaver, Savings on
There has been a huge amount of media commentary on the relative merits of active versus passive investing, particularly in relation to KiwiSaver funds. Most media commentators, including Weekend Herald columnist Mary Holm, argue that passive KiwiSaver funds are better because they are cheaper. Holm maintains that active funds underperform passive managers on an after-fee basis, mainly based on United States research, and she repeatedly encourages individuals to invest through passive funds rather than active funds. But this debate should also include an assessment of fund managers as financial intermediaries. The argument should not be about fees only.
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Members may lose the ‘race to the bottom’ on fees, researcher warns
Posted in Kiwisaver, Savings on
A new analysis has debunked the assumption that low fees inevitably equate with better outcomes for KiwiSaver investors. In fact, the study, released by Australian research house SuperRatings last week, found there was “often an inverse relationship between fees and investment outcomes achieved by members”.
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Brian Gaynor: KiwiSavers throw away thousands of dollars
Posted in Kiwisaver, Savings on
The latest KiwiSaver data clearly shows that the scheme has been a phenomenal success with one notable exception: a large number of scheme members are receiving no advice or poor direction and are in the wrong funds. As a consequence, these investors are throwing away tens of thousands of dollars of potential retirement savings.
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