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  1. #451
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    Quote Originally Posted by winner69 View Post
    Percy ..I hope your daughters are eternally grateful for your support.

    Our kids bought houses in “partnership” with us / jointly owned.

    Now they get grumpy when they offer to buy us out and I say no - such a good investment why should we “sell” I tell them
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  2. #452
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    Quote Originally Posted by winner69 View Post
    Percy ..I hope your daughters are eternally grateful for your support.

    Our kids bought houses in “partnership” with us / jointly owned.

    Now they get grumpy when they offer to buy us out and I say no - such a good investment why should we “sell” I tell them
    I hope you're getting a decent rent, with annual increases, for your half.

  3. #453
    Gnawing on Bones Beagle's Avatar
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    Quote Originally Posted by percy View Post
    You don't know how lucky you are..!
    25 years ago we fronted up with the deposit for daughter's and Gunna's house.
    2 years ago we fronted up with the money to pay out Gunna's half as the marriage was over.
    2 years ago we fronted up with the balance the daughter owed the bank,as there was no way she could run the house with her daughter,and pay a mortgage on the wage she was on.
    Just over a year ago I gave her my old car,yet I continue to pay all its costs,insurance,maintance,and petrol.
    The other daughter lives in a modest one bedroon flat,the mortgage of which we paid off about 5 years ago.
    Retirement.My wife and I live very modestly.We downsized about 30 years ago,into a ownership flat with no mortgage.I ran my business from home,with next to no overheads,just petrol for the van and the phone bill.Just kept plugging away at the sharemarket,and continued to work until I was 69 as I loved my job.With dividends,earnings,super.and a great run on the market I retired comfortably.
    So I think if you can live within your means, and pay off your house, and invest wisely you can look forward to a good retirement.
    If you are flash big spending trippers you will need about $4 mil invested,plus a mortgage free home..
    Sensible and wise,a bit over $1.2 mil invested,plus a morgage free home.
    A bit short.Downsize to a modest house with no mortgage or into a retirement village,and hopefully $200,000 to $400,000.invested carefully.
    From what I hear most people retire with a mortgage free house, and are lucky to have between $50,000 and $100,000 of
    savings.
    ps.A friend of mine owns rental properties.Rents one to his son.
    Wish we had done the same with daughter and Gunna.
    We know how blessed we are but somewhere along the line I failed my kids a bit in that I didn't teach them how to invest and how to think long term. They are young enough, (late 20's) so there is time but there are other issues to deal with at this stage.

    Thanks for sharing your experience. I am privileged to see some interesting things in terms of how some clients handle the whole passing on of wealth thing to their kids. What I have seen leads me to the conclusion that if you make it too easy for them they don't appreciate it. Here's a classic illustration. A very good friend of mine was given an Auckland house outright as a wedding present when he was in his early thirties. Every child of that family he married into was also given an above average house outright when they were married, in total 7 houses, (yes the parents were extremely wealthy after selling a plastics manufacturing business in Ireland for $26m pounds.


    Mr X's psychology was that if you give your kids and their partners a really good head start in life they have a tremendous platform to build their future upon. In the ensuing years, (and remember their are 7 kids and their partners making decisions here so we have an interesting sample size of 14 participants, every single family proceeded to live the high life by drawing down mortgages on their debt free home for fancy cars, overseas trips...you name it. Once they got addicted to "consumerism" for want of another word they carried on like drunken sailors drinking sea water wanting more and more. Twenty years later not one of those kids still has their house. Most of the marriages have broken down and Mr X refuses to help any of them in a really major way any more, although he does usually give each of his kids about $10,000 per annum just before Christmas.

    I share this most interesting of stories because it teaches us an interesting life lesson. Human psychology "is easy come, easy go" None of those kids or their partners truly understood the tremendous value of what they'd been given and the huge leg-up in life they'd received. This just one of many stories I could share so my opinion of this is base d on a vast number of examples I have seen with how clients handle wealth transfer.

    My smartest clients partner with their kids in terms of helping them save for their deposit. They know that to help too much is to undermine their own kids sense of achievement. When our twenty somethings sort their lives out we'll help them and not before ! Thing is they know they have plenty coming when we pass on so whether they do ever get some backbone or not remains to be seen.

    Good on you for helping your kids out but I can't help wondering if they have any clue how fortunate they are to have a dad like you to do that for them ?
    If I was to give my kids anything meaningful at this point it would be straight down a rat hole of one sort or another...probably best I don't say any more on that subject.
    Last edited by Beagle; 31-12-2018 at 10:11 AM.
    No butts, hold no mutts, (unless they're the furry variety).

  4. #454
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    Quote Originally Posted by percy View Post
    ......A friend of mine owns rental properties.Rents one to his son.
    Wish we had done the same with daughter and Gunna.
    Have done the same, with 3 rentals now rented to family. One was residential but converted to commercial lease (workshop and storage) last year.

    Worked perfectly when partner of one left in not uncommon circs (a 3rd person involved), announced was taking over the house. Ah, no.

    Tax effective but need to take care the paperwork is meticulous and the rent set within reasonable parameters in case IRD decides to take a look.

  5. #455
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    Quote Originally Posted by Beagle View Post
    ..... I am privileged to see some interesting things in terms of how some clients handle the whole passing on of wealth thing to their kids. What I have seen leads me to the conclusion that if you make it too easy for them they don't appreciate it...... .
    Interesting stories, beagle. Wealth transfer is something I have given a lot of thought to. Along the lines of hope for the best, plan for the worst. In my case it has involved quietly offering financial education over quite a few years, relating to property, equities and schemes like Kiwisaver.

    Find that Sharesies works well for the millennials - they get it because it's on their phone and they build knowledge fairly quickly about different risks and options. For presents I offer cash, actual stuff or Sharesies deposit and some are starting to choose Sharesies. Cool eh!

  6. #456
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    Quote Originally Posted by artemis View Post
    Interesting stories, beagle. Wealth transfer is something I have given a lot of thought to. Along the lines of hope for the best, plan for the worst. In my case it has involved quietly offering financial education over quite a few years, relating to property, equities and schemes like Kiwisaver.

    Find that Sharesies works well for the millennials - they get it because it's on their phone and they build knowledge fairly quickly about different risks and options. For presents I offer cash, actual stuff or Sharesies deposit and some are starting to choose Sharesies. Cool eh!
    Cool...thanks for sharing. We try and stick to actual stuff at this stage...stuff that can't be sold or covered in to cash for drugs, alcohol or cigarettes....sad but that's our reality at this stage. Hopefully the new year will see some changes...
    Last edited by Beagle; 31-12-2018 at 12:15 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  7. #457
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    thanks very interesting stories of passing on wealth. If your kids will get your money one day anyhow, isn't a good idea to gift them a deposit for a house so they get the benefit when they actually need it? especially for a house deposit

  8. #458
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    Quote Originally Posted by voltage View Post
    thanks very interesting stories of passing on wealth. If your kids will get your money one day anyhow, isn't a good idea to gift them a deposit for a house so they get the benefit when they actually need it? especially for a house deposit
    I still believe in partnering with your kids as the best way as without any effort on their part whatsoever they have no skin in the game. There is NOTHING, ABSOLUTLY NOTHING like having some of your own skin in the game to make one think responsibly ! (Its impossible to overstate the importance of this). Even if partnering is matching each of their dollars with several of your own this is FAR better than just handing it to them on a silver platter in my opinion. I have seen too many of my clients kids wreck houses with drugs, wild parties, methamphetamine, lack of care and maintenance...you name it...nothing to lose so why worry about maintenance, paying the rates or the mortgage ? If kids can't be bothered making at least some effort to save some of the money for the deposit will they have any backbone when it comes to looking after the property with painting and maintenance, making the mortgage payments or paying the rates and insurance ? The evidence I have seen strongly suggests to me that talk is cheap. Kids saying they love and respect you and will look after the property means very little if they don't have their own skin in the game.
    Last edited by Beagle; 31-12-2018 at 01:01 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  9. #459
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    Quote Originally Posted by artemis View Post
    Have done the same, with 3 rentals now rented to family. One was residential but converted to commercial lease (workshop and storage) last year.

    Worked perfectly when partner of one left in not uncommon circs (a 3rd person involved), announced was taking over the house. Ah, no.

    Tax effective but need to take care the paperwork is meticulous and the rent set within reasonable parameters in case IRD decides to take a look.
    Do family keep rent payments up ....and how ‘tough’ is the landlord if rent gets behind?
    “I know that I am intelligent, because I know that I know nothing “ — Socrates

  10. #460
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    Beagle, you have lots of common sense and would appreciate to hear more. Partnering, is this joint ownership? or do you help repaying loans?

  11. #461
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    Percy - my hat off to you to be able to help your daughters whilst still living comfortably.

    However it underlines the fact that kids, without parents with money they can afford to co-invest with their chIldren in their first homes, are all but shut of NZs expensive market. It also indicates that the tax advantages of leveraged home ownership is increasingly becoming a subsidy for the children of wealthier people.

    For those shut out of home ownership (and for those for whom home ownership is not a convenient or desired option) there needs to be a beefed up retirement scheme with the level of tax advantages that NZ home ownership has. (untaxed net benefit of occupation/ leveraged gains)

  12. #462
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    Quote Originally Posted by winner69 View Post
    Do family keep rent payments up ....and how ‘tough’ is the landlord if rent gets behind?
    Yes, no rent problems at all. The 'rules' are clear from the beginning and APs are required. One arrangement has been in place for nearly 20 years, over 2 properties and 2 relationships. One of the younger generation, tenancy has been in place 2 years and the commercial one couple of months.

    Also to add that the young generation get interest free loans to buy a vehicle, APs required though slow repayment is Ok. One is 18, one is 21. The rule there is they can negotiate more interest free loans for approved purposes after discussion, but the tap gets turned off if they sign up for a credit card. So far so good. I am actually not bothered about the money, but very keen they take responsibilities very very seriously. That is why I do it. Bit unusual maybe but work for me.

    ETA I did provide a short rent holiday of 3 weeks when a new baby arrived and the saved amount for rent did not quite cover the parental leave. Present from gran!
    Last edited by artemis; 31-12-2018 at 05:37 PM.

  13. #463
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    Quote Originally Posted by Bjauck View Post
    Percy - my hat off to you to be able to help your daughters whilst still living comfortably.

    However it underlines the fact that kids, without parents with money they can afford to co-invest with their chIldren in their first homes, are all but shut of NZs expensive market. It also indicates that the tax advantages of leveraged home ownership is increasingly becoming a subsidy for the children of wealthier people.

    For those shut out of home ownership (and for those for whom home ownership is not a convenient or desired option) there needs to be a beefed up retirement scheme with the level of tax advantages that NZ home ownership has. (untaxed net benefit of occupation/ leveraged gains)
    Had we not had been in the position to have helped out the daughters I think they would be having a very hard time of it.
    I went through very hard times through illness,stress and near business failure in 1987.Took a very long time for my health and finances to recover.I woud not like them to go through that.Once I was mortgage free my finances improved,so it was important to me they had no mortgages. .

  14. #464
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    Quote Originally Posted by artemis View Post
    Yes, no rent problems at all. The 'rules' are clear from the beginning and APs are required. One arrangement has been in place for nearly 20 years, over 2 properties and 2 relationships. One of the younger generation, tenancy has been in place 2 years and the commercial one couple of months.

    Also to add that the young generation get interest free loans to buy a vehicle, APs required though slow repayment is Ok. One is 18, one is 21. The rule there is they can negotiate more interest free loans for approved purposes after discussion, but the tap gets turned off if they sign up for a credit card. So far so good. I am actually not bothered about the money, but very keen they take responsibilities very very seriously. That is why I do it. Bit unusual maybe but work for me.

    ETA I did provide a short rent holiday of 3 weeks when a new baby arrived and the saved amount for rent did not quite cover the parental leave. Present from gran!
    Agree with you about the responsibility bit ....that is a necessity in any of these arrangements and they will be better people for it.
    “I know that I am intelligent, because I know that I know nothing “ — Socrates

  15. #465
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    Quote Originally Posted by winner69 View Post
    Agree with you about the responsibility bit ....that is a necessity in any of these arrangements and they will be better people for it.
    In our case Gunna never knew the meaning of the word "responsibility."

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