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  1. #11
    Guru justakiwi's Avatar
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    You are always so down on everything. We live in NZ. We have to work with what we’ve got and make the best we can of it. It’s not a “load of rubbish” actually, and $250 a week will be a damned sight better than nothing. Your constantly negative comments about our financial systems etc, and your impractical investment suggestions are not particularly helpful. We are all aware of your feelings/criticisms. Maybe just give it a rest for a bit.

    Quote Originally Posted by SBQ View Post
    It's a load of rubbish because they're based on 'static' assumptions. That's not how the finance works in the real world as you have years that are positive and years that are negative. You also have to factor inflation (which the NZ gov't doesn't have a gasp of 'indexing' payments to a CPI figure every year). Then you have to factor administration costs and taxation ; a key issue that is not spelled out well by various Kiwi Saver funds.

    What is $250/week going to buy in 47 years time?

  2. #12
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    Quote Originally Posted by justakiwi View Post
    You are always so down on everything. We live in NZ. We have to work with what we’ve got and make the best we can of it. It’s not a “load of rubbish” actually, and $250 a week will be a damned sight better than nothing. Your constantly negative comments about our financial systems etc, and your impractical investment suggestions are not particularly helpful. We are all aware of your feelings/criticisms. Maybe just give it a rest for a bit.
    First, my apologies for my negativity. I've found the whole NZ marketing about savings and investing has seem to "pulled the wool over their eyes" because i've never seen such differences on investing abroad.

    Second, if you're not reading between the lines, investing should not start with a small sum. Ask any financial advisor and they will agree that you need a decent amount to make it work because of inefficiencies like mgt & administration fees. What's even more blatant is the lack of transparency when financial advisor pitch at you all the scenarios and how much you will get at the end ; yet none will be held accountable in 10 or 40 years time.

    It's very reasonable to question what $250 buy you in 47 years time? If we look at $20/week today, have a look at history and figure out what dollar terms would that equate to 50 years ago? If it costs $8 to buy a pie at a dairy today, how much would that same pie be in 1970? The investments you're making HAS to beat inflation, but in your case, dealing in a small amount, you've kinda not even reached the gate before the races can start. The more logical choice is if you want to provide something for your children, do what many others have done... pay off the mortgage, when you reach retirement and move into an elderly group home, and then gift the house to your children. Not to mention they would benefit from tax free capital gains vs Kiwi Saver portfolio ETFs that would be subjected to taxes year after year. This is my hard case, others are more than welcome to run the #s down and prove me wrong.

    Yesterday I ran into a financial advisor (who was also and accountant and did some trust planning) at a local neighbourly gathering. My issue was very clear on why NZ's tax field was so different between the individual that invests directly vs the individual giving their $ to a managed fund to what Warren Buffet would say, "essentially buy the SAME thing.. but is allowed to charge a fee". Do I have a problem with this kind of arrangement? You bet I do! and so does Warren Buffet because on most part, they're essentially charging a fee for 99% of the time they're doing nothing. Do some YouTube searches on how Buffet spews all over these fund managers who think they can do better for their clients, then come back to me and tell me what i've said before is wrong. Anyways, going back to the financial advisor I met, I was hitting him hard on by asking why? No other country in the world discriminates their tax payer so much when it comes to investing. Then I started barrelling on about the NZ FMA. It was clear he knew exactly what I was talking about and i'm quite certain he doesn't get customers asking these types of questions. You know he told me about how unique is buying NZ shares that can be fully imputed on dividend credits...(which fuels the craze of NZ share investors wanting dividends over tax free capital gains) and then I explained why the liquidity on the NZX is dwindling which was tied in to NZ's FMA making overseas brokers to close off the NZ market for investments. The he said NZ is a small country - yes I agree.. but so is Singapore and Switzerland.

    So going back to investing for a newborn? Buffet would agree, you would be better off using the funds to invest in your child's education as that would have the biggest impact in their entire lifetime than to leave a small pot of $ to them at the end.

  3. #13
    Guru justakiwi's Avatar
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    OK. Got it. As far as you're concerned I am wasting my time even trying to improve my financial situation by investing. I disagree with you 100%.

    I do NOT own a house or any other property. I have next to no assets, as you would know if you had properly read my many other posts. I am trying to improve my situation as much as I am able. At 59, I don't have too many options. I don't have any sugar daddies hammering on my caravan door. What bugs me about you and your comments, is your apparent inability to understand MY situation ( and probably other people's too). I am so far removed from everyone else here in terms of pretty much everything - job/income, financial situation, possession of "stuff" and investment. But I am still an investor. Doing the best I can under the circumstances. So sorry, but don't you dare tell me I am wasting my time because I don't have enough money! I have falsely believed that for over 30 years. If I had understood what I do now, I would have started investing back then and would now be in a significantly better position.

    You need to encourage people, not make them feel like idiots and failures. People like me are the ones who most need to get into investing and as far as I'm concerned, better late than never.

    Quote Originally Posted by SBQ View Post
    Second, if you're not reading between the lines, investing should not start with a small sum. Ask any financial advisor and they will agree that you need a decent amount to make it work because of inefficiencies like mgt & administration fees.

    The investments you're making HAS to beat inflation, but in your case, dealing in a small amount, you've kinda not even reached the gate before the races can start.
    Last edited by justakiwi; 16-02-2020 at 02:29 PM.

  4. #14
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    Quote Originally Posted by SBQ View Post
    .

    So going back to investing for a newborn? Buffet would agree, you would be better off using the funds to invest in your child's education as that would have the biggest impact in their entire lifetime than to leave a small pot of $ to them at the end.
    Listener front page says ones DNA has more influence on children’s success than good parenting or education.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  5. #15
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    Quote Originally Posted by winner69 View Post
    Listener front page says ones DNA has more influence on children’s success than good parenting or education.
    Then the explanation why there are so many private schools in NZ? I have cousins that are so staunch at sending their kids to anything but public schools, 1 case all 3 children going to 3 different schools.

    But academic success is 1 thing, what Buffet is teaching to little ones in finance is not taught at schools. He points out simple things like what assets appreciate and what assets depreciate ; you don't need to be a rocket science to understand this (even the lowly IQ person can learn the difference), yet the biggest problem we find is the subject of 'finance' seems to be too taboo to talk about in general day to day living vs the All Blacks game.

  6. #16
    Ignorant. Just ignorant.
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    For what it's worth, I think it's important that your daughter gets the idea that there are more things to do with money than put it in the bank, put it in Kiwisaver, or save up for a house.

    Back in the day, when she turned about ten, I set my daughter up with some shares (RNS Renaissance, because iPods were so cool) so that dividend cheques came in twice a year, and with some bonds so that interest cheques came in four times a year. So she learnt about income investing.

    She had to do her own tax return every year. She hated it.

    But because she had no PAYE income, some of the imputation credits offset the interest income, and some of the imputation credits carried forward. Not exciting for a teenager, but when the first holiday job came along, and she got all indignant about income tax, the first years tax return was a refund due to those imputation credits. So she learnt about the value of doing the paperwork and getting it right.

    To teach her how to manage money, she had to have some money to manage, so there was an allowance.

    She had two bank accounts. One for spending, one for saving up for things (like playstations, iPods and the like). All in her name, and she could do what she liked with the money, (although she had to buy her own underwear) but there was no "rescue" from the parents if she blew it all on teenage cr*p. So she eventually learned to manage money (although it was quite hard to watch sometimes).

    She's no financial genius, but she understands that there are options outside the mainstream.

    So yes, education is important, but there's more to education than what they teach in schools.
    Last edited by GTM 3442; 16-02-2020 at 06:24 PM.

  7. #17
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    Quote Originally Posted by justakiwi View Post
    OK. Got it. As far as you're concerned I am wasting my time even trying to improve my financial situation by investing. I disagree with you 100%.

    I do NOT own a house or any other property. I have next to no assets, as you would know if you had properly read my many other posts. I am trying to improve my situation as much as I am able. At 59, I don't have too many options. I don't have any sugar daddies hammering on my caravan door. What bugs me about you and your comments, is your apparent inability to understand MY situation ( and probably other people's too). I am so far removed from everyone else here in terms of pretty much everything - job/income, financial situation, possession of "stuff" and investment. But I am still an investor. Doing the best I can under the circumstances. So sorry, but don't you dare tell me I am wasting my time because I don't have enough money! I have falsely believed that for over 30 years. If I had understood what I do now, I would have started investing back then and would now be in a significantly better position.

    You need to encourage people, not make them feel like idiots and failures. People like me are the ones who most need to get into investing and as far as I'm concerned, better late than never.
    The best way of encouraging people to invest is to make them "fully informed" and i'm certain most financial advisors would say investing too small of an amount would produce little or no 'meaningful' benefit. This by all means is not to rain on your situation but simply, the facts of the situation. Another fact of the situation is in order for investing to perform well, you need a reasonable amount of time - i'm speaking decades. At age 59 and the current level of the global market (or how far we've gone), the chances are you may be caught out in a major global stock market crash in the next 10 year. THIS is information that financial advisors won't tell you because they don't get paid unless you buy into their investment scheme.

    If you felt you've made wrong decisions in the past with regrets, the same can be said to those that chose to invest at an early age. After finishing highschool, many of my friends were too busy making themselves look good by buying a new car. They took on employment and were full of gloat, while I chose the poor student way by going on to college. I had a family mentor that was very knowledgeable about finance and encouraged me to start investing during that time... Do you understand how 'uncool' that looks like in your late teens and early 20s? You won't get the girl saying you have an investment brokerage account.

  8. #18
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    It is simply no longer true to say that small sums cannot be invested - over recent years a whole collection of companies has cropped up to cater for small NZ investors, with even more in larger markets. Anyone can invest, and virtually everyone starts small. A meaningful benefit is subjective and in terms of percentage return should be similar regardless of the amount invested.

    With respect to the time horizon, perhaps reread the thread title.

  9. #19
    Guru justakiwi's Avatar
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    Just for your information, I had one free consultation with a financial advisor a few years back. Just out of curiosity, to run my ideas past him and see what he thought. I discussed both my KiwiSaver and my investments with him. I explained my "plan" and the thinking behind it and his conclusion was, that I had done my homework, put a great deal of thought into what I was doing, and in his opinion, my plan was sound. He knew upfront that I had no intention of investing via him but he was still happy to provide a free consultation. He had nothing to gain by not being honest with me so as far as I was concerned his comments were genuine.

    As far as your "global crash" comments go, I am well aware that there will be a market crash probably before I got 65. I fully understand the implications of that. I went into this knowing I could lose my investment. However, as I have said before, I have no intention of drawing down on either my KiwiSaver or my investment, when I turn 65. So in the event of a crash, I will sit tight, cross my fingers and hope that in time, the markets and my investments will recover. None of us have a crystal ball. Not even you. We either take a chance or we take the safe road and watch our money depreciate sitting in the bank. I will always have "some" money in the bank for emergencies, but my money is never going to grow there. At least now, I stand a better chance of making my money work for me long term. And by the way. I'm 59 - will any luck I will see another 30 years. At least that's the plan.

    Quote Originally Posted by SBQ View Post
    The best way of encouraging people to invest is to make them "fully informed" and i'm certain most financial advisors would say investing too small of an amount would produce little or no 'meaningful' benefit. This by all means is not to rain on your situation but simply, the facts of the situation. Another fact of the situation is in order for investing to perform well, you need a reasonable amount of time - i'm speaking decades. At age 59 and the current level of the global market (or how far we've gone), the chances are you may be caught out in a major global stock market crash in the next 10 years.
    Last edited by justakiwi; 16-02-2020 at 10:04 PM.

  10. #20
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    Quote Originally Posted by justakiwi View Post
    Just for your information, I had one free consultation with a financial advisor a few years back. Just out of curiosity, to run my ideas past him and see what he thought. I discussed both my KiwiSaver and my investments with him. I explained my "plan" and the thinking behind it and his conclusion was, that I had done my homework, put a great deal of thought into what I was doing, and in his opinion, my plan was sound. He knew upfront that I had no intention of investing via him but he was still happy to provide a free consultation. He had nothing to gain by not being honest with me so as far as I was concerned his comments were genuine.

    As far as your "global crash" comments go, I am well aware that there will be a market crash probably before I got 65. I fully understand the implications of that. I went into this knowing I could lose my investment. However, as I have said before, I have no intention of drawing down on either my KiwiSaver or my investment, when I turn 65. So in the event of a crash, I will sit tight, cross my fingers and hope that in time, the markets and my investments will recover. None of us have a crystal ball. Not even you. We either take a chance or we take the safe road and watch our money depreciate sitting in the bank. I will always have "some" money in the bank for emergencies, but my money is never going to grow there. At least now, I stand a better chance of making my money work for me long term. And by the way. I'm 59 - will any luck I will see another 30 years. At least that's the plan.

    The financial advisor you met is not there to tell you wrong. Just like the financial advisor I met on Saturday except, the questions I asked were questions that every prospecting client should ask. I'm sure you've heard of the saying, "sometimes the truth hurts too much" and instead of accepting his arrogance (and I must tell you a lot of the people in this industry are arrogant), I was hitting him hard on why the whole NZ financial industry has gone this way? This is no different to discussions in other topics like classic cars, sporting, just the same discussion like sitting in a bar or any social gathering. It's even more disgraceful that the real winners are the ones that handle the $ and not their clients, they have no proven track record because they can always fall back on the same excuse that "oh you're time frame is to invest for the LONG-TERM" so they will never hold themselves accountable on years that under perform. In my view, my hard questions at these advisers should be appreciated by those that don't know much about finance because from the way I see it in NZ, there are not enough questions asked and no one is doing anything about it... because they don't care? Well I certainly care where my $ goes because I pay income taxes on what I earn, I pay consumption taxes when I buy things, it certainly makes sense to understand the tax implication when I want to invest my disposable income.


    Let me give you an example of my friend back in 2008 that didn't have a strong knowledge about finance and assumed his financial advisor would handle it all. Well, for over 15 years he invested in RRSPs (Cdn version of Kiwi Saver). Coming up to the 2008 crash, nearly HALF of his invested portfolio was lost. Can you imagine the psychology involved with investors back then? Specifically yourself because i'm sure my friend had felt the same thing as many others; "The FEAR of losing more wealth". The market was in a panic and what he heard was that his portfolio could lose another 20 or 30% again.. again the psychology in his mind was "I need to sell up as fast as I can!!!" and against the advice of his advisors, he liquidated everything. So while it may be easy for you to say today that you intend to keep things for the long term, market crashes cause people to think irrationally. Meanwhile, all along and through the many years, his managed funds was creaming their fees year after year...

    It's a bold move to assume you will live to 90. What would be your quality of life in the 10 or 15 years preceding? This is a very valid question as when people age, the cost of medical and care sky rockets. What if you ended up with a medical condition that would drain all your $? What if your children decided to use all their invested $ to go pay for an important operation that you required? These are questions that financial advisors need to address but in NZ, there's very little regard ; particularly the issue on deferring taxes on investments. It makes logical sense not to tax your investment earnings during the year where you're earning a lot of income, and deferring those investment gains to be taxed during retirement time (60s to 80s) for where it's very unlikely the person would have wages or salary income. We don't have this approach in retirement planning here in NZ.

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