Scaresies chat page

[Baa_Baa]

Kiwisaver statistics are all here.
At June 2022, 7.3% are under 18, 6.7% are over 65.

[bull....]

did some numbers

i have a fund like baa baa all i do is put in 100/mth and get the govt contribution. i have yrs to go to retirement but i prefer to invest my own money rather than rely on fund managers

anyway i dont think there scheme works how it is currently set and communicated on there website as they state contributions will automatically be invested according to the plan you setup

i set up my fund as per there example ( by the way there fund used in the example is 1.47% fund fee/annum they dont mention this)

Sam has a KiwiSaver balance of $10,000. They choose to invest $7,000 in a base fund, and $3,000 across their own picks.
In the first year, their estimated fees are:

Fee	Fee amount
Transaction fees on Sam’s picks	$30
Admin fee on Sam’s picks	$4.50
Admin fee on base funds	$0
Annual fund charge (included in unit price)	$102.90
Total fees	$137.40
Amount deducted from KiwiSaver account balance	$34.50

So the 3000 is divided into 10 stocks as per there rules of no more than 5% per stock

my picks ( example only and prices just of top my head )

picks	price	shares	cost
gne	2.73	110	$ 300.00
cnu	8.7	34	$ 300.00
hgh	1.55	194	$ 300.00
ift	9.28	32	$ 300.00
mel	5.4	56	$ 300.00
skc	2.25	133	$ 300.00
spk	5.1	59	$ 300.00
thl	3.85	78	$ 300.00
fbu	4.6	65	$ 300.00
ebo	44.5	7	$ 300.00
			$ 3,000.00
	brokerage		$ 30.00
	admin fee		$ 4.50

so after initial setup of fund my mthly contribution is $100 therefore $50 will go to the fund and $50 will be allocation between each of my stock picks so thats $5 per stock lol
my point is $5 is not even going to buy 1 share in ebos ? so how will the allocation work automatically ( computer error )

i need to ask this question before i carry on my analysis of if its any good for a trader

anyway based on there example and my $100 per mth contribution it looks like total fee's would be roughly 1.52% per annum if invested in a growth fund + your stock picks + contribution fee's so not exactly cheap ? if i have calculated right

anyway more investigating to do

[dobby41]

I'm scratching my head as well.

Edit: can dobby41 clarify further as I don't understand either.

If I have $1 and the govt gives me 50 c then I have made 50% return that year.
Year 1 - I now have $1.50 invested.
Year 2 - add $1 so have $2.50 invested. The govt gives me another 50c - 50c over $2.50 is 20% return. Total invested is $3
Year 3 - add $1 so $4 invested. The govt gives me 50c - 50c over $4 is 12.5% return. Total invested now $4.50
Year 3 - add $1 so $5.50 invested. Govt gives 50c - 50c over $5.50 is 9%. Total now invested now $6
And it goes on - the return lowering every year until it is not worth it.
Remember you money has to stay there - you can't just take it out when you want.

[justakiwi]

Yes but that’s not what Baa Baa is saying. He is referring only to his yearly $1 deposit. Every year that he deposits $1 the govt gives him 50c. So yes, he makes a 50% return on that dollar. Every year. That is all he is saying. Nothing to do with his overall fund balance or the return on that over time.

If I have $1 and the govt gives me 50 c then I have made 50% return that year.
Year 1 - I now have $1.50 invested.
Year 2 - add $1 so have $2.50 invested. The govt gives me another 50c - 50c over $2.50 is 20% return. Total invested is $3
Year 3 - add $1 so $4 invested. The govt gives me 50c - 50c over $4 is 12.5% return. Total invested now $4.50
Year 3 - add $1 so $5.50 invested. Govt gives 50c - 50c over $5.50 is 9%. Total now invested now $6
And it goes on - the return lowering every year until it is not worth it.
Remember you money has to stay there - you can't just take it out when you want.

[blackcap]

Yes but that’s not what Baa Baa is saying. He is referring only to his yearly $1 deposit. Every year that he deposits $1 the govt gives him 50c. So yes, he makes a 50% return on that dollar. Every year. That is all he is saying. Nothing to do with his overall fund balance or the return on that over time.

Dobby does make a very good point though that your money has to stay there.. it is tied up till you are 65. If you are a young person (the first home thing aside) this could be quite an impediment to joining Kiwisaver as the government top up soon becomes immaterial.

That said, all I add to my Kiwisaver annually is a lump sum of $1048 to take advantage of the free $524. No other contributions will go there. Ever.

[justakiwi]

True, but young people shouldn’t be in a cash fund anyway (in most cases) so not relevant to Baa Baa’s situation. If they were in a growth fund their overall long term return would make up for the fact that the government contribution becomes immaterial.

Dobby does make a very good point though that your money has to stay there.. it is tied up till you are 65. If you are a young person (the first home thing aside) this could be quite an impediment to joining Kiwisaver as the government top up soon becomes immaterial.

That said, all I add to my Kiwisaver annually is a lump sum of $1048 to take advantage of the free $524. No other contributions will go there. Ever.

[blackcap]

True, but young people shouldn’t be in a cash fund anyway (in most cases) so not relevant to Baa Baa’s situation. If they were in a growth fund their overall long term return would make up for the fact that the government contribution becomes immaterial.

O yes totally, young people should not be in a cash fund. I thought initially Kiwisaver was very short sighted that everyone regardless of age went into I think either conservative or balanced fund. They really mucked that up to begin with. It should have been on a graduated scale. Something like 18-40 growth, 40-55 balanced and 56+ conservative.
But hey they are slowly changing things for the better.

[bull....]

did some numbers

i have a fund like baa baa all i do is put in 100/mth and get the govt contribution. i have yrs to go to retirement but i prefer to invest my own money rather than rely on fund managers

anyway i dont think there scheme works how it is currently set and communicated on there website as they state contributions will automatically be invested according to the plan you setup

i set up my fund as per there example ( by the way there fund used in the example is 1.47% fund fee/annum they dont mention this)

Sam has a KiwiSaver balance of $10,000. They choose to invest $7,000 in a base fund, and $3,000 across their own picks.
In the first year, their estimated fees are:

Fee	Fee amount
Transaction fees on Sam’s picks	$30
Admin fee on Sam’s picks	$4.50
Admin fee on base funds	$0
Annual fund charge (included in unit price)	$102.90
Total fees	$137.40
Amount deducted from KiwiSaver account balance	$34.50

So the 3000 is divided into 10 stocks as per there rules of no more than 5% per stock

my picks ( example only and prices just of top my head )

picks	price	shares	cost
gne	2.73	110	$ 300.00
cnu	8.7	34	$ 300.00
hgh	1.55	194	$ 300.00
ift	9.28	32	$ 300.00
mel	5.4	56	$ 300.00
skc	2.25	133	$ 300.00
spk	5.1	59	$ 300.00
thl	3.85	78	$ 300.00
fbu	4.6	65	$ 300.00
ebo	44.5	7	$ 300.00
			$ 3,000.00
	brokerage		$ 30.00
	admin fee		$ 4.50

so after initial setup of fund my mthly contribution is $100 therefore $50 will go to the fund and $50 will be allocation between each of my stock picks so thats $5 per stock lol
my point is $5 is not even going to buy 1 share in ebos ? so how will the allocation work automatically ( computer error )

i need to ask this question before i carry on my analysis of if its any good for a trader

anyway based on there example and my $100 per mth contribution it looks like total fee's would be roughly 1.52% per annum if invested in a growth fund + your stock picks + contribution fee's so not exactly cheap ? if i have calculated right

anyway more investigating to do

got some more info from sharsies on instagram last night

so in my example i was saying it didnt work on auto allocation of contributions each mth to your stock picks if the value of contribution was less than the stock price ... solved your get a fraction of a share as your allocation to that stock pick

also its 5% of the 100% of your fund not 5% of your 50% when making stock picks

i still have to get a answer on my fee questions in regards to when they are taken as that can make a big difference in the long run to your fund size and also on what happens if i get a few baggers in my stock picks ( reason because if they have rules like some funds where your weightings in your picks become skewed because of my good stock picking i dont want to be penalised for being good at it because of some dumb rules around weightings. this would be a huge negative for taking this kiwisaver scheme on )
they are also looking to add more funds which is good more choice the better and also enable asx and us stocks at some stage to be added to your mix

anyway i ran a model on a made up fund with stock picks and using a smartshare growth fund which ahd a fee of .51% when you added on all the other fee's it was was a total roughly of .81% which included fee's on my gains as well thru the yr so getting better ... more investigating to do

[blackcap]

anyway i ran a model on a made up fund with stock picks and using a smartshare growth fund which ahd a fee of .51% when you added on all the other fee's it was was a total roughly of .81% which included fee's on my gains as well thru the yr so getting better ... more investigating to do

Small caveat on that though.

Don't the funds like Smartshares also get charged brokerage on their entry and exit points when they buy and sell stocks. That is not part of their MER. So I think we can give sharesies a bit of leeway here. The brokerage to get into the stocks should be taken into account from an individual level, but not used to measure the fund fees as a comparator.

[SailorRob]

Yes.Currently, protection of capital is more important than capital gain for me. I am expecting major market correction after one of the longest bull markets in the history. Fortuantley, I didn’t get caught to paying very high price(Crazy value) for my first home. Asset prices have so stretched I can’t think about converting my cash fund at this juncture.

'There have been more than a few scary headlines lately, but in my view those scary headlines are bestignored at a time when in my opinion there are a great many very cheap stocks available in the hiddencorners of the market where I spend my time. To illustrate, at present the ratio of the R2000 to the SP500is at approximately the same level as it was in March of 2020 as Covid was sweeping the world. Prior tothat time, it had not been that low since February of 2001'.

Everything is screaming cheap bar the few big caps that drive the indexes and confuse you.

My earlier explanatory post went right over your head.

When do you propose you'll get a better shot at world class value stocks than right now...