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  1. #181
    Senior Member TeslaGod's Avatar
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    Quote Originally Posted by BIRMANBOY View Post
    Your super-human investment capacity is something to be admired...I'm surprised your talents have not been suitably rewarded with the recognition your ego is obviously so desperate to receive lol. Headhunters must be lining up in droves to lure you away to Switzerland in private jets where you will presumably establish your own fund and be adored by all and sundry.
    It's why I'm in the position I am/I don't follow the sheep.

    Good luck with your divies mate.

    Don't forget to pay tax on your 5% return.
    Last edited by TeslaGod; 09-11-2021 at 05:39 PM.

  2. #182
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    Quote Originally Posted by TeslaGod View Post
    It's why I'm in the position I am/I don't follow the sheep.

    Good luck with your divies mate.

    Don't forget to pay tax on your 5% return.
    I'm afraid to say Mr TeslaGod but both you and I have have something in common. We both hate KiwiSaver.

    @BIRMANBOY:

    Returns of +20% or 30% in a year is very achievable in an investment retirement fund. What matters is the CUMULATIVE averages of returns and if you looked at what Buffet was ranting about, over a 10 year period, these 'active' managed funds can not beat the market index return. There is simply no way a KS fund, net of taxation (ALL taxation), less of mgt fees etc, can beat a low cost index ETF. KS has done so little for the working class and it will not make them rich at retirement. This is VERY different to the retirement funds in Canada that aim to give tax breaks to the working class, while penalising the rich who over contribute into their pension funds. For eg. Canada has RESP which is an education fund that you start upon the birth of your baby and all the gains grow 100% tax free and after highschool, the disbursements withdrawn are 100% tax free as it pays for tuitions, books, cost of living, etc. Then there's the disability fund RDSP where families who have children with disabilities, can invest in the plan and again, grows 100% tax free. When the child is an adult, the withdrawals can be 100% tax free. Get the picture? In NZ any savings towards retirement makes no distinction between the rich or the poor.

    As a matter of discussion on 30% returns in a year. I'm already near +30% return by closing my position in Visa back in Sept and buying ALB at end of Sept. I made a significant stake in ALB representing over 60% of the portfolio in this stock. All the nay sayers and financial advisors screaming that we are at record highs for the past year - never had a game plan like I did. Giving your money in a KS plan where the active fund manager tries to give you better returns is a farce. The minimum they should be doing is on a weekly basis, disclosing their "game plan" to their investors and an ongoing constant review of their past actions if it worked or not. After all if you depend on your hard working money for some guy in KS... there should be more transparency. But that's not how the FMA set things up in NZ. Those that don't take an active role in their own investments deserve to lose most of it in a bad year.

  3. #183
    Guru justakiwi's Avatar
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    .................................................. ..



    Quote Originally Posted by SBQ View Post
    I'm afraid to say Mr TeslaGod but both you and I have have something in common. We both hate KiwiSaver.

    @BIRMANBOY:

    Returns of +20% or 30% in a year is very achievable in an investment retirement fund. What matters is the CUMULATIVE averages of returns and if you looked at what Buffet was ranting about, over a 10 year period, these 'active' managed funds can not beat the market index return. There is simply no way a KS fund, net of taxation (ALL taxation), less of mgt fees etc, can beat a low cost index ETF. KS has done so little for the working class and it will not make them rich at retirement. This is VERY different to the retirement funds in Canada that aim to give tax breaks to the working class, while penalising the rich who over contribute into their pension funds. For eg. Canada has RESP which is an education fund that you start upon the birth of your baby and all the gains grow 100% tax free and after highschool, the disbursements withdrawn are 100% tax free as it pays for tuitions, books, cost of living, etc. Then there's the disability fund RDSP where families who have children with disabilities, can invest in the plan and again, grows 100% tax free. When the child is an adult, the withdrawals can be 100% tax free. Get the picture? In NZ any savings towards retirement makes no distinction between the rich or the poor.

    As a matter of discussion on 30% returns in a year. I'm already near +30% return by closing my position in Visa back in Sept and buying ALB at end of Sept. I made a significant stake in ALB representing over 60% of the portfolio in this stock. All the nay sayers and financial advisors screaming that we are at record highs for the past year - never had a game plan like I did. Giving your money in a KS plan where the active fund manager tries to give you better returns is a farce. The minimum they should be doing is on a weekly basis, disclosing their "game plan" to their investors and an ongoing constant review of their past actions if it worked or not. After all if you depend on your hard working money for some guy in KS... there should be more transparency. But that's not how the FMA set things up in NZ. Those that don't take an active role in their own investments deserve to lose most of it in a bad year.
    Last edited by justakiwi; 09-11-2021 at 07:23 PM. Reason: Deleted. Literally no point.

  4. #184
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    Quote Originally Posted by justakiwi View Post
    .................................................. ..
    @justakiwi: I'm afraid I must of hit a soft spot? What i'm getting at is the crux of the whole investment system in NZ. The FMA regulations is suppose to make investing in NZ shares on an equal playing field but instead, it's done nothing to education the very customers that put up 100% of the money and is exposed to 100% of the risk. Here's what Jack Bogle had to say:

    https://www.youtube.com/watch?v=K4lwJ5aQGlI

    and he's only working on an assumed 7% market return but the actively managed fund takes 2%. The difference compounded over multiple decades prove that the investor only gets back 1/3rd of the total returns. Yes and if you think that 2% is a killer, consider how IRD's FIF using the FDR method creams 5% off on the paper gain TOTAL on a portfolio that invests in US shares (assuming the paper gains in a year exceed 5%). Then that 5% of 'taxable income' goes all the way back to the investor and is taxed at RWT rates. Remember, this is excluding active management fees so when you add it all up, you're not getting much in return at the end.

    Is it not a surprise to those that were able to save and borrow mortgage on more houses were the ones that really won in NZ? How could you miss when you hold a house for more than 10 years, and all it's capital gains are 100% tax free, and the bank is rubbing it's hands too with ultra low interest rates (leverage). It does seem that Kiwi Saver was nothing but leftover crumbs for the working class of NZ.

  5. #185
    Advanced Member BIRMANBOY's Avatar
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    What? You havent left yet...still trying to remake the NZ financial systems into the "SBQ" model? Pointless exercise of course but must be frustrating for you to know that you have all the answers and everybody here is too stupid to listen to you. I feel for you but remember Canada has so much more to offer and would probably, no actually, would certainly appreciate your intellectual acumen if you made the move. I would even be happy to start a "give a little" fund to help out with all the expenses.
    Quote Originally Posted by SBQ View Post
    @justakiwi: I'm afraid I must of hit a soft spot? What i'm getting at is the crux of the whole investment system in NZ. The FMA regulations is suppose to make investing in NZ shares on an equal playing field but instead, it's done nothing to education the very customers that put up 100% of the money and is exposed to 100% of the risk. Here's what Jack Bogle had to say:

    https://www.youtube.com/watch?v=K4lwJ5aQGlI

    and he's only working on an assumed 7% market return but the actively managed fund takes 2%. The difference compounded over multiple decades prove that the investor only gets back 1/3rd of the total returns. Yes and if you think that 2% is a killer, consider how IRD's FIF using the FDR method creams 5% off on the paper gain TOTAL on a portfolio that invests in US shares (assuming the paper gains in a year exceed 5%). Then that 5% of 'taxable income' goes all the way back to the investor and is taxed at RWT rates. Remember, this is excluding active management fees so when you add it all up, you're not getting much in return at the end.

    Is it not a surprise to those that were able to save and borrow mortgage on more houses were the ones that really won in NZ? How could you miss when you hold a house for more than 10 years, and all it's capital gains are 100% tax free, and the bank is rubbing it's hands too with ultra low interest rates (leverage). It does seem that Kiwi Saver was nothing but leftover crumbs for the working class of NZ.
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  6. #186
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    Quote Originally Posted by BIRMANBOY View Post
    What? You havent left yet...still trying to remake the NZ financial systems into the "SBQ" model? Pointless exercise of course but must be frustrating for you to know that you have all the answers and everybody here is too stupid to listen to you. I feel for you but remember Canada has so much more to offer and would probably, no actually, would certainly appreciate your intellectual acumen if you made the move. I would even be happy to start a "give a little" fund to help out with all the expenses.
    ...perhaps it would be a win-win for both countries, with the IQ of both increasing once SBQ returns to Canada?

    (Sorry SBQ, possibly a bit mean of me. But with you confirming that you are worth 8 figures, I have total confidence that you are resilient & willing enough to take a much needed ribbing now & again.)
    Last edited by FTG; 10-11-2021 at 10:12 AM.
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  7. #187
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    Quote Originally Posted by FTG View Post
    ...perhaps it would be a win-win for both countries, with the IQ of both increasing once SBQ returns to Canada?
    ...
    A throwback to the Rob Muldoon style, although Muldoon used it in relation to Australia.

    The unique regressive NZ tax system certainly encourages over-investment into capital gains producing residential real estate and a poorly-diversified investment portfolio generally. And, Hey presto we have the price of an average home over a million dollars now.
    Last edited by Bjauck; 10-11-2021 at 11:04 AM.

  8. #188
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    Quote Originally Posted by Bjauck View Post
    A throwback to the Rob Muldoon style, although Muldoon used it in relation to Australia.

    The unique regressive NZ tax system certainly encourages over-investment into capital gains producing residential real estate and a poorly-diversified investment portfolio generally. And, Hey presto we have the price of an average home over a million dollars now.
    and when people like myself, who are a bit more vocal, try to point this problem out here in NZ, the appropriate response is (well maybe NZ is not your place and you should go back to where you came from).

    ...perhaps it would be a win-win for both countries, with the IQ of both increasing once SBQ returns to Canada?

    (Sorry SBQ, possibly a bit mean of me. But with you confirming that you are worth 8 figures, I have total confidence that you are resilient & willing enough to take a much needed ribbing now & again.)
    Again, the typical arrogance I see in NZ fashion. Would you of preferred, my wealth to be achieved through owning NZ houses (like TeslaGod and any rich person in NZ has done so?). I've made an ethical stance that $ invested into businesses is far more productive than owning more houses. NZ's situation is just that - can't change the stripes off a zebra and call it a horse.

    @BIRMANBOY:

    You know leave it to NZ trying to reinvent the wheel. The financial systems I speak of abroad are nothing unique. Canada's RRSP was introduced in 1957. America's 401K plan was introduced in 1978. Is it a wonder NZ did not have all that time to have a look how these retirement schemes worked abroad before finalising Kiwi Saver in 2007? Surely there should be some thought about benefiting the 'working class'? This is not the NZ that I was accustomed to know upon first arriving near 25 years ago. A financial system aimed to benefit IRD and the fund managers more than the individual investors.

  9. #189
    Advanced Member BIRMANBOY's Avatar
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    Lets lay the blame for million dollar houses where it should truly be placed. Severe housing shortages. Shortage of housing supply will alway drives house prices up and regardless of whether the commodity is houses, cars, kayaks or Kapiti ice cream, if the demand is there and the supply drops, up the prices go. The new builds havent kept up with a growing population for many years so here we are. And here we shall remain until we get to the point where we have enough qualified builders, plumbers, electricians and building supplies, not to mention fewer obstacles like heavy handed and difficult bureacratic processes. Of course you cannot blame people for investing in a good thing...so the quandry we find ourselves in is that there appears to be a concerted lack of political will to reverse this. Follow the money and we have the middle class and political "silent majority" vested in the status quo. Lets be honest no house owner wants to support policies that will see their major asset drop in price. Consequently we have the panorama of successive governments largely ignoring the issue but voicing sincere concerns lol. However all of this has nothing to do with KS. Nowdays being able to afford a house or a mortgage has mostly only been an option for someone with a very well paid job or funds from mum and dad. That is pushing up all the time so wheras in the 50's and 60's and 70's almost all people in decent employment could manage to become house owners, we have arrived at a very difficult place. High housing prices, rapidly increasing rental accomodation and growing disatisfaction in a growing portion of society. So back to KS...this is filling the gap for those disaffected...with help and contribution from the Govt and employers, the relevence of KS is obvious. AS of August 2021 the number of people enrolled in KS was 3.1 million. The demographic breakdown was 0-17 years old 254,000, 18-24 390,000, 25-34 695,000, 35-44 583,000, 45-54 540,000, 55-64 480,000 and 65 plus 190,000. Now this buy-in is a strong vote of approval for the scheme and it also has the obvious benefits of assisting those unable to participate in the housing market become involved and participating in their retirement at a safe and low risk environment. So is it the BEST investment....for many of those with assets and investing experience, maybe not, but for the majority with neither time, inclination or will its superb.
    Quote Originally Posted by Bjauck View Post
    A throwback to the Rob Muldoon style, although Muldoon used it in relation to Australia.

    The unique regressive NZ tax system certainly encourages over-investment into capital gains producing residential real estate and a poorly-diversified investment portfolio generally. And, Hey presto we have the price of an average home over a million dollars now.
    www.dividendyield.co.nz
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  10. #190
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    Quote Originally Posted by BIRMANBOY View Post
    Lets lay the blame for million dollar houses where it should truly be placed. Severe housing shortages. Shortage of housing supply will alway drives house prices up and regardless of whether the commodity is houses, cars, kayaks or Kapiti ice cream, if the demand is there and the supply drops, up the prices go. The new builds havent kept up with a growing population for many years so here we are. And here we shall remain until we get to the point where we have enough qualified builders, plumbers, electricians and building supplies, not to mention fewer obstacles like heavy handed and difficult bureacratic processes. Of course you cannot blame people for investing in a good thing...so the quandry we find ourselves in is that there appears to be a concerted lack of political will to reverse this. Follow the money and we have the middle class and political "silent majority" vested in the status quo. Lets be honest no house owner wants to support policies that will see their major asset drop in price. Consequently we have the panorama of successive governments largely ignoring the issue but voicing sincere concerns lol. However all of this has nothing to do with KS. Nowdays being able to afford a house or a mortgage has mostly only been an option for someone with a very well paid job or funds from mum and dad. That is pushing up all the time so wheras in the 50's and 60's and 70's almost all people in decent employment could manage to become house owners, we have arrived at a very difficult place. High housing prices, rapidly increasing rental accomodation and growing disatisfaction in a growing portion of society. So back to KS...this is filling the gap for those disaffected...with help and contribution from the Govt and employers, the relevence of KS is obvious. AS of August 2021 the number of people enrolled in KS was 3.1 million. The demographic breakdown was 0-17 years old 254,000, 18-24 390,000, 25-34 695,000, 35-44 583,000, 45-54 540,000, 55-64 480,000 and 65 plus 190,000. Now this buy-in is a strong vote of approval for the scheme and it also has the obvious benefits of assisting those unable to participate in the housing market become involved and participating in their retirement at a safe and low risk environment. So is it the BEST investment....for many of those with assets and investing experience, maybe not, but for the majority with neither time, inclination or will its superb.
    I beg to differ. While housing shortages contribute to rising prices, I would say it is not the major contributing factor. One just has to look over in America and Canada, Australia, etc and see how much house prices has risen (psst. their rates are no where near as high as NZ). Jacinda Ardern pointed out earlier in the year with her speech: (and I was hopeful at the time)

    https://www.youtube.com/watch?v=nToXpVvnGkU

    1) by year end of 2020, 40% of ALL houses purchases was made by those who already owned multiple properties. (meaning, there's no way a 1st home buyer can compete. Buyers of houses for the sole purpose of renting out and investing will always pay more)
    2) and from June to Nov 2020, the level of mortgage borrowing by these 'property investors' had increased by 116%. (no surprise here with record low mortgage rates, I saw as low as 2% last year)
    3) From 1991 to 2019, NZ experienced the HIGHEST real growth of housing prices in the OECD !!! (Yes higher than places like Vancouver Canada and my friends are crying there)
    4) Since last year, 15,000 houses were purchased by people who ALREADY owned 5 (FIVE) or more houses !!!

    Look at the total wealth of NZ composition mix. The riches in NZ have done it through owning NZ houses or some form of real estate. The riches in N. America, have done it through stock ownership in publicly listed companies. (like your RRSP, 401K plans etc). When 2/3rds of the NZ wealth is tied up in hard assets like real estate, that tells me only one, the prices will go up in unprecedented ways.

    Remember - in NZ, not ALL ASSET classes are the same (because taxes distort the investment outcome) so your example of a normal good like ice cream or kayaks is irrelevant. Those who are able to opt out of KS and use those funds in a more efficient manner (like investing directly into shares or index ETF), will do far better if they can meet the minimum deposit LVR for buying a house. The proof is there with Jacinda's speech citing how many houses were bought this past year by those who already owned multiple properties. That my friend is NOT HOW KIWI SAVER was suppose to be marketed as. The reality is KS never had a chance. Owing houses did far better. Even if they made KS as a tax free compounding scheme comparable to 401K plans, it would still not beat the performance of owning houses because in my previous post, a 2% cut out of the 7% annual market return results in only the investor seeing 1/3rd of the profits after 50 years of compound returns. The person that owns a rental house, uses the income streams to pay off rates and maintenance and gets the full tax free benefit of capital gain.

    Let me put it in another way. If the top 10% income earners of NZ focus their investments in residential properties, what % is left for KS? The remaining 60% (as bottom 30% are too poor to be in KS)? The demographic figures mean nothing. They need to attach how much of their total earnings is going into the scheme (6% of their annual minimum?). Think about it, how is it the best option for a person making $100K a year that only sees $6,000 going into their KS? In Canada, RRSP contributions can be high as 18% of the person annual income (and those unused limits are carried forward so the working class person will have gobs of incentives to contribute more if they feel ie 3rd week March 2020 was the bottom of the market).

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