NZ Wealth & Risk - money for thoughtful Kiwis
The Government announced its new housing package on 23 March. In doing so, they used some political capital. The following meme is apt:Any significant change that might impact residential housing prices was going to trigger a fight. The changes announced? Definitely. Below are some of my comments about the package, not to ...
Finance is important. It wins wars. Modern finance is one of the drivers for the quality of life we currently enjoy. Money and our financial system enable us to enter into transactions, specialise, and allows us to take money into and out of the future. Capital allocation One of the ...
(File under: Some terrible financial decisions can be great life decisions, and vice versa.) A few months ago, I took my family on a road trip around the South Island. We stayed in various towns and cities we don’t often visit. One of the things my wife and I often ...
I’ve met a number of people who’ve made a decent amount of money from property investment. I tip my hat to each and every one of them. Below is a consciously arbitrary, tongue-in-cheek, categorisation of three different types of property investors. The professional property investor Most of the people I’d ...
Every now and then I see people recommending a rental property as a great retirement investment. If you have plenty of assets, a rental property might be a good investment as part of a broader investment portfolio. But I think it’s a bad idea to tie up the majority of ...
“Past performance is no guarantee of future performance” Read the small print of any decent investment offering, and you’ll see something to the effect of “past performance is no guarantee of future performance”. This isn’t just compliance-speak. It’s true. Let’s look at historic returns of various $1 million share portfolios, ...
There are two main ways to make money when you invest in property: income (such as rent) and capital gains. Broadly speaking, income yields from property aren’t spectacular at the moment. Especially once you consider the risks involved with investing in direct property (illiquid, undiversified investments). I’m going on a ...
On May 24 I wrote my first “tweetstorm” (follow me on Twitter here). I made a number of observations about the FMA’s recent snapshot of NZ’s 1,800 Authorised Financial Advisers (AFAs). One finding in particular sticks with me. Only 3% of New Zealand’s 1,800 AFAs provided direct property investment advice over ...
New subscribers to the NZ Wealth & Risk mailing list receive a Build Your Own Financial Plan series of emails. This series consists of more than a dozen regular emails detailing certain aspects of your financial life. Below is an excerpt from one of the lessons. It’s about home ownership. If ...
Any political party is going to support the idea of “housing affordability”. Who wouldn’t! The issue with housing affordability is that it relates to property prices. Broadly speaking, the way to make housing more affordable is to reduce property prices. Many voters are property owners. For most of these people, ...
Josh Barro, writing for The New York Times: “Imagine if we bought food the way we buy housing. Instead of buying the food you need right now, you would buy a contract giving you rights to a stream of food in perpetuity. Say, a contract entitling you to five pounds ...
I have many questions about investing in residential property. I have my own ideas about some of the answers, but I wish I could have answers that are more satisfactory and align with property prices in New Zealand and Australia at the moment. If investing in residential property is ...
My children recently pulled out our Monopoly board. They’re too young to play, but had fun fooling around with the toy money and the playing pieces. As I was tidying up, it occurred to me that for many people, Monopoly is something of an entrée into the world of commerce. ...
Something I’ve been thinking about a lot lately is where financial advisers should stand with respect to residential property. Traditionally, advisers have oriented towards advising on financial assets – cash, fixed interest products like term deposits and bonds, managed investment schemes, direct shares, superannuation and Kiwisaver products. Certainly, there is a ...
The people I have in mind for this article are young couples. They might have a young family. Both have reasonable jobs. They can afford to rent a house that meets their needs. They have some discretionary income. They can put some money away. But they don’t feel like they ...