For a lot of us who have lived in Japan for a few years KiwiSaver may not be something that you are entirely familiar with. Basically KiwiSaver is a long-term savings scheme designed for retirement. It is not compulsory but from what I can see a lot of people in New Zealand are taking advantage of it. Most employees are automatically entered into the scheme when they start a new job but can opt out.
Workers contribute a small percentage of their gross pay. Most KiwiSaver schemes have a minimum contribution. If you find yourself in Japan after starting a KiwiSaver scheme you can access the funds in the scheme after a twelve absence outside of New Zealand. Of course if you do come Japan we can help you re-allocate that money from the KiwiSaver scheme into a tax-efficient offshore plan. As I have said in previous posts New Zealand tax residents have good tax benefits when it comes to offshore investments. Remember you are taxed on the assumption that your offshore portfolio makes 5% per annum. If your portfolio makes more than that then it is effectively tax free. That's a great deal.
Back to KiwiSaver, there are a whole range of investment funds available inside the KiwiSaver scheme. These range in risk from low, meaning cash to high risk. This would generally mean shares. You need to work out your risk tolerance.
Remember KiwiSaver is like a box. The most important thing is what you put in the box. What is your allocation and how much do you contribute on a regular basis.
If you are a Kiwi and living outside of New Zealand. There are alternatives to KiwiSaver where you can invest in similar things. That's what I'm here for.
Friday, 8 July 2011
Tuesday, 5 July 2011
Are you an investor or a trader?
What is an investor? An investor is someone who commits capital to gain a financial return.
What is a trader? A trader is someone who buys or sells in the market. They are not particularly concerned how long they hold the stock they are simply looking to make money.
An investor wants to identify stocks that provide maximum capital growth over a long period of time.
A trader wants to make a profit without any preconceived ideas of how much time they are going to hold the stock.
An investor wants something that is predictable and shows growing earnings. They are looking for capable management and something that is reasonable. They hope that the company isn't borrowing too much money and they want the company that they are interested in to have a good cash flow.
A trader on the other hand is not particularly worried with these issues. Traders are concerned with the movement of the price of the share.
So, which one are you? I'm going to hazard a guess and say that although most of you who are reading this like the glamour of the trading section and the excitement it generates. However you may not have the necessary knowledge and skills required to be a success at this. I know I don't. Even though it's boring an yawn inducing most of your guys will be investors in which you are building capital over the long term to pay for such things as retirement, your children's school fees or even something like an overseas holiday.
Be realistic when you think about your money making strategy. Are you an investor or are you a trader?
What is a trader? A trader is someone who buys or sells in the market. They are not particularly concerned how long they hold the stock they are simply looking to make money.
An investor wants to identify stocks that provide maximum capital growth over a long period of time.
A trader wants to make a profit without any preconceived ideas of how much time they are going to hold the stock.
An investor wants something that is predictable and shows growing earnings. They are looking for capable management and something that is reasonable. They hope that the company isn't borrowing too much money and they want the company that they are interested in to have a good cash flow.
A trader on the other hand is not particularly worried with these issues. Traders are concerned with the movement of the price of the share.
An investor sells his stocks or shares when it has delivered the result the investor was looking for or the performance is looking dodgy and the risk of holding it is very high.
A trader will sell when the stock has fallen to a set point.
So, which one are you? I'm going to hazard a guess and say that although most of you who are reading this like the glamour of the trading section and the excitement it generates. However you may not have the necessary knowledge and skills required to be a success at this. I know I don't. Even though it's boring an yawn inducing most of your guys will be investors in which you are building capital over the long term to pay for such things as retirement, your children's school fees or even something like an overseas holiday.
Be realistic when you think about your money making strategy. Are you an investor or are you a trader?
Sunday, 3 July 2011
A request from a financial adviser
I mentioned in my post a couple of days ago that if you are fortunate enough to meet with a financial adviser then be prepared to answer a number of questions. This can be quite difficult for some people. A large number of us for some reason don't like talking about money and financial planning. When I was growing up it was very rare for my family to talk about it. For some families the whole idea of making money and investments is a vulgar concept and talking about it is just not a dinner table topic.
My request to you is when you meet with a financial adviser please be open with him or her. I have been in a few meetings where the client does not want to tell me anything and is only interested in "What have you've got?" This is all very well but they have given me no information at all and I can't do anything. Imagine walking into a doctor's office and the doctor asking what is wrong with you and you saying, "just give me some antibiotics." Financial advisers are there to help you. If you have given them some of your precious time then you must have some interest in what they can do for you and how you can work together, so help yourself. You don't have to tell the financial adviser everything like what you had for breakfast this morning but obviously the more information you can give the better advise you can receive.
Go into the initial meeting with an open attitude and who knows you may be pleasantly surprised. Go into the meeting with a closed, arms crossed attitude and you wasting the adviser's time and even worse you are wasting your own time.
My request to you is when you meet with a financial adviser please be open with him or her. I have been in a few meetings where the client does not want to tell me anything and is only interested in "What have you've got?" This is all very well but they have given me no information at all and I can't do anything. Imagine walking into a doctor's office and the doctor asking what is wrong with you and you saying, "just give me some antibiotics." Financial advisers are there to help you. If you have given them some of your precious time then you must have some interest in what they can do for you and how you can work together, so help yourself. You don't have to tell the financial adviser everything like what you had for breakfast this morning but obviously the more information you can give the better advise you can receive.
Go into the initial meeting with an open attitude and who knows you may be pleasantly surprised. Go into the meeting with a closed, arms crossed attitude and you wasting the adviser's time and even worse you are wasting your own time.
Saturday, 2 July 2011
RISK
Risk, one of those four letter words that the majority want to avoid. Let me tell you a little secret. Even when you get into your car to drive down to the dairy (corner store) you are taking some risk. And so when we talk about investing what your attitude to risk is very important. If you have tendency to avoid risk like the plague then you may not want to invest in emerging markets or private equity. Although it is interesting, in my work talking to people about their current financial situations I have heard many people tell me that they don't like taking any risk but that they have made investments in their best friend's flower shop. That just doesn't make sense.
So, what is risk? Well in investment it is the possibility of losing the capital you have invested.Of course there are many different types of risk:
Market risk - the fact that you are getting into investing in the first place.
Financial risk - the possibility that a company (or lets be honest, a country) may get into financial difficulties.
Liquidity risk - the risk that you can't turn your investments to cash as no one wants to buy it.
Legislative risk - the government might change the rules and leave you high and dry.
Political risk - this relates to if you are investing overseas. They might change the rules which may be detrimental to your interests.
OK, so we have looked at the different kinds of risk. Naturally if you increase the risk in your investments then there is the possibility of higher returns. There is also the possibility of the losses been higher.
Where do you sit? Are you conservative or are you going to go for it? Just make sure you know before you jump in.
So, what is risk? Well in investment it is the possibility of losing the capital you have invested.Of course there are many different types of risk:
Market risk - the fact that you are getting into investing in the first place.
Financial risk - the possibility that a company (or lets be honest, a country) may get into financial difficulties.
Liquidity risk - the risk that you can't turn your investments to cash as no one wants to buy it.
Legislative risk - the government might change the rules and leave you high and dry.
Political risk - this relates to if you are investing overseas. They might change the rules which may be detrimental to your interests.
OK, so we have looked at the different kinds of risk. Naturally if you increase the risk in your investments then there is the possibility of higher returns. There is also the possibility of the losses been higher.
Where do you sit? Are you conservative or are you going to go for it? Just make sure you know before you jump in.
Friday, 1 July 2011
You and your financial adviser
According to Investopedia a financial adviser is "A professional who helps individuals manage their finances by providing advice on money issues such as investments, insurance, mortgages, college savings, estate planning, taxes and retirement, depending on what the client requests."
A financial adviser can help you plan for your financial future. The financial adviser can help you set realistic goals and then show you ways to achieve those goals. The financial adviser can help you save for your children's education as well as help you plan and save for your retirement. The financial adviser also helps you with what type of insurance you need for your current situation.
A financial adviser can help you with all of these things however he or she does need to know some information for you. If you tell your financial adviser that you are not going to tell him or her anything about your current situation then don't be surprised if they just pack up and leave.
When you meet with a financial adviser be prepared to talk about your personal situation. For example, what you do for a living, where you live, how many children you have, also your marital status. Then they may ask what you current income and expenditure is as well as ask various questions about your balance sheet. What investments you have now, what loans you have and how much money you have in a current bank account.
A financial adviser will then take all of that information, they will look at where you are now and where you want to be and then build a plan that hopefully gets you on the road towards your final goal.
Choose your financial adviser wisely and that should guarantee a long and profitable relationship.
A financial adviser can help you plan for your financial future. The financial adviser can help you set realistic goals and then show you ways to achieve those goals. The financial adviser can help you save for your children's education as well as help you plan and save for your retirement. The financial adviser also helps you with what type of insurance you need for your current situation.
A financial adviser can help you with all of these things however he or she does need to know some information for you. If you tell your financial adviser that you are not going to tell him or her anything about your current situation then don't be surprised if they just pack up and leave.
When you meet with a financial adviser be prepared to talk about your personal situation. For example, what you do for a living, where you live, how many children you have, also your marital status. Then they may ask what you current income and expenditure is as well as ask various questions about your balance sheet. What investments you have now, what loans you have and how much money you have in a current bank account.
A financial adviser will then take all of that information, they will look at where you are now and where you want to be and then build a plan that hopefully gets you on the road towards your final goal.
Choose your financial adviser wisely and that should guarantee a long and profitable relationship.
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