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How to get financially healthy for 2021: Alistair Bean


If there was one thing 2020 taught us, it was how important it was to prepare for uncertain times. As we head into the new year, the only thing we know for certain is that there’s a Covid-19 vaccine. Its implications – and if this means the end of the pandemic? Only time will tell. And while we can’t predict the future, we can prepare for it. So if you’re resolving to secure your finances, that’s a resolution worth sticking to.

 

ALISTAIR BEAN

 

WOULD YOU CUT YOUR OWN HAIR?
We all use professionals for specialist services – lawyers, accountants, hairdressers, airline pilots and chefs. We can attempt to do some of these things unassisted, but we put ourselves at risk of not getting it quite right. As anyone who tried an at-home haircut during lockdown could surely attest to.

FINANCIAL HEALTH MATTERS
You and your family’s long-term health is the most important priority of all, valuing your financial health should be the next most important long-term priority. Maximising your investments, managing risk and growing your assets will help provide important financial security for your lifestyle, retirement, and that of your children and grandchildren. And this important priority should be treated as such by using a trusted financial adviser.

LEARNING FROM COVID-19
Last year we saw many KiwiSaver investors who did not use a trusted financial adviser at the start of the Covid-19 crisis. Instead, they changed from growth funds to conservative funds, and they locked in losses as a result. It may take these investors up to seven years to earn their losses back. Records show hardly any investors who use a trusted financial adviser changed their funds, and as a result they are benefitting. Investors who sought such advice not only see extra value in their investments, they receive guidance while markets go up and down (which they always do), the opportunity to claim back fees in tax returns, and continued focus on their goals.

EXPERT ADVICE
At Alistair Bean & Associates – Financial Advisers we manage your investments on a daily basis, we focus on the short, medium and longer-term, and we provide access to investments that can only be accessed by using a financial adviser, both in New Zealand and offshore. This level of expertise offers more – and more informed – opportunities.

ALISTAIR BEAN’S TOP MONEY TIP FOR 2021
One of the best things you can do this year is a simple budget. If your total monthly expenses, including spending money and holidays, is say $4000 per month, then leave $48,000 in your bank account as emergency funds as a one-year provision. Invest the rest of your funds.
Do not leave any other money in your bank account unless you have other special projects, as banks are currently paying less than 1 percent per annum for one year term deposits. Less tax and inflation, this is equivalent to -1.4 percent per annum.

Contact Alistair Bean & Associates – Financial Advisers on
(03) 288 0404 or via Alistair.bean@abafs.co.nz to help achieve your financial goals. Personal disclosure documents available free in the resources tab.


 

Four tools for sorting your finances in 2021


Save more than time with automated money management tools to help you keep on top of your spending and investments. These won’t replace the advice of experts, but can act as helpful tools to level up your finances this year.

 

 

MONEY LOVER
Easily track your incomings and outgoings with a free expense tracker mobile app like Money Lover. Categorise your spending into relevant groupings like bills, groceries and petrol, and set limits to get alerts if you come too close to your cap.

SORTED.ORG.NZ
The government’s budgeting service is a slick and highly regarded offering of unbiased money management tools and advice. The website offers advice and guidance for everything from daily spending to mortgages, KiwiSaver, investing and retirement planning.

MONEY SIMPLE
Another free expense tracker, Money Simple is web-based and pulls all your spending information from multiple banks and accounts into customisable categories – giving you oversight of all your expenditure.

SHARESIES
New Zealand’s fastest growing investment platform makes investing easy and accessible for those less literate in the world of shares and stocks. Build and track your investment portfolio from the easy-to-use and low-fee online platform.


 

A man is not a financial plan: Polson Higgs Wealth Management


Studies show women make higher returns on their financial investments than men.
Why, then, do so many take a hands-off approach to money? Authorised Financial Advisor Shiree Hembrow has dedicated 25 years to helping women plan for and reap the rewards of well-managed finances.

 

The phwealth adviser says women have a different perspective on money than men.

“Since I have been working in the financial planning world, I have noticed that few women I meet are fully engaged in their finances or planning for their lives after work, mostly leaving it up to their husbands, and sometimes to no one,” she says.

Taking an active role in managing it empowers women to protect themselves for their financial future.

Statistically, women live longer than men and earn less. Statistics New Zealand data shows the gender pay gap was more than nine percent in the June 2019 quarter.

“This means women will require more money saved for what is likely to be a longer retirement,” she says. “For women over 50, they need reassurance they will not run out of money or be a burden on their families. This is extremely important for widowed or divorced women.”

Shiree says a written personal financial plan from an independent third-party adviser allows women, both single and coupled, to map out what they want to achieve in their life and learn how money works so they can take an equal and active role in decisions around shared and independent finances.

“I learned in my life that a man is not a financial plan,” says Shiree. “I married at 42, which for my husband was a second marriage. At the time I was an independent person with my own career and enjoying looking after myself.

“Bringing two independent people together in a new relationship is a miracle in itself, but for me, putting our financial lives together was more than just checking the bank balance every so often. Some of our dreams are separate.

“We will not do everything together all the time. Knowing what each of us wants without having to do everything together is important to me as a woman. I am a woman who needs to know where I am going and where we are going as a couple too.”

Shiree says the benefits of a financial plan applies regardless of the size of your salary or assets – and evidence shows once women are empowered around money they become formidable financial forces.

Why women make good investors:

A 2017 Fidelity study found women earn higher returns on their investments and save more than men by about 0.4% per annum.

Women take a more hands-off approach, allowing investments to gain a better long-term return. There is a book called Warren Buffet Invests Like A Girl and Why You Should Too.

Women are more likely to evaluate success by asking the question, “Am I on track to achieving my goals?” whereas men can be reactive and try to “win” with frequent changes.


 

Maat Group: Putting your investment dollar to work


Equity Investment Specialists, Maat Group, continues to bring value to the national commercial landscape and investors alike.

Metropol talks to Managing Director Neil Tuffin about how commercial property equity investment can make your dollar work harder for you.


What does the Maat Group offer and what does your name mean?
Maat Group is a commercial property equity investment company. Maat Group adopted the Egyptian goddess Maat as its symbol; she’s the goddess of truth, justice and balance.


What is commercial property equity investment?
It’s the purchase of commercial property as a direct property investment. By investing as a shareholder in a company formed for the purchase of an investment, the investor is able to purchase a larger property with a better yield than what is available if purchasing as an individual. The shareholder becomes a part owner in the property, along with other investors. The property is fully managed for investors including property management, financial management and general administrative duties.


How long do investors have to leave their money in the investment for?
Our equity investments don’t have any fixed time frame. Investors are encouraged to remain in the investment long term as this passive investment can provide capital gain over time. If circumstances arise that mean an investor has to exit, we can assist with this and facilitate the sale of these shares to the incoming investor. You can contact us for further clarification on our exit process at any time.


Do you charge any investment fees?
The company formed to purchase the investment property pays for the management for the property along with additional expenses such as accounting or audit fees. These are paid from the rental income of the property and don’t affect the distribution rate. The fee structure is set out in the product disclosure statement (PDS) which is available at the time of investment.


How often do investors receive distribution payments from you and is it taxed?
We distribute our returns on investments on the 20th day of each month. If you’re invested as an individual or as a joint partnership, we’re required to deduct your tax portion prior to your distribution payment each month. Our investments are run as a PIE investment with the tax rates of 10.5 percent, 17.5 percent and 28 percent. If you’re invested under a trust or company, you may elect a zero percent tax rate for your investment.


What is the minimum investment?
The minimum investment for our equity investments is $25,000. You can purchase multiple shares in each investment up to a maximum of 20 percent of the share parcels on offer.


Do investors earn capital gain?
The capital gain would be paid at the time of the sale of the property. Investors may receive a capital gain payment in addition to their original share price if the property is sold in excess of the original purchase price


 

Plump up the pension pot


Whether it’s a comfortable three decades away or in a few short years, it’s tempting to put off planning for retirement and facing fiscal reality.

 

 

How much of a nest egg we really need can be subjective, varying vastly depending on situations and expectations.

A figure plucked out by a few professionals is $300,000 per person or $400,000 per couple.

And then there are some experts that say we need a million or two to relish our twilight years.

Ironically both can be right. We all have unique needs, dreams, and fates.

  1. Do the maths
    All incoming funds and likely outgoing expenses meld to make the final pot of gold. Calculate incomes from weekly New Zealand Superannuation, other pensions, tenants, boarders, projected KiwiSaver funds and other investments. Will the mortgage be paid off? Will there be lump sums from cashed-up investments such as property or the fine art collection? Whether it’s a flowchart of likelihoods or a list of outgoings and incomings, it pays to put pen to paper and update continually.
  2. Downsizing
    Many plan to downsize upon retiring to plump up the pension pot, but when it comes to the crunch, it might be difficult to sacrifice creature comforts. Living frugally in a nicer home might appeal to one, and a humble abode and overseas trips to others.
  3. Decide on your lifestyle
    Some people might be content living off a well-tended vege garden, for others it’s banqueting on a river cruise. Lavish or frugal – or indeed somewhere in between – decide what lifestyle fits with reality, and work toward a healthy dollar sum.
  4. Expect the unexpected
    Unplanned medical costs, helping the children out financially, global events or even new opportunities, being over-prepared brings peace of mind. If forthcoming inheritance is in the mix, be aware anything can happen. Security is planning for the worst case scenario.
  5. How much to save
    The closer we are to retirement, the larger percentage we should be stashing away from our salaries. Invest wisely in purchases that increase in value or will make money. For example, will this latest computer help increase my income? As leisure days loom faster we are more likely to work smarter than harder. Regardless, every little amount will help and it’s never too late.
  6. The bucket list
    Retirement buys the time, but not necessarily the bucks. Wish-lists invariably come with a price tag and they are generally better crossed off early, while we are fit and able. Make a list of the ‘must-dos’, and ‘would like to do’, and ferret away the required funds.
  7. Get advice from all angles
    Take on board all the workable tips from financial advisers, success stories from happy retirees, an accountant who knows your spending habits and online research. The website www.sorted.org.nz has useful advice and current pension rates.

Seeing retirement as an exciting staging of life makes the saving up for the adventure a pleasure.


 

Loan Market

Climbing the Property ladder?


It’s right up there as one of the most important moves you’ll make in your life. Little wonder that buying a home – whether it’s your first home or your fifth – can be highly stressful, especially when you’re not sure if you’re making the right moves to get the best deal.

 

Loan Market

 

Based right here in Christchurch, the Nathan Miglani team is passionate about helping Canterbury people take the right steps to achieve the outcomes they’re looking for while protecting their financial wellbeing – now and in the future.  As experienced mortgage brokers (Nathan is the number-one mortgage adviser for Loan Market in the South Island), the company has the expertise to help customers from all walks of life. It has helped hundreds of young couples achieve the dream of purchasing their first home.

From KiwiSaver and the HomeStart grant to lawyers, building inspections and insurance, buying a home for the first time can be overwhelming, so the Nathan Miglani team works right alongside home buyers to help them through the process, from working out a budget and saving for a deposit, right through to liaising with the solicitors to ensure settlement goes smoothly.

Getting onto the property ladder and buying a home can start to set you up financially for the future you’ve dreamed of – but once you’re on the ladder you’ve got so much more to protect. So, when it comes to selling and buying again, it’s even more important to get the right advice, especially if you have a young family to consider.

When life gets more complicated, with children, a business, marriage or separation, you need a plan that doesn’t just work for you now but will fit your evolving needs for the years to come. Simply finding the lowest interest rate is not necessarily going to give you the best outcome. That’s why the team takes the time to get to know you; not just securing a mortgage, but working out a plan to meet your future financial goals.

And after they have helped you with your mortgage, they can help you with everything else: investment property, business, vehicle or debt consolidation. Like bankers in the good old days, Loan Market is there whenever you have a financial query – just pick up the phone and call. Every member of the team has a strong banking background so you can be assured you’re getting the right advice every time.

Client Care Manager, Teresa, has been in the banking industry for 27 years. Together with Client Experience Assistant Rebecca, she will work closely with you to ensure you have the very best experience with no mistakes that could jeopardise your hard-earned money.

Think of this as the beginning of a lifelong partnership. When your daughter needs a loan to buy a car or you decide to start a new business, you’ll know exactly who to call!