Month: May 2018

If its too good to be true-It almost certainly is

We have hard these words so often by those warning us to beware of scammers yet so often we hear of intelligent people being scammed of thousands of dollars and in extreme cases tens of thousands. Commonsense seems to go out the window when intelligent people get taken in by these rat bags. In a recent case, a New Zealand man in his late 50s whose job title was a cleaner aoppeared in the Christchurch District Court for his part in a ponzi type of scam where over $8 million was invested by 900 people in a fake foreign exchange scheme.

Many invester’s felt that everything was above board because the company involved weas registered on the Financial Service Provider’s Register however the cleaner was charged with obtaining registration as a financial service provider by deception.

A tradesman who had lost everything he put into the scheme commented that the investment appeared too good to be true and that he was afrauid of missing out on such an investment opportunity. A friend of the tradesman who had got him into the scheme later told him it was a scam but only after they had both lost the money they invested in it.

What happened to the money is a commonly asked question in similar scams and in this situation, none of it went into any legitimate forex trading platform or other invstment as had been promised by the company. Instead the defendant used part of the money as a deposit on a $3.5 million Christchurch property and $111,000 on a BMW.

I think there is a clear lesson here. Good money manager’s live a modest lifestyle and would you take financial advice from someone who drives a flash car? It hard to believe that people like this are able to relate to those who managed to save and invest money from their modest incomes. At the end of the day it is up to everyone to take responsibility for their own finances and use their commonsense, something that tends to go out the window when people are enticed into money making schemes promising easy riches.

Feel free to share and print to post.

www.robertastewart.com

Debt-a dirty word for the financially literate

“The borrower is a slave to the lender.” Proverbs 22:7

If you don’t have the money you don’t buy it is a quote I once heard from a church leader and he is right. Debt is a cancer on the financial health of people and just like physical cancer, the cure is often painful and requires a change in behaviour. It is all very well to keep your debt under control but you must learn to live within your means if you are able to. If the books make terrible reading then you still must do something about it such as seeking financial advice and going to a budget advisor.

Credit card spending is one of the main causes of debt because it makes credit easily available. Once you have convinced your bank of your credit worthiness you are virtually guaranteed a credit card. All the bank is concerned about is making a profit. They are not concerned that you are getting in debt and if you get behind in your credit card repayments, the interest rates really bite hard.

It is not just those on modest incomes who are in possession of a credit cards. Those on medium and high incomes use them as well.

So what does this tell you?

It tells me that what motivates people to use credit cards is greed and selfishness. It is the “keeping up with the Joneses” mindset. Some people spend their whole lifes trying to keep up a persona, that is keeping up a self-image just to impress others. That nice car or expensive house house may impress others but at the end of the day if it is bought with borrowed money then it will result in the borrower’s life being ruled by the lender.

Many people are pennywise but pound foolish! They take note of all of the bargains and will purchase one item over a competititor because it is 10p cheaper yet would think nothing of purchasing other stuff on credit and paying interest on it which means they are paying a higher price for everything bought on credit.

It is important to live by your own financial objectives and circumstances. In short: Stop being a people pleaser and be yourself!

The information here is the opinion of the writer. If you need financial advice then ask your budget or financial advisor. Feel free to pass on, share, and print this post.

www.robertastewart.com

Working out your risk profile

Investing money has its risks if you are prepared to go for growth but even though you may not have the stomach to take on risky investments

The main one is to diversify. That is to spread your portfolio over a wide range of industries. This is possible for the ordinary man and woman in the street who are able to invest in managed funds where your investment is combined with those of others. It is then up to the fund manager to handle all of the investments. This is exactly how kiwisaver operates.

Each fund will give you an option of investing in Conservative, Balanced, or GRowth funds and your decision of which fund to leave your money in will be determined on whether you can stomach heavy losses should the sharemarket go bellyup. If the though of losing your money will cause you sleepless nights then you should go for balanced funds. Conservative funds will not grow your money if at all once the fund manager withdraws their fees that you may have better options though in the case of kiwisaver, the government will contribute 50% of what you put in to a maximum of $520 per annum so at least this would make it worthwhile.

Your risk profile is not the only determining factor in deciding which fund to choose. If you are saving for a deposit on a home then you are not going to want to risk losing your money in the sharemarket which will happen if you had all of youer money in Growth funds only for the markets to tumble.

Your age is another factor to consider. When you are young, it is advisable to go for growth funds because you have more time to recover should the markets go down whereas someone nearing retirement would have their retirement plans affected should this occur.

It is your money however and your own responsibility to decide where you are going to invest so learn all you can about the various types of investments and in time you increase your financial literacy.

The information given here is my own opinion and not given as financial advice.It is best to seek professional financial advice if you are unsure.

www.robertastewart.com

Amazon Tax introduced to NZ

A new tax has been introduced to New Zealand where purchasers are required to pay goods and services tax on goods bought from sites such as Amazon. Previously any goods valued at under $400 NZ were exempt from tax.

Goods and Services tax or G.S.T as it is called is 15% of the value of the goods but apparently the postage paid on the item will be taxable as well. I don’t know about others but whenever I have bought stuff on Amazon I had to pay $25 NZ postage which means an extra $3.75 is payable in G.S.T on the postage alone never mind the value of the book.

The overseas websites are required to register for G.S.T but those that sell less than $60,000 NZ worth of goods to NZ per annum are exempt.

I’m not sure how this tax applies to books bought overseas and brought back home with your luggage. In due course we will see how all this unfolds.

This new law is designed to level the playing field because local retailer’s are suffering with the volume of online shopping. I think if Amazon set up their F.B.A service in New Zealand then physical retailer’s will really have something to worry about. FBA stands for fulfillment by Amazon.

ABOUT AMAZON FBA

Here is how it works. You source items to sell at Amazon. This may be from ebay or in our case trademe and put your markup on it to sell at Amazon FBA. Amazon will collect your goods for you for delivery to their warehouse. I do know of one or two people in the UK who source products for Amazon FBA by going through the websites of high street stores and sourcing products that way.

If you are in a country where you can do this then it is worth a try. I will just have to wait and hope that Amazon do set up a warehouse in NZ as well so that I can  jump on the bandwagon as well.

robertastewart.com.