Listening to the right people…
Taking advice from the right people and ignoring comments from the uninformed will help you to become better off financially in the long run. An example I am going to use is my nephew Kyle who had made a bit of money from sports betting. He withdrew all of the money from his betting account and invested the money in a fixed interest account. His goal is to save money for a house deposit but he is almost got the money now. It is some of the advice or rather comments that he has been given that really gets me, with some of it bordering on stupidity.
Myself, I advised him that investing in the New Zealand retirement savings scheme Kiwisaver would be a good bet because he would be able to use part of his kiwisaver for a house deposit providing that he has been in kiwisaver for at least 3 years and that it is for his first home. He would qualify on the latter as he has never owned a home but he has been in kiwisaver for just 6 months and is unwilling to wait another 3 years.
That may be so, but everyone in kiwisaver should at least contribute $1040 into the scheme per annum to take advantage of the full tax credits of $520. This is effectively a return of 50% per annum on your investment, all tax free.
The advice I gave is exactly the same as every other financial expert have been saying, and no, I am not qualified to give financial advice to anyone but then neither are many of those who have been adding their two cents worth. Some of them have little money or assets and have nothing to show for their life’s work.
If you hang around losers, you will be one yourself. What they will do is drag you down to their level because then that it will make them feel better about themselves. Some people have such a low opinion of themselves that they will tear others down because the success of others is giving them an inferiority complex.
To use Kyle as an example, he has prospered since he moved out of his auntie’s flat.
Kyle has more financial sense than any of his siblings; one of whom told their mother that he has a gambling addiction. He withdrew 10k from his betting account and invested the money and when he told his brother that he had nothing left in his account that he had nothing left, he thought he had lost the money.
The pathetic thing about this is that this sibling cannot live a day without alcohol and smokes like a chimney that who knows how much of his income is disappearing every week on booze and smokes. Multiply the weekly amount spent on this and the amount spent annually on his vices is quite substantial, certainly in the 1000s.
It pays to not let others know what you are doing and keep your activities to yourself apart from those who are on the same page.
As for investing money into his retirement fund to save for a house, well that may not be the right option for someone looking to use the money in the short to medium term. A retirement fund is exactly that-a fund for retirement and one has to understand that you have to wait until you are 65 or whatever the retirement age when you reach it. Money for other purposes should be put in appropriate account.
A stupid comment I did hear from someone regarding kiwisaver was, “You may not get it back.”
Kiwisaver will get the money at 65 but what gets my goat is that the person who masde this comment has very little in the way of assets so that whatever she spent the money on she never got it back. It is the same with people who spend x money on a nicotine or alcohol addiction; that is money gone forever, not to mention a shortened life span because of the health consequences of these addictions.
I wrote a post a few weeks ago about using your money as a seed to grow your wealth. Money if it is sown in the right places can reap a nice future harvest.
Happy investing!