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Needs Versus Wants

Written by R. A. Stewart

What is the difference between a need and a want?

To explain it in plain language a need is something we need for our day to day living such as food, shelter, clothing, and utilities, while a want is something we desire but can do without. It is all down to prioritising your spending. 

Even a need is something which you have a measure of control over. We all need clothing but you do not have to purchase the most expensive clothes in order to meet this need. Your local charity shop will be able to supply you with appropriate clothing for a few dollars.

The same applies to food; you can meet this need by taking advantage of the specials in the supermarket and by not wasting food.

Money which is able to be saved by making smart purchases can be put to be used elsewhere. “Better in your pocket than someone else,” as the saying goes.

That does not mean you should just fritter away the money on something which you want.

Some people will try to reduce whatever they spend on a need in order to finance a want, none more so when we are talking about their hobbies and the things they are passionate about. Collectables are a prime example.

When you hear about the collections of some people whether that is dolls, beer labels, or whatever, you think that how can one person finance all of that? Some other area of their personal finances must suffer in order to pay for all of it; that may be travel or retirement savings.

We all have a choice of what we spend our money on at the supermarket and spending that money on good wholesome food is a wise investment. Can you spot any foods on this list that you may leave off your shopping list?

The difference between a need and a want can be subjective; for example a person who is addicted to alcohol, cigarettes, and drugs would categorize these items as needs but these are wants to someone who does not have to deal with these issues.

Needs

Housing

Clothing

Food

Water

Medical needs

Wants

Overseas holiday

Hobbies

Gambling

Expensive clothing

It is important to note that needs vary from one person to another and that your budget needs to be tailored to your own personal circumstances and not copied from someone else’s needs.

Before you spend money on expensive needs such as a vehicle, ask yourself, “What is the least expensive option?”

Purchasing a flash car just to impress your peers and to keep up with the Joneses is a mistake and will cost you in the long run. 

A vehicle may be a need if you require it for transport but it becomes a want if you desire the most expensive model. 

There can be consequences to not having your needs filled. It may result in illness and even death if your medical requirements are not met.

It is all a matter of getting your priorities in the right order and that requires wisdom. You do not have to experience something to know that it is bad for you; you just need to open your eyes and see the experiences of others and learn. 

About this article

Feel free to share this article with others. You may use this article as content for your blog, website, or ebook. 

www.robertastewart.com

 

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Investing for seniors

Investing for seniors

Written by R. A. Stewart

 

Your age is a crucial factor in establishing your savings and investing strategy. Your 20s, 30s, 40s, and 50s are your savings years. It is these years when you build up your assets. 

Your 60s and 70s can be considered your spending years. It is when you tick off items on your bucket list while you are able to.

That does not mean that you do not have to work, a lot of older people are taking this option, not because they cannot make ends meet on their pension, but because they enjoy what they are doing.

In New Zealand, retirees will have access to their kiwisaver account once they reach the age of 65. Money invested in kiwisaver will be in growth, balanced, or conservative funds. Most people during their working life opt for growth or balanced funds.

It is time to decide whether to stay with the status quo or invest in more conservative funds. 

Your age and your health are the two most important factors in deciding which fund to invest your money in. 

Older people do not have time on their side to overcome financial setbacks such share market falls and so forth, therefore if you are 60+ it is a good idea to lean toward more conservative investments but still retain some exposure to risk.

It is worth mentioning at this point that New Zealand financial advisor and writer Frances Cook has a formula for calculating how much exposure you should have based on your age, and it is this…

Subtract your age from 100.

If for example you are aged 60 then only 40% of your portfolio should be invested in the share market.

I do not necessarily agree with this formula and my exposure to the share market is more than her formula suggests I have.

However, that is a personal choice; one that I do not necessarily recommend to you because your circumstances will be different as they are for different people.

If you are connected to the internet and you have a lot of spare cash in your account then I suggest that you place most of your money into an account that is not connected to internet banking. This is to reduce your chances of becoming a victim of internet scammers. 

With internet banking being the norm, this could be difficult in the future though.

In any case I still believe that it will pay to arrange your finances so that if you fall victim to a scammer then not all of your money will be lost. 

Don’t leave all of your money in the one account for goodness sake as some victims of scammers have.

If you are traveling then make sure you don’t have access to your life savings because if you do then so will be a scammer if they manage to get hold of your login details. What I am trying to say is you should leave your entire life savings in an account which you use to do your daily spending. Keep it in a separate account from the account you do your day to day banking. The 

Scammers have all kinds of ways to trick people into handing over their login details.

Anyone can be a victim so don’t be proud by saying “I am not that stupid.”

As you get older you will have to invest more conservatively; that does not necessarily mean transferring from growth to conservative funds but investing some of your current savings into low risk accounts. The deciding factor is your timeline. How soon you need the money and funds which are going to be used within 12 months are best invested conservatively.

 

www.robertastewart.com

 

ABOUT THIS ARTICLE

This article is of the opinion of the writer and may not be applicable to your personal circumstances. Feel free to share this article. You may also use this article for your website/blog or as content for your ebook.

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The Benefits of Saving

The advantages of saving

Written by R. A. Stewart

Having savings will make life easier later on down the road. Just think about these benefits of saving money that people who are shopaholics cannot take advantage of.

  1. You are able to invest the money and grow your wealth. There are ample opportunities to invest your money and make it grow and if you are able to save your money, you can take advantage of these.
  2. When you save up for something instead of using your credit card then you save on interest repayments. People who buy stuff on credit are paying more than if they have paid in cash. During a person’s lifetime, this interest adds up to a fortune.
  3. Having savings behind you gives you more options. If you spend everything you make then when the time comes that you may lose your job, you are inhibited by your lack of resources. People with savings behind them are able to move to another city in order to find work.
  4. When an emergency arises such as dental repairs, car break down, family occasion such as a wedding or funeral, you are in a better position to deal with it if finance is not a problem.

Saving money requires self-discipline and responsibility for your own finances and with a bit of planning and organization you can make life easier for yourself to cope with the financial hits that will occur from time to time.

Having a plan for your money instead of just saving for the sake of it will give you motivation to keep saving. There are several things you could save for; here are some ideas.

* An emergency fund

*To build a share portfolio

*Save for a car

*Save for a wedding

*Save for a house deposit

*Save for an education fund for your kids

*Dentist and medical bills

Money which is used for saving is disposable income; it is money left over after paying your fixed costs. Think about what you spend your money on that is a want rather than a need. That is money which can be saved and used elsewhere. Money which is spent on wants is considered as consumer spending; it is money which is consumed. Disposable income or discretionary spending money as it is also referred to can be used to protect yourself against future financial shocks. It is the responsible thing to do to make choices which benefit you and your family. 

Irresponsible people just fritter away their disposable income without any thought to the future. What you spend your money on will make a difference to future financial outcomes. It all boils down to planning which will in turn help you to make better choices. No one ever reached the retirement age and regretted that they joined a retirement scheme. 

Always strive to save when you are in a position to do so because life does not always follow a straight path; there will be setbacks along the way as those people affected by natural disasters will tell you.

About this article

This article is of the opinion of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your ebook, website, or blog. 

www.robertastewart.com

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The savings habit should be developed from a young age.

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Beginners Guide to the share market

You do not have to be rich to get involved in the share market these days with online share market platforms such as Sharesies and Hatch which provide a gateway to novice investors.

If you are from a country other than New Zealand or Australia then Robinhood from the States is a share market platform which you can use.

Here are my tips to follow if you are a complete beginner.

Tip 1: Shares go up and down

The value of your shares will fluctuate; that is the nature of the markets. It is important not to focus on your shares but rather on saving and letting the markets take care of itself because if you are strategic with your investments then falling markets will not scare you. 

Tip 2: Know why you are investing

Have a clear plan on what the money’s for. Is it for your retirement, a mortgage, a vehicle, or as a rainy day fund. 

Tip 3: Invest money you can afford to lose

Money which is invested in the share market should only be money which you can fully afford to lose because of the volatile nature of shares, however, you can choose a conservative funds when investing in managed funds. It all depends on your time frame. If the money is needed in the short term then investing in conservative funds will be your best option. 

Tip 4: Know your risk profile

Your risk profile is the level of risk you are prepared for or are willing to take. If you are young you are able to take more risks because you have more time to recover from financial setbacks.

Tip 5: Not a substitute for kiwisaver

Online investing  platforms such as Robinhood, Sharesies, Hatch and the like should not be a substitute for your retirement fund, in New Zealand that is called Kiwisaver)

Tip 5: Not a get rich scheme

Investing in the share market is a long term game; it is not a get rich quick scheme. Don’t be taken in by the stories of those who have made a share market killing because you never get to hear about the losses and it is likely that people who made that killing will spend years trying to make another killing and lose all their gains.

Tip 6: Patience is a virtue

It is time and not timing which is the key to making money in the share market. Patience investors are rewarded handsomely if they stay onboard rather than jump ship during stormy seas.

Tip 6: Do your homework

It is important to do your homework on the various companies you plan to invest in and not just invest haphazardly. The alternative is to invest in managed funds; the fund manager will choose the companies for you.

Tip 7: Take responsibility

Don’t blame anyone for your mistakes, take responsibility for them and learn from them; that way you will become a better investor.

Tip 8: Get right advice

Listen to the right people. Prior to the Global Financial Crisis, some financial experts were saying “The high interest rates do not reflect the higher risk investors of finance companies are taking on.”

Well guess what happened? A number of them folded.

www.robertastewart.com

Start investing on a shoestring

Sharesies makes it possible for anyone to get into buying and selling shares. It is an online share market platform where you have the option of purchasing shares in individual companies or in various funds (managed/mutual funds). You can even start with $5. This is a no brainer because it gives investors young and not so young the chance to improve their financial literacy. There is certainly no substitute for experience when it comes to learning and this is applicable to everything else, not just investing.

Join sharesies here: https://sharesies.nz/r/377DFM

Disclaimer: I may receive a small sign up bonus if you join sharesies.

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5 Industries not to invest in

Coal is still being burned in New Zealand and a lot of other countries.

5 Industries not to invest in

We live in a changing world; industries which were once thriving will likely see a decline but those that are able to adapt to a changing world will thrive, but there are some industries which I would think twice about investing in for various reasons. It is up to each and every investor to do their own due diligence when making their investment choices.

Here is my list of industries to avoid:

  1. Fossil Fuel industries

It is no secret that coal is the scapegoat for climate change and all of the weather related events which take place around the world with monotonous regularity. As a result, it is risky to be investing in anything which is being blamed for climate change, coal being one of these. 

During the GFC, the New Zealand government privatised many state owned companies to pay it’s debts, Solid Energy who were involved in the mining industry was one of these. Just a few years later, Solid Energy collapsed with debts of 400m. Falling coal prices were given as the reason for it’s demise.  About the same time, the Pike River coal mine blew up killing 29 miners. It too collapsed. Both were listed on the NZ share market. Investors got their fingers burned. Need I say more?

  1. Manufacturing

Manufacturing is another industry which is vulnerable to changing economic conditions and government policies. During the GFC, Feltex carpets collapsed. It was listed on the NZ Stock exchange. Investors lost their money. I do not know the reason for the demise of Feltex but do know that whatever is manufactured in the West, it is likely that it can be made in China at a fraction of the cost.

  1. Airlines

The lock downs around the world taught us how Airlines can be easily affected by a pandemic. Air New Zealand were greatly affected as were Airlines around the world. The government bailed them out and it was not the only time that Air New Zealand was rescued by the government. In 2001, they were saved from going under by the NZ government. The shares went down 14 cents per share before they recovered but never returned to their original price. The NZ government ended up owning 51% of the company.

  1. Retail

Internet shopping has made retail shares risky. I just saw on the news recently that Australian Post has an aircraft which will be used solely for parcels. The seats were taken out of this former passenger plane. Trends which take place in Europe and America are ahead of Australia and New Zealand so high street retail firms need to adapt fast or be left behind.

  1. Property Developers

There have been several companies involved in property development which have gone to the wall in the past decade. Slowing economic conditions, staff shortages, and material shortages are problems which hinder progress. 

During the Global Financial Crisis, Lombard, a finance company in New Zealand went bust. They loaned money to property developers and when their creditors were unable to service their debt it affected Lombard. Their glossy brochure stated that the loans are secured by property but the problem came when the value of the properties were worth less than the debt.

Learning from Experience

Experience is the best teacher and I admit that I lost money when I bought shares in Air New Zealand and Feltex Carpets. I also lost money when I invested 5k in Lombard Finance at compound interest. When Lombard went belly up that 5k had over to over 6k. At least I did receive some money back and this was deposited into my retirement fund which in New Zealand is called Kiwisaver. 

As for Coal; the Pike River mine is around 13 or so miles from where I live. I did think of buying shares in Pike River before the explosion just for an interest. I suggest that if you are buying shares in something for the same reason then do so with discretionary spending money.

Special note

Any industry which relies heavily on the discretionary dollar is always going to be vulnerable to changes in the economy. 

www.robertastewart.com

Lake Mapouriki near Franz Josef Glacier. A tourist hotspot which was hit hard by covid lock downs.

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Diversification and what it is

How to diversify 

Written by Robert A. Stewart

Diversification is a term we often come across in the investment industry but what does this really mean for the Mum and Dad investor and how can the ordinary investor profit from diversification? Here is an article written in simple language which everyday investors can understand.

Diversification in the share market

What it is and how you can make it work for you

Diversify, diversify, diversify are terms you will come across in the world of investments so what does it mean and how can you make it work to grow your wealth?

When someone says you should diversify your investments what is meant is that your investments are spread out among different companies and sectors in order to reduce your risk.

An investor may have shares in a phone company, a power company, a bank, an insurance company and so on.

This kind of diversification was once beyond the means of the average investor because one had to purchase at least $3,000 worth of each share just to make it viable because of the broker’s commission on each buy and sell transaction.

Not any more!

Online share market trading platforms such as Sharesies in New Zealand and Robinhood in the US have opened the way for anyone of any means to get involved in the markets. These platforms enable anyone to build up their financial literacy on a shoestring. There are lots of other online investment platforms similar to Sharesies and Robinhood which gives you a wide choice. 

With sharesies the minimum investment you can make is $5 but with Kernel Wealth, another online investment platform in New Zealand the minimum investment is $100. This is just an example of different rules for different companies.

Mum and Dad investors can buy into a range of diverse companies on a shoe string with sharesies and robin hood which in the long term is good for those astute enough to participate.

Investing in individual companies is not the only way to build up a diverse portfolio; the other way is investing in managed funds or as it is referred to in the States, Mutual Funds. 

When buying into these funds you are combining your money with other investors to purchase units  in the funds. Fund managers will purchase shares in a range of companies on your behalf.

The level of risk can vary depending on the industry which the fund manager invests your money.

These investments are generally referred to as Growth Funds which has the potential to grow your savings but at a higher risk. 

Those investors who want a mixture of high risk and low risk funds will invest in what is called Balanced funds. This is a combination of growth and balanced funds. Investors may have the option of choosing which percentage of their investment they would like in growth or conservative funds..

Diversification is an excellent wealth building strategy for the average investors who wants to create a nest egg for the future. It is a matter knowing what you want to achieve with your investments and investing accordingly.

About this article

This article is based on the writer’s experience and may not be applicable to your personal circumstances therefore discretion is advised. You are welcome to use this article as content for your ebook or website. Feel free to share this article. 

www.robertastewart.com

Prevent Spam Comments

For those website owners who want to know how to stop spam comments on their wordpress sites, try this:

Installing WP-recaptcha

Here is how to prevent spam comments on your wordpress site.

1 Log into your WordPress Dashboard

2 Click on Plugins, then click add new.

3 In the search box type wp-recaptcha and hit enter. Click install now next to the WP-reCaptcha plugin.

4 On the next screen click the Activate Plugin link, and the WP-reCAPTCHA plugin will be installed and enabled

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How to Reduce Vehicle Running Costs

Owning a vehicle can provide convenience and freedom, but it also comes with a significant financial commitment. From fuel and maintenance to insurance and depreciation, the costs of keeping a car on the road can quickly add up. However, with some strategic planning and a few smart choices, you can reduce your vehicle running costs and keep more money in your pocket. In this article, we will explore some practical tips to help you save money while still enjoying the benefits of having a car.

  1. Choose a Fuel-Efficient Vehicle

One of the most significant ongoing expenses for vehicle owners is fuel. To reduce this cost, consider investing in a fuel-efficient vehicle. When shopping for a new or used car, pay attention to the vehicle’s miles per gallon (MPG) rating. Smaller and hybrid cars tend to be more fuel-efficient, saving you money every time you fill up your tank.

  1. Maintain Your Vehicle Regularly

Regular maintenance is crucial to keep your vehicle running smoothly and avoid costly repairs down the road. Follow the manufacturer’s recommended maintenance schedule, which typically includes oil changes, tire rotations, brake inspections, and more. A well-maintained vehicle is not only safer but also more fuel-efficient.

  1. Drive Smarter

Your driving habits can significantly impact your vehicle’s fuel efficiency. To reduce fuel costs:

  • Avoid aggressive driving, such as rapid acceleration and hard braking.
  • Use cruise control on the highway to maintain a steady speed.
  • Reduce idling time, as idling burns fuel without moving your vehicle.
  • Combine errands to minimize the number of trips you make.
  1. Shop Around for Insurance

Auto insurance is another significant cost associated with owning a vehicle. Don’t settle for the first insurance quote you receive. Shop around and compare rates from different insurance providers. You might find that you can get the same coverage at a lower price by switching insurers or negotiating with your current provider.

  1. Consider Carpooling or Using Public Transportation

If you live in an area with good public transportation or have the opportunity to carpool with others, consider using these alternatives to driving alone. Carpooling not only reduces your fuel costs but also helps decrease wear and tear on your vehicle. Public transportation can be an even more cost-effective option, as you don’t have to worry about fuel, maintenance, or parking expenses.

  1. Drive Less

Reducing the number of miles you drive is one of the most effective ways to cut vehicle running costs. If possible, try telecommuting for work, walking, biking, or using rideshare services for shorter trips. You can also plan your routes efficiently to minimize unnecessary driving.

  1. Optimize Your Insurance Coverage

Review your insurance policy to ensure you have the right amount of coverage for your needs. If you have an older vehicle, you may be able to reduce your coverage to save on premiums. However, make sure you have enough coverage to protect yourself financially in case of an accident.

  1. Avoid Premium Fuel

Many vehicles are designed to run perfectly fine on regular unleaded gasoline. Using premium fuel when your car doesn’t require it is an unnecessary expense. Check your vehicle’s owner’s manual to determine the recommended fuel type, and stick to it.

  1. Reduce Weight and Drag

Carrying unnecessary weight in your vehicle can decrease its fuel efficiency. Remove items from your trunk and roof that you don’t need for your trip. Roof racks and carriers can also increase drag and reduce fuel efficiency, so remove them when not in use.

  1. Plan for Depreciation

While it may not be an immediate cost, vehicle depreciation is a significant factor in your overall vehicle expenses. Choose a vehicle with a good resale value, and take care of it to maintain its value over time. You can also consider leasing instead of buying if you prefer to have a newer vehicle every few years without worrying about depreciation.

In conclusion, reducing vehicle running costs requires a combination of smart choices and proactive maintenance. By selecting a fuel-efficient vehicle, driving sensibly, maintaining your car regularly, and exploring cost-effective alternatives, you can enjoy the freedom of owning a car without breaking the bank. Remember that small changes in your habits and choices can lead to significant savings over time, allowing you to allocate your hard-earned money to other important aspects of your life.

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New Zealand Financial Adviser says…

“3 Money Mistakes made by people”…

according to New Zealand financial advisor Frances Cook.

Frances Cook was on the AM show and explained the three mistakes made by people which are costing them hundreds of dollars every year.

Mistake number one

Not negotiating over price!

Frances says “Don’t just stay loyal to your power company but look elsewhere to see if you can get a better deal”

She advises people to shop around, for everything; that could be your power company, your internet supplier, or your phone company,” and not just stay loyal to them without questioning whether you may be better off with a competitor. “Start with one company and do your research to see what kind of deals they are offering, if you can ring them and bring it to their attention. They may give you a deal in order to retain you as their customer.

Mistake number two

Leaving your kiwisaver in a default fund.

Those who join kiwisaver and do not specify which fund they want their money in will automatically have their money in a default fund which is invested in conservative funds. The money is safe but the returns are very low meaning by the time those in conservative funds reach 65 their retirement nest egg will be smaller than it would have been if it was invested in balanced or growth funds.

This is applicable to those in New Zealand but it may apply to some abroad depending on how your retirement scheme works.

Mistake number three

Having a bad attitude

I couldn’t quite catch what Frances said was the third mistake but she did say that it was like not learning to swim because you don’t know how to. If you say, “I am not good or not interested with all this financial stuff,” then that kind of attitude will cost you a fortune over a lifetime. There is no excuse for staying ignorant about personal financial matters.

Gaining financial literacy is easy with so much information available online.

Check out Frances Cook’s website www.francescook.co.nz 

www.robertastewart.com

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7 Things you should never do if in debt

7 Things you should never do if in debt

Written by R. A. Stewart

If you have consumer debt of some kind then there is a responsibility and an expectation that you will honour those debts and pay them off in good faith. It is your responsibility to repay whatever you owe and there is an expectation by the lender that he or she will be repaid the amount they lent plus any interest on the loan.

Taking responsibility for your financial affairs and not just burying your head in the sand when problems arise is a part of being a mature adult. Any money you have left over after paying your fixed costs is called discretionary spending money. Your debts are fixed costs which means they must be paid for. You do not have any discretionary spending money if you have consumer debts.

There are things which you must NEVER do when you have debt of any kind. Here is my list of no nos as for debtors.

  1. Subscribe to Satellite TV

This is something which you should never do when you are in debt. The cause of debt is the inability or unwillingness to live within your means and make sacrifices. Sky TV is something which you can do without.

  1. Go on an overseas holiday

How on earth can a debtor go on an overseas holiday when they have debts to pay? A person with a conscience would not be able to relax and enjoy themselves. 

  1. Spend money at the bookies

When you are in debt any money in your possession does not belong to you, it belongs to your creditors. You should not be gambling if you are in debt. That is irresponsible. The amount of money is inconsequential, even if it is just $5 on a lottery ticket every week. That is $5 that could be used to pay off your debt. 

The lower your debt the less interest you have to pay.

  1. Go out for a meal

This is another big no no for a debtor. Money spent in restaurants is something you do with discretionary spending money and since you are in debt, you do not have any discretionary spending money. If you have a partner who insists on being wined and dined, tell them straight out that you need to pay back your debts before going on nights out. If he or she doesn’t understand that then give him or her their marching orders.

  1. Subscribe to netflix

This is also something you do with your discretionary spending money. Netflix is a drain on your finances and your spare time. You cannot have a debt and Netflix at the same time.

going to the rugby

  1. Buy expensive gifts

It is all very well showering loved ones with expensive gifts for birthdays and Christmas but not Okay if you are in debt. You are the one who is paying for this madness, not your loved ones. 

Buying stuff on credit is only delaying the inevitable; the crunch always comes when you have to pay it all back plus interest. 

This all boils down to prioritizing your spending. If you are in debt then paying your creditors has to take precedence over everything else; that is after your fixed costs have been taken care of.

  1. Buy a new car

This is one of the worst decisions you can make when in debt because if you are already in debt then you have no more to buy a car therefore, the only way that you can acquire one is to borrow more money and this will keep you in poverty. I suspect that none of my readers will be stupid enough to make this mistake because people who are financially literate read articles which increase their financial education.

About this article: The information in this article is of the opinion of the writer and may not be applicable to your personal circumstances therefore discretion is advised. Feel free to share this article. You may use this article as content for your ebook or blog/site.

Www.robertastewart.com

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Investing with online share market platforms

Share market tips for the Mum and Dad investor

Written by R. A. Stewart

I think it is fair to say that a lot of people dream of hitting it big on the share market and some do but for everyone who has found a pot of gold in the markets there are countless others who entered the markets blindly without doing their homework or having a strategy in place; this article is to give you some pointers if you have some money to spare and are looking for somewhere to invest your hard earned cash.

In the share market, as in real life, if you are able to reduce your number of bad decisions then you will be better off; not that there’s anything wrong with making mistakes.

You are sometimes better off by learning a lesson the hard way if that is what it takes for you to get the lesson. 

Here then are my share market pointers.

1 Investing directly into the share market is beyond most small investors because their ability to diversify their portfolio is limited therefore the only option is to invest all of their funds in one company which leaves them open to disaster. If that particular industry which the company is involved in suffers a downturn, value of the share heads south. It is similar to a horse racing fan attending the track and betting all of their money on the one horse instead of dividing their bankroll between several horses.

Small investors are able to invest in the markets, however, and enjoy the same benefits of larger investors by investing in managed funds; this is where your savings are combined with other investors. You do not have the choice of which companies to invest your money in as that decision is left to the trust manager, however, you can choose which type of fund to invest in whether growth, balanced, or conservative.

2 Investing in the markets is a long-term game, therefore, if you require the money in the short term then you may be better off leaving your money in fixed term interest bearing accounts however, having said that, investing in the markets can increase your savings if you give it enough time. Young people have the advantage of time on their side; they are able to take more risks with their money because they have more time to recover from financial setbacks than their parents.

3 Don’t try to time the markets! It is time and not timing which is the key to making money in the share market. If you are waiting until the markets dip before investing you are missing out on plenty of opportunities to increase your capital and this is particularly true in a rising market. 

4 Decide whether the money is required in the short term, medium term, or long term before deciding on where to invest your money. 

Money needed in the short term or on standby is money which may be needed for car repairs, a holiday, household expenses etc

Medium term funds is money needed for a new car

Long term funds are savings for your retirement such as your superannuation funds.

Short term is not money which should be invested in bank deposits where you are able to have easy access to it.

Medium term money can be invested in managed funds where you are able to have easy access to it but still have the potential for it to grow.

Long term money is money invested in a retirement fund such as kiwisaver in New Zealand.

Conclusion

Think of money as “seed,” it will reap a nice harvest if you give it enough time, therefore you need to sow enough seed in order to increase your wealth; the share market is an excellent investment and managed funds makes it easier for the ordinary person to get involved in the markets. My site www.robertastewart.com has articles to help you increase your wealth. CHECK IT OUT!

Start investing on a shoestring

Sharesies makes it possible for anyone to get into buying and selling shares. It is an online share market platform where you have the option of purchasing shares in individual companies or in various funds (managed/mutual funds). You can even start with $5. This is a no brainer because it gives investors young and not so young the chance to improve their financial literacy. There is certainly no substitute for experience when it comes to learning and this is applicable to everything else, not just investing.

Join sharesies here: https://sharesies.nz/r/377DFM

 

Note: This article is of the opinion of the writer and may not be applicable to your personal circumstances

#sharesies #kiwisaver #savingmoney #sensibleinvesting #sharemarket