Posted on

What is discretionary income?

What is discretionary income?

This is a question which is important to those who want to balance their household budget. As most people know there are two categories of spending; your needs and wants.

Here is a list of expenditure which can be classed as needs.

Power/heating

Rent/rates

Food

Car expenses

Clothing

Loan repayments

Savings/investments

Some of these items you have some control over. For example you have the ability to choose how much you spend on food. The same is with clothing. You have the option of shopping around for something affordable. You also have control over how much power you use.

Wants are items which are not essential but are optional. Here is a short list of items which are wants:

Holidays

Hobbies

Entertainment

Gambling

Alcohol

Cigarettes

It is what you do with your discretionary spending money which will make a difference to your financial outcome. If you use your money as a seed for your investments then money worries can be a thing of the past. Dental and Medical bills are not cheap and the wise person who sets aside funds for a rainy day can pay for these emergencies in full.

Your personal financial situation will determine what you do with your discretionary spending money. If you have your life ahead of you then you may have more disposable income after your bills have been paid. If you are older you may not have as much disposable income but have more savings behind you.

If you have consumer debt then you do not have any discretionary spending money. Your number one priority as far as your finances are concerned is to pay off that debt. 

It is not how much you make which determines your financial outcome but what you do with how much you make. Some people spend all of their discretionary spending money and are left with nothing until the next pay day.

Here are some stories:

When I was a teenager we were helping a neighbour build a cattle yard on his farm. My father said to the neighbour, “There is no profit in having the best looking cattle yard.”

What he means is that having the nicest looking cattle yard is not going to make any difference to the bottom line profit of the farm.

Years ago, a colleague bought a car for twenty grand. When one of his friends told me, I replied, “If that was me I would have just bought the cheapest car and invested the rest of the money”.

An expensive lifestyle proves costly in the long term. Those who have developed the habit of living modestly are better equipped to deal with the cost of living crisis.

At the end of the day you make your choices and your choices make you.

About this article

The information in this article is of the writer’s opinion and experience and may not be applicable to your personal circumstances therefore discretion is advised.

Disclaimer: Please be aware that if you sign up for sharesies or coinbase through my site then I may receive a small commission.

www.robertastewart.com

Posted on

Your goals and investment strategy

Here is an article I posted on the site three or four years ago. If you are not from New Zealand then Sharesies and kiwisaver may be foreign to you. Sharesies is a share trading platform similar to Robin Hood in the US. Your own country may have its own version of Robin Hood and Sharesies.

Kiwisaver is the New Zealand retirement scheme with its own unique incentives to encourage people to contribute. Your own country will have its own scheme with its incentives.

Your goals and investment strategy

The type of investment you place your savings in all depends on your goals and the time frame for achieving your goals. Investing in low interest accounts is not the best strategy for long term goals while investing in growth funds in the share market is not necessarily the best option for achieving your short term goals. Your investment platform has to be tailored to suit your goals. This table will give you a better idea of what I am going on about.

SHORT TERM GOALS

A short term goal is any goal which can be achieved within a year. This may be for a holiday to the West Coast (if you are from another district) or saving up for a car (if it is cheap enough).

MEDIUM TERM GOALS

A medium term goal takes between a year to 5 years to achieve and can be saving for a house deposit or an overseas trip.

LONG TERM GOALS

A long term goal may be saving for your retirement or paying off your home mortgage.

Lets look at some investment options.

SHORT TERM GOALS.

If you already have the money saved up but won’t be needing the money for 3-6 months then investing in fixed term accounts with one of the high street banks is a good option but if you are actually saving up the money then opening up a special account for this is one but not ther only option. I understand that one is able to drip feed money into bonus bonds and it is easily accessible. Investing in Sharesies may be another option worth taking a look at

MEDIUM TERM GOALS

Investing in Sharesies is a good option I believe because your savings has potential for growth while you are saving but another option is to use an everyday savings account to save and once you have saved a certain amount invest in a 90-day investment with a high street bank. 

It should be pointed out that if you are saving for your first house deposit then joining kiwisaver is a must because you are able to withdraw part of your kiwisaver for a first home deposit provided you have been in the kiwisaver scheme for at least three years.

LONG TERM GOALS

Investing in kiwisaver is your best option here irrespective of the date of your birthday because even if the  retirement age of 65 is just around the corner, you can scale back the type of funds you are in from growth/balanced to more conservative however people may have 20 years or more left after they retire so this may not necessarily suit some people. Once one reaches 65, those in kiwisaver are able to withdraw their retirement savings in one hit or whenever they need it. 

There are so many investment options available to you and you do not have to be rich to get involved but you do need to invest to get rich, one investment I am in favour of is Sharesies;

If you have read my previous posts about explaining Sharesies, you can sign up on the link below;

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

ABOUT THIS ARTICLE

This article is of the opinion and experience of the writer and may not be applicable to your personal circumstances. Seek independent finance advice if you require it. Feel free to use this article as content for your ebook or website/blog.

 

www.robertastewart.com

Posted on

Investing facts of life you must accept

Investing facts of life you must accept

In every aspect of life there are some cold hard facts that you need to get your head around. Investing your savings is no different. Here are seven facts of life when it comes to investing. Understand these and you will be better equipped to make better choices.

  1. Whenever there is a chance for a capital gain there is also a chance for capital loss

Whether you like it or not, if an opportunity for a capital gain arises then there is also the chance for a capital loss. It is easy to invest when all is going well and the money you have invested has grown but most of your capital gain will come when you are investing while others are selling. It requires patience and self control to stay with your financial plan when the markets are heading south. Your financial plan has to take into account the possibility of a bear market therefore, invest according to your timeline.

  1. It is time not timing which is the key to growing your wealth

The key to prosperity is to start saving early. Once you get into the habit of saving and investing from an early age then things will become easier for you years down the track. Saving a portion of your income means living within your means but that does not mean that you have to be very stingy. It means not frittering away your spare cash on items which are not going to help you financially in the long term. If you are on the verge of retirement or already retired then you have less time to recover from financial setbacks therefore cannot be as aggressive with your investing as the young ones but that does not mean that growth funds are out of bound but rather just balance your strategy depending on how soon you are going to use the money.

  1. Your investments are your responsibility

You may be using a financial adviser to deal with your investments but they are still your responsibility because an adviser cannot think for you; it is up to you to set your own goals which match your personal situation. It is then up to you to tell your adviser where you wish to invest your money. Some investors like to have someone to blame and during a market downturn the first person to blame is their fund manager. In the case of retirement schemes such as the New Zealand Kiwi saver, investors have the choice as to whether to invest their money in growth, balanced or conservative funds. If balanced funds are chosen then there is the choice of what percentage of your savings will be invested in growth funds. Balanced funds are a mixture of growth and conservative funds.

  1. Value is determined by what others are prepared to pay for

Have you ever stopped to ask yourself the question, “What will this be worth in x years time?” The answer is quite simple!

What gives something value is what others are prepared to pay for that item whether it is a painting, someone’s stamp collection, shares in a particular company, cryptocurrency, property, gold, or whatever. 

None of us can know for certain what the market will do, therefore we take calculated risks based on our knowledge and expectation. 

As with anything in life there is no guarantee but if you do your homework and put a bit of thought into your strategy then you can have a nice nest egg to call upon when you need the money.

  1. Life is one big pyramid

One fact of life you need to accept is that life is like a pyramid. Using sport as an example; few ever make it to the elite level, comparatively few that is compared to the numbers taking part. It is the elites who make the most money, then as you go down to each level there are more and more participants. At the grass roots level you will find the highest number of participants, these are the sports men, women, and children who take part in sport for no other reason other than the enjoyment they derive from their chosen sport. 

If you have the ability to make money from your sport then it certainly will pay to have a backup plan by adding another string to your bow.

As for investing, well, there can only be one Warren Buffet, Robert Kiyosaki, or Anthony Robbins. It is important that you be the best at being you and not try to be a second rate version of someone else. Your personal financial choices must be what is applicable to your own circumstances.

 

  1. Life is all about percentages

Most people have played the lottery and most of us whether we have played it or not have heard about the absurd amounts of money which some lucky lottery winners have won; sometimes running in the millions. There is something which you must understand and it is this; For every person who won the lottery there are countless thousands who have lost their money trying the same thing. This is also true of many aspects of investing. You may have heard about someone who made a killing on the share market, on bitcoin, or some other investment but you seldom hear of those who lost everything while trying the same thing. My advice to those who are thinking about taking on high risk investments is to only do so with discretionary spending money and not with your retirement savings or money set aside for a house deposit or a car.

  1. Life is a numbers game

In life you cannot expect to win every single time. That is unrealistic. But making mistakes is just part of the learning process. The fact is that the more mistakes one makes the more likely one is going to win. Some people avoided risk after the 1987 sharemarket crash having got their fingers burned during Black Monday. 

If you do not take risks then nothing may happen to you but then you will also miss out on some of life’s experiences. When it comes to investing you need to take some kinds, albeit calculated ones in order to get ahead of inflation and the cost of living, otherwise the value of your money.

www.robertastewart.com

ABOUT THIS ARTICLE

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

Posted on

Mistakes made by ordinary investors

If you have money invested in your country’s retirement plan then you are an investor whether you know anything about the markets or not. Chances are you have your money invested in some kind of mutual fund which is managed by a fund manager who invests on your behalf. It is up to you to decide on which fund to invest in and for how long.

1-Too Conservative

You have got to learn how to be an investor and take calculated risks; there are no two ways about it. You can manage these risks to take into consideration your age, goals, and your timeline. If you have your money in conservative funds and you are in your twenties then your retirement fund will fall far short of where it is likely to be when you retire. Investing in growth funds is all about achieving capital gains. 

2-Too inconsistent

Lack of consistency as far as contributing to your retirement fund will cost you in the long run. It is easy to be consistent in your contributions when the share market is going strong but it is when the markets are bearish that you need to motivate yourself to keep investing because during the low points is when there are bargains in the share market. If you are working in some type of job then a percentage of your gross wages will be deducted and deposited into your kiwisaver account.

3-Too Emotional

Fear and greed is what drives the share market is an old cliche which rings true. Many investors react to the market’s swings and roundabouts and sell when they should hang on to their stocks. Investing in the share market is a long term game; it is not a sprint, it is a marathon. If you have some kind of retirement fund then your fund manager invests on your behalf, however if you are in New Zealand you are able to switch funds which some investors do in reaction to what the market is doing. If you have some kind of financial goals then this should take into consideration a possible share market crash.

4-Too Greedy

Many investors are simply too greedy; they invest in something offering high returns without paying any attention to the risk they are taking on, or worse still, they place all of their eggs in one basket hoping to make a killing. This all or nothing approach has destroyed several retirement plans. This was certainly the case when several investors saw their life savings disappear with the collapse of several finance companies. Diversification minimizes your risk.

5-Too Impatient

Patience is the name of the game in investing. It is time and not timing which will build your retirement riches. There will be ups and downs in the markets but a bit of patience will pay off in the long run. Something some people do not have so they invest in risky stuff offering quick returns and end up losing more often than not. 

6-Too Gullible

There are offers or as they are called “opportunities,”promoted online mostly and sometimes in the print media as a way of making quick profits. If an investment seems too good to be true then it mostly certainly is. Usually the person or company promoted such offers are the ones making money out of it. You may have read stories about the amount of money such people have made from whatever it is being promoted but they are in the minority. 

It is up to investors to take responsibility for their own decisions and not try to find a scapegoat if things turn to custard.

www.robertastewart.com

Posted on

Is Kiwisaver for KIds a Good Idea?

Is Kiwisaver for KIds a Good Idea?

Written by R. A. Stewart

Is it a good idea for parents to open a kiwisaver account for kids? 

That is a question I have been pondering because a lassie who writes to me has a three year old son. Here are the pros and cons I considered.

The pros

1 It will give the kid a good start in life as the money can be used for a deposit on their first home.

2 The markets are down which means that there are bargains in the share market.

3 It will help give the kids a tolerance to risk

4 It will help develop their financial literacy

The cons

1 Kids are ineligible for the kiwisaver incentives until the reach the age of 18

2 Money in locked into kiwisaver until they reach the retirement age of 65

3 There are other alternatives

After considering all of this I decided that getting children signed up to kiwisaver in order to help them get their first home is a good idea, however, it is worth noting that if he or she inherits Mum or Dad’s home then they are not eligible to withdraw any of their kiwisaver funds to purchase their first home. Having some form of goal and a route for getting there is better than not having any kind of plan. A plan such as this gives children an option when they are older. I cannot think of any circumstance when any adults may have regrets that their parents enrolled them into Kiwisaver.

It is important to choose your fund and not change because a fund which is on a high will come down while a fund which is low will rise; that is the nature of the markets. Just focus on contributing to kiwisaver both for yourself and your children.

Another important thing to remember is the importance of having a will because if you die without a will then it is likely that lawyers will take a good piece of your kiwisaver if there is a dispute over who gets what. In any will disputes, the person’s spouse will inherit everything, if they are not married then it is their children, if they are not married and have no children then it is their parents and if their parents are deceased then their siblings are next in line. This is of course if the person has no will.

Of course one may argue that due to the high cost of living that it is difficult for them to make ends meet let alone contribute to their own kiwisaver and their childrens as well. If this is true for you then you should make a plan to increase your income or decrease your spending. A combination of both is ideal. Think about this if you saved $5 per week, that is $260 per year. In 10 years that is $2,500 years. $10 per week is $520 per year. 

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 use the article as content for your ebook and website. 

www.robertastewart.com

Posted on

Now is a good time to join kiwisaver if you have not already

Now is a good time to join kiwisaver if you have not already

Written by R. A. Stewart

It is a good time to join kiwisaver if you are young and just starting out in the world. If you are over 30 and have not already joined kiwisaver then why not? Kiwisaver is the New Zealand retirement scheme. If you are in work you will get the equivalent of 3% of your gross wages from your employer deposited into your kiwisaver account. 2%, 4%, or 8% (you choose) of your gross wages will be deposited into kiwisaver and deducted from your pay. You can also make voluntary contributions to your kiwisaver account. This is an option used by those who are self employed or not in work.

The government’s contribution to your kiwisaver is what makes this a no-brainer. You will receive $520 of government money into your kiwisaver account but you need to invest at least $1040 to receive the full $520 otherwise the government contribution is 50% of your contribution. This is per annum; in other words you need to invest at least $1040 into your kiwisaver account per annum to receive $520 of government money every year.

The Kiwisaver year begins on July 1 and ends June 30 the following year. If you are on part time work and it looks as though your kiwisaver contributions are going to be less than $1040, you can make voluntary contributions to ensure your own contributions reach $1040.

In order to take advantage of the falling share prices you need to be in a growth fund or have some portion of your portfolio in a growth fund, otherwise called a balanced fund. If you are in a conservative fund then you are going to miss out on the market rebound. Financial experts will tell you that if you are in a growth fund then you need to leave it invested for at least five years. That way, if the market falls during this time there will be time for it to recover and recoup any losses which it has to be said are only paper losses.

Money which is needed for the short term such as a holiday abroad next year is considered short to medium term money. If you had this money invested in a growth fund you may find that your spending money for your trip has been depleted therefore, to reduce this from happening investing in something less risky is an option taken by a lot of holidaymakers even though the return on this money is less than the inflation rate.

If you are prepared to take the risk then you might consider investing your short term money in growth funds in the hope of increasing your capital but it is important to understand that whenever there is an opportunity for capital gain then there is a chance for capital loss.

It cannot be stressed enough that it takes a cool head to live through the ups and downs of the sharemarket and be relaxed about it. One thing you can always bank on is that the sharemarket will go up and down. It is important to have a strategy in place to take this into account.

Diversification minimizes your risk. Diversification is when you spread your investment among several companies. One company might fall over but not the whole lot.

Some may argue that if you plunge all your money in one stock then you will make a killing; that is true, but you never hear of those who tried that and lost. If you are going to do that then it should be done independently of your main investments rather than risk your retirement savings going down the drain.

ABOUT THIS ARTICLE

The information in this article is of the writer’s own opinion and may not necessarily apply to your personal circumstances. You are advised to seek professional financial advice if you require assistance. You may use this article as content for your ebook or website. Check out my other articles on www.robertastewart.com

Posted on

How to gain Financial Literacy

How to gain Financial Literacy

Written by R. A. Stewart

Financial literacy is the ability to handle your money. It is basically the skill to make the most of your money and not fall into the traps of the illiterate. No one is born with financial literacy but some are born with an inability to understand financial matters. This may or may not be due to hereditary conditions. 

For the majority of people, financial literacy can be learned and practiced. You can read all of the books on personal finance in the library but all of this information will do you no good unless you put it all into practice. And it is then and only then will the real you come out.

Being a savvy investor is not all about making the right investments but there is the mental side of it. You need to be able to stay strong when things are not going your way. 

You need to keep a cool head when the markets are sluggish and your portfolio seems to be losing value. It is also the negative comments of others that you need to shut out. Everyone is keen to provide advice of some kind; it is up to you to discern whether it is good or bad advice.

It is therefore important to build up your financial literacy but you do not need to spend an arm and a leg on books on courses when it is all available for free.

Your town’s public library will have books on personal finance. Learn the methods used by these authors and apply them to your circumstances if they fit in with your financial goals.

You may even pick up a few financial books at a charity shop in your town. I have. It is unbelievable to think that when so many people complain about inflation, cost of living, and so forth that few people find it worthwhile to purchase these books for a dollar or two.

The internet has a lot of free financial advice. Just do a google search of any financial question you have and see what comes up. There are videos of a financial matter on youtube if you prefer to watch videos.

All of this will assist you in making the right choices but, keep in mind that mistakes will be made and the main contributors to financial mistakes are greed, fear, and a lack of knowledge, These can easily be overcome by financial wisdom. Having the discernment to know bad advice from good advice is a good quality to have.

There really is no excuse for financial ignorance because it is more widely available than ever before.

Obtaining head knowledge is one thing but putting it all into practice is another and that is where your real knowledge develops. What you read and hear is information but it only becomes real knowledge once you use that information.

There is no greater teacher than real life experience. 

Your mistakes will be your most expensive lessons but you do not need to make the same mistakes as others have made. Just keep your eyes and ears open to whatever is in the news and you will learn of occasions where investors have lost considerable sums of money. Try to figure out the lessons in these situations in order to avoid making the same mistakes.

Studying history can be useful if you can learn from the mistakes of previous generations in years gone by. The 1987 stock market crash (Black Monday) has plenty of sad stories. Many people never recovered from that while others were more cautious with their money. Same as with the 2007/08 Global Financial Crisis (GFC). A number of retired folk lost all their life savings when several finance companies fell over. Again you will learn some valuable lessons from some of the mistakes these investors made. 

Wisdom comes from life experiences; if you are young you will hear stories from the older generation. Keep your mouth closed and listen because you will learn valuable lessons.

www.robertastewart.com/internet-income

ABOUT THIS ARTICLE

Read my other articles on my blog www.robertastewart.com Feel free to share this article. You may use this article as content for your ebook or ebook.

Business Opportunity

My special guest’s 3-Step “No Product Funnel” can be duplicated to start earning a significant income online.

He’ll show an enormous amount of proof on the training that HE and his STUDENTS are doing that pretty effortlessly. So, make sure you register now to claim your spot on this special training.

Signup for the free training HERE https://bit.ly/3cU63mB

Posted on

KIWISAVER CHANGES IMMINENT

INTRODUCTION

It is important to keep up to date with changes to government policies because it could have some impact on your financial situation and the New Zealand retirement savings scheme Kiwisaver is a perfect example. Even if you are not from New Zealand, your own country will change policies on various issues and these may or may not affect you.

Kiwisaver changes maybe on the horizon

New Zealand’s superannuation scheme called “Kiwisaver,” was introduced in 2007 as a way for all New Zealanders to squirrel away money for when they reach the retirement age of 65. The scheme is voluntary but incentives were put in place to encourage people to join and to contribute to the scheme.

The incentives which were in place when kiwisaver was introduced were:

  1. $1,000 kickstart on joining the scheme
  2. A maximum of $1,040 tax credits per annum. To qualify one had to contribute $1,040
  3. Employer contributions which are at present 3% of your gross earnings.
  4. Deductions were made from your account at the rate of 4% or 8% of your gross income and deposited into your kiwisaver account..

It seems that governments have looked at kiwisaver as an easy form of revenue when trying to balance the books. Because National became the government in 2008 just at the beginning of the Global Financial Crisis and removed the $1,000 kiwisaver kickstart and reduced the tax credit to $520 per annum but one still had to invest at least $1,040 to receive this amount.

This never made any impact on the National party’s popularity. The public understood that the books needed to be balanced.

Fast forward to 2022 and New Zealand has a huge debt to repay as a result of the covid lockdowns. This current government just like the previous one is expected to make cut backs to the kiwisaver incentives as a first step towards balancing the books. The $520 annual tax credit is expected to be removed. The 3% employer contribution is seen as an incentive enough for wage and salary earners to sign up with kiwisaver. Instead, the $520 annual tax credit will still be available but only for voluntary contributions. What this means is that investors need to make voluntary contributions of $1040 per annum to receive the $520 government money. Whatever is deducted from your wages and deposited into your kiwisaver account is not considered to be voluntary. This is expected to incentivise savers into making extra contributions to their kiwisaver account above what they would normally make.

Someone on 50k per annum would receive $1,500 of employer contributions per annum toward their kiwisaver which is a nice top up towards their retirement savings, but the desire to make life more comfortable during one’s latter years should be incentive enough to get most people to have some financial plan in place.

This change is likely to be part of the May Budget.

Since it is Labour voters who are likely to be most impacted by this kiwisaver change it will be interesting to see how this affects Labour’s popularity.

These changes which are part of a government review in kiwisaver are not the only ones. It was also recommended that beneficiaries be enrolled in kiwisaver and that payments be made for them. The other was to pay “care credit” Kiwisaver contributions for people who take time out to raise children, or care for sick or disabled relatives.

The review was ordered by David Clarke, the Minister of Commerce and Consumer Affairs.

www.robertastewart.com

Posted on

RETIREMENT SAVINGS SCHEMES

Kiwisaver Retirement Savings Scheme

“A good man leaves an inheritance to his children’s children.” Proverbs 13:22

Saving for one’s retirement is the responsible thing to do and it is up to each individual to get their own finances sorted for their latter years. New Zealand has their own retirement scheme as most other countries do to help make life easier for their citizens when they retire. 

The New Zealand retirement scheme is called “kiwisaver.” It is open to New Zealand residents. Kiwisaver is voluntary and anyone aged up to 65 can join. You do not have to be in work to join kiwisaver, you are able to make voluntary contributions at any time.

You are about to make contributions through your wages and salaries of between 2%, 4%, or 8% (you choose). Your employer will also make contributions to your kiwisaver account. If you are not employed then you can choose to make voluntary contributions.

The key component of kiwisaver is the government’s contribution which is a maximum of $10 per week or $520 per year but you have to contribute at least $1040 per annum to get the full $520 otherwise you the government will put in 50% of whatever is your contribution.

You will receive the government money sometime in July. The kiwisaver year starts 1st July and ends 30th June and any money deposited into your kiwisaver account during this period will be eligible for the government contribution the following July. You could say leave it until June before you put any money in kiwisaver and still be eligible for the tax credits as the government money is sometimes called.

When joining KiwiSaver you will be given the choice of fund managers. If you do not choose one, the I.R.D (Inland Revenue Department) will choose one for you and when this happens, it tends to lean on the more conservative side. 

You have the option of different funds, Growth, Balanced, or Conservative with growth funds being aggressive. They have the potential to grow your savings but the downside is that they are the most risky. Conservative funds are low risk but can inhibit the growth of your savings while balanced funds are a combination of growth and conservative funds. 

Your savings in kiwisaver are locked in until you reach the retirement age of 65 (applicable in NZ) but you may be able to access your funds under exceptional circumstances. These are if you are suffering from financial hardship, have a terminal illness, or die (money goes to your estate). It is important that you have a will because if you don’t, any money still in your kiwisaver will likely be swallowed by lawyer’s fees.

You may use some of your kiwisaver funds for a deposit on your first home but only after you have been in kiwisaver for at least five years. If you are at that stage where you will be looking at purchasing your first home in the not too distant future then it would be a good idea to go for a combination of balanced and conservative funds when choosing which type of kiwisaver fund to invest in because if you went for growth funds, the markets may have gone down when it comes time to withdraw some of your kiwisaver funds for a home deposit. That would be a double whammy because when the market recovers and is on the up, you have missed out on the gains because you withdraw your money when the market was down.

It is a good idea though to have other investments which can take advantage of the swings and roundabouts of the markets even if you only have a small amount to invest. 

Always try to keep up to date with what is going on in the financial world as this will increase your financial literacy and help you make better decisions on your finances.

Check out my site www.robertastewart.com for useful information on how to increase your wealth.

The information in this article is the writer’s opinion and experience. It is advisable to seek independent financial advice to ascertain the best financial plan for your situation.

Posted on

Taking Responsibility for your Finances

Taking Responsibility for your Finances

Life is full of choices and what you do with your choices determines the outcome or what happens in the long term. Taking no action is a choice in itself. As far as finances go, what you do with your resources can make a difference to your life.

In New Zealand and in most countries some form of retirement scheme is in operation.That is where a small percentage of your pay goes directly into your retirement scheme. There are various incentives available to encourage people to contribute toward their retirement savings. 

New Zealand’s retirement scheme is called “Kiwisaver” and it is voluntary which means that no one is compelled to join or to contribute to their retirement fund if they do not wish to.

Considering the advantages of belonging to Kiwisaver it is truly baffling why anyone would not want to join. 

I have heard all kinds of excuses such as, “I’m not earning enough,” “You can’t take it all with you”, “Other people are not in Kiwisaver.”

These are all excuses and not reasons.

The truth is and the real reason why some people are not involved in KIwisaver or are contributing toward it is because they are irresponsible.

Of course you will not hear any of them admit that.

The bottom line is that it is not up to the Prime MInister to spoon feed people. At some point one has to take responsibility for your own finances.

Irresponsible behavior is a habit and a pattern of behavior. Responsibility is a dirty word to some people and a person who is not responsible enough to join a retirement plan of some kind is likely to be irresponsible in other areas of their life. The number of one parent families is a prime example of this. “Where are the fathers of these kids” is a question I sometimes ask myself when I see a story on TV about single mothers.

Responsibility also means that you must make the decisions on which funds to invest in; those who may be intellectually limited and those who do not have the time to do their research can make the use of a fund manager by investing in managed funds. All money invested into kiwisaver are in managed funds. 

Fund managers are skilled and have the kind of financial knowledge that the ordinary man in the street does not but you still have to choose which fund to invest in whether it is growth, balanced, or conservative. 

Markets will go up and down which are beyond the control of the fund manager, therefore, do not take your anxieties out of them when the markets are down.

It is certainly a fact of life that some people will let others make their decisions for them so that they have someone to blame when things turn to custard.

You may have a financial advisor but they still need to know what your intentions are as far as your goals in order to make the right choices for you. An investment made for someone who has thirty years left till retirement is not going to be the same as one for someone who has five years to go. It is your responsibility to keep your advisor informed.

That is, if you have an advisor. If you do not then it is up to you to do your own homework. That way, if things turn to custard then the person who is to blame is the one you see in the mirror every morning.

Watch this video

This is not for everyone; we prepared a presentation for you outlining the income opportunity, please watch through it in its entirety. Here is the training link, http://bit.ly/3uQXf7I

www.robertastewart.com