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Tax issues end of 2021 Financial Year

We are coming up to the end of the 2021 Financial and Tax Year (on 31st March), and there are few things that we thought you should be aware of.   New Marginal Tax Rate from 01/04/2021If your income is over $180,000, from 01/04/2021 there will be a new marginal tax rate of 39%.  If this applies to you, please contact your adviser as it is important that your adviser has this tax rate set up properly on your investment portfolio.  You will also need to ensure that yo...

Buy now - pay later - what could go wrong? Well....

Showing my age, when I was a teenager, if I wanted to buy something, I needed cash, or I could do this thing called 'lay-buy'.  You found your item and the shop put it aside and you made regular payments.  When you had paid it off, you got to take the item home and enjoy it.  I purchased many items (clothes, music) by this method. Then came credit cards, debit cards, and now the 'retail phenomenon' of  'Buy Now - Pay Later'.  This fits in with the world of instant gratif...

Romance Scams and how to avoid them

There was a recent article in the New Zealand Herald (premium subscription) headed up ‘Catfished: Kiwi loses $840,000 to online romance scams’. This was the largest reported loss in a long term romance scam, but it is reported that nearly $19 million was lost to online fraud last year (to 30 June) at an average of $4,777.  But of course, this was only the reported amounts – a lot of people are embarrassed to report the losses. Surprisingly people aged 18-40 were involved with almost h...

Ethical Investing and New Zealanders opinions

very year Mindful Money – the New Zealand charitable trust created to help people monitor the ethical allocations of their New Zealand investments and RIAA (the Responsible Investment Association of Australasia) run a consumer survey to monitor peoples’ opinions on ethical investing. Over time the number of people who ‘care’ about ethical investing has increased, and continues to increase.  You can find the report here. Some of the highlights of the 2020 survey are: ·  &n...

Buying a property at auction - a personal experience

Call me old…. But I haven’t been involved with the purchase of a property for nearly 20 years.  Peter and I built our dream home in Cambridge, and loved the process, and sold our properties in Turangi (one by negotiation and the other by deadline treaty), but buying a house – nope, no modern day experience. Until a few months ago.  A family member decided to purchase a house in Cambridge – at the peak of the property market euphoria (well time will tell whether it was the ...

More financial scams about - BEWARE

This information is from the FInancial Markets Authority - and we are repeating the message in case we can save at least one person from being caught in a financial scam.  PLEASE pay attention to this and think carefully before engaging in any investments or financial opportunities. The Financial Markets Authority (FMA) has reported a steep rise in the number of investment scams attempting to impersonate legitimate New Zealand businesses since the emergence of COVID-19.FMA research has also...

Three big changes in a post-pandemic world

This information is copied from a recent Fortune magazine newsletter that we received.  Given that 2020 has been a big year, we thought we would share the information with you - as an indicator as what is ahead in the next decade.Fortune - CEO Daily NewsletterAccenture CEO Julie Sweet has a unique window into what’s going on in the world of business. Her company serves hundreds of large companies in 120 countries, with a half million employees and more than $40 billion in revenu...

Generate KiwiSaver actively engaging in 'impact investing'

Moving towards an 'ethical approach to investment' for those of our clients that want this approach means that we are talking to our existing and future fund managers about how they are investing, and why, and making sure that there is substance behind their claims. We were impressed to see Generates' announcement that they were the cornerstone impact investor in The Salvation Army Community Bond. The Community Bond is a fixed interest, 5 year impact investment yielding 2.30% per annum and ...

The Six Stages of Ethical Investment Awareness

At Moneyworks, we are undertaking our international certification and education to become 'ethical/responsible/sustainable' advisers.  Part of this is understanding the different 'claims' to ethical investing (which I will use as a catch all for all the terminologies). Fund Managers start off doing nothing about ethical investing, then migrate to 'ESG integration', where they start understanding what 'non-ethical/responsible/sustainable' investments they hold in their portfolios.  This...

The purpose of New Zealand's retirement income system

New Zealand Superannuation is a cornerstone to the retirement income system in New Zealand, and as we often say in our seminars, it is one of the most generous public pension schemes in the western world.  Everyone who is entitled to the income receives the same amount before tax, regardless of how much you have earned, how much you do earn and how many assets you have. In the 1990's there was a high 'superannuation surcharge' where your New Zealand Superannuation income was abated bas...

What is the ideal age to retire?

Obviously the ideal age to retire is when you are ready, and retirement doesn’t need to mean sitting around all day doing nothing.  Your retirement might involve spending more time with your family, grandchildren, or travelling, volunteering, getting involved in physical activities like hiking, cycling or taking up a new hobby that you have always wanted to pursue. As healthcare gets better we can stay fitter and healthier for longer (unlike Nathan Rothschild – who was the wealthiest ma...

What is a typical lifespan in New Zealand today?

Answer: Much longer than it used to be!  What does this mean for your retirement planning?  The current life expectancy in New Zealand is 82.21 years And interestingly, while the lifespan in New Zealand is increasing, the lifespan in the USA is decreasing (currently 78.7 years).  If this is something you are interested in finding out more about – check out the book ‘Tightrope’ by Nicholas Kristof – it is a fascinating insight into what has happened in the USA in the last 4...

3 Psychological tricks to help you save money

We have heard from people that with Covid lockdowns (and the lack of travel opportunities overseas) that they have more money in the bank.  Of course, we don’t want to have another lockdown. A client shared the video below with us, and we thought it would be useful to share. It is only 5.47 minutes. Although this is an American video, the concepts still work – the 3 psychological tricks are: 1.    Pre-commitment. (one app to help you with this is ‘stickk’) 2. &nb...

Stolen or hacked credit cards – a hassle, but what is the real story about how much it costs?

Over the last four months quite a few of our clients have had their credit cards stolen or hacked.  While there are some protections provided for your funds through your bank when your credit card is used fraudulently, it is a hassle to sort out. You have to work out everywhere that the credit card was used, and contact that company or supplier and update your new credit card (not to mention not having a credit card for a period while the new one arrives).  This is one reason that we r...

How do New Zealanders see their retirement future?

This survey of 15,519 adult New Zealanders was carried out from 2018 -2019 by the CCFC (Commission for Financial Capability - which was the Retirement Commissioner).  The Key Findings are: 1. Most people do not plan financially for retirement2. People expect NZ Super and KiwiSaver to be the basis of their retirement income3. KiwiSaver enrolment is high for the employed but many have limited knowledge about KiwiSaver4. Only 29% of respondents could access 3 months work of cash in an emergenc...

The value of working with an adviser - new New Zealand research

The value of financial advice - Money & You researchThe Financial Services Council 2020 research project looked at how New Zealanders think about money and how it affects their decisions and well-being.  2000 New Zealanders were researched in March 2020 (yes, just as Covid and lockdown was hitting us).  The first part of the research has previously been released - which was called 'Money and You - its not about the money, its about you and these were the key findings: You can...

Ethical Investing – how do we know what our fund managers are doing?

There are a number of factors that we take into account in our process, which will be built on over time. 1.    Are the Fund Managers Signatories to UN PRI and or/RIAA 2.    What published information do the fund managers have on their approach to Ethical Investing 3.    Direct questioning of the fund managers that we recommend The team at Moneyworks are known in the industry for asking difficult questions of our fund managers, and not taking their an...

Ethical Investing – the different terminologies

Ethical Investing is the short hand for many different types of approaches to understanding what and how the companies that you are investing in are carrying out their business. Since the Industrial Revolution companies have carried out their activities with the sole aim of generating profit to pay dividends to their shareholders. You may recall the photos during the 1800’s and the 1900’s of the pollution created by ‘industry’.  There is a great article here that shows what the USA ...

Ethical Investing – Moneyworks approach

Since 2017 Moneyworks have been analysing the ‘ethical investing’ approach that the fund managers that we recommend take.  Having investments that don’t ‘do bad’ is important to us at Moneyworks and also to many of our clients. Over the years the field of ‘ethical investing’ has evolved and has become quite complex.  We believe that ‘ethical investing’ as a factor in making investment decisions is still in its early days. Moneyworks are members of the Responsible Inve...

Lost’ Australian Super – first steps to change legislation so that this can be transferred to a New Zealand KiwiSaver (thanks to Chapman Tripp)

Australian ‘unclaimed super’ money gap to be plugged (10th June 2020 – Brief Counsel) The Taxation (Annual Rates for 2020/21, Feasibility Expenditure, and Remedial Matters) Bill, introduced to Parliament on 4 June 2020, includes amendments which would enable the direct transfer of New Zealanders’ unclaimed Australian superannuation money (USM) from the Australian Tax Office (ATO) to a KiwiSaver scheme. A significant change to close a long unresolved issue The proposed changes, to the Inc...

Changes to KiwiSaver this year

There have been a number of changes to KiwiSaver this year.  Some of these changes took effect on 1 April 2020: · All members aged 65 years or over can make a retirement withdrawal ·  KiwiSaver providers will be notified of prescribed investor rate (PIR) changes from Inland Revenue (IR).  The KiwiSaver provider is required to update your PIR with the information provided to them from IRD.  You can provide your provider with a different PIR if you believe that it is incorrec...

Things you may not know about KiwiSaver

1.    Get regular withdrawals from your KiwiSaver to fund your retirement spending When you reach the age of eligibility for New Zealand Superannuation (currently 65), you can access your KiwiSaver. You can withdraw a lump sum, but many of Moneyworks clients find it useful to set up a regular withdrawal to be paid to them (fortnightly, monthly, quarterly), to top up their New Zealand Superannuation income.  It helps smooth out your income and cashflow. 2.    AN...

What does the ‘KiwiSaver Retirement Projection’ on your KiwiSaver Statement mean?

If you are aged between 18 & 64, from this year, you will receive some more information on your annual KiwiSaver Statement.  This ‘Retirement Projection’ information is a legislative requirement, and is prescribed by the regulators. It is important to note that this is only for your KiwiSaver. To get a proper analysis of how much money you will have available in retirement, and how you could draw that down and more importantly – how long your money will last, contact us at Moneyworks ...

It really isn’t possible to ‘time’ the markets – investors with $1.4 billion in KiwiSaver funds learned this in March

When we meet with our Membership Fee clients on an annual basis, we consider the risk profile that their investments are invested in.  As your life changes, this may change.  We encourage our non Membership Fee clients to engage with us to discuss your risk profile and whether it is appropriate for you, at any time, just email us on advice@moneyworks.co.nz. We work with our clients to help them understand the value of staying where they are when there are major changes to investment ma...

Coronavirus world, economic outlook and investments

This is a newsletter that was sent out on Monday May 11th 2020, to Moneyworks Financial Planning and Investment Clients that we work with on an ongoing basis.  It has quite a lot of interesting information, so we thought we would share it with you this month.The fancy free days of attending the Melbourne Tennis Open at the end of January and our annual Portfolio Construction Summit and Finology Conference in Sydney at the end of February seem like a dream right now.  It is amazing how ...