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Catastrophe Bonds - exotic financial instruments

In 1985, when I began my career, the Dow Jones Index was at 1,200 (now around 22,000).  NZ Trustees had been limited by legislation to certain investments.  Share investments were considered to be sophisticated, exotic investments, only a handful of people dared venture near them. Working as a Sales Executive for giant US fund manager Fidelity Securities, from  1987-1989, my role was to explain and educate Australasian financial planners and investment advisers about why international share...

Why you shouldn’t ‘tweak’ your insurance claim (it’s not just a little white lie).

On July 9th, 2017 – eight months after moving into our brand new dream home, we had a massive power surge that blew up our brand new appliances, the switchboard, lights and various other things. (Suffice to say we now have $1000 of additional power surge protectors installed.) While it was a real hassle not having a dishwasher or range-hood or sound from our TV for many weeks, the process of claiming on our fire and general insurance was a total eye opener for us.  Like many people, we have ...

Investing in Bitcoins and Cryptocurrencies

We have recently had several queries from our clients about whether they should consider investing in Bitcoin, or cryptocurrencies.  The short answer is NO unless you can afford to lose all the money that you are investing. Why do we say no (unless you can afford to lose all the money that you are investing)?  Bitcoin and other cryptocurrencies are virtual payment networks built using blockchain technology.  These currencies are used for both illegal and legal business transactions, but als...

What is the significance of blockchain?

You might have heard of Blockchain in reference to Bitcoin or Cryptocurrencies. However, Blockchain as a technology has far more potential than just providing a virtual currency system. In fact, a number of observers believe that blockchain ‘may well change everyday business in scores of industries’. From the perspective, it is an important technology for you to know about as an investor. I have copied below information from one of my daily newsletters that I get from Fortune about the pote...

Lifetime Retirement Income update

Lifetime Retirement Income is an innovative financial solution that has been available in New Zealand for over a year.  We have recommended it to clients and over the last year, Lifetime have updated their offering in response to feedback from clients.  These changes provide more flexibility to the offering and make it even more attractive to clients. Lifetime provides you with an annuity for your lifetime.  They will pay you the agreed amount until you die.  If you live longer than anticip...

The Residential Care Subsidy - what you need to know

For the last twenty years, we have seem commentaries in the media about 'setting up a family trust to avoid paying residential care subsidies.' In reality, the rules of Government departments change on a regular basis and there is no certainty that creating a family trust will mean that you will be eligible for the residential care subsidy if you need to go into residential care.  Of course, there is the other range of discussions about whether it is moral and ethical to 'hide' your money when...

What to do in a terrorist attack

The world has definitely changed, and being a New Zealander, it is likely that you are going to travel.  Hopefully New Zealand is relatively immune from terror attacks, but that doesn't mean that as individuals we are. The NZ Herald recently ran an article that you may not have seen, that talks about what to do in a terrorist attack, or when you are travelling to keep yourself safe.  I have given you the link to that article below and have copied the key points below along with a personal tip...

Sue Watson – Waiheke and Auckland

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Richard and Emma O’Reilly (and Kate and Beth)– Kapiti Coast

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Non disclosure case studies from the Ombudsman

The IFSO (Insurance and Financial Services Ombudsman) regularly provides its members with case studies on actual claims before it.   ...

The importance of disclosure on your insurance policy application

When we work with clients to put in place new insurance cover, I think we might annoy clients by nagging them to remember everything that might ever have happened to them, even if there isn't a question on the policy relating to that topic. Although it might be annoying, there is method in our madness (and nagging().  Your insurance policy is designed to provide you with money when something bad happens to your health (be it death, or inability to work or a traumatic illness or injury).  The ...

What happens if you die without a will in New Zealand?

Around half of New Zealanders don’t have a will.  This means that if you die you have legally left no instructions about what should happen.  This can cause significant issues if you have dependent children.  Who will care for them?  Where will the money come to look after them? Since ancient Greek and Roman times, the State has had the power to step in if there was no will or if the will disinherited particular children without explaining why. Throughout history an important part of maki...

KiwiSaver and your Will

From many years experience, we know that the most difficult thing to get our clients to do in relation to their financial planning is to put in place or update their will.  It is difficult both practically (getting it done and witnessed), but also emotionally, thinking about being dead and what would happen to your loved ones and dependents. When you don’t have a lot of assets, it is easy to say – ‘I won’t bother with a will, it is all too hard.’ ...

Putting people in boxes

From Denmarks TV2 https://youtu.be/jD8tjhVO1Tc ...

Team Hoyt - very inspirational

I was looking on YouTube for an 'inspirational video' - not knowing what on earth I would find.  And I discovered Team Hoyt, and ended up with a tear in my eye and shivers down my spine, so thought I would share their story with you. What is the Team Hoyt story? Rick was born in 1962 to Dick and Judy Hoyt. As a result of oxygen deprivation to Rick’s brain at the time of his birth, Rick was diagnosed as a spastic quadriplegic with cerebral palsy. Dick and Judy were advised to institutionalise...

Making your own coffin - as part of a club - yes it is happening here in New Zealand.

SYDNEY, Australia — Roger Terry and his wife, Grace, have little interest in quilting, fishing or book clubs. Instead, they meet with other retired friends each Tuesday at a disused sports center to build coffins, a hobby that has gathered followers across New Zealand. “We have a heap of fun,” said Grace Terry, 77, a former nurse in Hawke’s Bay, on the North Island of New Zealand. “I’ve seen people come alive making their own coffins.” Mrs. Terry’s own coffin, painted mauve and...

The Dow hitting 20,000 and what it hides

Every day, we get a number of newsletters and articles across our desks at Moneyworks.  Many of them are repetitive and provide us with general background information (like the four separate daily newsletters that I read about what is happening now with President Trump).  But every now and then we get a commentary that we think would be interesting to share with you.  The commentary below provides food for thought, and is an interesting analysis.  Let us know if you have any questions. The...

Walk Weird traffic crossing

The joy of Monty Python sketches is surprisingly enduring: More than 30 years after the comedy troupe's Flying Circus sketch series ended, it continues to be rediscovered and celebrated by new generations of fans around the world. Including, of course, in Ørje, Norway. Ørje is a village of about 2,000 people near the Swedish border, and the Swedish art collective Kreativiteket have delighted fans of the venerable comedy troupe, as well as every other pedestrian, by converting a crosswalk i...

Short Termism in Investing

There are a number of different models that investors use.  Some people trade financial securities minute by minute – and aim to make their money as ‘day traders’.  Others aim to make money by ‘timing the market’, while others still have a high turnover of investments in an aim to make short term gains, or by arbitraging the timing of information flows or between different markets. Moneyworks’ financial planning clients all have a long term investment focus. When you are accumulat...

FIF (Foreign Investment Income) and FDR (Fair Dividend Rate) Taxation

The crucial things with FIF/FDR taxation are: 1.This tax applies if you own non NZ based investments (apart from a small handful of exemptions in Australia). 2. If you own your investments in your own name, you have a de minimis exemption from the tax for the first $50,000 of cost price of overseas investments.  If there are two of you, then the de mnimis exemption is $100,000 (ie your allocations are joined). 3. Below this level you are taxed on overseas dividends received. Above this leve...

Tax Rates and Taxation Liabilities and Obligations

31st March is the end of the tax year for most individuals and entities in New Zealand.  In the UK it is the 6th April, Australia 30 June and the USA 30th September.  The start of the new tax year is generally when new taxation related policies begin.  In New Zealand, this means that the 1st of April is when NZ Superannuation income is adjusted for increased costs, when benefits change and when any changes to KiwiSaver occur. ...

Former Undercover CIA Officer Talks War And Peace

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What is 'Financial Planning'?

In 1989, Carey decided that she wanted to have a financial planning business in a 'small town' (as compared to the cities of Hamilton, Adelaide, Sydney and Wellington that she had lived in.)  Carey had been working in the relatively new financial planning industry since 1985 in Australia and then New Zealand - after finishing Waikato University with a BSc majoring in Economics and Earth Sciences, and then gaining a Post Graduate Diploma in Applied Finance (from what is now Finsia). Making thi...

Moneyworks 20th Anniversary

On the 14th February 1997, Carey left her Marketing Manager role at AXA New Zealand and set up the financial planning business that become Moneyworks NZ Ltd.  At the same time, she moved to live with Peter in Turangi, changed her last name (from her maiden name of Hughes), and called the business Church Financial Services Ltd (which seemed logical at the time!).   Logos development over time:     ...

10 Optical Illusions that will blow your mind

Take 4 mins out to exercise your mind, and review these 10 optical illusions, there are a couple that don't work for me - but you might be able to see all 10! ...