Investment Videos

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welcome to the first edition of
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investment insights for
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2024 today we have Gom Dean with us
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welcome
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Gom today we will hear how the markets
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performed at the end of 2023 we'll delve
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into the current state of the bond
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market and examine China's economic
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recovery additionally we'll analyze the
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Dynamics of tech stocks and highlight
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key themes that invest should keep in
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mind for the year ahead Gom in the final
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quarter of 2023 markets seem to be
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recovering after a period of uncertainty
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can you please provide a brief overview
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of what was happening in the local and
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Global markets during the last
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quarter equities saw strong return after
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a pool start in October with November
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providing the strongest set of monthly
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return in over 3 years as the continued
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strengths in US Stock Mega cap was
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supported by positive return across the
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board the S&P 500 finished up 11.7%
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despite falling 2.1% in October and the
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NASDAQ finished up
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13.8% emerging market equities were up
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5.6% but fell short of develop Market
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China continues to be a drag on
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performance as much talked about postco
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recovery continues to stutter the US
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market received a leg up as investor
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reacted to the prospect of red cut in
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202 before with Market commentator
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pronouncing the red hiking cycle to be
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at its end and rhetoric from the US
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Federal Reserve striking a doish tone
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Market jumped at the first sign of
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easing in
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rate as we've seen more than once in
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this cycle Wall Street has been much
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more eager in his expectation for red
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Cuts pricing in sharper and more prompt
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rate Cuts than the communicated by the
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FED officials could you please share the
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current status of the bond market and
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highlight any emerging Trends or factors
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that might impact Bond investments in
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the coming months the expectation of
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imminent red Cuts also fed through into
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Global bond market with yields falling
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across the curve in response the
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Bloomberg Global aggregate Bond index
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returned 5.7% over the quarter the FED
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opted to hold rates twice more while
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both the European Central Bank and the
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bank of England also kept rate
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flat after the Fed December meeting the
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market be to price in three Cuts in 2024
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instead of two the US 10year Treasury
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yield was down 80 bus point while the UK
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10-year guilt was down 90 bus Point
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corporate bonds also fared well in
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November MINI BOOM as soft Landing
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scenario looks more likely closer to
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home uh with the Reserve Bank of New
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Zealand living interest rate untouch
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throughout the quarter yields on New
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Zealand bonds fell the yield on the New
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Zealand 10-year government bonds which
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had reached its peak of 5.6% ended the
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year at
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4.3% before the airbn Z November meeting
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the general feeling was that the
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official cash rate would be cut in the
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second half of 2024 however the
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accompanying announcements put an end to
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that with forecast indicating cuts to
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begin in mid 2025 and a potential for
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another hike before then what rates may
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have picked um they seem unlikely to
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revert all the way back to the very low
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rates of the 2010s this shift means the
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value of fixed income in multi assets
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portfolio construction is clearly
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greater today uh it would not be so wise
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however to assume that the defensive
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role of the fixed income will be as
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strong as in the last decade there is no
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guarantee we will automatically return
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to a period of negative correlation
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between equity and bond
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what role might China play in the
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markets in 2024 and what other
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challenges it is currently facing the
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postco Chinese recovery has not gone as
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most Observer expected in Weak economic
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growth and ongoing real estate stresses
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Weighing on investor confidence Chinese
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equities finished the quarter down to
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cap off an overall poor year in response
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to the slow growth the Chinese
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governments announced numerous stimulus
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measured to kickstart economic growth
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including a white list of approved
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property developer were eligible to debt
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loan and Equity
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financing now looking into 2024 we
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expect a recovery in Chinese retail
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sales as consumer confidence starts to
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grow while the country moved to an
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inhouse advanc manufacturing should
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assist
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growth our view is um that China remains
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committed to doing whatever it takes in
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order to fulfill its 5% growth Target
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going
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forward we continue to recommend
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investors and Bas allocation to China
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and Emerging Market are at Benchmark
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weight at least indeed the negative
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sentiments may present contrarian
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opportunity to the extent that the risk
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are already priced
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in are the Magnificent Seven likely to
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continue to dominate sentiment and
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returns like they did in 2023 or are you
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expecting a broader view of equity
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markets to emerge the dominance of the
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so-called magnificent 7 in 2023 was
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drived by various factors including
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strong financial performance Market
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position and technological innovation
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these companies have a significant
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impact on the equity market and have
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delivered impressive return for investor
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but not only in 2023 indeed each of the
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seven stock as easily outperformed the
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S&P 500 163% return in the past decade
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and have continued to do so in early
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2024 driving Market concentration to its
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highest level since
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1972 it's important to note that the
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market Dynamic can change over time
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while this Tech stock have been
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influential in recent years there is
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always the potential for new companies
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or sector to emerge and capture Market
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attention the equity Market are Dynamic
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and can be influenced by a wide range of
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Factor including economic condition
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regulatory change technological
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advancements and investor
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sentiment it's difficult to predict with
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certainty whether the dominance of The
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Magnificent 7 will continue or if a
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broader view of equity Market will
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emerge it's possible that the other
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sector or companies May gain prominence
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in the future driven by new innovation
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or changing market dynamics
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diversification risk management and
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staying informed about market trends can
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be important strategies for investors to
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consider as we are already a few months
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into 2024 are there any significant
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themes or trends that investors should
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keep in mind for this
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year cooling inflation across economies
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interest rat Cuts possible China
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recovery and election in many countries
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while interest rates are having an
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impact and cyclical inflation pressure
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are subsiding many significant
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structural inflationary pressure
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remain increasing protectionism supply
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chain pressure and the need of a
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long-term energy transition all skew
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inflation risk to the upside furthermore
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the coordination of the fiscal and
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monetary effort at the time of the
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pandemic could now devolve into a
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tension between a more restrictive
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monetary stance and a continued
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accommodative fiscal support for
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government eager to fund transition and
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win
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votes the greatest deflationary force on
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the service of the upsite equation is
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likely to be AI 2023 was arguably the
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year of AI C of Ag and those stocks
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deemed as AI enabler completely
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dominating Global Equity Market return
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the dynamic between these two opposing
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forces could result in a pattern for
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inflation that is near or at Target for
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reasonable length of time only to be
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punctuated by stocks that filter through
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to slightly higher long-term average
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level higher rates today are once again
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highlighting the fragility of heavily
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eded players in the market it has
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shifted power from borrowers to lenders
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in our view private debt is very
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attractive in this environment providing
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liquidity to economy in needs of it and
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offering investor strong risk adjusted
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return it is worthwhile keeping in mind
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that globally this year a record number
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of voter worldwide will participate in
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national elections with at least 64
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countries holding a polls these
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elections encompassing approximately 49%
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of the global populations are expected
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to have far-reaching implication in the
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year
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ahead the outcome of these national
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elections can have significant impact on
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market performance election often
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introduce a level of uncertainty as they
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can result in change to government
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policies regulation and economic
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priorities this uncertainty can
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influence the investor sentiment and
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market dynamics thank you Gom and thank
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you for watching this edition of
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investment
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[Music]
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insights

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[Music]
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welcome to this edition of investment
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insights plus today James and I will be
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diving into topics that have been making
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waves in the markets and discussing
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their impact unfortunately the Russia
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Ukraine crisis is still going on how
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have markets been affected over the last
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year and a half yeah the ongoing
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conflict between Russia and Ukraine has
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been a tragedy for all those involved
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with significant loss of life and
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displacement of millions of people we
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hope that more effort is made to bring
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an end to this
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violence in terms of the market impact
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the biggest impact has arguably been
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felt and could still be felt in the
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commodity sector and then of course how
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that flows through to inflation
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pressures and interest rates which of
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course have been very high so as a
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result of that over 2022 we saw a strong
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Resurgence in traditional energy
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companies such as Exon Mobile and
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Chevron which capitalized on these high
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Energy prices and boosting production
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energy markets increased over 50% last
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year when most other sectors were
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negative and while that commodity price
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spike has eased somewhat over 2023
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volatility Still Remains even recently
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Russia bombed ports around Odessa and
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Ukraine where the majority of Ukraine's
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grain exports are shipped which ended
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the one-year-old deal that allowed food
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crop exports from Ukrainian ports the
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tragic events in Gaza has added further
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volatility So currently West seen sharp
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increases in crude prices closing in on
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$100 a barrel due to global supply
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issues which is actually working in
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Russia's favor as it continues to sell
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Russian oil at around $80 a barrel to
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India turkey and China $20 above the
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Western imposed sanctions but what it
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also does is raise companies input costs
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which can impact their margins or
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whether they can pass those on to the
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consumer so with all of this and the war
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still ongoing the biggest question mark
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will be what happens to inflation and
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what action central banks will need to
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take to bring inflation down thank you
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James how has the Reserve Bank responded
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to persistent CPI and GDP growth yeah as
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widely expected by markets and signaled
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earlier by The Reserve Bank of New
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Zealand in May the bank has left the OCR
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at 5.5% at its last three meetings so
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with the interest rates Rising the
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response to those pressures has been
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huge we're at 5.5% today up from. 25% in
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September 2021 about 2 years ago but the
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big question is where to from here in
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its most recent statement in October the
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bank acknowledged that interest rates
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might still need to remain restrictive
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for longer acknowledging that interest
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rate Rises are doing their job in
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constraining the economy and taming
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inflation pressures yet also citing
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near-term risk that inflation and growth
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do not slow as much as what is needed we
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can't forget that monetary policy has
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that lagged Effect one interest rate cut
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can take up to 12 to 18 months to fully
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trickle through the system so the
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message is that rates are likely to
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remain higher for longer and further
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rate hikes are not completely ruled out
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this is a signal that the Reserve Bank
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of New Zealand are still clearly
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prepared to do what it needs to do to
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bring inflation under control and
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Achieve price stability thanks for
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joining us for this edition of
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investment insights
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[Music]
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Plus

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[Music]
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welcome to this edition of investment
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insights today we have James Wilson with
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us welcome James thanks Natasha we are
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still seeing ups and downs in the market
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what has been impacting Investments
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during the third quarter of
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2023 yeah that's right Global markets
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experienced yet another volatile quarter
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with both equities and fixed income
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declining driven mostly by expectations
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around interest rates so the view there
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has shifted from focusing on the fact
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that we are near the end of the monetary
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tightening cycle and now focusing on
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higher for longer interest rates and
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this is what markets have been reacting
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to starting to discount near-term rate
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cuts by central banks as core inflation
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remains relatively sticky as well as oil
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prices rising sharply over the quarter
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likely to affect inflation
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expectations the impact of higher
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interest rates was widely felt across
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the markets from equities to property
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and also bonds but very good for cash
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returns of course the other key theme
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for the quarter has been the Divergence
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in economic growth between the major
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regions with the US continuing to show
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economic resilience while momentum in
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Europe is fading and an Evidence of an
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economic slowdown in China is mounting
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domestically GDP Rose by .9% in the
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second quarter which was stronger than
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the market expectation of 4% also q1 GDP
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was revised up to Flat from netive 0.1%
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which erased technical recession so the
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upside surprise to Q2 GDP reflected a
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strong rebound from weather disruptions
1:35
in the pre quarter and better than
1:37
expected net exports as higher volumes
1:39
more than offset weaker prices
1:41
particularly for dairy however the
1:44
economic Outlook remains subdued with
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higher interest rates and consumer
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spending expected to decline further and
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of course the recent election in New
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Zealand we are hearing a lot about the
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slowdown in the Chinese economy what
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impact is that having on the local and
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global financial
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markets yeah look China gets a lot of
2:04
airtime in the financial news it is a
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country which historically has had one
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of the highest GDP growth rates
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worldwide and has subsequently faced
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mounting growth headwinds involving the
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financial WS of evergrand a Chinese
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property developer the Chinese
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government regulatory crackdowns on on
2:21
the technology sector and of course
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their strict stance on zero Co and
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lockdown
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measures in fact the World Bank has
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recently downgraded it 2024 forecasts
2:31
for the China economy and this has a
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material impact on the Asia region
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especially where headlines show it has
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the worst economic Outlook in half a
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century so China is a very important
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player on the global stage and this year
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China has made Global markets Ratt and
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if Global markets rattle then local
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markets tend to feel it too so the
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weakness in China has stemmed from a
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couple of places as China reopened its
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economy this year after strict pandemic
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requirements there was a lot of positive
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rhetoric but the actual Co reopening
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story has been quite underwhelming
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Chinese retail sales are below
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pre-pandemic levels and household
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savings are very high which led to weak
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macroeconomic
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data secondly from further weakness seen
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in the property sector now this is
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important because Chinese economic
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growth is heavily reliant on its
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property sector which accounts for
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roughly a quarter of its total GDP the
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sector has been under intense scrutiny
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Lately by the government with regulatory
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limits on excessive borrowing leaving
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many developers out of business
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including ever Grand which was recently
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pushed into default but the Silver
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Lining is we' seen some action the
3:40
Chinese government has taken material
3:42
steps to ease monetary policy and
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attempt to support growth and Equity
3:46
markets there are signs that these have
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started to work there was even record
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net inflows into China focused Equity
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exchange traded funds over August now
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from a local economy perspective we are
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quite reliant on China and we have been
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for some time slowing Chinese growth is
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having an impact on the New Zealand
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economy which is already under quite a
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lot of pressure this can be seen via
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weak Chinese demand for New Zealand
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Dairy which has driven down Global dairy
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prices so that's not good for our
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exports as well as sheep and Forestry
4:16
being under pressure and to give that
4:17
some context New Zealand exports around
4:20
60% of its logs to China so with these
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industries being under pressure I'm sure
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local businesses especially in the
4:26
regions have started to feel the impact
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thanks games as we head towards the end
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of
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2023 what market trends can we
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anticipate for the remainder of the year
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and into the new year yeah look as we
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navigate the later end of 2023 the
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Outlook remains inherently uncertain but
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we remain cognizant of several key risks
4:46
facing the global economy and financial
4:49
markets the majority of developed Market
4:51
central banks have opted to keep rates
4:53
on hold and remain data dependent a key
4:55
question is whether central banks will
4:57
look through the volatility in the
4:59
upcoming coming inflation and labor
5:00
market data which may show signs of
5:04
reacceleration and then what this means
5:05
for those Mega cap technology companies
5:07
the likes of meta Nvidia and apple which
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have dominated Global Equity market
5:11
returns this year yet tend to face
5:13
headwinds as interest rate expectations
5:15
rise so this will definitely be
5:17
something to watch it's also fair to say
5:19
that headline inflation is expected to
5:21
remain volatile driven by recent
5:22
increases in Energy prices and a
5:24
potential rise in food prices from
5:26
reduced exports from Russia and Ukraine
5:29
or poor harvest in Asia from Al
5:31
Nino also the US government has recently
5:34
averted a shutdown with Government
5:35
funding extended for 45 days while a
5:38
shutdown is expected to have a minimal
5:40
effect on the broader economy it does
5:42
underscore weakness in US Government
5:44
strength and could result in a potential
5:45
downgrade by Moody's the only agency
5:48
assigning a AAA rating to the US the
5:50
China economic growth story is of course
5:52
another risk to look for as they
5:54
continue to cut their rate to stimulate
5:56
the economy so we'll be watching to see
5:58
how effective this is with with regard
5:59
to other headwinds such as slowing
6:02
demand in the real estate sector and a
6:03
recent liquidity crisis in Country
6:05
Garden which is China's biggest property
6:07
developer which could reduce confidence
6:10
uh further in the sector in New Zealand
6:12
we don't expect major change in the
6:14
economic Outlook following the recent
6:15
election with both parties broadly in
6:17
agreement of fiscal macroeconomic policy
6:20
if we continue to see resilient economic
6:22
growth persistent inflation Rising house
6:25
prices and a strong labor market we will
6:27
be taking note thank you for joining us
6:29
for this edition of investment
6:32
[Music]
6:40
insights

0:02
foreign
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welcome to this edition of investment
0:08
insights plus today James and I will
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touch on topics currently trending in
0:12
the markets there have been talks of
0:14
disinflation globally what is
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disinflation and how is it different
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from deflation it's a good question and
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very topical disinflation is a decrease
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in the rate of inflation in other words
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it means that prices are still Rising
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but at a slower rate and it is quite
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different from deflation which is a
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negative inflation rate whereby prices
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are decreasing how all disinflation
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impact the markets
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their interest rate hikes by central
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banks are having their intended effect
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with slowing economic growth leading to
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headline inflation falling and most
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advanced economies although remaining a
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lot stickier and higher than we would
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have liked now inflation isn't bad for
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markets per se so we need to understand
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where we are coming from today which is
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historically very high inflation
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combated by central banks around the
1:01
world raising interest rates at the
1:03
fastest Pace since the 1990s now
1:06
disinflation in this regard We Believe
1:08
would be welcomed by the markets as it
1:10
can reduce some of these cost pressures
1:12
for both businesses and households and
1:15
perhaps indirectly signaling a ceasefire
1:17
and interest rate Rises perhaps even a
1:19
decrease which again would be positive
1:21
for markets Thanks James there has been
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a lot of talk recently about how tech
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stocks are driving overall market
1:28
performance how so the Super 7 as they
1:31
are collectively known heavily out of
1:33
favor over 2022 and really the only
1:35
thing in favor over 2023 thus far so the
1:39
NASDAQ index which is technology heavy
1:41
has had its best start to a year in four
1:43
decades so it is true the impact of
1:46
these companies such as Nvidia up 190
1:49
this year alone alongside the likes of
1:51
Microsoft Apple and meta have completely
1:53
driven market performance within the
1:55
global Equity space this year these are
1:58
also the biggest companies collectively
2:00
having driven around 90 of the total
2:02
Market return this year at a point in
2:04
time which is just enormous and also
2:07
disguises the fact that hundreds of
2:08
other companies out there are going
2:10
through a tough time
2:12
there's no denying artificial
2:14
intelligence or AI is a huge Market
2:16
opportunity a food quote solved the new
2:18
electricity before we've probably all
2:21
heard of chat GPT
2:23
so there's absolutely no surprises that
2:25
these larger companies are completely
2:27
gunning for market share in this space
2:28
the winners have a lot to gain thank you
2:31
for watching this edition of investment
2:33
insights Plus
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[Music]

0:02
foreign
0:06
of investment insights today we have
0:09
James Wilson with us welcome James
0:11
thanks Natasha
0:14
with the New Zealand economy entering a
0:16
recession of the slimmest of margins in
0:18
June what is your outlook for local
0:20
markets the New Zealand economy
0:22
contracted 0.1 percent in the first
0:24
quarter of this year following a fall of
0:27
0.7 in the December quarter so this
0:30
meets the definition of a technical
0:31
recession which is two consecutive
0:33
quarters of negative economic growth
0:36
the decline in the first quarter was
0:38
driven by weakness and professional
0:39
business services following a series of
0:42
devastating weather events earlier in
0:44
the year including the flooding in
0:45
Auckland and Cyclone Gabrielle and while
0:48
we note that the decline of 0.1 percent
0:50
is minimal it is clear that the New
0:52
Zealand economy is losing momentum and
0:54
facing a number of headwinds including
0:57
slowing Global growth so there is reason
0:59
to remain cautious on the local Equity
1:01
Market as we expect softer demand to
1:04
persist going forward with consumers
1:06
continuing to feel the pinch of rising
1:08
mortgage rates falling house prices and
1:10
cost of living pressures
1:12
however the silver lining for the local
1:14
New Zealand Equity Market is that it is
1:17
not a great representation of the New
1:18
Zealand economy so weak GDP doesn't
1:21
automatically translate to weakness in
1:23
the New Zealand Equity Market which is
1:25
more exposure to traditional defensive
1:27
sectors such as Healthcare utilities and
1:30
property
1:31
so in light of further weakness in GDP
1:33
numbers we would expect the local Equity
1:36
Market to remain quite resilient to
1:37
these pressures and depending on the
1:40
severity of a global slowdown the local
1:42
market may even be attractive for Global
1:44
Investors
1:46
May 2023
1:50
trade by 25 basis points taking it to
1:53
5.5 percent what does this increase mean
1:56
for QE investors that's right the
1:59
increase in the official cash rate by 25
2:01
basis points in May was widely expected
2:03
by the markets bringing the cash rate
2:05
now to its highest level in 14 years
2:07
this has different implications for
2:09
households for those of us with Savings
2:11
in the bank it's great news but for
2:13
those of us with a mortgage perhaps not
2:15
so great news but from an investment
2:17
perspective after all the financial pain
2:19
we've suffered in getting to this point
2:21
cash and bonds are now starting to offer
2:24
attractive returns to Kiwi investors
2:26
whereas investors in the equity or
2:28
property Market tend not to react so
2:30
favorably as higher interest rates
2:32
generally means higher costs and can
2:34
result in lower expected valuations so a
2:37
key thing we are monitoring is whether
2:39
interest rates have peaked or not
2:41
and we see it as vitally important to
2:43
focus on investing actively in companies
2:46
which can best withstand these cost
2:48
pressures looking forward
2:53
while 2023 has certainly been an
2:56
interesting year for Global markets with
2:58
equities reversing their large declines
3:00
in 2022 and technology stocks surging on
3:04
the back of the Euphoria around
3:05
artificial intelligence and this is most
3:07
certainly going to continue to be a
3:09
theme for the rest of 2023
3:12
now we are already seeing monetary
3:13
policy Divergence across the largest
3:15
economies some regions approaching the
3:18
point of pausing their interest rate
3:19
Rising regime others are still getting
3:21
there and some in the case of china may
3:24
start to do the opposite
3:25
and This Global Divergence reflects the
3:28
breadth of challenges faced by each
3:30
region
3:31
and while we believe the worst is now
3:33
behind us over the short term it is
3:35
entirely feasible that interest rates
3:37
continue to rise and remain high even
3:40
after pausing because inflation is
3:42
coming down however core inflation which
3:44
strips out the more volatile impacts of
3:46
energy and food prices remains High a
3:49
key factor in that is having a tight
3:51
labor market which is historically tied
3:53
across the globe especially in the
3:55
services sector where fairly widespread
3:57
shortages are seen now this puts upward
3:59
pressure on wages and in turn creates
4:02
inflation
4:03
now the one thing to watch with all of
4:05
this is the lagged effect of monetary
4:07
policy the effect of an interest rate
4:09
rise on on an economy doesn't happen
4:11
right away and it can take up to 18
4:13
months so the question markets will be
4:15
looking to answer this year and will
4:17
certainly be have central banks got it
4:19
right have they gone too far or not far
4:21
enough the answer of which can result in
4:24
Market leadership changes for example a
4:26
defensive rotation or a cyclical rebound
4:28
thank you for watching this edition of
4:30
investment insights
4:32
[Music]

0:03
foreign
0:06
welcome to this edition of investment
0:09
insights today we have Paddy Brown with
0:12
us welcome Paddy thanks Tatiana we are
0:15
continuing to feel the pressure of
0:17
inflation here in New Zealand with the
0:19
official cash rate at a record high and
0:21
interest rates continually increasing
0:23
how has this impacted investors The
0:26
Reserve Bank of New Zealand surprised
0:28
the market with half a percent increase
0:30
on the 5th of April
0:32
double the increase anticipated by the
0:34
markets
0:35
despite the large hike there is no
0:37
change to the projection of a 5.5 Peak
0:39
official cash rate
0:41
it is of note that other central banks
0:43
and other countries are taking a more
0:44
dovish approach to inflation with
0:46
Reserve Bank of Australia pausing at
0:48
3.75 there are three key reasons for the
0:51
larger than expected Reserve Bank of New
0:53
Zealand increase number one the rebuild
0:55
from major weather events including
0:57
Cyclone Gabrielle and the Auckland
0:58
flooding expected to lead to larger than
1:01
expected inflation
1:03
secondly we're in election year and
1:05
there's a likelihood of fiscal policy in
1:07
the upcoming budget bringing further
1:09
inflationary pressure and there are
1:11
signs that mortgage rates are starting
1:12
to fall which essentially undoes some of
1:14
the reserve bank's inflation tightening
1:16
work
1:17
Rising rights negatively impact One
1:19
prices
1:21
Rising rates also tend to have a
1:22
negative impact on equities as companies
1:24
borrowing costs increase
1:27
it is a positive though for those with
1:28
cash in the bank the OCR is now at the
1:30
highest level since 2008 but we've
1:32
historically seen some much higher
1:34
levels with the OCR reaching 8.25 just
1:37
prior to the global financial crisis in
1:39
2008. the upper North Island floods and
1:42
Cyclone Gabriel has caused Devastation
1:44
to local communities and Regional
1:46
economies across the North Island what
1:49
is the likely impact in regards to
1:50
inflation in New Zealand and does this
1:53
affect the outlook for the OCR Cyclone
1:56
Gabrielle has caused significant damage
1:57
to homes infrastructure and livelihoods
2:00
across Northern and Eastern regions of
2:02
the North Island
2:03
the Cyclone is New Zealand's costliest
2:05
non-earthquake natural disaster the
2:07
disruption and losses will weigh on New
2:09
Zealand's March quarter GDP which may
2:11
have contracted however the New Zealand
2:14
economy remains very much open for
2:16
business
2:17
Cyclone damage and disruption isolated
2:19
specific regions
2:21
looking ahead the recovery and rebuild
2:23
work is expected to add growth in the
2:25
coming quarters
2:27
tentative estimates by The Reserve Bank
2:29
of New Zealand sees recovery adding one
2:31
percent to New Zealand's GDP over coming
2:33
years on the 5th of April The Reserve
2:36
Bank of New Zealand stated that over the
2:38
medium term the inflationary impacts of
2:40
these events are likely to be somewhat
2:41
larger than assumed at the time of the
2:44
February statement as more information
2:45
has come to light about the scale and of
2:48
the rebuild activity the impact this had
2:51
on the OCR largely influenced the half
2:53
of a percent we've just saw there's no
2:56
change to the 5.5 forecasts but that
2:59
will be data dependent the banking
3:01
sector has been experiencing trouble
3:02
recently has this affected Global
3:05
investment markets and should we be
3:07
concerned for the local banking sector
3:09
the recent failure of Silicon Valley
3:10
Bank and rescue of credit Swiss have
3:13
titled tightened Global Financial
3:15
conditions and reduce the need for
3:17
monetary policy to be as restrictive
3:20
to date policymakers Swift reactions
3:22
have contained the crisis and we haven't
3:24
seen broader contagion as a small open
3:26
economy with heavy Reliance on Global
3:28
Investors to fund our current account
3:30
deficit New Zealand has a high
3:32
sensitivity to the health of the global
3:33
economy and international financial
3:35
markets International shocks impact New
3:38
Zealand via three key channels
3:40
reductions in trade via lower Global
3:42
growth
3:43
tighter financial markets and
3:45
uncertainty which reduces business
3:46
investment and household consumption
3:49
the New Zealand banking system is
3:50
dominated by the big four Australian
3:53
banks who collectively have over 85
3:55
market share these four Banks all have
3:57
high credit ranges by International
3:59
standards although we are closely
4:01
watching Bank exposures to the declining
4:03
household markets on both sides of the
4:05
Tasman looking forward into 2023 what
4:08
are some of the key themes we can expect
4:10
to see in the markets we see challenges
4:12
for markets persisting throughout 2023
4:15
and likely into 2024. markets are
4:18
eagerly looking for signs that won't up
4:20
when inflation may fall allowing
4:23
interest rates to decline again and this
4:24
is likely to result in continued Market
4:26
volatility as the markets digest new
4:28
information higher rates globally are
4:30
exasperating pressures on weak
4:32
businesses
4:33
as we have seen with the recent banking
4:35
crisis as well as fueling unrest and
4:37
geopolitical tension inflation remains
4:39
stubborn and in New Zealand's a tight
4:41
labor market combined with high levels
4:43
of government spending will likely see
4:45
inflation remain high in the near term
4:46
despite a declining economy
4:49
on the positive side many commentators
4:51
believe that rates are close to their
4:53
Peak to the cycle and that we are seeing
4:55
increased migration to assist with our
4:57
chronic skills shortages
5:00
[Music]
5:02
foreign

0:03
foreign
0:06
welcome to this edition of investment
0:09
insights today I have Patty and Leah
0:11
with us from nurses Investments team
0:13
welcome thanks Tatiana
0:16
thanks teriana 2022 was another
0:18
unpredictable year for investors and the
0:21
markets filled with many significant
0:23
events globally and locally what were
0:25
some of the highlights of the final
0:27
quarter of 2022
0:29
that's right Tatiana it was a very
0:31
challenging year for investment markets
0:33
but one highlight was positive
0:34
performance over the final quarter which
0:36
came off the back of signs that offshore
0:38
inflation pressures were easing riskier
0:41
assets like equities and high yield
0:42
bonds rallied as these signs implied
0:44
central banks may not raise interest
0:46
rates as high as originally thought
0:48
if you recall interest rates or Rising
0:51
interest rates had hurt asset
0:53
performance throughout 2022.
0:55
this relief was short-lived though as
0:57
central banks did continue to raise
0:59
rates late in the quarter so the Reserve
1:01
Bank of New Zealand raised interest
1:02
rates by 75 basis points or 0.75 and the
1:06
U.S federal reserve race raised interest
1:08
rates by 50 basis points so these late
1:11
quarter declines weren't enough to
1:12
completely dampen performance though so
1:14
Global equities returned 10.7 for the
1:17
quarter listed property returned 7.4
1:19
enlisted infrastructure returned 7.6 we
1:23
have seen inflation and interest rate
1:24
Rises over the last 12 months how has
1:27
this impacted new zealanders
1:29
interest rates and inflation have
1:31
impacted almost all areas of life for
1:33
kiwis from increases in the cost of
1:36
living which has increased 8.2 percent
1:37
for the average kiwi household through
1:39
to interest payments on mortgages which
1:41
have increased 45 for the average kiwi
1:43
household
1:44
we've also seen large declines in
1:46
kiwisaver balances as traditional
1:48
risk-off assets like bonds didn't
1:50
provide the same protection they
1:51
normally would because the drivers and
1:53
markets have been so unique
1:55
while kiwis may find this alarming
1:57
there's one key message that all
1:58
investment professionals live by it's
2:00
not about timing the market but about
2:02
time in the market if you have any
2:05
questions about your retirement fund or
2:06
the investment option that you're in
2:07
please speak to a financial advisor
2:11
it's a move into 2023 what are some of
2:14
the themes we can expect to see in the
2:16
markets
2:17
2022 was a very tough and volatile year
2:20
for markets and we expect this
2:22
volatility to persist into 2023
2:25
the need for central banks to respond to
2:27
high levels of inflation by hiking
2:29
interest rates was a major driver of the
2:31
poor returns we saw in 2022
2:33
inflation now looks to have peaked or be
2:36
close to its peak and a number of
2:37
markets globally and financial markets
2:39
will be looking for signs that central
2:40
banks will cause raising interest rates
2:42
or begin to cut rates
2:44
much of the strong Market rally that
2:46
we've seen in recent months is a result
2:48
of markets trying to anticipate the end
2:50
of the current interest rate cycle
2:52
expect markets to remain volatile and
2:54
prepare for Market Falls if inflation
2:56
proves to be persistent
2:59
High interest rates and inflation are
3:00
affecting household and business
3:02
spending which should lead to economic
3:04
slowdown and possible recession in New
3:05
Zealand and a number of other economies
3:07
globally
3:09
given the very high level of employment
3:11
we are currently seeing any recession is
3:13
forecast to be mild
3:16
another theme driving markets in 2022
3:18
has been geopolitics and in particular
3:21
Russia's invasion of Ukraine and
3:23
resulting sanctions which led to
3:24
significantly higher energy prices
3:27
2023 has started off with further
3:29
geopolitical tension between the USA and
3:31
China and markets will be watching
3:33
developments closely
3:39
Mercer builds highly Diversified
3:40
portfolios for our investors
3:42
we ensure that your Investments benefit
3:44
from a broad range of economic
3:46
conditions and are not overly exposed to
3:48
a particular industry or geographical
3:50
region we invest in a wide range of
3:53
asset classes from equities and bonds
3:55
through to unlisted infrastructure and
3:57
unlisted property
3:59
Mercer has been incorporating ESG
4:01
factors into our portfolios for more
4:03
than a decade and we have focused on
4:05
meeting local and international
4:07
reporting requirements
4:09
we will be updating our scenario
4:10
analysis and issuing our third climate
4:12
change management report in 2023
4:15
[Music]
4:18
foreign

0:02
[Music]
0:05
welcome to this edition of investment
0:08
insights today we have James Wilson with
0:11
us welcome James thanks Natasha
0:14
with the backdrop of stubbornly high
0:16
inflation persisting in major economies
0:18
together with the ongoing Russia Ukraine
0:21
crisis how have the markets been
0:22
performing this quarter
0:24
you have probably seen on the news that
0:26
investment markets have had another
0:28
tough quarter Global share markets have
0:30
fallen over four percent bringing major
0:32
indices back into beer market territory
0:35
and bonds which should be expected to
0:37
provide some cushioning when share
0:38
markets fall continue to post negative
0:41
returns due to Rising interest rates the
0:43
New Zealand dollar continued to
0:45
depreciate particularly against the US
0:47
dollar however the New Zealand share
0:50
market which has a more defensive
0:51
composition bucked the trend and
0:54
generated a positive return over the
0:56
quarter
0:57
High inflation has predominantly been
0:59
the cause of the weak global market
1:01
returns not so much the war in Ukraine
1:04
the war has showed no signs of stopping
1:07
recently we've even seen Ukrainian
1:10
forces drive back the Russian army in
1:12
some areas only to be met with a Russian
1:14
escalation of more troops and the
1:16
annexation of four Ukrainian regions so
1:19
it certainly feels far from a resolution
1:21
there and while this war hasn't been
1:23
driving Global share or bond market
1:25
returns it continues to put pressure on
1:27
commodity prices such as energy and food
1:30
which we've all likely felt at the
1:31
petrol station and the supermarket it is
1:34
one of the reasons Global inflation
1:36
remains significantly elevated as a lot
1:38
of countries like New Zealand have to
1:40
import these essential Commodities at
1:42
higher prices and this led to inflation
1:44
at a time when inflation was already
1:46
high this has been particularly bad for
1:49
Europe where inflation has hit a new
1:51
high for the 11th consecutive month
1:53
above 20 in some countries the US isn't
1:57
too far behind with annual inflation up
1:59
8.3 percent with President Biden
2:01
recently announcing the inflation
2:03
reduction act in New Zealand we are also
2:06
not too far behind annual inflation is
2:08
up 7.3 percent which is a 32-year high
2:12
there has been a lot of discussion
2:14
lately regarding the likelihood of a
2:16
soft burst hard Landing what are the key
2:19
issues that are likely to determine
2:20
which way economies may head and what do
2:23
each of these scenarios mean for New
2:24
Zealand investors
2:26
you may have seen in the media recently
2:28
that the central banks around the world
2:30
include in The Reserve Bank of New
2:31
Zealand are raising interest rates in
2:34
order to slow the economy to bring
2:36
inflation under control the problem is
2:38
the impacts of higher interest rates can
2:40
take a while to take effect
2:43
a soft Landing is when the central banks
2:45
are trying to look to bring inflation
2:47
under control without causing a severe
2:49
downturn in the economy and getting the
2:52
balance right is often referred to as
2:53
walking on a tightrope if the central
2:55
banks raise interest rates too much it
2:58
could push the economy into a more
3:00
significant slowdown and that's what we
3:02
mean by a hard Landing this is likely to
3:04
be detrimental for shares and bonds our
3:07
view is that a soft Landing is still
3:09
possible and if so investment markets
3:11
are more likely to Stage a recovery the
3:14
current pressures that would normally
3:15
lead to a hard Landing are being offset
3:18
by consumers and businesses remaining in
3:20
Good Financial shape this has been more
3:23
recently helped by energy investment
3:24
packages which have been introduced
3:26
across developed countries such as the
3:29
United Kingdom along with other European
3:31
countries which include Denmark Bulgaria
3:34
Germany and Italy where they have
3:36
announced a household and business
3:37
energy subsidy as we are coming to the
3:40
end of 2022 can we expect to see more of
3:43
the same in the markets we certainly
3:45
expect markets to remain volatile
3:48
due to a number of uncertainties and
3:50
significant risks which remain we are
3:52
keeping a close eye on inflation and
3:54
interest rates in particular which could
3:56
result in a wide range of scenarios
3:59
as well as impacts of any further
4:02
geopolitical risks and the economic
4:04
developments in the UK which many have
4:06
begun to describe as a fiscal car crash
4:09
in this volatile environment having a
4:11
strategy which is Diversified across a
4:13
range of asset classes such as property
4:15
and infrastructure and into asset
4:17
classes which can offer some protection
4:19
against inflation has never been more
4:22
important but for now the most important
4:24
thing to do is to choose the most
4:26
appropriate investment strategy which
4:28
suits your financial objectives and
4:30
personal circumstances
4:33
[Music]

23:13
NOW PLAYING

Why We Do What We Do | TED Talks | Tony Robbins
Tony Robbins
2.1M views

0:02
[Music]
0:06
welcome to this edition of investment
0:08
insights today we have hayden tyrell
0:10
with us welcome hayden thanks laura
0:13
the russia ukraine crisis has been
0:15
ongoing for a while now with sanctions
0:17
being put on russia from countries
0:18
across the world how has this impacted
0:21
markets both worldwide and in new
0:22
zealand two key themes are driving
0:24
markets at the moment these are
0:26
inflation and a conflict between ukraine
0:28
and russia the conflict came at a time
0:31
when global share markets were already
0:32
showing increased levels of volatility
0:35
this was off the back of signals from
0:36
central banks around the world that they
0:39
would start to wrap up their support of
0:40
monetary policy regimes in response to
0:43
soaring inflation
0:45
this shook global share markets as a key
0:47
asset in the tool belt of a central bank
0:49
is to raise interest rates we've seen
0:51
this happen in new zealand recently with
0:53
the reserve bank in new zealand raising
0:54
interest rates and these increases
0:56
feeding through to the likes of mortgage
0:58
rates
0:58
this hits businesses the same way that
1:00
it hits households resulting in
1:02
increased loan expenses lower profits
1:04
and a lower share price the conflict
1:06
only added to the volatility as
1:08
investors questioned the severity and
1:10
also the ripple effect it would have on
1:11
many industries and regions
1:14
as a result we saw global share markets
1:16
continue to sell off and investors move
1:18
their money to traditional safe haven
1:19
assets such as treasury bonds and gold
1:22
we also saw commodity assets such as oil
1:25
and wheat have large price fluctuations
1:27
as the conflict's impact on supply of
1:29
these assets was questioned
1:31
war on conflict creates instability
1:33
which we have seen with the migrant
1:35
crisis and financial markets with the
1:37
duration of the conflict unknown do we
1:39
think there will be continual market
1:40
instability going forward
1:42
whilst the war continues and questions
1:44
remain around how it can impact markets
1:47
we will see increased levels of market
1:48
volatility
1:50
in saying that we saw a board-based
1:52
recovery in equity markets across march
1:54
and the vix index which is a measure of
1:56
volatility in the s p 500 has retreated
1:59
indicating less expected volatility in
2:01
the markets the shock of the conflict
2:03
has at this time being priced into
2:05
markets however it will not take much to
2:07
change this if a further escalation
2:08
occurs or the war spills over into a
2:11
neighboring nato country flash flooding
2:13
recently seen across the pacific is
2:15
becoming more frequent with climate
2:16
change cities are learning to adapt how
2:18
are the portfolios adapting to climate
2:20
change
2:22
sustainability is one of mercer's core
2:24
investment beliefs
2:26
last year most new zealand committed
2:27
ourselves to achieving net zero carbon
2:29
emissions from all of our investments by
2:31
2050 with a 45 reduction by 2030. this
2:35
means that we're actively working
2:36
towards a lower carbon future through
2:38
collaborating closely with our
2:40
investment managers to reduce portfolio
2:42
carbon emissions and avoid companies
2:44
that will be adversely affected by
2:46
climate change instead investing in
2:48
solutions that aid the transition like
2:50
renewable energy and digital technology
2:53
inflation numbers in new zealand and
2:55
around the world are at historical highs
2:57
this tends to provide headwinds for
3:00
financial assets how are the portfolios
3:02
set up to deal with inflation that's
3:04
right laura inflation in new zealand was
3:06
5.9 over the past year we've seen
3:08
similar levels globally
3:10
we expect it to remain elevated over the
3:12
short term and then trend back down to
3:14
more normal levels in the medium to long
3:16
term
3:17
our portfolios are stress tested
3:18
regularly for a range of different
3:20
scenarios including higher inflation
3:22
this helps us understand how they would
3:24
behave in that environment a diversified
3:26
approach means we have allocations to
3:28
inflation-sensitive assets such as
3:30
listed and unlisted infrastructure and
3:32
property that should help smooth returns
3:34
in a higher inflationary environment
3:38
[Music]

0:06
welcome to this edition of investment
0:07
insights today we have john hepburn with
0:10
us
0:10
2021 was another year full of
0:12
uncertainty for investors in the markets
0:14
with aucklanders spending more than 100
0:16
days in lockdown various restrictions
0:18
across the rest of new zealand and
0:20
globally and the vaccine rollouts
0:22
john can you give us a roundup of the
0:24
local and global markets over the final
0:26
quarter of 2021
0:28
the fourth quarter of 2021 proved to be
0:30
a relatively strong period across the
0:32
board for investors with only japan the
0:34
emerging markets and new zealand posting
0:36
negative returns despite the rise of the
0:39
latest covert variant omicron financial
0:41
markets remain upbeat with financial
0:43
indicators showing supportive signs of
0:45
economic growth and governments
0:47
appearing reluctant to impose harsh
0:48
lockdown measures to counter the new
0:50
variant
0:51
new zealand equities had a turbulent
0:53
year which continued into the final
0:54
quarter a rally in december of 2.6 was
0:57
not enough to correct the declines of
0:59
november and october leaving the index
1:01
at a modest 0.2 for the year australian
1:04
equities on the other hand had a
1:06
positive quarter this positive return
1:08
was entirely attributable to december as
1:10
the index declined in both october and
1:12
november
1:13
global equities finished the year
1:14
strongly this topped off an incredible
1:16
year for the sector posting positive
1:18
returns in nine out of the 12 months and
1:20
delivering a 24.2 return for the year
1:23
global bond markets did not fare as well
1:25
over the quarter as investors weighed up
1:27
the possibility of interest rate hikes
1:29
and the corroding effect this would have
1:31
on their return omicron is the latest
1:33
strain which has achieved new record
1:35
highs of over a million cases a day new
1:38
zealand recorded its first
1:39
border-related community case in
1:41
december
1:42
what further impact might this strain as
1:44
well as other possible future strains
1:45
potentially have on kiwi investors
1:48
financial markets have been volatile in
1:50
recent weeks with investors unsettled in
1:52
part by the emergence of the omicron
1:54
variant
1:55
we don't believe that omicron by itself
1:57
will derail the recovery rather that it
1:59
will simply be another obstacle and the
2:01
two steps forward one step back reality
2:03
of living with this virus the variant
2:06
currently looks to be much less severe
2:07
than previous variants however is much
2:09
more transmissible this has caused a
2:12
large number of supply chain bottlenecks
2:13
around the world as many workers have
2:15
been forced to isolate with the virus
2:17
this has added to the inflationary
2:19
pressures we have seen over the past few
2:21
months as companies have lifted prices
2:23
for goods
2:24
if case numbers do not explode to
2:26
unmanageable levels in new zealand we
2:28
should see relatively little additional
2:30
impact on our local economy there has
2:32
been a lot of talk that interest rates
2:33
and inflation will continue to rise how
2:35
does this impact investors and the
2:37
investment options
2:39
higher inflation that is more persistent
2:41
than first thought as well as strong
2:43
recovery from 2022 is pushing us toward
2:46
a swifter reduction in monetary stimulus
2:47
from central banks
2:49
this will be a major theme in 2022 and
2:52
the transition away from extremely
2:53
stimulative monetary policy will likely
2:55
mean increasing volatility higher
2:57
borrowing costs and more modest returns
3:00
from many asset classes in new zealand
3:02
after 18 months at a record low of 0.25
3:06
the official cash rate was moved to 0.75
3:08
in early october inflation is very high
3:11
house price gains are unsustainable and
3:13
the economy is running hot against the
3:14
backdrop of an extremely tight labor
3:16
market financial markets expect the ocr
3:19
to peak near 3 in the next couple of
3:21
years this is likely to impact
3:23
confidence spending and the housing
3:25
market
3:27
the inflation debate is likely to remain
3:28
heated well into 2022 and while we
3:31
believe some elements of the current
3:32
cost pressures will subside
3:34
investors mustn't be complacent we have
3:37
seen some of the world's central bankers
3:39
acknowledge that inflationary pressures
3:40
might be more persistent than they first
3:42
thought
3:43
for investors the path of inflation and
3:45
interest rates is a crucial piece of the
3:47
economic puzzle because the impact it
3:49
has on investor sentiment asset prices
3:52
and company margins
3:54
looking forward into 2022 what are some
3:56
of the themes you think we can expect to
3:57
see in the markets
3:59
we expect 2022 will be more difficult
4:01
for investors to navigate with world
4:04
shares almost 25 above pre-covered
4:06
levels the easy gains are behind us
4:09
while the tailwind of easy monetary
4:10
policy is now a headwind as central
4:12
banks look to reduce stimulus and raise
4:14
policy interest rates
4:16
as an active manager we will see
4:18
attractive opportunities and remain
4:20
comfortable with our investment strategy
4:22
however returns are likely to be more
4:24
modest volatility higher and the
4:26
divergence between various sectors and
4:29
companies more pronounced
4:33
[Music]
Force Financial Hub
Force4Families
3 / 4

0:02
there we go uh what it means for you all you could folk is that the slides will be recorded as well as the web pages i
0:09
use uh as well as my voice but none of the chat so if you do want to send me a chat
0:15
good old delvin sent me the first one so kudos to you you've got two options you can either
0:20
send it to as on the drop down box to everyone so everyone in the in the meeting today can
0:27
see your message or alternatively if you want to share it anonymously just change that drop down box to hosts
0:34
and panelists and uh i'll share it definitely but i won't call you out i did call darwin out
0:39
because there was an awesome key order to me and i'm quite chuffed for that so i'm happy to have an explanation right so really happy with that stuff um so
0:46
without further ado here we go introduction to investing um now bear in mind do ask lots of questions because my
0:53
my right eye is keeping an eye on the chat um we do also have the ability to
0:59
raise your hand on the zoom controls so instead of typing if you do want to say oh someone just oh quickly i didn't get
1:06
to see who that was there's always one that puts their hand up for accident um but if you do want to say something
1:13
i'll um you definitely let you know and uh then you can quite happily talk
1:18
now this session is really really lots and lots of stuff so come with a pen and paper handy hopefully if you don't
1:25
capture it it will be uploaded to the force financial hub probably in a week or two because i t
1:32
have to get that done so give them a bit of breathing space um otherwise i'll stick around at the end
1:38
for a bit because i know there's lots and lots of questions usually so don't feel as if uh come two o'clock but i'm
1:43
just going to disappear in a smoke so to speak so i will take us through the kadakia
1:49
but i'm going to lay the challenge down if you're coming back tomorrow or the next day feel free to take us through it
1:54
because i always love it when i hear someone else say it because they always sound so much better than me so let's start it off great way to start
2:01
our um our training in our knowledge session today
2:20
so thank you and um in case you hadn't seen it before just in the middle there to utter a quarter by the time
2:26
commissioners out in your name um and happily it sounds a lot nicer than what we used to call of the commission for
2:32
financial capability but um ah let's actually skip the thing here
2:39
but uh we're the ones that run the sorted website so we're gonna look at the sorted website today uh in case
2:44
you've never been there um sorted dot org dot nz actually i'll i'll lay out a
2:49
question for you all just before i get into the agenda who's actually been through the sorted website and had a little faucet through just hit me in the
2:56
chat with a big old kiss or a pour a hand up cheers mike um mike was first well done mike oh now
3:03
everyone's trying to hit their hands up brian susan yeah awesome sam
3:08
um oh mark you're biased you're like firmly asconded in the
3:13
sorted website and also as well we'll touch on the
3:18
force financial hub because the two are very complimentary uh but the great thing with the force financial hub is is
3:24
dedicated to your good sales in the armed services um so we'll touch upon that one as well
3:30
so three key things covering today i know it only sounds like three things but they are three big things uh why
3:36
should we invest so just remembering why are we investing we're not we're not talking about fomo you know the old fear
3:41
of missing out but what's our reasons is it just to get the money working a bit harder for us
3:47
because interest rates are so low or is it too i know say for a house deposit save for
3:52
retirement you know get us thinking about why we're investing to make sure that when we do invest we stick with it
3:58
because that's a key thing and you'll notice we're going to talk today about the six key rules
4:04
it's on agenda item three so there you go um the barriers to investing so what are some of the things that may actually
4:11
have stopped us in the past or perhaps still stop us now and then tomorrow's session might be
4:17
quite a good add-on because a lot of the feedback we get is you know can't afford it just there's other priorities those
4:23
sorts of things so tomorrow's session might be able to actually spin forth some ideas around that and then last but
4:29
not least the six key rules to investing and we'll delve into each one of those uh but bear in mind that some of them
4:34
will be um pulled apart a little bit more over the coming days this week
4:40
uh cool now susan i'm just going to lower your hand but if you did want to talk feel free to
4:46
raise it again and i'll happily unmute you i'm just thinking you may have lift your hand up an accident so that's all good um
4:52
oh there's my little slide normally it's at the beginning so you'll remember the mouse i think he's dressed in a christmas sweater he or she i don't know
5:00
um if it's a hair or sheen mouse but it's a mouse um so free independent
5:05
impartial information and tools and the whole reason why it's been put together
5:11
either for use now or way into the future it will always be free but the key is it's about giving you the
5:16
knowledge and tools to be able to go and make your own wonderful financial decisions for your own financial journeys
5:23
it won't have the answers but hopefully it'll put you through a few doors in front of you to say right
5:29
here you go this is a the ammunition need a military analogy tennis i know no
5:34
bounds i haven't actually had anybody with a damn joke today that's uh it's quite shocking
5:40
so the week's only done all right let's start off with the poll um i love poles because they
5:46
bathe me in orange and i suddenly look very tan so here we go so the pole is anonymous um and it's
5:52
just a quick simple question of which of the following assets have you invested in or are invested in
5:59
um so you've got a through to g crypto shares managed funds property bonds kiwisaver or none of the above so let's
6:06
see how we go let's see if we can get a hundred percent we're uh 12 32 oh bam everyone's coming through here
6:15
oh i see the g options missing
6:20
uh we've got eleven to go tend to go tend to go i don't know who hasn't boasted because it's completely
6:26
anonymous i don't know so i can't single somebody out if we've only got one vote to go i keep going
6:31
we've got six to go six to go now from experience from talking to your
6:38
good selves before it ends in df um you're all well a lot of us seem to
6:43
well across all the investment stuff i think you're well supported with
6:48
the work that mark does with uh financial providers and so forth doing great deals those sorts of things
6:54
um so we have five to go a few a couple people just joined so they're probably thinking what the
7:00
heck's going on um all right let's end it there it's been a minute so let's just share those results
7:06
so here we go i like this question actually because it's quite a good capture of what we're doing at the moment um so hopefully in
7:12
the screen now you can see that this uh you know there's four of us in crypto um
7:18
crypto in general um which is interesting a lot of us 18 out of the 29 that voted in shares
7:27
managed funds property some big numbers coming through bonds as well which is good good to see because
7:34
sometimes bonds are like oh what's that that sounds like a boring asset class or we get the old bonus
7:39
bonds type uh linkage uh and last but not least 90 of us are in kiwisaver so
7:46
the reason why we are like asking this question is kiwisaver can be invested in
7:51
a lot of the assets that uh you know cryptoshares managed funds property upon um i know one fund manager in new
7:58
zealand that does keem you say that it has an exposure to crypto yeah i think a lot of the fund managers
8:04
are still out on that one but um yeah so all the other asset classes that you see um
8:10
can actually form the bases of your own keys so just in case you were thinking you
8:15
didn't have those assets you do all right thank you so much so
8:21
why what actually question for you all i'm looking directly at you why invest why do you invest
8:29
let me on the chat let's see what ideas come through and see if i can finish something
8:38
while they come through this is water in a very nice uh i am in auckland so assault mothers drink nice
8:44
water glasses um donna better returns yeah exactly
8:51
uh passive earning make my money do the work love it die great one uh brian long
8:56
term savings definitely uh oh god now you're leaving me behind here we go now better catch up well done
9:02
everyone um ll oh maximize rather than maximise
9:09
dj reference here that's a really bad day joke but uh thanks earl uh nikki oh nikki hey how you going um create
9:16
passive income grow my money and just for anyone wondering passive income if you're thinking what the heck
9:21
is that it just means that it's generating money to you without any
9:27
effort your money's doing the work for you so you know what someone told me once think of every dollar as one little
9:34
worker for you that can go out and generate an income so passive income is the ability to
9:41
invest in something and it just pays you back and it can be shares where it pays a dividend it can
9:46
be oh maybe it turned a positive or pay some interest it can be a rental property if you get some rent back
9:52
uh or bonds if that pays a a coupon or interest payment back to you as well and
9:57
so investments where you can put money in and pull doesn't have to be regular but paul and
10:04
come out of it as well cool all right well we asked we've got uh darwin on my mic darwin that's it kia ora uh growing
10:10
money for my kids education and first first home dell didn't quite get
10:15
the last word there um yeah exactly it's it's the things that you can lay out and
10:21
plan for and help you succeed with it as well which is brilliant uh james for a better future
10:27
simple as that love it um mitchell money for retirement yep it's
10:33
such a horrible word isn't it retirement just suddenly i bet the moment you say it you're going
10:38
to end up with graveyards like me on the chin or on the side my wife we went to the 50th my wife had
10:44
great pleasure in saying oh my god you look older than you might craig now and i'm not even 50 yet i don't know um
10:52
money for retirement uh saving for retirement brilliant love it retirement so retirement's featuring pretty heavily
10:59
long term security love it mark and and security is a great word because it means different things to different
11:04
people as well um pay off the mortgage and retirement yes and that cannot be understated
11:11
payment mortgage it's a massive achievement in itself especially with some of the mortgages flying around at
11:17
the moment um i invest because otherwise inflation would obliterate my savings very
11:22
positive but yeah exactly um
11:28
yeah the inflation if you don't know what that is we'll sort of touch on it on the
11:33
upcoming sessions um but you may have heard it it's quite high at the moment and you'll probably see it you know cost
11:40
the petrol going to the supermarket you know uh pan of the strawberries are still
11:45
sitting at about four bucks i mean we're entering december now and i've pulled so many strawberries off my own plants at
11:51
home thinking i'm sure they're getting riper why they're still sitting at four bucks a punnett so maybe uh cost
11:57
pressure is there some inflation um cool yeah no good all good on that front um sweet so we've got lots and lots of
12:04
reasons to invest um for those of us that haven't invested um
12:10
what one of the reasons being why haven't we got to that point of investing like what are some of the
12:16
barriers or even for the people that have invested what have been some of the barriers that stopped you originally before you got
12:23
invested uh maybe hit me up on the chat see if i see if he could leave me behind again
12:33
oh that's a biggie yeah thanks hannah lack of knowledge definitely um fear and no spare money yeah fear
12:40
because i mean it's your money going to work imagine if you got it wrong completely freak out um and spare money
12:47
that's a biggie because you've got to to figure out how well in your budget how you can pull
12:54
some money out either regularly or as a lump sum definitely definitely go to that um ll unsure how to buy shares yup
13:01
even you know the fact that we've got the sharesies or hatch or invest now
13:06
around um if you didn't know about them you'd still be struggling as to how you
13:12
can actually buy some shares in your own name um lack of knowledge so two ticks of that one oh three ticks now lack of
13:18
knowledge fear of losses definitely high knowledge for ticks no disposable income
13:23
lots of jargon ah and definitely that's that's why we're while we're in the industry we want to jargonize it
13:30
completely so you always have to use a financial advisor but no seriously um
13:36
it's like you know i'm a little bit of a dehydra so if we go and buy wood from a wood supplier
13:43
it's just man they speak a whole nother language and i'm like whoa whoa whoa hang on can you break it down layman's term so i
13:50
completely get it i guess my jargon is is a plenty um
13:56
certain uncertain disposable income yep income fluctuations definitely lifestyle inflation that's another word
14:02
for spending isn't it just maybe correct me if i'm wrong um want to educate myself before investing
14:09
yeah definitely and and it's almost like an oversupply of information at the moment it doesn't look definitely
14:16
um preference for instant gratification ah yes aka shortsightedness yes because we
14:22
live in the now and our you know they call it liz's brains i don't know why but anyway our
14:27
brains are wired to think about the here and now not 15 20 years into the future
14:33
so completely agree with that die um and what we've got sam don't know where to begin there's so many options
14:38
which one is best yes with a question mark too so it sounds like a leading question it almost sounded like guinness
14:44
which is the best one um worried i'm going to lose it yep so many opposing opinions
14:50
definitely uh and last but not least just from brian uh learn about investing before committing yeah exactly right and
14:56
and just on that comment um the opinions and the articles blogs the
15:02
videos you name it it's all out there the moment you type into google or
15:08
go or whatever search engine you use um there's millions of entries that pop up
15:13
how to invest we need to start so it's almost like it's great having all this information
15:19
fingertips but the fact is we just overload too much information and we can
15:24
almost have um what is it procrastination by paralysis or something another way you don't make
15:30
a decision because you just don't know which way to go so um
15:36
oh yes fearful and a covert climate and for a lot of you if you're in kiwis over last year sort of march and you
15:43
know got any any kiwisaver fund that you're in you would have seen that take quite a
15:49
quite a hit uh before there was some support limited to economies
15:55
around the world and then subtlety markets took off so yeah interesting times no thank you everyone that was really good um so
16:02
let's delve into it so here we go um yeah ask me questions as we go along
16:08
i'll just sort of whip through this um and this is sort of investments 101 so i do excuse the um
16:15
uh the basics of it but the reasons why it's so so good and powerful is once you know this
16:23
you know how your kiwisaver will you know be invested um you know where
16:29
individual asset classes sit and you can see four of them on the screen and you'll know how things sort of work
16:35
which is great because then when you go out and start looking for stuff um you can start to understand oh well that
16:41
makes that kind of save a provider of a different or that investment fund or that might be doing really well because
16:47
it's a growth those sorts of things so one ask up any questions as we go along
16:52
and uh happy to answer them as i as i work through this so there are four key asset classes um
16:58
cash and bonds property and shares there is a little fifth one off to the right as well off to the right of shares and we call
17:05
it alternative assets some fund managers use them some don't so we
17:10
haven't put it on this graph but it is there and alternative assets can be things like
17:16
commodities it can be hard or soft commodities so soft would be you know your oil
17:21
type thing and your hard commodities might be gold so we'll just pick on the real obvious ones um there's one manager
17:27
as i mentioned is in crypto so that would be classified as an alternative asset just so you know uh but cash and
17:35
bonds i might just click on this so we can see where they fit cash and bonds are what we call income assets
17:40
and property and shares are what we call growth assets and if i use a car as an algae it's the
17:46
easiest way to think of it is if you look at the car the income assets are like the airbags
17:53
in your car they're there to try and you know make the journey a little bit less
17:58
bumpy and hopefully they come into play if something really bad happens that's the
18:04
reason why we have cash and bonds or airbags in our car
18:09
the growth assets namely property and shares uh
18:14
well it's like the engine in your car so the more money you put into your engine the faster your car is going to go and
18:20
potentially the faster you get to your journey but you know if you put all your money
18:26
into the engine and nothing into airbags if something goes wrong you're not going to be too well
18:31
protected so you have to be prepared for the ups and downs i don't know is that a good analogy if
18:39
that makes sense hopefully it's taken me 30 years to come up with so be kind
18:45
um so yeah income and growth assets so think of them as two two levers
18:51
and if you're going to be more conservative let's bring up this slide just so you can see so down the bottom if we're
18:57
going to have more on the income side so more airbags in your car and a little engine um then you would be on the sort
19:04
of the defensive conservative side of the page because you want to protect your money as much as possible
19:11
and then when you go into the middle it's balanced and you can see here what lever are we pulling for balance
19:18
the top prize for the first person to hit me on chat with what lever do do we start moving to get a balance of
19:26
growth or aggressive which one do we start increasing
19:32
oh waiting patiently there must be a blockage in the internet like no one's hit me yet hey
19:39
thanks nikki yes i had to call you out because that was awesome first right so you get accolades uh shares shares or growth
19:46
assets so you know we're going to start pulling back on the airbags putting more money into our engine because we want to you
19:52
know enjoy the journey get there faster perhaps um or perhaps undertake a longer journey
19:58
um so we're going to put more money into our growth allocation so you can see down the bottom here just while i look off at the other screen
20:05
defensive conservative very very small percentages for growth assets
20:10
through to balance starting to get like 50 50 almost sometimes a 40-60 split
20:17
and then through the growth and aggressive where you're leaving all the defensive or income assets behind the
20:23
airbags but you're putting more money to work in the markets through property or shares and when you start looking at
20:29
your kiwisaver and i really really do encourage you all to do this you'll notice that a lot of your money
20:34
are really in two things bonds and shares and all the other ones like cash and
20:41
property and alternatives uh you know maybe small percentages five maybe ten
20:46
percent but otherwise your bonds and your shares are the big ones any questions on that
20:52
you've got that you've nailed it you've basically done uh investment 101 where we've clicked that box now
20:59
i don't think there's any questions um so just if anything comes through i'm gonna click through and show you the six key
21:05
rules in this thing and then we're gonna actually delve into each one um we are 122 so heaps of time
21:12
all right so here we go so first one goals remember we started the session off with y invest it's the y
21:20
so when you know the y it makes it easier to stick with the y and it also
21:25
makes it really easy to figure out the time horizon because it is so so important when you're trying to figure
21:30
out where to invest and how to invest so definitely uh rule number one goals
21:36
rule number two balance so that's risk versus reward trade-off airbags
21:41
versus engine income versus growth so what's the right balance for me
21:48
and we're going to look through some tools around figuring all this out the asset mix so now you all know when
21:54
we talk about assets cash bonds property shares maybe alternatives so those are your
22:00
assets and then within those classes and we'll delve into that a little bit um soon
22:05
um you might get single what they call single sector asset allocation so within
22:11
the bond you might just be in new zealand bonds or new zealand government bonds or you
22:17
might be in um and shares might be new zealand gentiles like the uh energy
22:23
retailers so that's what we call a sector so it's still shares but you're actually
22:30
nutting it down to a real small sub-sector of shares in this in one
22:35
country and in one sector as well which can be very lucrative but it also means
22:40
you're taking more risks because you're starting to limit what you're investing in as well
22:46
uh diversify so how do you spread those assets out and when it's linked to the
22:52
asset mix how do you spread them eggs in different baskets
22:57
research to how you can conduct your own research and i'll show you a great little tool so that you know for all of
23:03
us that are in kiwisaver oh big shout out to our three phone call and listeners i just saw you now so um
23:09
welcome aboard um i know you don't get to see the cool pictures that i'm talking about so um hopefully you get to
23:16
watch the recording uh in the next week or two and then at least you'll know what the heck talking about these
23:21
bubbles and things and stuff like this so research so you know being able to sit down
23:27
figure out how well your keepsake providers doing how well the market's doing and just keeping them honest you know just making
23:34
sure that you're in control of it because i click on kiwisaver but that was the one that could be worth tens of
23:40
thousands if not hundreds of thousands of dollars to us at age 65 so it's a big ticket asset that we want
23:47
to get right and be in control of that's the key uh then last but not least uh growth so leaving the money in there you
23:54
know making sure you've got this time frame right to do with your goals and letting the money grow and letting
24:00
time and compound growth compounded terms
24:06
i don't think there's any questions at first but so that's good and we still got 34 people so no one's dropped off even better um so goals and i mentioned
24:14
two things it's the why and the time frame all right so just on the screen at the moment you've got
24:20
a an example of one but what's that five-letter acronym
24:26
that is the most brilliant thing that dennis always raves on about and i think you do it in the nzdf as well
24:32
uh hey love it sam just be a bit more committed next time with that question mark because if you
24:38
just went smart you would have got a chocolate fish you would have turned up at the doorstep but because you've got a
24:44
question i can't get chocolate fish but yes no sam perfectly right smart goals specific measurable achievable realistic
24:50
time down um so if you're looking at doing any type of goal planning write those letters down and you know
24:58
see if you can fill in the boxes because it'll put a framework around it and make it really importantly measurable so you
25:05
can draw a pretty little graph you can put something on your phone so you see it every day um just to keep it keep it in
25:12
front of you keep it current keep your focus and you can see here for this particular one it's a house deposit in six years
25:19
and this is where the time frame is really important so six years that means when we start looking at how to get the
25:24
airbags versus the engine balance right um we could probably take a little bit more risk we could probably you know go
25:31
from a one liter car to a 1.5 you know something like that
25:37
six years hundred grand so we can measure that out and you know the investments we're going to have what's
25:42
the potential to turn how can that help we get to the hundred grand i understand to lindsay if you still
25:48
have the uh get to a hundred thousand is it in five years mark i think it is
25:56
mark's quickly find with keyboard and type in something i think it's still in five yes so if you
26:02
haven't heard about that email um mark and mark will talk uh at the
26:07
conclusion of this particular presentation and i'm sure oh actually mark if you just want to mention the email address
26:13
for inquiries through nzdf so if you haven't heard about the get to 100 grand in five years uh email that
26:20
and or there might be something on the force financial hub about it but it's fantastic it gives you a strategy to get
26:26
to 100k because it can seem like an impossible goal
26:31
because the numbers are so big but man when you start working through it it's very very achievable so yeah figuring
26:38
out the why so it makes you stick with your investment decision
26:43
but also importantly the time frame because the time frame will make a big difference to how you invest your money
26:50
in terms of that potential risk versus reward and mark's popped up the email address benefits at nzdf.nil
26:58
dot unzip um any questions on that so far because we're heading into rule two
27:04
now and look i i tell you i've done you know tertiary
27:11
qualifications on this um and done external studies done all sorts
27:18
and this this is how well not easy but how basic investments are just remembering the
27:24
trade-offs between risk versus reward i know there's lots and lots of other noise going on in the market
27:31
but it all comes down to why are you investing what do you want out of it and what are
27:36
you prepared to you know put at risk to help you with that journey
27:42
and that's it so all this other stuff around you know trying to time the market doesn't work time in the market
27:47
doesn't work some people get it right yes they've put it all over the internet saying they're great and guru like uh a
27:54
lot of people get it completely wrong but they're not the ones that put it out in the media so just remember these simple rules i know they sound simple
28:01
but trust me it's what you need to know to go forth and start making your own
28:06
sort of financial decisions so the balance between
28:12
potential returns on the y and the sky axis i have you know that uh in the previous session one
28:18
of the participants from nz have told me that little rule because i can never remember the x and y axis i hated
28:23
calculus at school the y in the sky so the vertical axis is why the horizontal axis is x
28:31
so potential returns from low to high risk from low to high as well so if i
28:36
just click through this lovely little asset classes take a
28:42
little while to come through there you can now see the fall that we talked about cash bond shares property
28:48
property shares so in terms of low risk low return
28:54
cash cash sits at the bottom so it's one of the safest assets out there
28:59
though with inflation it's not really that safe it's a bit of a yeah great i can still see my thousand
29:05
bucks in the bank but in five years time that might only buy me i don't know
29:10
let's say 700 worth of stuff because the value of your money has gone down
29:17
um even though the bank balance stays the same so that's why we don't like too much inflation
29:24
the real absolute safest one are government bonds so if you were looking at cash this is cash in the bank
29:30
um and if you wanted super super safe like super low risk um
29:36
bonds or government bonds are the ones to be in but again you want super safety
29:42
consummate with that or equal to that is super potentially super low returns as
29:48
well uh great question here is a more risky buying investment properties in the current inflated prices market well
29:53
that's the thing um you know there's trust me when i say i haven't been in
29:59
this industry for 30 years i think everyone's been saying the sky is falling on investment properties for so
30:05
long and yet it hasn't it does have blips of corrections
30:10
um and who's to say what happens in the future we don't know so this is why it's
30:15
so important to get the why of the investment decision right because why are you buying an investment property is it for something
30:21
in your future retirement in 20 30 years time then you know potentially the price you
30:26
pay now may not matter in 20 30 years time you've got to make that decision for
30:32
yourself in terms of your own circumstances i mean you could argue quite equally that
30:38
share markets are highly overvalued as well and again february march last year
30:44
it wouldn't have been that hard to assume that the skies fall and coverts turn into a global pandemic the world
30:51
will be affected and nobody will be able to go to work so no you're going to lose money don't go there but what have we
30:57
seen since then it's it's actually doubled almost tripled some returns um
31:03
and yeah there's been a bit of a blip over the weekend but again we don't know what the future holds um so trying to
31:09
sort of certainly guess the market um can be a bit of a false error so
31:14
hopefully it answers the question i won't call you out because you only send it to me but yeah make sure you get a good advice
31:21
and be some good information around it know the risks
31:26
the potential returns from it and make sure you know the why that investment decision hopefully answers it
31:33
um so bonds next rung up we'll talk about what bonds are in case you didn't know
31:38
it gives you a little bit more of a potential return but the risk is a little bit higher
31:44
again in cash and then we're going into our engine again so remember these are our airbags income assets uh property
31:51
a lot more risk compared to cash and bonds but potentially the return up cool
31:57
did answer that question uh potentially returns a lot higher as well and then last but not least shares so
32:03
you know shares is the highest potential return out of the four but also
32:09
conversely the highest potential risk as well so hence why we need to make sure that our time frame was right
32:16
so are there any questions because i'm just going to take you off
32:22
the website if you haven't done already please do sign up because it just means you can save all your progress on the sorted
32:29
website um i will just share this link in case you haven't been there i know a lot of you said you know which is
32:35
throwing it there we go so you've got the link uh the one we're going to look at is investor
32:41
kickstarter and has anyone done an investment profile
32:48
or selected their own kiwisaver fund
32:55
and if you haven't maybe hit me with a no as well oh got some hands going up
33:04
all right there's um a few uses and a few knows as well so
33:11
just so you know um if you've been in kiev's over a wee while uh when you joined nzdf and it's
33:17
the first time you joined keemstar you will be in what we call default scheme and the default scheme through ends it
33:24
is the immerser so that that's cool that's fine at least there's been a bit of a selection process in there because
33:30
if you have to have selected mercer as um oh that's cool that's cool sarah that's
33:36
right get into that one um have selected mercer as a good provider um and so
33:42
forth and mark can talk to that um and so the um
33:48
so if you joined nzdf but you already had keemsaver and you're you've never
33:53
selected who you're with then you're in a default fund and you might be with a whole bunch of
34:00
uh what we call default providers and that's going to change on wednesday so
34:06
that they'll whittle down the default providers um and now there's a whole well some are being renewed and there's
34:12
a couple new ones um but you will be in what we call a conservative fund if you're in the old
34:18
default stand prior to joining in the gear okay so that's the key if you join nzda
34:25
and it's your first key in server you'll be in default but you'll be in a default balance
34:30
because they made the great decision that you know people that don't choose should be in balance because if you've
34:35
left it alone that's going to give you the best opportunity long term for your investments uh what's mark written here
34:40
this month's informed investor magazine features several articles on the pluses and minuses by investment properties in
34:46
new zealand brilliant thanks mark um so yes just got sidetracked so if you
34:52
haven't selected your investor profile it's not too late so the tool i'm just going to quickly
34:57
show you now is an investor profile or risk tolerance questionnaire um it asks you nine
35:03
questions that's all nine questions and answer them as honestly as you can see them here um
35:09
ask for your age see this important point about time horizon how long have you got your
35:15
preparedness it's really important i do love this questionnaire i know i might be biased but it is a good one i'm a financial
35:22
advisor in my own right and this question there is the best one i've seen because it doesn't just ask
35:28
you about the page what would you be happy uh putting at risk it also asks you how prepared you are are you an
35:35
optimist or pessimist how are your job prospects because they all can play
35:41
around with our attitudes or our ability to stick to the business um so once you've answered those you'll come out as
35:49
one of them and funnily enough they match what we've been talking about so let's just say a score is balanced
35:56
it gives you a little donut graph to show you how your income and growth assets should be
36:02
invested so just give your guide and importantly an impartial guide for that
36:08
um it gives you the suggested time frame so
36:14
here's one important thing that i do like to mention is for all of you that are in um
36:21
a conservative fund or even a defensive fund because someone has told you to go
36:26
into it because you said i'm going to buy a house in the next couple of years and they say oh you should be a
36:31
conservative just show you that yes conservative is very safe compared to oppressive
36:39
but there is still the ability for it to lose money so if
36:44
keeping your deposit that's in kiwi savings that'll be your first time buying
36:49
is really really important that you don't lose anything on it and conservative um look at the time frame
36:55
four to five years so if you're in conservative and someone said go into that because you might need
37:00
it in a year or two time then i would be picking up the phone again and have that conversation because
37:06
you can see quite clearly on screen at the moment you want to try and leave it for at least four to five years now i
37:12
don't know if you've noticed but over the last couple of months you may have seen a negative return
37:18
on your conservative kiwisaver or your conservative investment and we'll talk about why that
37:24
would be a second um and you can see if we open this up to say aggressive
37:32
look at that all blue is pretty much shares and you can see here our time frame has now gone out to 13 years now time frame
37:39
is not about getting it exactly right that if you're in 13 years you're going to come out through in the money it's
37:45
more about acknowledging that because you've got so much in growth markets hopefully you've worked through a full
37:52
business cycle so a full boom and bust and recovery cycle to get the benefit of that time frame
37:59
it's not 100 right we like to say that you would get that
38:04
return most of the time which means 95 90 to 95 of the time it should sit
38:12
between negative eight to plus 25 but you know sometimes it goes horribly
38:17
wrong and you can sit either in the money plus 30 plus 40 percent other times you might be like negative
38:23
15 negative 20 percent or like pandemic when it first hit negative 30 percent in
38:29
share markets so very very important so if you haven't done a risk profile then i definitely definitely say do the investor toolkit
38:36
see how you score and then compare it to your kiwisaver is anyone going to use that tool
38:47
awesome darwin love it now because i gave you an awesome kia ora and then now you're just emphatically hitting the
38:54
first of the list um oh hannah's as well ll yes sarah
38:59
james cool great love it all right so diversify here we go so again through all my studies this is
39:06
going to be explained to you in two minutes and you will know exactly what i know about specification uh without
39:12
having to do all the studies so that that is brilliant so here we go remember our four key asset classes
39:18
cash so diversification is about spreading it all right or putting eggs in different
39:23
baskets so you could well just have all these investments in new
39:29
zealand cash in new zealand bonds in new zealand property new zealand shares in new zealand
39:34
that would be one way to the first fight because you've got it across four but we're actually going to start going from
39:39
four to other levels to diversify so
39:44
new zealand is cash in new zealand what you wouldn't want cash in other countries
39:50
because that's playing the currency and nobody knows about currency and you can't get it right so cash stays
39:56
in new zealand here's the first level of diversification so on the top right you can see new zealand and offshore so
40:03
bonds would be new zealand and offshore usually
40:08
unless you go into a what as i mentioned a simple sector um but new zealand bonds
40:15
can be corporate bonds which are around company
40:20
debt and we'll talk about that in a second or sovereign debt which is government bonds um so that can be um
40:27
well it's only we only have one government um our government bonds or it could be council bonds as well because
40:33
uh what we call quasi government all right so you can sort of see that we've started diversify that out of that now
40:40
and then for corporate debt um you might instead of having it all in one company because the risk of losing
40:46
money in a bond can be quite high because it's not something that um it's not like a share where you've
40:53
got maybe hundreds of thousands of shares on ultra you've got your bottle a
40:58
parcel of money in a bond and if you put ten thousand dollars into
41:03
i don't know some roofing company that said yeah yeah give us your money um because you're
41:09
lending it to them and i'll explain what bond is in a second and they went bust they've lost 10 grand
41:15
just like that the whole lot of that money is gone so it's really important to spread that
41:20
out so as an example in corporate debt you might have some of the fishermen parkour uh you might have someone from
41:26
ontario you might have another 20 30 names in new zealand just to make sure that
41:33
not all exposed to one company or one sector so a bond in case you're wondering
41:39
is it's like a debt so or a loan i should say so if i had ten thousand dollars and um
41:47
let's say fischer and paikal said dennis we want your 10 grand we need it for
41:54
five years but because we're borrowing it off you and you want to return we'll pay you a little bit more than the bank
42:00
so we might give you five percent so i agree to give fisher and parker my ten thousand
42:05
dollars for five years and they agree to pay me five percent interest every six months
42:11
and at the end of the five years i'll get back my ten thousand dollars um
42:18
great question bernice i'll answer that one second um so the
42:23
the danger of this and this is to denise's question about our bonds unsecured
42:28
is that it's it's a loan so if that company official enticle went fast
42:34
and they had no assets to sell and nothing was available i've lost 10 grand
42:39
it's it's gone so it's not it is semi secured in there
42:44
but if you look at um they talk about rankings of um
42:51
secured and unsecured so it'll go through iod as top of the picking list iod gets their money first whatsoever
42:58
right so there's no writing id id is first and foremost then you've got um any bank guaranteed debt linked
43:05
securitized type get then you start going through the change by shareholders and
43:11
uncommitted wages and salary bond holders are sort of down here right down the bottom so to speak so yes
43:19
if you're going into bonds you want to make sure that you're invested with safe companies or companies that can pay the
43:26
money back which is quite interesting because if you look at bonds they're our airbags so man that sounds
43:33
like a lot of risk so it's very important that when you're invested with a kiwisaver manager
43:38
whoever it might be or buying bonds that yes there's a security of repayment i.e
43:44
the company is good for it and b you're getting recognized for the risk
43:49
so if you are going to give your money to a very you know i don't know uh dodgy company
43:55
so to speak you'll want your interest return to be sky high because you want to know
44:00
you're going to get enough recompense from enough um
44:05
what's the word word escapes me but enough of a return to recognize the risk you're taking
44:11
um so yeah so that's that's how that gets diversified and this will be at work in your kiwisaver
44:17
um and then government debt because there's only one government in new zealand
44:23
can be diversified by different terms so it might be a you know one year two year five a three
44:30
year five-year tenure and then they can diversify with that
44:35
and i'll just click through here and then i'll explain quickly why if you're in a very safe fund why you've seen
44:41
negative returns um actually just go back one so bonds
44:46
are interest rates okay so when you buy one you get an interest rate
44:51
if interest rates go up from when you bought it it can look like your bond is losing
44:57
money because interest rates are more or higher so on paper it looks like you've lost
45:02
money on the flip side when interest rates drop and you've bought higher it can actually look like you've made more
45:09
money so when you're starting to see your kiwisaver statements and it's come up negative two percent for september
45:17
it's because the bonds we've bought at a certain interest rate and interest rates have risen
45:22
and it means that on paper when it gets valued it's made a
45:28
a loss so to speak and hence why you see a negative return and if you needed that house deposit out at that point in time
45:35
you will take a hit so that's why i always always always like to say if you're in a conservative
45:41
fund or even defensive and you need to settle the house in the next two three years just ask the question to make sure
45:47
you're in the right fund because you can have losses um
45:53
oh mark just hit us with new zealand government drone uh bonds dropped 3.3 in october sorry it should be dropped yep
45:59
no good um here's a question is there a difference between coupon and yield
46:05
there is so coupon is what your what you buy so a coupon just i i like to think
46:12
of it as like a shop coupon it'll tell you what the what the price is so that's what you're going to buy it at so if the
46:17
coupon says 5 you're going to get a return of 5 the only thing that changes is if you
46:24
buy it after it's been released then they then talk about a yield
46:29
so to the person ask a question because they just sent it to me so i can't say the name if interest rates have gone up
46:36
um the yield you can either buy what we call a discount or a premium
46:42
so the yield can be higher or lower than the coupon i know we're getting
46:48
into detailed stuff but the simple rule with bonds is provided the company's all
46:54
good if interest rates go up then chances are your bond may have actually
47:01
dropped in value or is being sold at a discount because you have to entice people to buy that money
47:07
when they can get a higher return out in the market and on the flip side if interest rates drop
47:14
it's sold at a premium because you actually need to be enticed to sell it so you can make a little bit more money
47:20
on it because you then have to go and find a higher interest rate to offset it
47:27
hopefully that answers your question on that and then mark's comment around government bonds have dropped three percent that's a massive drop that's
47:34
that's a that's like a loss than capital value uh from government bonds and
47:40
that's because interest rates were so low and then they took a big jump up when inflation came out and suddenly it looks
47:46
like it lost a bit of money um all right property new zealand offshore so again um property assets not
47:53
residential but it could be infrastructure um could be retail industrial
47:58
office uh all those sorts of things and again it's not just new zealand it's also offshore
48:03
and then if i just click through on shares it all comes up at once new zealand offshore and then i think you can see my
48:11
mouse but you can see we're now into individual sectors so there's a telco sector banking sector
48:17
offshore will be different countries and then you'll find that there's a banking sector offshore
48:22
in the us telco sector and u.s and the same for different countries and then within the telco sector with
48:29
different companies so by the end of it if you were to list every single investment that your kiwisaver manager
48:35
has you could be in the realms of 100 hundreds of companies if not a thousand
48:42
thousands of companies and the reason for that is that on a very high level if new zealand had
48:48
the worst happen like a housing crash and foot mouth breakout our dollar would plummet you know
48:55
investment new zealand will be very hard to make because you want a decent return for the risk so having money offshore is
49:02
a way of protecting against that and then on the other side of it if we looked at if you put all your money into
49:08
vodafone and vodafone suddenly fell over and failed you haven't lost everything
49:14
you've got money in different sectors at work as well so that's a way of just spreading that risk
49:21
out hopefully that makes sense and to the person who asked about the difference between coupon yield did that answer the question hopefully
49:29
so you can see four layers i did cool brilliant um you can see four layers so we've got the asset classes
49:36
we've got new zealand offshore you can see that is it um what sectors are we
49:41
going in or is it private or government debt or sovereignty then last but not least individual
49:47
companies um so and the last thing that's at work here as well is currency so we're not
49:52
all the new zealand dollars but also in u.s dollars or japanese yen or
49:58
australian dollars those sorts of things um all right so research now just a question before i quickly
50:05
whip into it um has anyone sort of conducted their own research to
50:10
find their own kiwisaver and those sorts of things
50:18
hello yes mark yes jonathan yes yes yes yes okay cool
50:24
did anyone that said yes use the smart investor oh manage funds rather than chaos cool
50:33
does anyone use the smart investor tool which i'm just going into now
50:38
yep okay that is cool i knew what you meant um so i'm just going to quickly show you
50:44
this because i know we're pushing the time here but um i really really encourage you to use this
50:50
um when you've got 5-10 minutes uh you can see here that you can use it for managed
50:55
funds or kiwisaver i'll just quickly show you tv saver
51:01
now i know full well um that you know it's only an hour so we will be around us for some questions so
51:08
if you've got questions answers feel free to stick around just ask me mark's on paul as well marx our expert
51:14
benefits so i'll just pick growth here we save it and it's automatically going to start updating
51:26
and you'll see here there are 68 kiwisaver funds in the growth category
51:33
now if you look at scroll down a little bit you'll see a little sort by list so in the sort list there are growth
51:38
assets low to high high to low so if you want to really generate good returns over the long term you probably want to
51:45
know who invests the most and most in growth assets in your engine uh you can do low to higher fees you can do load a
51:52
high return and last but not least if you want to find your own team say provided you can do an alphabetical order a to z or z
51:59
anyone want me to focus on one put me on the chat now you know first one through and i'll click it
52:07
let's see who's the quickest type is oh i can't pick out nurse die cause i have to go through the alphabetical
52:13
thing um fees returns or assets sorry die i
52:18
should have clarified that my bad
52:24
please okay cool um all right so actually we'll do high speeds because this is quite interesting because you'll
52:30
see that so all you do is click higher speeds and
52:36
this is about giving you the tools to be able to just check in with your kiwisave provider and make sure you know you're happy with it
52:43
so you can see here new zealand funds life cycle age 65 kiwisaver
52:49
well um is the asset mix is 7822
52:54
so it's not stupidly aggressive but it's not real growth but it is still growth uh
53:00
but they charge 3.07 when the average is 1.48 so double the
53:07
average so if they paying double the fees then man you want are they doing all right on
53:12
the returns front and actually so this return here is for the last five
53:18
years per annum after tax rp so they have returned 8.66
53:25
neta fees net attacks per annum for the last five years uh but the average and the growth space
53:31
has been 9.16 so you're paying double the amount of fees
53:37
and you're generating the uh an average return that is less than
53:42
the market average so your question would be to that provider well what am i paying for
53:48
returns go up and down all the time but you want to be sure that they're actually giving you your value for money
53:54
because every bit of return that you pay extra there's money in the back pocket
54:00
that's been taken away so the more you can save on that and then if we went to lowest fees
54:09
now um just as a bit of a disclaimer here um
54:14
the fees are worked out on a balance of ten thousand dollars so that's why simplicity doesn't show as the cheapest
54:22
so if you went down you'll see simplicity is over
54:28
well it's after the next year um just in case you're wondering but uh you can see
54:33
here the cheapest growth fund kiwisaver is juno 0.47 don't be alarmed if you
54:39
don't see the five-year data it just means that the fund hasn't been around for five years uh but if you were to
54:44
scroll down there we go bnz keeping saver point six of a percent
54:50
versus 3.1 so and their return was higher than the
54:56
average as well so a you're saving what two and a half percent per year in fees which is a lot of money over a lifetime
55:02
uh and your return is above average so yeah and that's bnz so you can scroll
55:08
through this really really quickly scroll through this and explore through this um and actually do the research
55:14
on your provider which is pretty cool um if you've got questions about that home
55:19
to the end and then we'll happily answer them as well um so rule number six
55:25
three minutes to go nothing like last minute um it's growing your mother's this is the quick powerful demonstration of
55:32
um time in the market rather than trying to time it
55:38
so we've got lee may here up on our left who at the age of 19
55:44
started work but decided not to contribute to her savings until she was 26. now from 26 she started putting in
55:52
two grand a year she did that religiously to 65 all right
55:57
2 000 a year and you can see here quite easily it's a 10 return so yes it's quite high
56:03
but the example is relative it doesn't matter what the return is it's about what you contribute and when okay so
56:10
just bear that mind don't worry about the 10 percent but you can see from lee mae that she's put in 80 000 over that time frame
56:18
it has returned her that grew to 890 uh sorry 973 000
56:24
so the net earning is the difference between 973 and the money she put in so it's 8.93 so her
56:31
money increased 11 fold all good so if we compare that to moana so moana
56:37
and li may left school best friends at the same time she decided that age 19 to put in two
56:44
thousand dollars um oh sorry 1819. either 109.98 uh and
56:49
then stopped after 25th birthday so she put in 2 000 and then didn't put in anything else
56:55
same return but then you can see down here oh yeah but wanna did um save a little bit
57:02
less and that's how it should be 944 versus 973.
57:07
but here's the key so she only put in a total of thousand dollars so a lot smaller amount
57:14
for a lot shorter time frame but was invested for longer and her money returned 930 000 31 000 so
57:24
her money grew 66 fold so it's about the time that you can give
57:29
your money in an investment it doesn't matter what the investment is but the time you can give it
57:34
before you take it back out again to allow it to grow and that's uh the lee main one itself is
57:41
just a very quick and easy example on that yes i know 10 percent is very high
57:47
like i say it's a relative example and it in saying that that's probably why it's also really really important
57:53
getting our investor profile right and the fun that we're in because if you're in kiwisaver and you've got 30 years
58:00
into retirement you probably don't want to be in a conservative fund because you're giving up that potential return
58:06
over the next 30 years yeah sure it'll be a nice safe journey
58:11
but imagine the difference in money what what it could provide you with so yeah
58:17
so action plan um research managed funds i've been using this sort of tool those sorts of things definitely write this stuff down
58:24
because you've got to commit to it get it underway even you might be doing it now while i'm talking you got bored
58:30
with me and just gone off and done your own research already which would be absolutely awesome but just make sure
58:35
you commit to it to make things happen so is there anything out of today while i quickly
58:42
paste the feedback link that you think damn i'm going to do that that sounded
58:47
absolutely awesome yes absolutely invigorated me to go and do that so um
58:52
i am just going to pop a link up and then hopefully we'll answer some questions and also
59:00
get your feedback about what you're going to do now the survey link um please please please complete it it's
59:07
anonymous i've just pasted it on the chat uh but it just asks you if the session hit the mark against what he was talking
59:14
about um and also because it's really important because nzdf wants to know that we're actually presenting stuff
59:20
that you might be um interested in um and yeah can we improve
59:26
it somehow so i'm back over to you and you can
59:31
all yours hey um look thank you very much for that dennis that was a really good session and welcome everyone i hope
59:37
you enjoyed it and as dennis mentioned at the beginning of the session we've got four more that we're running this
59:42
week so please do attend those because you'll find each of them go into this in
59:47
a bit more detail and uh fridays one of course is the one on shares which a lot of people appear to be interested in
59:54
and just in terms of some things that have been raised during the session so in terms of resources we've actually put together a resources guide there's a lot
1:00:00
of information out there some of it's free and some of it you can actually buy but at a cheap price so
1:00:06
anyone who wants a copy of the resources guide i we update it every month and a
1:00:11
half so please just email benefits at ncdf.mil.nc anyone wants the resources
1:00:16
guide and we can send it to you um within defence we actually have now 93 of defence members are contributing
1:00:24
to kiwisaver the dfss the ssrss manage funds like
1:00:30
that and that's really good um and all of those people um every year are
1:00:35
now getting some uh really powerful information to help with their planning so i do urge everyone please whether
1:00:42
they belong to our schemes or whatever other kiwisaver scheme they may belong to do check your member statements that
1:00:48
are sent to you normally in about may of each year and for members of the ncdf kiwisaver
1:00:53
scheme and the dfss there's some really powerful information there to help with your planning and i
1:00:59
do everyone to have a look at it i think as of the last check we had about 70 percent of our members had actually
1:01:05
looked at their member statements which was really good but that means 30 haven't and so as i
1:01:12
said there's some really powerful information there so please please do take the opportunity to have a lot
1:01:17
um just a reminder for members of the dfss category a in category c
1:01:22
you would have all have received a separate letter advising you you they you're actually entitled to a free financial plan provided by our financial
1:01:30
advice service milestone direct limited and so i um i think for me every uh as
1:01:36
of last week we've had about 200 people so far registered for that out out of
1:01:41
about 300 people 3 000 people who are eligible um and so please if you haven't
1:01:47
registered do so it's free to you and it's available over
1:01:52
the next four years and so we'll continue to plug it because a financial plan is a critical tool i think at
1:01:59
everyone's toolbox everyone needs to have a financial plan at some stage during their life um and so
1:02:05
for for a whole a lot of historical reasons there's some money in the reserve accounts for the cat and the cat
1:02:11
see that we're able to use to provide a financial plan for those members so please do something about it
1:02:17
um in terms of the sorted site uh which is a really tremendous site and i do encourage everyone to have a look at it
1:02:24
they won't actually make reference to the nzdf kiwisaver scheme or the dfss and the reason for that being is that
1:02:30
our schemes are actually open to mems of the defence community but they're not open to the general
1:02:35
population so you won't see our schemes mentioned there but you will see the mercer schemes now mercer is our
1:02:42
actually our fund manager and so whilst there's a difference in the fee structure if you have a look at
1:02:48
the mercer product within the sorted site it'll give you an indication of where they sit in terms of the ranking
1:02:54
both in terms of fees and performance we are making some further changes to the fee structure for the ncaa kiwisaver
1:03:00
scheme in the dfss and those changes will apply from the first of april
1:03:06
and you'll see there's a further reduction in fees reflecting those changes that have been
1:03:11
been approved and i always use the analogy of a three-legged stall that when you're looking at a scheme yes you look at
1:03:17
performance that's a very important factor yes you look at fees that's a very important factor but you also look
1:03:23
at the issue around the benefits and services that are also provided by the scheme hence the analogy of a
1:03:29
three-legged stall and i think it's critical that you look at all three things together and look at
1:03:34
what we provide with our schemes for the membership and um and so again you'll
1:03:40
get you'll get information on that through the force financial hub and of course in terms of investments and things like that we have our financial
1:03:45
advice service milestone direct limited and they also have a lot of information on investments on their site as well um
1:03:53
i actually got something sent through last night because i'm one of their subscribers
1:03:58
and they sent through something about 8 30 last night they came through an investment some interesting material and
1:04:04
things so again that's provided free to anyone who wants to register for that and it's also available on the milestone
1:04:10
site that's accessed either through their own website or um
1:04:15
the force financial hub so questions come up scott to everyone when are they making the first of the
1:04:21
four contributions of the canton cat sea schemes that was made on the twenty of the war august so if you go into your uh your member
1:04:28
account for the scheme you'll see that there was a contribution win on that stage and the next one will be made august next year
1:04:35
and and each of the subsequent to the years after that so thank you very much uh happy i'll
1:04:41
stay on the line with with dennis and happy to uh answer any questions until queries that people may have
1:04:48
thanks mark well i think the question's been quite light come on challenge us
1:04:54
we can't give you advice but at least hopefully hit us with some questions otherwise we'll we can wrap it up and uh
1:05:01
quite happily i'll go jump out in the sunshine uh justif in terms of we have a um
1:05:08
a monthly report that goes up on the force financial hub that shows the returns for for our schemes for the
1:05:14
um dfss the nz keeps overscan the internet flexi saver scheme and it breaks down
1:05:20
port by portfolio and it also breaks it down by pir pir is the
1:05:26
the tax rate at which your returns are taxed because grant robertson needs every cent he can lay his hands on
1:05:32
and so um your money is um you'll be able to see
1:05:37
the returns on that and for those of you who belong to other schemes if you have a look at the the account for your schemes most of
1:05:43
them will probably have a monthly report or something like that that also shows the returns for yours for your scheme
1:05:50
there's a lot of information out there and the financial markets authority which is the regulatory watchdog that
1:05:55
has oversight of all managed funds including keep your saver funds they're putting more demands on the
1:06:02
fund providers in terms of transparency and and accurate and clear information that uses uh jargon free language and
1:06:09
all that sort of stuff as well so you'll see there's a lot of resources and a lot of information out there to help people with their planning and just in terms of
1:06:17
giving them a bit of guidance around um investments and things like that
1:06:22
i think some other questions have come up around flexi saver and stuff hang on let me have a look yeah that's six
1:06:27
should a six year old open a kiwisaver or a saving account i.e flex is over um
1:06:35
data you want to answer that yeah sure i'm happy to provide a response but i'm just conscious yeah
1:06:41
well i'll do my bit and then you can hit with your response if you're on because you know flips this over in and out um and
1:06:47
it and it probably goes to ll's question as well around should we be getting our kids into kiwisaver now basements
1:06:54
um i think it's a using kiwisaver for you know a child that's just born for their first time
1:07:01
might be a little bit sort of dangerous because we don't know what the rules might be in 20 30 years time when they
1:07:07
want to buy but if you're looking at using kiwisaver as a vehicle for saving long term for
1:07:13
your child some daughter whatever it might be then yeah it's a fantastic opportunity
1:07:19
to put some money in add to it each birthday or something whatever it might be
1:07:25
and just let that bubble away and then i think you know just me personally on a psychological emotional sense thinking
1:07:31
at age 18 being able to go to my child and say okay turn 18. here's your
1:07:36
kiwisaver that i set up here's some tools that you can use to you know change provider do the things you want
1:07:43
to do with it whatever it might be it's yours and it's quite a powerful
1:07:49
message to give or you know from some other people been saying doing it earlier in their child's life so that they get
1:07:55
acquainted with investments and so forth uh but just be a little bit cautious around um setting
1:08:02
this up for the first time because we don't know if that rule will stick in 20 to 30 years time
1:08:08
and that and that's a really powerful um incentive for people to do it the downside and there is a downside around
1:08:15
kiwisaver is the rules are very prescriptive about when you can actually access the funds and things
1:08:20
so what's what we see is we have a number of people who've actually set up flexi saver accounts for their kids with
1:08:27
a view being that they're actually putting some money in each pay and they're building up an education
1:08:32
fund for the kids so the kids get to 18 they either decide to go off to university or to do apprenticeship or
1:08:37
something like that they need a bit of money to fund that and they can actually take the money out then to fund their
1:08:43
education or training whatever it's going to be you can't do that using a kiwisaver fund
1:08:49
the other thing about kiwisaber is you can't use kiwisaver to buy investment properties
1:08:55
but you can actually use flexisaver to buy by that
1:09:01
and so one of the scenarios i know our financial advice service talks about is that for many of our people who are
1:09:08
posted to auckland as an example it's getting more and more of a challenge for them to buy a house in auckland where
1:09:13
they actually live but you could actually use flexisaver funds to buy a house as an example and
1:09:19
say the hawke's bay or taranaki or somewhere like that where houses house prices are lower than they are in
1:09:25
auckland you don't actually live in the house yourself but you are able to get onto the property ladder and you use
1:09:31
someone's else's rent to actually pay your mortgage um and pay all the costs associated with with um owning a house
1:09:38
so whilst you haven't been able to get into the property ladder in auckland you've actually been able to get onto the property ladder elsewhere in the
1:09:45
country and what you're doing is you're using your flexi saver funds to do that rather than
1:09:50
um kiwisaver funds because flexisaver there's there's far less prescription around how you use your funds
1:09:57
cool thanks mark yeah because it's about flexibility and choice that's that's the key isn't it yeah yeah um
1:10:04
ian asked why didn't simplicity show um i was just going to scroll down and show you that is because
1:10:10
when they um had to work this calculator out they had to work on my assumed minimum
1:10:16
balance of ten thousand dollars to make everything sort of work together nicely um but if i
1:10:23
find where is it
1:10:37
it's right down the bottom um because it hasn't been going for five years either that's that's the other
1:10:43
thing you're not going to see a five-year return i don't think oh there it is simplicity there we go
1:10:48
0.5 but if you look at the fees um that's the reason um so to your question
1:10:55
ian if you had 10 000 in this fund so i know simplicity works on a
1:11:01
you know you start off with zero balance so the fees are a lot cheaper but it just compares it at ten thousand dollars minimum across the
1:11:08
board for everyone from different kiwisaver managers of different ways of charging fees
1:11:13
but that's why and it's actually probably a great question to to show the fact that
1:11:19
regardless of the marketing that can go on in the marketplace to say oh we're the cheapest we're we're the most
1:11:25
passive or we're the most active this is a great little tool to just quickly do a
1:11:30
common sense check to make sure that what you're hearing is exactly what's actually appearing because all
1:11:36
this information is prepared through the from the providers to the financial markets authority
1:11:42
to sorted so it's not it has to be 100 correct it's all audited and 100 correct
1:11:48
which means there's no sort of fudging or getting away with things had a question here now hang on just
1:11:55
before you go past that you've introduced two concepts that you haven't actually referred to earlier today
1:12:01
yep uh which is the difference between an active and a passive fund because that actually has has a significant
1:12:07
impact on the fees so when you look at a fund like simplicity which is a passively matted
1:12:14
fund you're not comparing apples with apples when you look at a scheme like the nzb of kiwisaver scheme which is an actively
1:12:20
managed fund um and so there is a there is a difference and it is a significant difference in the and the philosophy and
1:12:27
the approach and everything else and hence why the fees tend to be cheaper for passive funds than they are for
1:12:32
actively managed funds yeah that's a good point and i think we talked about that one in
1:12:39
investing strategy on wednesday so there you go yeah um but it's a great point thanks mark um i had a question come in
1:12:46
uh if i was elected to have some more money in high risk investment and then start a family so change to a
1:12:52
conservative fund is the return from the high risk investment invested with me uh when i change and yes it did make sense
1:12:59
um so just just think of it as you having a basket of goods and on the day
1:13:05
you want to make that change that basket of goods might be worth 100 bucks right and when you say oh
1:13:11
i don't actually want that much now i want to know that i've got some money in my bank if you sold that basket of goods
1:13:16
for 100 bucks put the money in your bank you've got 100 bucks so if you go from a high growth
1:13:22
to a conservative you're pulling that money away from the growth lever or the engine and putting
1:13:29
it into your airbag so yes you do um what we call it crystallize so you
1:13:35
crystallize your gains or your losses and put them into something else so yes
1:13:42
you do get to keep what you've earned but bear in mind whatever you put it in we'll talk about
1:13:48
kiwisaver these are always investments that can still go up and down
1:13:54
but going from a high growth or aggressive to a defensible conservative
1:13:59
you would like to think that you're not going to be impacted by massive swings and value so yes hopefully that
1:14:06
answers your question i can't say your name because you just sent it to me just just if i could just interrupt dennis
1:14:12
i've just got the latest returns for the ncdf kiwisaver scheme for for the
1:14:17
month of october um and um for the five years because remember this is a long-term investment
1:14:24
so you should always look at the five-year returns rather than just what's happened over the last month or anything else but they if you if you've got someone in
1:14:31
a high growth fund which i think is what our friends talking about then for the 28 pir for the five years the average
1:14:39
return has been 10.2 after deduction of fees and taxes by contrast someone who's got their
1:14:46
money in the conservative fund the returns have been 3.5 for each of the last five years and the moderate fund uh
1:14:53
returns a 4.9 percent for each of the last five years so you will be making you will be having a significant impact
1:15:00
impact on your longer term returns potentially if you change from a more
1:15:05
aggressive to a more conservative investment setting but then today it's your course what you've got to be
1:15:10
comfortable with ultimately where where do you have your money invested yeah definitely i had a great question as
1:15:16
well oh my person here thank you for that answers that's good um thanks as well mark um do you think there's such a
1:15:22
thing as over diversification well yeah yeah
1:15:27
the analogy i'll use is like a seesaw right you have a fulcrum point in the middle so you can pivot up or down all
1:15:33
right that's what makes sea sauce fun but if you think of diversification as you know little fulcrum points along
1:15:40
etsy sort you're not going to get much of a pivot are you if you have more and more points across that plank
1:15:47
so there is the potential that you could be invested in all sorts of things
1:15:52
um and the whole um oh no worries luz um i'll call you out
1:15:58
because it's nothing worse than having computer problems so hopefully watch the recording back and uh that'll hopefully
1:16:03
fill in some of the gaps you've encountered due to i.t issues so yeah so the thing with
1:16:10
diversification is because you're putting your eggs in different baskets some of those baskets will go up in
1:16:16
value some of those baskets will go down in value and the concept being you know
1:16:21
sometimes it doesn't quite work that way but on average it does that if share markets are going up
1:16:28
then on this side of things it may not be going as well but on the flip side of share markets get really really volatile
1:16:34
and go down then this side might be doing better so it's a way to average out
1:16:41
your returns but more importantly it's about making sure that you're not putting all your
1:16:47
eggs in one basket and if you get that basket wrong losing all your money so
1:16:53
we refer to it as the best free lunch and you know there's every time the
1:16:59
markets sort of fall about and drop people start questioning whether or not it works
1:17:05
but you know in the us as an example they have what they call the four percent withdrawal rule
1:17:11
i saw an article saying it needs to drop down to 3.3 but let's let's just say four percent um because on average a mix
1:17:18
of uh sixty percent uh bonds forty percent shares
1:17:24
will be able to get you there over the long term um regardless of what
1:17:29
individual assets are doing so i think me personally oh nowhere his love's all good
1:17:34
me personally yes i think there is the ability to over diversify but i think if you're trying
1:17:40
to manage your risk for the long term i don't think you can do too badly investing in you know those
1:17:46
four asset classes getting different companies so across across the defence schemes we've got nine portfolios and
1:17:53
the returns for the last 12 months range from 0.3 for cash to 40.4
1:18:01
for overseas shares in the local currency so again as dennis is highlighted there's a there's a ride a
1:18:07
wide range of um returns and coming with the risks that are actually
1:18:13
associated with it now the last uh 18 months have been extraordinary months and so we're not necessarily
1:18:18
going to see those returns delivered in the future but nonetheless there's been some pretty robust returns but also some
1:18:25
media returns for things like interest you know cash fixed interest and all that sort of thing
1:18:30
yeah and just um to the last point as well if you look at the um some of the indices
1:18:36
they talk about on the news so the dow jones s p 500 so i'll pick on the s p 500 that's 500 companies the 500 largest
1:18:45
companies in the us so okay do you buy an index the s p 500
1:18:50
and no you've got 500 companies or do you then try and figure out okay what's my best companies out of that 500 and
1:18:57
that's when a lot of us that are you know we've got day jobs trying to figure out oh
1:19:03
what's top ten really i mean you know not so long ago you would have put kodak in the top 10
1:19:09
of your investments uh or perhaps enron now i don't if if you're all too young to know kodak and
1:19:15
enron kodak invented the digital camera and put themselves out of business so they were all based on film
1:19:22
and their share prices enron fudged the books and went completely bust so you know
1:19:29
buying a good range or a good selection of companies on a share market is a good way to protect yourself against the
1:19:36
unknown so just as a bit of a cap off so hopefully it answers your question about
1:19:41
over diversification all right anyone else we're still here
1:19:48
i miss these days mark well it's been it's been a couple i was not worried every time i see you didn't you got your hand banned and stuff maybe you've been
1:19:54
having another fight with a knife oh that was a skill saw oh
1:20:01
not the blade though it was just the edge but it cuts a lot of wood it just happened it's
1:20:06
old man hands of my skin's just a great job the last time i saw you i think you had
1:20:12
it you'd had a fight with a kitchen knife so uh probably probably yeah and i keep knocking it as well yeah um
1:20:20
all right well i don't think there's any questions so i think we're done there so what i'm going to do if i just stop the
1:20:26
recording okay

0:03
there you go um all right someone just told me they have to leave it 1 55 to join another
0:09
meeting that's fine obviously that meeting is much more exciting right now all good
0:14
i'm completely confident that uh today we will be able to get the
0:20
session done um and you know potentially have some questions as well so i'm a cure to all
0:26
my name's dennis sedel i'm a facilitator for te ara ohana ora retirement
0:32
commission and i'd just love to welcome you back i do run quite a few for nzf from the old
0:38
webinar so and as i said before i do love presenting to you guys and girls because
0:44
we get lots of great questions on hand we have mark williamson as well who is the
0:50
benefits manager with the nzdf so you know you can ask any curly question
0:56
obviously we can't give you personalized advice but we should be able to answer those questions either by way of what i know
1:03
or mark's expertise as well so we've been able to answer those questions
1:08
um now i don't know if you've noticed on the chat there is a
1:16
pdf download it's called learn to invest series
1:21
now that pdf is the workbook for these series so obviously yesterday was an introduction
1:27
to investing today we're going to be talking about making room for investing uh tomorrow we're talking about
1:33
investment strategies and then um thursday we're doing optimizing your
1:40
investments and it all culminates on friday with getting started with shares
1:45
and the reason why that one's come about is you have these platforms now where you know you can effectively invest with
1:51
five bucks a week so you know just getting you started making sure you're aware of the risks
1:57
where to find information we're not going to give you uh companies that you buy so bear that
2:02
in mind but we want to be able to empower you all with the ability to go forth make
2:07
your own sort of investment decisions from there so hopefully everyone can see that on the
2:12
chat uh let me know if you don't and i'll make it available um sort of during when i've got a bit of downtime like
2:19
perhaps when they're watching the video or something uh so welcome we're now at 24 uh which is good oh we've got one new
2:25
message here what have we got here uh we cannot find i knew that would happen um
2:31
so let's have a look here if i can click to download that
2:36
and i need to save it so bear with me you're all going to be a witness to me concentrating on trying to save this
2:46
and i think i yeah what it means is that any i'll
2:51
we'll download it actually what we will do is
2:58
okay i'm just going to share this again with my desktop
3:10
all right hopefully this all works so from me now you should have a learn to invest series pdf ready to go
3:18
can someone just give me a quick shout out to say yes i can see it and all you need to do is click down ah
3:23
cool great all right um so what i'll do is uh later on excuse the delay because i've had to concentrate where it's
3:30
clipping later on i'll make that link available again because if anyone joins a little bit late they won't see that
3:35
link so cool you've got it all there feel free to you know download it it's a
3:40
pdf so depending on your program you'll be able to use a pdf editor to
3:46
fill in the blanks but effectively it's it's almost copying the slides so if you
3:52
want to get ahead of what the presentation is you'll know what we're going to be talking about which sort of spoils are surprisingly but that's all
3:59
cool um now if the case anyone wants to say something out loud feel free to hit the raise hand button
4:07
every time i say that there's always one that hits the raising hand button by accident um or alternatively use the
4:12
chat and as i mentioned you can send a message just to me as hosts and panelists or to everyone so if you want
4:18
everyone to see your feedback or your sharing of information then just make it to everyone and it just means i
4:24
don't have to repeat its uh at nauseam because i'm sure i'll still get sick of my voice um
4:31
now this here's my challenge i've uh laid it out yesterday but does anyone want to take us through the karakia
4:37
feel free to raise your hand and i will unmute you and you can take us through it if not
4:42
i'll do it again but i'm going to lay the challenge down for tomorrow all right all right
4:48
okay all right that's fine i'm not offended you must just love the way i roll my
4:54
arms obviously
5:12
so thank you and um great way to start our lesson so to speak um but just in the middle there you may
5:19
have noticed uh is our new name which as i keep saying
5:25
is a great name now because it actually sounds like something not in a very
5:30
official commission for financial capability so yes that's who we are obviously this
5:35
slide hasn't come up but we run the sort of website so if you haven't been there before
5:40
uh the sorted website sorter.org dot nz is the site that is there to a give you
5:47
free tools and or access to tools and information and knowledge
5:53
and really importantly impartial information and knowledge so it's all about empowering you to make
5:59
your own financial decisions rather than sort of telling you if you have to go through bank a or b or
6:05
insurance is it it's all about giving you the tools and information to make your own decision
6:11
so just as a question you can see it on here and you'll be thinking i'm sure dennis didn't give us homework
6:16
but for those of us that were part of yesterday's introduction to investing did you make any changes did
6:23
you do a little bit of research because i know we covered a lot of stuff um but two key ones stand out risk
6:29
profile did we do the investment toolkit and then the other one was did we do some research on our kiwisaver fund um
6:37
if you just want to hit me on the chat i'll just see you know what you found out what you came across
6:42
and um oh yeah cool so someone did an investor profiler talk to the wife of that and
6:48
how did the conversation with the wife go that would be um interesting
6:54
and it's with um couples or where there's one one person
7:00
or more involved or more than one person i should say uh yeah you don't tend to score the same
7:06
so it's quite interesting trying to strike that balance um anyone else want to sort of volunteer if
7:12
they did anything it's completely fine if you didn't because we'll just pick up and move on to the next one
7:20
cool investor profile of research and um dennis my man
7:25
when you did that did it surprise your investor profile like what you came out as
7:33
not really okay yeah that's good it's all right we're all waiting on the edge of our seats thinking yeah it did but so that's all
7:40
good um and then when you did your research did you sort of come up with like a short list of who fits that bill
7:47
so to speak um it should go uh well without mentioning but we will mention it that
7:53
the force financial hub because a really important consideration is to
7:59
when you're doing your research is to also look at the benefits you get through in zpdf via your kiwisaver
8:06
because there's some unique benefits on offer to all nzdf employees through the kiwisaver
8:13
scheme that you wouldn't get outside as well so just add those into your mix as well
8:19
finish reading the latest edition of informed investor magazine oh thanks mark mark was just telling us
8:25
about another book he read but i'll get him to tell us about that one afterwards all right that's cool let's
8:30
move on so what are we covering today i know it looks like a lot but there's only about 16 17 or 19 slides there you
8:37
go and two of them are basically things uh so when is a good time to invest
8:44
um you know really just asking yourselves the question of that as well um is our money going where it should be
8:50
so that age-old question of do you pay debt off first or do you invest or do you do
8:56
both at once what you know what do we feel is right or what do we know what's right in that respect um how to create a
9:03
money system that includes investing so i mentioned it yesterday today's session is about
9:10
taking a bit of a step back um because the reason why this particular module
9:16
was built in is because it's been lots and lots of comments around you know it's it's hard to find the money to get started or
9:23
um you know how how can we get started just saving 10 bucks a week you know how can we do these sorts of things so this
9:30
session is about just taking a step back um looking at our own money plans or
9:35
budgets if we call it just reminding ourselves that you know you need to work through that figure out our needs and wants to figure out how we're planning
9:42
for our goals how important are they and can we find room in our budget to actually
9:47
put towards that goal as well and then last but not least as i said creating room in the budget for
9:52
investing um and you know we had this great uh philosophy a little and long so
9:58
you know for not for me at 48 years of age but if i was back in 18 land uh you
10:04
know even if i put 20 bucks away a week into some investment plan and didn't
10:11
even think about it for the next 20 30 years i would be absolutely amazed as to what that built
10:16
up to so a little and long a little means you just put away a little bit
10:21
regularly the long means you allow the markets or the investment to
10:27
give you that compound growth or that compound returns just seems to be so important to growing your money
10:33
now as always ask your questions as we go along um no real rush on this one in terms of
10:38
trying to get all the information out to you and if you sort of miss something just raise your hand to chat or run feel free
10:46
to send me a chat through and happy to bring it up so um what do you reckon there's a question
10:52
for you all um what do we think we need to have in place uh before we invest well what would you
10:58
like to have in place before you invest let's see what comes through on this one
11:04
i like questions because given a chance to have a drink of water
11:11
ah yes this is why you're called dennis you're just like me a goal exactly what is your reason um oh well here we go go
11:18
on you're all well on the uh keyboard today um sam financial goal plan and gold
11:25
brilliant love it oh denise you just know it don't a budget yes
11:31
um uh rebecca's starting capital yeah yeah exactly and that you know if i thought back to when i was
11:37
20 all sorts of funds had all sorts of minimum amounts and i always thought share brokers were
11:44
wealthy people i mean they charged a lot and you had to have a minimum amount well outside my league and then fast
11:50
forward to today we're subject to some id requirements you can open up a a a shares account or a hatch
11:58
account and start investing with five bucks um which is amazing that sort of um
12:05
decentralization or gamification of share trading just amazing opportunity um budget
12:13
thanks darwin yes budget we'll be talking about those um oh ian love it
12:18
then you gotta stop using those question marks commit to it emergency fund yes exactly right you've got to have a
12:24
perhaps a backstop in place because um the reason why an emergency
12:29
fund is really good is because the last thing you want to do if you've got this pot of money that you've been putting away and investing
12:36
is if the i don't know let's just say the wheels need a replacement car the last thing you want to do is tap that
12:41
lot of money that you've got um try and have an emergency fund set aside and i know it can seem
12:48
well maybe counterintuitive building up an emergency fund building a savings fund paying off your mortgage whatever
12:53
it might be it's just about you know different pots for different needs
12:59
and if you've caught my webinar before about money
13:04
plans budgets so forth it can be quite demoralizing having your emergency savings and with your goal
13:11
money your holiday travel fund whatever it is and then having to pull into that to pay for your car repairs for a while
13:19
so it is quite useful to have them separated and you know specifically for those
13:24
types of me so love it then thank you emergency fun definitely um a level of certainty yes great mike
13:31
these are great suggestions coming through i'm just wondering is this all in the workbook is it brilliant well done um yeah certainty and it can mean
13:39
um job certainty uh no one will ever know what markets are going to do but mark
13:44
and i were just talking about it at the beginning yesterday we're talking about markets taking a big dip downwards because of the new
13:51
uh covert variant and then today the news is a bit better so markets
13:56
flipped back up so you know in terms of trying to predict
14:01
when the marker will be more certain for our investment can't do it the only time we know that is right is now if you've
14:08
got the ability and the means to invest it's never wrong to start investing
14:14
because you're going to do it for the right reasons for the right time frame and hopefully not take too much risk along the way
14:20
um surplus funds yes awesome sooner thank you um oh mark coming in there with goals
14:27
and a strategy exactly right a bit of financial security
14:32
and ooh darwin you've hit me with a massive acronym there bk a gty 2021
14:42
i can't venture what that means but you tell can you enlighten us or what that means
14:49
oh no oh no oh sorry darwin that looks like a password [Laughter]
14:56
maybe or maybe not we we will say not to that so that's all good uh but yeah no brilliant but these are the
15:02
sorts of things we need to have in place and if we look at you know you may remember we talked about debt once um
15:08
things we need to look at that um the big key difference here is i
15:13
think goals you know what find the why of why you're investing um and it just just me personally i
15:19
think that is the most important thing because it really then starts to drive okay how
15:27
or your enthusiasm and your commitment to pulling money out of your spending every day
15:34
to put towards an investment goal that might be six months away it might be 36 months away
15:41
so having that level of commitment comes about from having a you know a clear
15:46
idea of a goal that you haven't liked and the smart goal process because i know i talk about that ad nauseam
15:53
specific measurable achievable um realistic and time-bound
15:58
applying that process to it building a vision board um i would have my phone there but i've
16:04
got a phone but having some sort of reminder on the phone to keep me focused i mean if it's um mark and uh through
16:12
its work enzyme has put together a great strategy about getting to a hundred thousand dollars in
16:18
five years and that's making use of all the the benefits and um investment vehicles on offer
16:26
through benzodia for clinton kevin server so those sorts of things can make it so much more exciting and then you
16:32
know i would find personally putting away you know 100 bucks payday or 200 bucks payday
16:39
or the ability to have a hundred grand deposit in five years time i would commit to that because i can see
16:45
that goal coming through but yeah no the other things that we do want to have a place like emergency fund
16:52
anything that stops us from being able to achieve our
16:57
medium long-term goals it's always a bonus um no other questions coming through feel free if
17:04
anyone's got a comment about that feel free to send that through as well um so on your screen and it's in your
17:10
workbooks as well uh it's just showing you the difference between you can see here uh where's my cursor
17:17
gone there it is ten thousand dollars all right and you can see that um
17:22
there's two different pathways for that ten thousand dollars so in your books it'll be a little bit clearer but just on screen here if you
17:30
haven't opened that particular workbook i sent now now if any has anyone joined and
17:35
can't see the workbook link please let me know on the chat because we're at 31 participants
17:43
and i might wait another three or four minutes and i'll make that um download available again but let me know in the
17:48
chat if you haven't got the download link for your workbook um so what we have here are two lines oh there
17:55
we go we've got one hand going up that's cool don't have it okay let's just quickly do it now
18:02
so bear with me sorry people that have it and i think in my opinion
18:09
right um so that is just uploading and once it's uploaded well it has now all
18:14
you need to do is click and it'll download to your computer so let me know if you've got it that would be
18:20
awesome um yeah so that's ten thousand
18:26
dollars now someone's put their hand up uh richard your hand has gone up so
18:33
i will allow you to talk just need to unmute yourself you can chat away
18:43
it may be that you put your hand up by accident but that's completely cool i did okay all right all good um
18:51
yes i've just shared that link so for those of us that don't have uh the download link should have it now oh yeah
18:57
one's got it brilliant um so our two lines so this is ten thousand dollars left in the in the share market for
19:04
uh 25 years all right um i always can't see it uh it's on the
19:10
chat so louise if you go into your zoom controls if you move your mouse around it should be like a chat function come
19:18
down uh it looks like a little well it's called chat there's like a little speech bubble if you go
19:24
into that hopefully louise you're into that now
19:30
and if you still can't see it let me know and i'll i'll resend it again see the pdf head download but keep
19:36
saying error when i try to open it that's a bit weird okay i'm not sure that might be a specific your own
19:43
computer issue um as long as you've downloaded it then that's all good i will send this again
19:54
and what we will do rather than me trying to be an i.t guru that i'm not
19:59
um there we go okay i've shared it again what i'll do is i'll share the
20:05
email the link to mark and then mark if it's called with you maybe make it available on the website or something
20:11
like that or if anybody wants it they can email um benefits at
20:18
nzdf.mill.in what do you write about that does that sound good right
20:28
oh yeah cool thanks mark um yeah because there's a couple of people saying
20:34
uh a couple of people saying it's not um working properly so i think that might be the best way to go
20:40
um and yeah appreciate that louise yes it's um if you are sending it on the chat then yes that's where it comes up
20:46
so uh good point um yeah okay there's a few errors that's cool um it's a pdf document so maybe
20:55
ah okay thanks mark so if you're using nzdf devices then that will be the reason why
21:01
so what i'll do is um rather than focusing on this i will
21:06
email it to mark and if you do want a copy of it and effectively it's the workbook that we're in working through
21:12
the slides so it just allows you to write your own notes into it um is
21:17
you can email that email link and mark we'll put the email link up and then just get it sent out okay
21:24
because there's 32 of us on there some of us can make work some of us can't so back to the um brilliant thanks jack
21:31
back to the um graph at hand so we've got a ten thousand dollar lump sum showing two lines purple line of the
21:37
orange line uh invested for 25 years all right um
21:43
so if we looked at the orange line and started with ten thousand dollars typical results in terms of a share
21:50
market sits between you can see there's like a sort of a slightly lighter color
21:55
sort of a high low really in terms of share market performance and i'm just looking at the figures
22:01
because it doesn't quite show on here could be anywhere between ten thousand eighty dollars to thirty four thousand
22:08
all right but if we and this is getting to our little and long
22:14
if we add a little bit to that 10 000 pot um all the way through so in this
22:20
instance we're talking about uh 50 50 bucks a week all right doesn't sound like a lot it can mean a lot um but it
22:27
doesn't sound like a lot compared to the 10 000 uh that can increase this potential
22:33
balance and you can see the higher lows are a bit more pronounced um to what about 120 odd thousand so in
22:41
terms of growing that nest egg you've actually given it a lot more opportunity to grow because
22:47
the one thing we need to remember is here we've got ten thousand dollars at risk in the market doesn't matter what the prices are doing it's your 10
22:54
000 going up and down but here and this is exactly like your kiwisavers
23:00
you are contributing money regularly and you might be sort of buying it at smith and kelly prices and things going up
23:06
getting more expensive but then also if you keep that
23:12
process going that that sort of almost muscle memory of okay i'm just going to keep paying 50 bucks a week i'm going to
23:18
keep contribution going i don't care what markets are doing you'll be buying it at lisco's prices so what it means is
23:24
that you're buying things cheaper and as things recover you get the benefit of that recovery like a shot in the arm
23:30
almost so the concept we're trying to get across is that yes it's good to start one but if you can
23:37
just try and keep adding to it regularly doesn't matter how much it is as long as it's something that you can add to it
23:43
your results will definitely stand out from the rest so
23:49
uh with that in mind here we go i know you'll be thinking oh my god dennis is launching into a poll
23:56
it's going to ask me if i've kept the spending going so this is our lead in into money plans or
24:03
budgets so you know have you ever kept the spending diary and the spending diary is one way of
24:10
keeping check of where we're spending and how we're spending our money and oh we've got 13 or 32 it's very
24:16
anonymous so i can't tell who's voted so keep them coming in um and spending diaries one and then
24:22
we'll also touch on some of the spending tracker wraps that are out there as well but effectively the spending diary
24:30
is there as well as an app to give you insights into how you spend
24:36
money and it's especially important if we've never ever done that and we're trying to start a budget uh so we've got
24:42
23 of 32 so we've got nine to go i'll give it another five ten seconds
24:51
that's all good um oh we've got a yes to me as well so
24:57
that's cool so we've uh we've got six five to go five to go all right might just end that because i think some
25:03
people might be um on other tech that doesn't allow the poll to come through so on your screen
25:09
you should have a uh survey very accurate survey because there's 27 people voted uh and
25:15
almost 50 50. sort of like a balanced profile 44 saying yes and 56 percent saying no
25:23
so spending diary you know in its very simplest form is like a 3d one notebook
25:28
that is it uh who here as a question runs a budget or a money plan now just hit me with a yes
25:35
or hit your hand up if you like who runs a budget
25:40
now it's got some hands and lots of yeses and a couple of nose that's cool
25:50
i love that one loosely yeah yeah that's cool um
25:57
i can always rely on every webinar there's always one person that uses excel there's probably a lot more and
26:03
you're very keeping very regarded about it uh but shout out to sarah peters and
26:08
she uses the excel spreadsheet um oh there we go mark uses excel um
26:14
and sam's really calling it out excel is the best look don't get me wrong excel i love it
26:20
but i it just never ceases to amaze me that there's always one or more people in a
26:26
webinar about budgeting that uses itself fantastic tool um
26:32
mitchell if i had chocolate fish i was doing this in person i'll be throwing it out to you right now because you use the
26:37
sorted budget tool that is awesome um jackie your hand's still up so i'm thinking you might want
26:43
to say something but if you don't feel free to oh god that hand just get quick um
26:49
excel was sorted didn't save my budgets oh no uh at least to that point
26:55
maybe it was an idea issue but also if you sign up you can save your budget
27:02
and signing up is completely confidential by the way hey awesome someone said it gave them a
27:08
strategy to get gets paid off love it that's brilliant um
27:14
geez mike how does that work split across google sheets sorted and trello
27:19
is that a good way to to do it ah
27:24
well um on you based on that feedback lecture i'll just um feed that back because it's that's so frustrating
27:31
having done all the work trying to save and it doesn't work that's annoying um i'll feed it back to the i.t team so at
27:38
least they can make sure that they've been framed um
27:43
oh it's pretty busy not at all the way ideal yeah okay cool yeah and alicia i just
27:49
copied the template over as it's a good tool yeah it's it's brilliant um yeah
27:55
the only problem it has and this is why we talk about um talk microscopy and the detail here this is awesome um the only
28:01
thing with sorted is that it's about you putting the figures in and giving you a reference point to come
28:06
back to which is cool but in terms of ongoing monitoring if that's something you really want to do
28:12
um yeah the budgeting tool is probably not the best so you need we need to look at other ways of identifying spending
28:19
links and then what's chillow is a good way to track what things need paying mostly for
28:25
fixing the house okay cool so it's almost like not project management but being able to put
28:31
like cash flow management i guess is that a good way to describe it mike
28:39
because then you can put dates and almost run your household budget like a business so that you know your upcoming
28:44
bills it's basically a kanban board well there's something i've learned today kanban haven't heard of that so
28:50
i'll definitely be googling that um thanks everyone for filling out the poll there
28:56
now apologies to all of us that have seen this video before but it's a good little video
29:02
um the animation is state of the art um let's have a quick watch and it just
29:08
talks through about um spending diary and it talks about a bathtub and identifying spending legs
29:14
so really it's about you know figuring out why it's important and the benefits of actually working
29:21
through a system like this so here we go
29:26
managing your money should be as easy as running a bath you turn on the taps and make sure more money goes in and goes
29:33
out if you forget the plug and spend more than you earn the bath never fills but even if you put the plug in do you
29:40
still find that the bath never fills very high for very long do you find yourself wondering where your money is
29:45
actually going turns out that bath has some cracks and leaks your everyday expenses keep draining it it's
29:51
practically impossible to remember what we spend money on every day it's even harder to keep a running tally of what
29:57
we spent on one kind of thing over the last week or month like takeaways petrol groceries or
30:03
clothes and little by little now spending here and there on things we don't even think about makes that bath
30:09
leak without us noticing what we all need is a way to see where our money's flowing that's what a money
30:15
tracker is all about tracking your spend can give you a clear picture of what's really happening with your cash
30:21
now there are different ways to do this you can carry a small notebook and write down how much you spend every time you
30:26
buy something you can use an app to record everything you spend on your phone or tablet
30:32
you can keep receipts and then write down your expenses at the end of each day you can also use fpos for everything
30:37
you buy and then go through your statements the key is to find a way that works for you and stick to it you'll be
30:43
glad you did the more accurate your money tracking is the sharper the picture you'll see of where your money's
30:48
flowing it pays not to miss a thing as you record each expense group them by what they're for like groceries bills
30:54
petrol gifts or clothes whatever you typically spend money on if you're using a notebook or spreadsheet make a column
31:01
for each it makes it easy to add up when you do get ready for some surprises
31:07
you may even be shocked how much you spend on everyday things really wherever the surprise leaks are that's where your
31:14
opportunities are too and as you plug those leaks you'll watch your bath fill
31:20
head to sorted dot org dot nz to find out more on how to manage your money
31:27
so yeah so apologies that's probably about the 10th time you've seen that video we do love that video um but yeah
31:34
the key the key is is being empowered and in charge of your money plan and the money flows that you have um and always
31:41
is the the example of the government governments um has well hundreds of billions of
31:47
dollars coming into its coffers every every year but it also has a plan so the budget
31:53
that it comes out with you know every year around where they plan to spend money
31:58
they can only do that with the knowledge they have in terms of what money's coming in and what money needs to go out
32:04
to pay for things so we're no different um running your household like a like a government or perhaps a business just
32:11
getting a little bit of an insight around that and how we spend our money and especially
32:16
there's nothing worse than say setting up a savings plan let's call it 20 bucks
32:22
a week and then you know after a month having to stop that because there's another
32:27
bill that's come along that sort of has to take urgency or priority over that um so this is about getting control
32:34
figuring out have we got some spare cash to you know invest and if we do
32:40
what's our goal for that okay it's uh i've got a spare you know 20 bucks a week
32:45
and i want to just save that for you know my view my future child's education and 18. so
32:52
let's just say they were born you want to put 20 bucks away and in 18 years time you want them to have it so you
32:58
could you could take a lot of risk for that you could go into like a growth fund or you could you could set up a um
33:04
online share platform and buy a exchange trader fund or some shares you like um and then just keep adding to it
33:11
and as long as we've identified how we spend our money and stick to it then it's got the best possible
33:16
opportunity to to hit that sort of purple line graph that we saw where it's actually buying in the good times but
33:23
also buying in the bad times and making more use after 20 bucks that's that's going in so on the screen at the moment
33:29
you've got some ideas around some third-party apps it was brought up before that always
33:35
remember where third-party apps just check with your bank if you can use them because the bank
33:41
in their terms and conditions especially for online banking or phone banking they want you to keep your login and
33:47
password safe confidential and don't divulge it to anybody the
33:52
problem is if you want all your transactions captured by these types of applications out there
33:58
even pocket smithfield was designed in new zealand you're going to have to give
34:03
your permission to access your bank accounts and that's where a bank might get a little bit sticky about it so definitely
34:09
definitely do check with them another alternative which has been brought up by your good sales in the past
34:15
um is just approach bank and ask them if they've got a spending tracker type
34:21
app and usually i've heard it so much now that the red the blue the yellow the
34:26
green well light blue and the dark blue bangs
34:31
all offer their own version of a spending tracker for free just by virtue of the fact you have your account with
34:37
them and as you've seen before there's lots of ideas out there around you can download your transactions into excel
34:45
and set up your own sort of monitoring you can have the bank statements and just work it off that
34:51
you could mike's left us now unfortunately but he had some great ideas he was using trello
34:56
google sheets which is a free version of excel i guess and there's something else to mention that i
35:03
can't quite remember uh sorted or the sort of website of course i should know that um so
35:09
the key is find something that you can use and you're comfortable with and it's easy to use
35:14
right i know i'm happy about this type i think any questions on that
35:27
i think there's an event as well there's no
35:33
right all right so you've got a question on screen at the moment so what we've done now is we've we've taken those
35:40
initial couple of steps so we've gone through and figured out a system for uh monitoring our money flows our money
35:47
tracker we've built a budget so how does that budget look and we're going to go to the
35:53
sorted site soon and have a look at a at the budget template so again apologies for people who use this
35:59
because it's a rehashing of it um but once we've done those
36:05
a money system or how we organize our bank accounts
36:10
is a great support mechanism for these other two things that we're doing
36:17
so can i ask and you don't need to tell me a mounds um and and hit me up in the chat um how
36:23
you've organized your bank account so do you have one account for everything or do you
36:28
prefer the have a day-to-day account savings account and a bills account how do you
36:34
set things up and what i'll do is if you don't want to share it send it to me and i'm just going to raffle them off as we
36:39
work through um but yeah feel free to share it but like i said don't tell me amounts
36:44
and um yeah i'll uh i'll try and pinch one or two ideas
36:50
um but just while people are typing up maybe uh the record i've had
36:55
oh someone just hit me with seven accounts so i'm just going to say the record i've had is 23 accounts
37:00
and you may have heard the story before but i'll just quickly reiterate um her concept was it was it was an account for
37:07
every need that she had and one example was that she had a friend's birthday coming up in a
37:13
three four months whatever it should open account put five bucks a week away into it just before the birthday pull
37:19
all the money out close it down use that money to buy the present and that was her way of doing it so it's another way
37:24
of you know the little brown envelopes or just knowing that you've got a little
37:29
jar for every expense that might be out there so it's pretty cool um what we've
37:35
got here pay for everything on credit card and pay off every fortnight oh yeah brilliant so it keeps it all on one
37:40
um sheet so to speak which is great uh one account for all with spending tracker oh yeah i'm glad that works um
37:47
brian because having one account for everything it's just uh you've really got to be in control of
37:53
that so that's brilliant that you can do it with your spending tracker um oh this is why it was quiet some
37:58
people here written like a big escapade on it uh this is brilliant um money goes into joint accounts and split into 12
38:04
different accounts and never goes negative and i guess i won't say the person's name but from your perspective
38:10
with those 12 accounts you know you've got a bills account you know you buy like a warrant account or an
38:15
insurance company it's good knowing that once you've paid it in there it's taken care of i guess that's where you're coming from
38:22
um joint bills count and joint savings for house car and holiday brilliant yeah
38:27
it's um it's just an account for every or not every but uh common needs of just
38:34
putting that money inside um always openness to everyone so this brilliance everyone can pillage this one
38:40
i have a separate mortgage account i'll pay them to then a bill account one smart
38:46
card for spending that earns the airports yeah and several savings accounts different things i pay extra bills can't have any bigger bills
38:52
brilliant yeah and that's another good thing that um i tend to forget to mention is
38:57
if you do use credit card you can actually shop around now as well and find the one that gives you the best
39:03
rewards because if you are going to put everything through a credit card definitely pay it off in full each month don't use it any other way
39:10
then the rewards that you get back just for paying your bills like normal can add an extra
39:16
five six seven hundred bucks every year even more potentially um
39:21
notice how i didn't refer to air travel because that's not happening i divide my money after bank rent and
39:27
certain fixed amounts of savings bills food and excess excess gets invested after the balance reaches the super
39:32
threshold brilliant love it and then at least you've got that certificate great
39:38
uh sam's hit us with one main transaction account because of mortgage two different types of savings accounts yeah love it that's cool as long as it
39:44
works for you that's the main thing excuse me um leisure spending online that is interest added that is
39:50
easily accessible savings account bills home improvements mortgage kiwisaver turn deposits and interest rates go back
39:57
up for the customer yes um and yeah let's not forget kiwisaver's long term um but it is still another
40:05
another pot for us and it can be for retirement but it can also be for our first home purchase
40:11
um this person has seen eight accounts yeah so just pip the other one by one
40:17
seven um eight accounts mortgage and payroll main suite available existing the
40:22
highest interest rate turned positive yeah they're keeping it close um
40:27
and i'm guessing somewhere in the mix a lot of us may have an emergency or rainy day or the oh crap fund
40:34
um sort of hidden away as well um
40:39
three accounts excluding mortgage accounts credit card full transactions and payoff monthly yep and i'm guessing
40:44
you get rewards with that um seasons with lots of different savings accounts wonder if i should
40:50
consolidate well yeah i mean if this is the other big thing if they're costing you money
40:56
then you know i don't know three four five bucks a month um that's money you could be investing
41:02
into your your he's um portfolio five bucks um every month type
41:09
thing um because man it's so much better in your pocket than the banks uh but yeah only consolidate this fees or a
41:16
consideration and also if it's going to simplify and improve your account patrol system
41:23
otherwise if it works for you then just stick with it i guess um jay said us with i've got five accounts
41:30
one is every day one is build two we do need to remember that somewhere in
41:36
here uh we need to have some fun stuff uh as well
41:41
uh everything goes on the credit card payoff each month yeah well yeah it's not a credit card ah okay thanks uh
41:48
one smart because we load credit onto it it helps you not have to go okay brilliant so you can only spend what you
41:53
put on to the card sort of like those pressing cards sometimes but a bit more flexible yeah that's good i've learned
41:59
something um and then we've got here general spending account a personal spending account for two of us a savings account
42:06
for our son the bill's account uh have calculated how much our bills are could be savings account food and fuel account
42:12
and travel account we put money into each after pay comes through brilliant that's and i mean and the cool thing is
42:18
because it's all um simplified and every account has its purpose
42:24
um you can just keep track of things a lot easier and feel in control and plan with a degree of
42:31
certainty for the future as well because you know right where we've paid for our annual registration and our warranty and
42:37
mechanical checks on the car we've done all of that so yes we can put that extra money to something else so love it
42:42
thanks so much everyone because that's a money system is a very important um
42:48
building block to making sure your budget um actually succeeds
42:54
so i'm just going to quickly show you the budgeting tools um
42:59
here we are on the sorted site i'd do it be unsorted i'll just quickly show you this where
43:04
are we here's my budget tool there it is this one
43:13
and i'll just just quickly show you this because this you know four thousand dollars a month
43:19
um our own home uh kids five pets
43:26
holiday and a clear cut so it's really easy so if you haven't
43:32
used it give it do give it a whirl um it's either visual for us picture type people
43:37
or a list view for us excel people so both both types of um
43:44
visual stimulation are provided for um probably give a dog back in the
43:50
background that's a joy of working from home i have to tell you it's uh it's a bonus
43:55
um the one reason why i want to break this budget down a little bit more for you is for this reason here so if i have
44:02
went under savings i could add in here add category
44:08
and i could put here uh long term savings and i don't know we'll just call it
44:14
sharesies i'm not we're not trying to promote cheeses but it's just that everyone knows about shares is and i'm gonna put um
44:23
50 bucks a week into it sorry 50 bucks a fortnight from a payday
44:29
and so about trying to figure out what money you got free what goal you want for that money to to apply to
44:37
um then putting it into your budget so this is how easy it is to put in here so you can see here under savings
44:43
we've assigned long term saving shares these 50 bucks a fortnight so just building it into our
44:48
budget and the sort of tool allows you to just build it in quite and easily
44:54
which is really really cool um but yeah it doesn't have to be shares it can be a managed fund it can be
45:02
a hatch it can be an invest now or it can be i think this steak from australia that's come over now so anything that
45:09
you know where you've done the research the reputable professional um the fees aren't going to like
45:16
gouge out and if you're putting in 10 and they're taking out five um someone's going to get rich off that
45:22
and they're going to be you investing it um uh oh here's a question through from
45:28
jonathan with emergency funds the standard device seems to be three to six months of expenses do you think there is
45:33
an opportunity cost having such a large amount of money in cash fix interest whether you think the security of an
45:38
emergency fund is more important jonathan love it great question um actually before i answer it what do we
45:46
reckon what's some opinions on that question that jonathan posed um chuck it on chat and we'll just quickly whip
45:52
through those as well and then i'll i'll give you my two cents for what it's worth as well um
45:57
so yeah the budget tools there if you want to use it some of us already are that are on this call and use it well
46:02
which is brilliant uh but just do bear in mind this is why that initial step is so
46:08
important figure out what you're spending and how you're spending it and where you're spending it then put your
46:14
budget together because trust me i just tried to do it myself when you do try and put a budget together without
46:20
knowing those first step with that first step or a couple of steps the budget might sort of fall apart
46:26
because of an expense you didn't expect and then to revisit it and it gets annoying so try and do that initial step first if
46:33
you've tried to do a budget before and haven't stuck with it and don't worry about getting it wrong
46:39
and and thinking pulling my hair out like me um
46:44
try and um just revisit tailor it alter it to your own
46:50
preferences and make sure it works for you um louise you're not allowed to say that
46:57
i was looking for an answer um louise i also wondered about it since the wasted funding
47:03
how much risk would come forth yep uh and mark said i have emergency funds and flexi cellar now that's a really
47:09
great point um mark do you just want to pipe up now just on flexi saver and how
47:14
it can fit in hi thanks dennis hi everyone um so
47:20
hopefully everyone's aware that we actually have a number of savings schemes within defence one of them is the ends of their flexi saver scheme
47:26
gives you access to seven different investment options which dennis touched on yesterday when he was covering off
47:32
the initial thing of investments more information about it is on the force financial hub just go to google
47:37
force financial hub and go to the page for the ends of their flex saver scheme but the reason why i put my funds in
47:43
there if i've got funds sitting in the bank i'm getting probably one percent maximum return and when you take into
47:48
account tax and inflation it means i'm actually paying the bank to hold my money whereas with flexi saver i've got
47:55
my money in a more aggressive portfolio and i'm getting higher returns but i accept at the same time there's greater
48:02
risk that comes with that as well so it's the trade-off between the between the risk and the returns but i'm
48:07
satisfied with the outcome and i can access by funds within three to four working days if there's an
48:12
emergency and i need to touch them cool thanks mark um and i've brought the page up so everyone can see
48:18
the flexisaver scheme but it's it's a it's a great little option that yes um we do need to
48:26
acknowledge an emergency savings and i just saw alicia come through with one um it's something you do want to be able to
48:32
get your hands on quickly to be able to pay for bills that are unexpected that's a whole concept
48:37
but on the flip side this is why i was looking for your guys opinions and gail's opinions on it is
48:43
you could end up you know three six months worth of income or expenses with a little dollop of money there just
48:49
sitting languishing in a savings account not touching it because you haven't needed it
48:55
thinking come on it must be a better option so for mortgage holders for people that have mortgages
49:01
you could put it as an idea put it into your floating rate loan and just check to make sure
49:07
that you can draw that back out again because that's a way that you can save interest or if you're with a bank that offers you
49:14
a what they call a mortgage offset so they recognize the savings you have
49:20
and use that to lower the loan balance on which interest is charged so again
49:25
you recognize for the for the balance you hold or your total balance so do check with your bank about
49:31
that one alternatively to mark's point flexi save is great and i'm not saying
49:37
uh you know we're recommending it but it is good because it's specifically built
49:43
not built but specifically there and tailored for nzf personnel employees so
49:49
it just means that you've got access to an investment that you can either make it super aggressive or something you
49:55
know that's a little bit more conservative but still hopefully generates a little
50:00
bit of an additional you know return over and above what bank rates are so it's a great little option um susan
50:06
asked are there any penalties from withdrawing from clicks and saver mark
50:17
um but yeah so to um yeah to your question jonathan it was a
50:23
brilliant question that's why i like to open it up that one um yeah you it's a call you make you might maybe if
50:30
you've built up five ten grand let's say um you know maybe keep a grand or two
50:37
at your fingertips in a online account and then maybe give the rest of it the opportunity to earn a better return than
50:44
a flexi saver or something similar or put it into a mortgage on a floating rate or whatever it is
50:50
but again you could try and break that amount up just to see if you can generate a little bit extra
50:56
money on top of it because every little bit helps i don't know if that answers your question jonathan but i think it's very personal
51:03
um choice but at least we've all got some more options um cool all right
51:12
oh this is good we're at eight minutes so this is good um so is there any any tips so for those of
51:18
us that have set up savings accounts i mean what sort of tips have you got to
51:24
if you want to share them just with me and i'll share it with everybody or with everyone uh that helps you to keep on
51:29
track um so just while you're typing away i mean i've presented a couple of them and my
51:35
favorite is you know the smart goal framework and a visual type
51:42
representation of it um and you know now my wife and i michelle and i have planned that we want
51:48
our mortgage paid off at a certain date and certain age um but we're both on that page and we
51:53
both love that idea and every sort of six months i just give her an update of where the loan balance is
52:00
uh versus where we think it should be and it's you know generally it's a little bit less so it just keeps our
52:05
focus um what have we got here someone said make automatic payment set and forget yes
52:10
definitely because you want to keep it away from here you don't want to have to make that decision every payday you want to make it
52:17
automatic where you can so try and do that love it um set myself targets and one of the
52:22
progress against targets yep definitely very good military analogy there mark targets
52:29
but yeah it's as simple as that just make it a no even as simple as making it a graph
52:35
where you should be versus where you are um i mean that's all we do in financial planning we
52:41
map it out and then we figure out okay well dennis you're going to get to this amount which is what you said but actually you're on
52:47
track to get to this amount which you know that's an extra 500 bucks a week in retirement or hey dennis uh you're not
52:54
saving as much as you need to you're going to either have less in retirement or you know you need to fix this guy up and
53:01
make it a little bit more and you will actually get to your goal so always always revisit and course correct where you can
53:08
um i will always pay something in the savings even if it's 10 bucks yes it's a fantastic feeling isn't it even
53:15
if it's ten bucks i mean we i don't know maybe it's society now we sort of you got 10 bucks whatever but
53:22
any little bit can build up to a giant dick some if given enough time
53:27
which has been tested um with let's say one may make a fortnightly deduction from
53:33
payroll minimum of twenty dollars per pay well there you go it's easy and what's even
53:39
easier is that you just deal with payroll in that respect to set it up and to change things which
53:44
is great um jackie's hit us with daily account which pay goes into on payday take out
53:51
everything which is over and above what's in the budget for next fortnight yep so you know exactly what you've got to work with yeah and it keeps you
53:58
gives you that certainty to stay stay focused yeah um if i can pay my off my mortgage should i
54:04
it would mean using voluntary accountant dfpss cat a or keep it invested
54:10
that's a great question now it's just been sent to me so i won't call you out um yeah yeah let me go through these slides
54:17
and then we'll just get to that question at the end if that's cool um and jonathan it's good to be realistic
54:22
with your budget expectations learn to live within things yes yeah and it and there's always a little bit of um what's
54:29
the word a little bit of adjustment as we begin this journey if we've never done it before
54:34
but i can guarantee you we don't guarantee much in investment worlds but i can guarantee you the more you
54:39
apply yourself to it the easier it gets and my best example of that is when kiwisaver first came
54:46
about before 2007 it was like a hit to the pay path
54:51
because suddenly you were paying out money that you never had to before and it was a shock
54:57
but then over the course of those fortnights after they had months turned into years it's just
55:02
secondary nature so you know i've changed jobs a few times i just expect that my new job kiwisave
55:09
will come off and i have a net enough money to play with so to speak um so it's just it's part of muscle memory now
55:16
which i know that a lot of your training and military service is all about muscle memory as well so there you go
55:23
um for my calculations 4.7 mortgage rate there's a threshold of which it is
55:29
better to pay the mortgage over interest investing not financial advice yes no that's cool all right that's interesting
55:35
you've worked it out um and i'm guessing jonathan just on that 4.7 you've worked it out so that if you
55:41
had a tax back inflation you get to an investment rate that you need to be able to offset that
55:47
is that we are all good if you have to go to your next meeting that's cool um
55:53
or just while jonathan answers that one so making room for investing start small don't
55:58
suddenly launch into yeah five and a bucks payday because if you have to change it the next payday or stop it or
56:05
whatever you need to do it's just going to be a little bit disheartening so start small and then build up from there
56:10
remember a little and long knowing our numbers because it's very important because if you're going to
56:15
find something to be able to invest you do need to know how you're spending money and where you're spending your
56:20
money obviously keeping it automatic a really key part of that as well is know the why
56:26
of why you're investing i mean it's great to get your money working for you but just have a little bit of an idea of
56:32
well if i put it into share markets i could get this and that could mean i could do this just the why just try and
56:40
meet that out even using smart goal acronym to try and do that a great way to remind yourself and a
56:46
great way to keep yourself focused make it automatically talk about that keep it away from trying to make
56:52
decisions and last but not least review regularly course correct if you need to
56:57
and that can either be you know if you're ahead of where you're tracking brilliant love it keep going uh and if
57:03
you're slightly behind where you should be then you know what what do you need to do to change now
57:09
to have the biggest impact to actually achieving or um
57:14
you know uh exceeding your goals that you want to have so as long as you do it early enough then unlike me at 48 i'm
57:21
not going to have to make massive changes to try and hit the goal so to speak
57:27
um oh cool thanks jonathan for clarifying that and if everyone can see it hopefully uh based on a long term
57:33
average return of seven percent on the s p 500 which by the way is standard pause 500 it's the 500 largest companies in
57:40
the u.s and the time frame of 10 plus years yeah and it's really important when you do
57:47
start looking at books looking at those sorts of things that
57:53
you consider the long-term assumptions rather than just sort of looking at the last two three four five years
57:59
um the only thing the only caution i've mentioned about the last 10 years
58:04
that has been since the the gfc um you probably want to look back 20 30
58:11
years because the the last 10 years is basically 2011 to 2021 yes it
58:18
accounts for a pandemic in there but there's a lot of extra money been sloshing around the system with lots of
58:23
low interest rates um so just if you take it back prior to the gse interest
58:29
rates were high inflation was high and there was a bit of excess in the system so to speak so at least it gives
58:34
you a bit more of a grounded return as well um so yeah we know about investment goals
58:40
so i won't cover that uh action plan so obviously after today we've got some workbooks with where you could make it
58:45
work feel free to write it in there um and uh what i will do now is
58:52
share the link for our feedback so if you do have to go um feel free to go and thank you so much
58:58
for your time mark over to you for a second and then we'll answer that question as well
59:03
uh okay dennis thank you for that um just a couple of points that people raised and
59:09
going back to the person who asked the question about should they pay off the mortgage first i think you mentioned
59:15
you're a dfss member um
59:22
okay right so a big plug please remember all of you who are members of the cat a and the cat
59:28
c you would have received a letter advising that the scheme is able to provide you with a free financial plan
59:36
um so far we've had about 200 people registered for that financial free financial plan please
59:42
do something about it because that financial plan will help provide you with the information to enable you to
59:47
make the decision about do you invest as opposed to pay off the mortgage and the stats that i think it was
59:54
jonathan was raising are very valid while he was doing that i was quickly thumbing through a couple of books i've
1:00:00
got here that actually show the market returns going back from 1900 onwards and i think
1:00:06
again your figures are consistent with the long term as opposed to just the last 10 years
1:00:12
just a couple of other points as well um so we've talked about the dfss we've talked about the flex saver scheme
1:00:18
please if anyone wants information about that or their kiwisaver scheme go to the force financial hub and have a lot there
1:00:25
all the information is there and happy to take any queries that people might have just email me benefits
1:00:31
at nzdf dot mil dot um nz and then the last point is that we have
1:00:36
a resources guide that we put together over a period of time which gets updated every month around where people may go
1:00:43
to get additional information on investing there's actually a lot of material out there that's free
1:00:48
through webinars and podcasts and things like that and there's some really good local stuff but there's a lot of info
1:00:54
international material as well but on top of that there's a range of magazines and bulletins and bits and pieces that
1:01:00
um i get and subscribe to um and so um it depends on whether
1:01:05
people want to spend the money or not but there's some really good stuff that's available again both local for the new zealand market
1:01:11
but also um and uh international and things as well so anyone who wants that resources list
1:01:17
again just email me and i can send it send it out to you and just the last thing around is also
1:01:25
the of course hopefully everyone's aware that we actually have our own financial advice mortgage broker service uh
1:01:30
multi-direct limited if you you can access their site either by googling milestyle direct or going through the
1:01:36
forced financial hub and you'll see that they have a range of information there for us as members of defence and our
1:01:43
families and that includes a range of webinars and podcasts that they've actually put together for us over the
1:01:48
last couple of years and there's a couple of there that focus on uh investments and things as well and
1:01:53
they're very good very good knowledgeable team of people to um you know to get information from as well
1:02:00
cool um so i for those of us that are left this is tomorrow's topic um
1:02:08
investing strategies but if you've got the workbook you can fly straight ahead uh but yeah active versus passive so
1:02:15
just getting a sort of an understanding what the two terms mean their pros and cons
1:02:21
um types of funds how to pick the right fund the difference between speculating versus investing
1:02:28
uh and then you know investing income and capital gains so how can you use it to your advantage
1:02:34
so to the person that asked a question about paying off the mortgage or from their cat
1:02:40
a savings definitely definitely make use of that financial planning process because
1:02:47
it'll hopefully spark up the ideas that it's not just as easy as comparing the
1:02:52
math because it definitely is it definitely works because it's a certain return you're going to pay up your mortgage
1:02:58
but then what do you do do we have the um stick ability to then take those morbid claims and build that fund back
1:03:05
up these are some of the key questions that will come out of that financial planning process but then at least you've got the maths
1:03:11
and then hopefully you've had that you know the more holistic conversation uh about it as well um i don't know if that
1:03:18
person's still on but if they are then answers that question i guess we're just just interrupting that dennis one of the
1:03:25
things about using your cad a funds to pay off your mortgage is yes you're getting yourselves perhaps into a more
1:03:31
financially secure position but if you look at the latest messy university figures again on what one
1:03:38
spends on retirement and they've just they've actually just released a second set of figures for 2021
1:03:44
um but basically anyone retiring or planning on retiring an orc and wellington in christchurch as a couple
1:03:50
you're going to be spending about 1400 a week of which 672 comes from national
1:03:56
super and that means you need to you're going to need to have um 800 a week coming from other sources
1:04:01
to give you that income or that to give you that level of retirement that we all would like to have
1:04:07
and the problem is that in the past people thought well i'll downsize i'll sell my big flash house i've got one
1:04:13
location i'll downsize and buy a cheaper house in another location and use the difference to supplement my retirement
1:04:20
income the problem is that that the options for people downsizing are getting less and less because house
1:04:27
prices are increasing in most regions around the country and so the idea of
1:04:32
having that nest egg may not be available now as an option for people when they anticipated they were going to
1:04:39
have that as their main source of retirement income so that's the thing to think about and so one of the things we always encourage everyone to do with
1:04:45
both their kiwisaver and the dfss funds is to have a plan
1:04:50
uh work out how long that money needs to last you and you make the assumption it needs to last you for 25 years plus
1:04:56
and um you then need to have a plan around what sort of income that will generate you and how much you drill down
1:05:02
over that each of those 25 years to supplement your retirement income
1:05:08
brilliant thanks mark um and johnson great question jonathan you've seen a little bit uh investment clued up there
1:05:14
i think uh just ask a question about researching companies for value investing for within the scope
1:05:21
probably more from a point that it's a it's an investment strategy or philosophy
1:05:26
um rather than us trying to um delve into how value investing works so
1:05:33
just as a precursor we'll probably cover it tomorrow but you know value investing is about trying
1:05:39
to find companies that represent good value funnily enough
1:05:44
and buying them at the right price and then you know holding on to them in terms of investing for the future and
1:05:51
a good good example would be warren buffett if you want to see how
1:05:56
they buy and hold for the future and value investing if you think of it as understanding knowing the company
1:06:02
knowing their opportunities so it is quite an active decision-making
1:06:08
process so we'll touch upon active hassle decision making in terms of that last comment there
1:06:14
about the 3 withdrawal rate you need 1.38 million include and
1:06:20
the the retirement commission i think their figures are you actually need about eight hundred and nine thousand as
1:06:27
the latest figure you need to give you that eight hundred dollars a week to supplement national super and this is
1:06:33
all predicated on the basis that you're actually owning your own home and you don't you don't pay mortgage you don't pay rent anywhere and of course we're
1:06:40
going to have more and more younger people coming through who for a whole variety of reasons probably will be paying rent
1:06:46
or maybe still paying a mortgage when they ultimately retire and so this is where our society is
1:06:53
going to be changing quite dramatically moving from where we were an owner property democracy to where
1:06:59
we're going to have more and more people actually be renting rather than um you know having their own home and
1:07:05
that's going to ult totally alter the the dynamic of being retired as well
1:07:11
yeah yeah yeah it's interesting um times isn't it um uh i just had a question the zoom link
1:07:17
email received the webinar where should we go to access recording um the the recording will probably be available in
1:07:23
say five to ten working days a couple of weeks so on it to get it up
1:07:29
um yeah so it will be there and the zoom link is that is was it on the email mark however
1:07:36
um so if you uh i'm gonna email paul and get him to send me the documents uh and
1:07:41
then anyone who wants the documents just send me an email to benefits at nzdf.net and i'll send them out to you but i need
1:07:47
to get paul to send them to me first oh yeah that's right and then and the zoom link for the next webinars coming up are
1:07:54
they anywhere available yeah they're on there again if you haven't got them for the rest of the week email me and i'll
1:08:00
send them to you because i've got them i've got them through the benefits site and things so they actually went on general notices
1:08:06
that we posted all around the place but for those of you who may not have seen them then i can send them out to you again
1:08:11
brilliant so um to the person who asked the zoom link um just email benefits at
1:08:17
nzdf.mill.nd yeah cool that's good and then that'll that'll keep mark busy for the afternoon
1:08:25
um now does anyone else have any questions um oh here we go it'll be interesting to see what happens with
1:08:30
super as the number of beneficiaries of the skin increases may need to increase eligibility age which makes them more
1:08:36
important to plan for retirement early yep definitely agree with that because at the end of the day jonathan
1:08:43
it's about control and choice the the ability to pick your own retirement date
1:08:49
um same with you know clients that have uh had a long time ago where they've paid off their mortgage it's not just
1:08:55
paying off the mortgage it's also the fact then they can choose to go back and study they could leave their
1:09:01
jobs and not sort of at the behest of having to earn an income to pay for the mortgage to keep the home
1:09:06
now it becomes a case of well i don't have to pay the loan anymore got some investments what else can i i've always wanted to
1:09:13
take a six month holiday or whatever it might be so it just gives you the ability to plan
1:09:18
and look i don't know about all of you but personally i'm planning you know i'll probably retire about 65 or later
1:09:25
because i really love what i do um but if health prevents me from
1:09:30
working i know i can retire a bit earlier than 65 if i needed to so it's it's
1:09:36
my own choice my own control over it and knowing that if government does change it it's not going to affect me greatly
1:09:44
but yeah good comment i think anyone retiring after 2040 and jonathan i don't know where you've
1:09:50
whether you fall into that category or not but the news ain't good because basically my generation's spending all
1:09:55
the money um and so something's going to have to give whether it's the age of eligibility
1:10:00
or the lump sum the payments that are provided through national super or accommodation of both
1:10:06
uh because um you know apart from we i think from memory new zealand now
1:10:12
has something like 600 000 people getting national super but in addition to that we actually have about
1:10:18
300 000 people are on benefits of other types you know whether it's a sickness benefit mental health drug dependency
1:10:25
alcohol dependency all those sort of issues and something has to give at some stage a population of five million people can
1:10:31
we really afford to sustain um nearly a million people um getting benefits of one sort or another and so
1:10:38
that's why something will have to give in the future and particularly with more demands in the health and education
1:10:43
sectors and everything else and so it's inevitable that there will be changes
1:10:49
one one shape form or another and that's why for young people and i don't know um you know what category you fall into
1:10:55
jonathan for young people it's critical that people actually think about these issues now because i know from personal
1:11:01
experience i'm 62 and i just can't believe how fast the years have gone and and hey presto now
1:11:06
you're facing retirement around the corner and i can remember starting work as a 22 year old straight out of
1:11:13
university and i can still recall it as though it was yesterday i just can't i i can't believe how fast the years
1:11:19
have actually rushed by definitely definitely i can say that too
1:11:26
you're a lot younger than me [Laughter] um right so are there any questions if
1:11:33
not then we will wrap it up and get ready for tomorrow's session so
1:11:39
don't forget that tomorrow i just have to quickly make sure it is on investing strategies that you're going to screen
1:11:45
but it's at one o'clock same time um and yeah today was all about finding
1:11:51
that extra bit of money to invest and then now we're going to start delving into how to invest and what might appeal
1:11:59
um so yeah awesome brian welcome good good to have you back and we'll see you again tomorrow
1:12:05
um no questions all right well mark i'll email you that pdf so you don't have to go
1:12:10
and um then um everyone else you know if they want it they can come to you and we will
1:12:16
catch you tomorrow okay so thanks for that have a good afternoon everyone thanks
1:12:21
see you and uh to everyone stay safe keep well enjoy your tuesday evening
1:12:26
tuesday evening and um thanks so much for your input and hopefully tomorrow we'll have the same exciting day as we did today
1:12:33
all right i'll leave you too thanks

0:02
there you go recording in progress um so we are up to 24. um
0:09
oh let's let's play a challenge does anyone want to take us through the cutokia
0:15
got a couple more opportunities to step up to the plate i did a webinar earlier this morning and
0:20
um someone took us through and i have to say i was better than my good self uh no just put
0:27
your hand up if you do otherwise i will happily take us through it
0:33
no no no we've still got two more days to worry about this uh
0:54
thank you for listening to me again i'm hopeful someone else might take us through it tomorrow um and just in the middle there in case
1:00
you didn't know that our new name retired commission
1:06
is who we are and we're happily providing you with the sorted website we won't worry about that
1:12
one but the sorted website is basically the little mouse as you know
1:17
um and sorter.org.nz in conjunction with because the force
1:23
financial hub is your own internal website for all things financial and it's marx pride and joy putting it
1:30
together so just so you know mark is also on this call so um you look ask lots of questions
1:36
um we can't give you any personal advice but the cool thing is with mark on board he can answer all the technical stuff
1:42
about what um specific benefits there are um and also
1:47
talk to the uh well the kiwisaver product as well as taxes over the product because lots of questions come
1:53
up about that um and what else and then yeah it also refers to the sorted site so you can
1:59
actually make use of both worlds really really well but sort of is all about giving you free access to the tools
2:06
and specifically all the calculators on there we'll use one of them today as well as giving information to just
2:14
really empower us to make our own financial decisions so you may or not
2:20
may not remember um six key rules to invest in so we're just gonna have a quick recap by way of
2:26
a video so you don't hear me talk all the time um and this is really just a bit of a
2:31
recap but if you haven't seen it before it goes through the six key rules of investing obviously we're not going
2:37
through all six again today but we are delving a little bit deeper into one a couple of them so here we go
2:43
quickly watch this [Music]
3:29
[Music]
3:38
so
4:18
[Music]
4:25
just love it when i click to go to the next one it always replaces the video um so here's what we're covering today i
4:31
mean there's five points so like i say there's quite a quite a bit of detail uh but just like yes and all the previous
4:37
ones throw those questions through and comments because it's really what keeps the whole webinar alive not just me
4:44
uh but it's actually your interaction with me so i'm looking forward to that um so active versus passive investing so
4:51
you may have heard this term being thrown around before oh i'm an active manager and no i'm passive
4:58
what are the two mean um and there are some other different investment philosophies
5:03
sort of sitting beneath that as well um and really just trying to figure out are they buzzwords or do they actually
5:09
mean something to us types of funds so
5:14
sort of delving into how we invest into the funds and you
5:20
know there could be what we call multi-asset funds so remember our four key assets we're going to touch on those
5:26
again in a second um but that means multiple assets that's as simple as it is or there could be
5:32
single asset funds so it might just be one asset might be cash might be just bonds might be just property might be
5:39
just shares so types of funds that are out there how to pick the right funds so we're
5:44
going to flick back to the sorted site and use the smart investor tool again which you
5:50
probably all have used hopefully um but just sort of run through that really powerful and awesome tool
5:57
uh speculating versus investing we've got a little bit of a poll there we made it really relevant because we're asking
6:03
about crypto but just learning the difference between the two as a speculation or investing uh
6:09
because it's it's a good thing to have and especially nowadays with um all this talk about fomo you know fear
6:15
of missing out and i don't know if any of you follow any reddit threads but you know to the moon if that means
6:22
anything and all these sort of mean stocks that have come about
6:27
yeah you'll probably know exactly what i'm talking about if i mention that and then last but not least investing um
6:34
income and capital gains so what does the two mean what is a what's a dividend mean uh some
6:40
more sort of investment oriented or intake terms coming into it so yeah keep the questions coming um
6:48
and we'll just get into it of course so remember
6:53
uh i've talked about our four key asset classes um i'm not going to ask you to name them
6:59
because we know what they are but cash bonds property and shares and remember that they sit on
7:07
sort of two sides of the page remember one was our airbags and one was our engine and our car what what were the
7:14
two names can everyone remember it was if i drew a line between
7:20
bonds and property there was cash and bonds that was a type of newton
7:27
asset and property and shares were a type of asset can anyone remember hey sam
7:34
well done yes so excuse me uh income and growth so income assets
7:40
are like our airbags and our car they're there to protect us um and hopefully give us a
7:46
bit of a return and then our growth assets uh the engine in our car that pull us
7:51
forward so the more powerful the more money you put into your growth assets uh potentially the easier the ride or a lot
7:59
easier to ride but the quicker your journey to your destination potentially that's the key word we have to be able
8:04
to ride through the ups and downs up time great times are really easy to
8:10
ride through but you know when markets sort of drop or they go sideways for a
8:15
very long time it's hard to keep that focus so remembering in our little six step video that time frame is so so so
8:22
important so sam big shout out to you income and growth well done um
8:28
and then if we took that next level down just bearing this in mind we look at our
8:33
um you know in our investor profiles or our actual fund types that we have that can meet
8:41
our investor profiles so you've got those mixture there i mean these are the common ones but picky and some fund
8:47
managers call them things differently but generally defensive conservative balance growth and aggressive aggressive
8:54
is easy to understand what it is and perhaps defensive as well it's just when you get to the conservative balance to
9:00
growth it's a little bit sort of hazy as to how it's invested so
9:06
generally speaking here's my little mask on if you look at a conservative you know if we're looking at that income
9:12
level the airbags you would have you know close to
9:17
usually conservative maybe 75 to 90 in income assets so
9:24
anywhere from 10 to 35 in growth assets so
9:29
very very small allocation to growth but it's all about the protection all about the airbags and then if you go to
9:36
the flip side on a growth one it all becomes about the growth assets more about the engine than it does about the
9:42
airbags it's nice and simple any questions that there was just a
9:48
quick recap because you can start delving into things and just while we wait for that um now quick question what does
9:55
liquidity mean to you all it's our first sort of uh investment term uh mark just so you
10:02
know we're up to 31 which is cool so what does liquidity mean to you
10:09
cash yeah oh that's my name's sake awesome um yeah cash cash is
10:16
liquid yup but anyone want to venture against what liquidity
10:21
means to us like guess cash is a liquid investment and that might sort of give away what
10:26
liquidity meant
10:37
ah sarah awesome love it um oh god now everyone's all come through at once um so yeah sarah how quickly you
10:44
can get it into cash here so you know what are you invested excuse me
10:50
what are you invested in and how liquid is that investment so if you're in cash it's pretty liquid isn't it because you
10:56
can exchange that cash for goods and services whatever it might be but if you're in let's say a bricks and
11:03
mortar residential property it's going to take longer to realize cash from that property
11:09
either by way of selling it or by way of mortgaging it it will take time so it
11:16
becomes a little bit less liquid or a liquid as an asset shares
11:23
you know as long as there's a market for them that's the key are very liquid as well they can be bought and sold
11:29
in a matter of seconds um so they can be treated or considered as liquid assets
11:35
as long as it can be sold quickly that's the key and what have they got coming through so
11:40
jonathan hit us with how easy it is to access your investments i liquidate yep perfect um
11:46
what what you do have oh okay i think what you're saying to the person i can't say the name because
11:52
they sent it just to me it means what you've actually got to your name is that what you meant um
11:58
hopefully that's what you meant um yeah i think you can look at it as liquidity as me
12:05
as you know how quickly can you cash everything up and have a pot of cash appropriate
12:11
so what we need to bear in mind is with liquidity every one of these investment classes
12:19
has different liquidity aspects or different characteristics to it i mean
12:24
it's important to remember that you know if we're investing in cash bonds the reason why they are lower
12:31
risk relative to property and shares and alternative assets
12:37
is because they are relatively liquid and you can realize them relatively quickly okay
12:43
when we go to property and shares uh and i'll talk about alternative assets because there's some things in
12:49
alternative asset space that are not liquid we want a premium if we're going to lock
12:55
our money away for a length of time because shares have a volatile nature
13:00
property needs a long time to sort of come into its own if we're going to lock it away for that length of time yes you can sell it
13:07
quickly but you need to give it time to to do its thing so to speak you want a bit of a premium on it you want a better
13:14
return so hence why the return profile or the return characteristics for property
13:20
shares alternative assets can be higher relative to cash involved
13:27
and then so that there we have asset classes and then the other thing we need to be
13:32
concerned with in terms of liquidity is the type of fund we've gone into
13:37
so kiwisaver is easy because there's only two things it's either you can access it for your
13:43
first home buy you can only leave a thousand bucks in there and that's it or once you've done that
13:49
it's for your retirement that's the two things yes there's um
13:55
serious illness considerations or financial hardship but generally speaking that's the two reasons
14:01
that you can get your key saving money out so you could think of kiwisaver as
14:07
being in liquid for us to use day-to-day but it is portable so you can
14:14
shift your kiwisaver provider you can change from a defensive to a balance to an
14:20
aggressive or vice versa so we just want to be very clear about that there's two
14:25
different types and a great example with the entity of flexi saver is it's a very
14:32
um i guess liquid portable investment so the long investment markets are working
14:37
well you've got access to your money you don't have it locked up so you've got
14:42
access to your money i think mark was it three four days five days working days a week
14:49
sorry mark good oh yeah cool correct just let it come through so you've got you've got a little bit of a time frame but otherwise
14:55
you get access to the money so that's really important and when kings over monies and i've just mentioned it's got
15:01
alternative assets and you might have seen it that some providers are now moving into
15:06
uh private equity venture capital and all that means is that they're using
15:12
some of the money to fund a business that they believe has
15:17
great potential for the future very very high risk and that money you can't just request it
15:24
back so you'll actually see this as the market tends to develop that
15:29
private equity venture capital you're starting to see um i think there was alberium pathfinder
15:36
and even simplicity they're moving into community housing projects so they're actually trying to
15:42
use some of the kids over money to fund projects to generate a return from as well
15:48
so it's just touching upon the changing investment landscape and if anyone's got
15:55
any comment on that feel free to send it through but we just want to be careful about
16:01
the assets we go into and their what we call liquidity profile all good
16:09
hopefully everyone if there's any questions coming through on that all right all right so let's ask the
16:16
question um because i don't want to assume that everyone knows it or doesn't know it so
16:21
have we heard about active and passive what does it mean to you hit me with some definitions
16:30
and i mean i think to jonathan's question yesterday i talked about um we talked about value investing um so
16:37
i'll delve into that a little bit as well but um this is just a nice nice little toe
16:43
in the water on investment strategies so active versus massive i think i can hear keyboards clapping
16:51
through my headphones um oh there you go mark's done it
16:56
already mark well done uh actively try and outperform the markets yes um how the assets are handled by the
17:03
manager oh very good yeah i love it very good anyone else want to venture
17:10
so we've we've um so the person only sent it to me so i can't give you the accolades
17:15
uh but yeah how the assets are handled by managers so how do they invest their money what's their investment philosophy
17:24
and it's really important um so you may have heard of late because it's becoming
17:29
very commonplace now about the ethics and the morals of how we invest money so
17:34
this is about what is the investment manager's philosophy how do they take my money and invest it
17:41
do they have a belief that the market is what we call it efficient
17:46
so you can't beat the market you better just have your money in the market and let it go
17:52
i.e that's passive management or do we believe there are pockets of
17:57
opportunity where a manager can go into it make some money for the investors and
18:03
get out and go into other pockets so active management so what do we think what what's our i
18:10
wish i could take a quick poll actually what are we sort of where do we think things sit or actually my question
18:17
more to the point is because you're with your kiwisaver manager and a lot of us have picked who
18:23
we're with um are they active or are they passive
18:33
see what comes through on this one so just to summarize as chat comes through
18:38
active management is about taking money and you know i guess trying to beat the
18:44
market but trying not all the time but trying to find pockets of value
18:50
or growth where you can deliver better returns
18:57
to the investors and a passive strategy is finding how you want to invest and just
19:03
investing in the market according to your risk profile and sort of like the type just let the tide
19:10
take you up and down but over time hopefully upwards um here
19:15
we go cool i'm just catching up to the chat um oh brilliant thanks mark for clarifying that yes so enjoy saving
19:21
schemes are actively managed so just in case anybody's thinking what's what's the most esteem or things in here
19:28
so actively managed um lian's active dies active camera active
19:34
uh we have here i have active my husband as passive he's a big consideration for this and that's a great point um
19:42
so again you've just seen it to me so i won't say but this person brings up a fantastic point um what else we've got
19:48
active active uh jonathan jonathan was a man yes so
19:54
with these questions personally i think passive is best for long-term growth i.e index funds etfs and we're going to talk
20:00
about those soon um statistically very few active fund managers beat the market long term yes and that's the great point
20:07
about this question about active versus passive um and look i've been in
20:13
financial markets 30 years so i've seen it come and go on both sides
20:19
of the page so you know i'd like empirical evidence
20:24
as what jonathan mentioned around statistically uh yeah 80 of active managers don't tend to beat the market
20:31
on average consistently over the long term still leaves 20 that do so we just
20:37
need to um be conscious of it and then our other anonymous contributor
20:43
did mention that cost plays a massive role so you know
20:49
and just look at it this way if you've got a manager that's hopping in and out of markets trying to sort of
20:54
find some value or some growth for you that will cost a lot more time resources
21:00
research than a passive manager that just seeks to put money into the market and let the
21:07
market take it where it needs to go so cost does come into it so active managers on average
21:13
tend to be more expensive than passive managers on average though it is
21:19
getting cheaper on both sides but i do like your point jonathan
21:27
but again it's you know i always i always think personally um warren buffett who's a
21:33
very famous investor the sage of omaha wasn't just warren buffett but needs a name that comes to mind um he's an
21:40
active manager but he buys and holds for the long term so and i consider him active because
21:47
he looks at the market finds a company or two that he likes and researches
21:52
everything about them so that he knows exactly their um their strengths their
21:58
weaknesses the opportunities you know the old swot analysis of this he knows their
22:03
potential over long term and then he will buy a stake in that company and hold it for the long term and when i say
22:09
long term 5 10 15 20 years 20 plus years um he will hold it for that time frame
22:15
so that you know that's an active decision to buy those companies
22:21
so does anyone else have a comment about it as well and and some common uh names in new
22:27
zealand if we're thinking about active we've got mercer um from uh working with the nz deer for the kim
22:33
saber uh and i think for flexi saver components as well mark was that that's separate mess up
22:42
sorry you can have mute as well if you like so it's easier
22:48
all right that's good time so
22:55
oh cool this is good oh yeah all managed by mercer so brilliant so you've got you've got mercer you might have a milford um you might have
23:02
fisher funds you might have um aspiring asset management there's some
23:08
names in there that i've thrown in there that you may not have heard of before like aspiring but um they are what we
23:14
consider active managers and then brilliantly uh my participants here have come through
23:19
with some suggestions on the passive side yes simplicity is passive um because they
23:25
you know invest and we'll talk about indexes soon or interesting uh nzx smart
23:31
shares have passive etfs or exchange rate funds yes um colonel was an interesting new passive
23:37
provider yep so you've got different names attached to each one um and it's really important
23:44
to know if your own manager is a active or passive manager um because if
23:51
you know if you have a belief or a philosophy yourself that you know i just want to put money in the market and
23:56
the market will take care of it and i don't want to pay a lot for that then you want to know if
24:02
your manager is a passive manager on the flip side if you have a belief in active management that active management
24:09
can deliver you want to make sure that you are with an active manager and not someone that is sort of a closet
24:16
passive manager and it does they are out there so they say they're active but if you look through how they invest
24:22
their money it's not too dissimilar to a passive manager yet they charge high fees for it so it's things we need to
24:29
start being aware of hopefully everyone's going right find out that passage but yeah active usually
24:36
trade shares quite frequently looking to enhance the returns and passive buy and hold a range of
24:42
shares and if you on your travels after today start looking and researching
24:47
things there's two terms that come to mind alpha and beta so alpha is what active
24:55
managers seek to deliver to you alpha and alpha is the return over and above
25:02
the market return so market return we can think of as passive investing or
25:08
index investing so that would be what we call data so you get the market return which is great
25:14
but an active manager is looking for alpha returns um and another thing to look for as well
25:21
don't always expect that an active manager will always always outperform
25:27
you need to take it over a bit of a longer time frame so you know two three
25:34
plus years rather than every month a month or every year because there can be times when the
25:40
investment philosophy doesn't quite match up to what the market's doing so you need to give it time if you are
25:46
with an active manager it's really important and then passive buy and hold a range of shares and don't get me wrong
25:54
you can have an active and a passive manager in bonds
26:00
as well as property but don't just think this is about shares is that all good any questions on that
26:08
so we've now given you insight into active and passive management uh but if there's any questions do ask
26:14
i'm gonna flick and then we're gonna watch a quick video from um well she's exited the business now but
26:20
this is carmel fisher so she set up fisher funds and we're going to watch about 50 seconds because it's quite a long bit
26:26
but the first 50 just talks through um around some of the fun types and
26:32
makeups no questions going through cool all right so do come through i'll ask the likes of this particular here we go
26:51
[Music]
26:59
a manage fund is an investment where your money is pooled with other investors and invested in a fund that
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then invests in in assets be it shares or fixed interest or property or whatever
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now that's managed by a fund manager on your behalf and so when you invest in a
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managed fund you receive units in that fund at a certain price and the number of units doesn't change unless you put
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more in or take some money out but what does change is the unit price and the unit price will go up or down every day
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depending on the value of the underlying assets cool so
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what we wanted to do there is um is talk because it leads perfectly into
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so we i think you all remember a managed fund is exactly
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what carmel said a pooling of all investors money that are in that managed
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fund into a pot and then that pot is invested into different types of asset
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classes so all of those is a fund that is managed simple as that i know go figure manage
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fund um and one thing to bear in mind as well is overseas if you read us
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articles and so forth they talk about mutual funds uh same difference except we call them um managed funds in new
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zealand so just to be aware kiwisaver is a managed fund that's all it is
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and the difference being is that it's got some extra rules attached to it to make it kiwisaver and to make it
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compliant so what you've also got on the screen are two other types
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of well two other fun types so the acronym etf exchange traded fund and index funds
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so does anyone know or want to venture what an exchange traded fund is
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or even what are the index numbers
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or if you know if you're invested in a um
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awesome brian i'll definitely answer it uh if you are invested in an etf now or an index fund maybe just throw me out
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who you're invested with we can use them as great examples
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i've once read a stat about exchange traded funds um is that there were more of them than
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there were companies or something or other and it was like what how does that work
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um it might sort of give away what the exchange traded fund is so um
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oh here we go they're coming through i was waiting for people to type obviously um i'm loving this person she just sends
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it to me as anonymous so i can't say um but yeah love it here we go i'll just
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bring it up index equals following a particular index eg mzx 50 the nasdaq
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brilliant love it thank you perfect uh mark oh mark actually said yes in the pathway
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global responsibility fund uh so that's uh is that a etf or an index mark
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um thanks mark uh jonathan etf takes a collection of stocks then tracks that
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collection for examples and etf electric car companies i think jonathan's our resident uh investment expert that works
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in the nzdf so love it jonathan um yeah so it's a good way to think of it um etf
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exchange trader fund is like a basket of companies um or a collection of companies it's a
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great word that can be traded on a stock exchange and you know in the in the old days it
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was just a pure basic one uh but now you're actually finding that exchange or etfs will call them into yes
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but shortened to me um are being created to you know you might get like to jonathan's example
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one for electric vehicles um there was a uh the ken show moonshot
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fund etf which basically tracks all these companies um like space exploration or
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moonshot companies ones that if they succeed will pay off in the
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multiple multiple multiples um so hence what's called the moonshot fund but lots
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and lots of uh etfs have been created and you know disbanded
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daily to reflect um us as investors what we might want to
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invest in um so louise asked so is etf a group of companies yeah it can be or a
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group of assets um except the big difference or the big advantage is that you can trade it
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so you have what we talked about right at the beginning good liquidity to be able to trade that
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investment vehicle daily uh hourly even how often you want to trade it um so yeah you can have an etf or shares you
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can have an etf again for bonds you can have etf for property so don't think it's just
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limited to shares it's also other asset classes as well um so yeah louise i hope
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that answers your question um and then oh someone just sent through they've got the vanguard s p 500 easier
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so again it's a it's um yeah exactly right mark
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um and to that point as well your fund manager from time to time
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if you were to look at sometimes the top ten holdings or their holdings through a
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deeper report sometimes they make mad use of etfs or indices to invest in
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to you know get the i guess the share market exposure they
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want um because it's very easy to do and very cheap to do as well
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um so louise hopefully that answers your question and yeah mark to that point yes you can
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buy them through platforms like hatch um chairs or stake and invest now as well
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um yep yep cool thanks jonathan i think we'll just pull you in who's my resident expert
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this will be brilliant um so yeah to that point uh mining companies and if they gain or lose value
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um the price of their etf will gain or lose value accordingly um so it's sort of
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like a managed fund you can sort of see similarities but the difference being is that you can trade an etf
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so you can hop in hop out do what you want it's it's a tradable instrument
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whereas a managed fund it's an application process and there's usually some sort of process to draw money out
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as well so it's not quite as liquid does that make sense
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hopefully that makes sense brian you said yes please to the definition of idiots hopefully that's
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cool as a definition yep sweet okay cool
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and then we also speaking of index funds so we now know that an etf can be
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created to you know collect up all these different types of assets or
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specific types of assets and create an investment vehicle for people so an
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index fund is what it well someone's already said it anyway um you know it's a fund you can
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go into to buy an index so an index is just a
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i think uh i guess a table if you want to call it a collection again
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if you look at our nzx 50 so that's 50 of new zealand's biggest companies on our stock exchange
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and if you when i say a table you'll have it all in the table format you have all the names and if you wanted to put
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100 into the mzx 50 you would buy that as an index fund and
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you know that your hundred bucks went into 50 of new zealand's biggest companies
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but within that index i know we're getting into the details so please stick with me um
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within that index the um i guess the
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the uh percentage or the allotment to each company will be according to their
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size in that index so if you look at our index i think you know if we rewound
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um a year or two our biggest one i think might have been zero or a2 jonathan maybe he could point
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in that right direction and then over time a2 has lost some of
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its value quite a bit of its value so it's still in the index
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oh a2 milk and fisher and michael healthcare will be the one
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you know it's still there but because it's not as big as it once was it means you'll have less money in that
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you might have more money in another company so that's where passive investment really kicks in because
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who knows what share prices are going to do in the future so are you better to have a share of an index where it
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doesn't matter you'll just get a share of everything or do you
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go with the manager that's active that looks at the nzx 50 and goes well that's great but i don't like a2
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i'm going to remove a2 from my investment portfolio and put that extra money into
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fischer and local healthcare so they can sort of try and you know use
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the index as a starting point but then move around it and try and find
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those opportunities does that make sense is that are there any questions on that
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oh good good question sam so are all index funds passive what about these years
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see we get getting into the nitty gritty um and please do sing out if it's like oh my god what is dana's talking about
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um etfs can be uh well i think if you think of it
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they're active in the way that if you've picked one that you know like uh jonathan's example of mining
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stocks or um uh what's the other one that you've mentioned um
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what was the other one you mentioned without being scrolling back to all the chat mining stocks and
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oh electric cars that was the other one um you know you sort of active buying them and putting
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them in there but generally you don't see a lot of change within an exchange rate of funds so you could say they're
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passive as well because they're very low cost and the reason why the low cost is once
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you've put it together you're not going to change anything it's that's how it is same with index funds yes they're
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passive because they are built to follow an index that's all it is
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so nzx 50 the asx 200 so that's the australian 200
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largest companies um on the news at night if you watch it the dow jones the s p 500 the nasdaq
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they are all names for indices i talk about indexes that's the singular name
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plurals indices but nasdaq is all the top tech companies s p 500 is the largest 500 largest us
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companies and the dow jones you think well there's got to be thousands i think it's only
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12 15. i think the dow jones is very small
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does anyone want to let you know i don't quite know to keep up with it mark if you have no or jonathan hit me on the chat
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but very very small but um sam does that answer your question about index funds
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cool that's good great uh and then jonathan just made a comment index fund is usually managed by a computer against
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the lower fees as the company running the fund doesn't have to base on the manager yeah it's it's all about cost savings um and i'll throw a spanner in
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the works onto that one before we move on um so louise just asked so what's the difference between a managed fund and an
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etf well it's if you think of it the managed fund is managed so
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it infers that someone is managing something on your behalf
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but i think if you think of it as like an extra layer because you might go into the
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managed fund that then invests into an etf huh when you're talking about this um so
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think of the etf as the i guess the end investment vehicle and a managed fund is
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the door that you go through to get into it so now you know if i thought back 10 years you
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had to go into a managed fund to go into market share markets let's say that now
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you've got the opportunity to bypass a managed fund go into a sharesies or a stake or a
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hatch or invest now and invest directly into etfs so
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they're similar and i think just because of the changing landscape
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managed funds are sort of still there you know you want to get someone else do it for you that's great it's all looked
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after and taken care of or you could you know dabble yourself and go into an etf through it through a
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sharesies and know that you've invested in the top 10 mining companies or the top 10
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electric vehicle manufacturers so hopefully yeah i don't think i've answered that too well louise but
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hopefully it's sort of similar oh yeah cool thanks mark so msn market
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provides a good daily report on how arc of course that's good louise um on how share markets around the world
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have performed here um index fund is a good indication how the market is performing
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yeah yeah i mean you remember um uh
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when we talked about this the other day where we had the levels of diversification and we
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went into different countries generally speaking indexes or indices um if share markets are good
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though all generally on average tend to go up but if there's a really bad day like the
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pandemic last year um most if not all share markets dropped so
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all indices dropped so but it does give you an indication of
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the underlying economy as warren buffett sort of said once it's
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you can there's some sort of time delay i can't remember the quote exactly but effectively you know we're going to get out there
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it's a reflection of how well the economy is doing at the moment it might be a bit out of kill today now the one spanner i would
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throw in the works is an index
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is just an index it's not a um it's put together by people as well
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so um the reason and it's just to get you thinking so yes index is probably the
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the end bottom rung of passive management that's where passive starts from
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but the reality is someone still puts together the index and if you look at some articles in the
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u.s some indexes um oh no we're not going to put that in there because that's too high risk and we think that value is too
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high so it's not going to go into the index so even then there's still a degree of um
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human interaction going on so just bear that in mind as well uh what have we got here matcha said
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ends today of saving schemes and managed funds yes you use one fund manager mercer which then invests through 49
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world nine 49 managers which in turn invests in thousands of companies worldwide nine
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major investment types and that's the sort of um excuse me buying power if you like you get working
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through a fund manager you get the exposure to different markets that we as individual people probably wouldn't be
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able to access or perhaps even know about and jonathan said one example of an etf
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index fund is the vanguard total world this is an etf that has index funds of share markets from around the world yep
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and it's weighted to the um the size of the share market so
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if you look at the um uh we call it the miski aqui so msc i
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acwi so morgan stanley capital index um all country world index
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yeah exactly noise uh it's basically if you would look at that it's based on
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countries you know i guess gdp output size and the economy and if you looked at it
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if you wanted the new zealand investment in there it would be very very small because we're a very small portion of
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the whole world economy as such so you'll see fund managers sort of skew
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that slightly in our favor sort of a home investment bias so again that's an active decision
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making that allocation choice uh okay right um how are we going how's our how's our
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head space because we're you know we're talking a bit of detail here so we're good so far
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cool sam's good and jonathan appreciate what you're chucking in there mate it's um good stuff
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um all right so we talked about this before and you know i might just go into managed funds this
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time a quick question is um
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has everyone had a chance to use this particular tool now it's been a couple of days
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yeah cool uh 7.2 trillion yeah vanguard the other big one's blackrock
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um daryl trillian bill as well so it's quite amazing um all right so what what i've
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done is picked on the managed thumbs and it's it's just adding another layer to
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this particular tool it's a great tool to find out those three key things that we talked about but what i'm going to
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show you now is just how to delve a little bit deeper um and look i've just picked growth
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funds and i'll just go with this first one key street so it's a it's a
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i think key streets are craig's investment partners offshoot um you can sort of see the mix which is
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really important remembering our income and growth levers so if we want to maximize growth and
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we're happy to ride the roller coaster then we want to make sure that our growth fund has a lot of money at work
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and share markets all right um this one is 65
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growth 35 income um and you know the average is 80 20 so
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it's it's below average in terms of investment so you know if you wanted to look deeper
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if you're with an active manager and they're putting a lot of money at work and share markets you'll pay for that
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if they're not putting a lot of work into the market and they're sitting on cash then
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you want to make sure you're not paying for that as well so my first question for this particular one would be
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well you're well below the average on investing my money in share markets
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but you're still charging almost equal to average fees high fees
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um what why why why are you sitting on so much cash and it may well be that the sitting on the cash to put it into the
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market when the opportunity arises but it's something you want to know because you're paying what 1.7
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for what is almost a balanced investment does that make sense
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hopefully that makes sense yeah cool all right good
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um and you can see the returns 8.24 versus 9.5 obviously below the average as well um
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so what we can do if we click on this
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um you can see that a link comes up so this is the the next sort of level
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um and you may have already done this when you're you're building your short lists so it'll take you through to the
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main website for that particular provider so you can see here you know all the all the accolades and stuff but
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we don't worry about that we want nuts and bolts so you can look at our funds
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and you know you can view um disclosure statement that's very legalistic i
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always think start with the fund update now if you really don't want to do this and
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just want to start learning it the easy way if you're with nzdf
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kiwisaver the immersive fund look at your monthly update or go to force financial hub
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and look at the update on there because it will actually give you a lot of information about what's going on so you can see here monthly fund fact
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sheet we'll just pick on october uh we will at the growth fund
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then any second now
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so you can see straight away you know some of the details the fees and stuff um you know you see the feed here 1.25
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but on the other page 1.68 so there's a difference so they must charge a performance fee in there somewhere
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that's why it's higher um but here remember i talked about the meci so this is the benchmark so an
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active manager will use a benchmark from this instance it's the morgan
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stanley capital index msci so they want to know that they can beat that benchmark with their investment
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decisions and you can see here for all the investments within it they've got different weightings
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and then here is the asset allocation you can see how they've
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invested the money regionally so what countries and then oh yeah so top top five shares
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top five fixed interest so alphabet apple and cash didn't know alphabet as google
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you know apple microsoft macquarie and amazon so very tech heavy uh in terms of this fund
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and so you know us-based eddy as well
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but the fun fact sheets give you a lot of detail and sometimes
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oh this one doesn't have it but sometimes i put a great little piece of commentary in there mark the the mercer
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one has or the nzdf one has good commentary in it i think from memory
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oh yeah um just yeah you're good yeah yeah yeah yes we we put out a monthly
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report that goes up on the force financial hub which gives a bit of detail but we try to strike the right
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balance without swamping people with too much information but people who want more they're welcome
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to come to us and we can give them more you know if they'd like it it's a case of striking the right balance between
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not not overwhelming people with too much technical information either yeah
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yeah i know it's a fine balance isn't it um and hopefully we haven't um inundated
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people with technical stuff today but no this is this is very good this is very good okay cool um so yeah so there's
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just a quick example or i see someone's asking another quick question um a quick way of delving that little bit deeper so
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rather than just looking at those those three key things that we had right
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there the assets the fees and the performance
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we can actually now look at the manager and this is why i've always said build a bit of a short list maybe two or three
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names four or five names if you want um just so that you can start comparing things because um t street is active
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um but my first question will be why they're sitting on so much cash because on growth i want to know i've
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got at least 80 of my money in share markets and if i don't have in share markets
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then i want to know why if they are expecting a big crash well so be it they're active
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you know how long do i give them until they get it wrong because at the moment they're starting to lag behind the rest
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of the marketplace so it's hopefully starts getting you to ask questions we had a question here do
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you rate these guys other than just how they present their data i.e um i mean it's they're
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an offshoot of a brokering firm um so you know just like any other
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kiwisaver provider and it'll come down to your own preference and i think weigh it up
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in the shortlist if you like the sound of keystroke put them in there but weigh it up against you know the benefits you
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get through your employee scheme your employee kiwisaver scheme
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as well as you know performance comes into it but look at it at five years plus don't look at the short term stuff
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because everyone can change year to year easily
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and look at the fees it's really important because every fee that you pay for every percentage point there's a
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percentage point less that you don't get to have in your back pocket um
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so any questions there i just want to take you a little bit deeper without getting sort of too complicated on
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things but a little bit deeper on that tool um and we just use the managed funds one but you can do the exact same thing with
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gamesaver now uh
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oh one quick thing i'll mention as well so i just have to lower your hand um is if you do build a short list you can
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sign up um to their updates so without being a client i mean this is how i built my
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knowledge knowledge initially and this is how i still read my investment stuff every month
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um i get two or three different fund managers signed up to them and i get their monthly reports and i have a read
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through and it's really really well if you're interested in it interesting um so it's a quick way to start building
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that knowledge as well so question for you all what's the difference between speculating and
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investing whatever
54:02
yeah yeah my namesake's doing well less risk and investing yep investing requires research yep love it
54:09
um so a good example would be if i bought a farm speculating comes with higher risk but higher potential turns yes i love it
54:16
jonathan you must be an advisor somewhere in there because you used with potential always usually potential um so
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if i bought a farm if i bought it to produce an income i
54:26
want to grow some avocado trees produce avocados to sell to bring us an income that would be investing because
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i'm making an investment to produce an income and to have a more
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tangible result if that makes sense um i could also buy a farm
54:46
on the bet that land prices might go up and it might get subdivided into land
54:52
that can be developed so that would be speculating because i don't know if it's going to happen
54:57
but if it does i'm in the money so there's there's a slight key difference into jonathan's point we can use it to
55:03
our advantage depending on how long we've got to invest for
55:08
so you just want to be clear about that and it comes down to
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why are you buying so it's the same with investment assets why are you buying
55:20
game stock shares are you buying it because everyone on the reddit thread said to the moon
55:27
if everyone keeps buying the price is just going to go up or are you buying it because you think gamestop is a great business and can
55:34
actually sell and do a lot from your bricks and mortars stores um big difference between the two
55:40
hopefully that makes sense just sort of touching on that just to make sure so just in that vein here we go let's run
55:46
this poll um do you think cryptocurrency is
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speculating or investing um so oh here we go we've got two oh none
55:59
on the western side speculation i know someone's going to break the mould here it's anonymous i can't tell who's done
56:06
why
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oh there we go we've got investing coming through as well um now in case i know we've got two
56:17
minutes so we're getting towards the end but um i'll stick around for questions so in
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case there's lots of questions we'll happily stick around um all right we'll just send it there i mean the majority
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here i'll just put this up on screen you know and majority said speculating um but a few of us said investing and it's
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look it's interesting it's a sign of the times uh but crypto you know or blockchain the
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underlying technology may have a future but a lot of it has still to do with
56:48
getting regulations in place and making sure that people's money is protected when you
56:54
invest in these things all right so next question for you all um how can we derive income from our
57:00
investments well what can we invest in or what some
57:05
some words you've heard in terms of income
57:10
talk about capital gains so the price of shares going up oh there we go
57:16
ian just about got there i know ian did get there actually die came second uh dividends yes so um
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dividends perfect dividends from shares returns on property exactly right um oh what's happened to my little
57:30
picture oh i had a perfect little picture about the coffee company that's cool that must
57:35
be inspired um on maybe fridays about shares um
57:41
staking cameron can we just clarify you said staking was that a typo
57:47
um yeah dividends exactly right you buy shares dividends now if we don't need that
57:52
income this is key we don't need it get it reinvested now if you're in a fund manager or with a fund manager that
58:00
should happen automatically dividends don't tend to get paid out or interest payments from bonds don't get
58:06
paid out unless you're in a specific type of fund so for our kiwisavers ah crypto cool thanks cameron um
58:13
for our kiwisaver it gets reinvested so that is something like this graph here
58:19
remember i think we talked about it yesterday a little and long every time a dividend is paid or an interest payment
58:26
is made it's used to buy more assets so it also it sort of becomes like the snowball rolling down the hill getting
58:32
bigger and bigger and bigger so that's how you need to think of it um so while we don't need that income
58:40
use it to your advantage to buy more assets now for those of us that have done a sharesies or a um
58:47
a hatch or a invest now or state whatever it might be
58:53
you will probably get dividends paid out to you because they're your assets so dividends come into your cash account so
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just be sure that you use those dividends to then reinvest it's just another quick
59:07
easy win in terms of making sure that you're actually
59:13
using your money as best you can so cameron you might want to clarify
59:18
staking because i don't quite know that term in terms of crypto because i'm nowhere near crypto stuff
59:24
um but i'm guessing it's a way to make money off crypto let me say
59:29
um so today what have we covered now we're at 201 um active versus passive so
59:34
we hopefully know the difference between the two and um i think cameron might hopefully
59:39
be helping me out with the definition of that uh some types of funds that can
59:44
address that so manage funds etfs in the index funds um how to pick the right funds so using
59:51
that tool and delving just that little bit deeper and going into the fund manager's website and finding a bit more
59:57
info speculative versus investing so knowing the reason why we're buying and then
1:00:02
last but not least if we're getting uh or cool no worries uh catch tomorrow as well um and knowing
1:00:09
the reason why we want to invest because that can help
1:00:14
let us know if we are just speculating on an investment or inves investing for the future um
1:00:22
oh okay so there you go so mark plots it out uh also plot the dividends each year to ensure i'm getting a reasonable income
1:00:29
stream on investment so um obviously i'm not going to go through goalless but
1:00:34
if there's anything out of today that you're going to do please please please commit to doing it write it down
1:00:40
where at the end i'll let mark do his bits this is for tomorrow optimizing your
1:00:46
investments uh you're curious over how much fees time in the market ethical investing so we're getting a little bit deeper into other areas and friday
1:00:53
culminates and how do i buy shares um over you mark and i'll um pop up the
1:00:58
feedback link okay thank you very much dennis that was really good uh just a couple of points
1:01:05
for people who may not have attended the earlier sessions we do have a resources guide anyone like a copy of that please
1:01:11
just email benefits at ncdf dot mil dot nz um
1:01:17
there is a as dennis alluded to again today there is a rafter material available much but it's free there's a
1:01:24
variety of podcasts and webinars and things like that so please you do take the opportunity i know we're all time
1:01:30
for but it is really worthwhile spending a bit of time looking at some of this information if you want to if you want
1:01:35
to do so second thing is in addition to the sorted site and there is a lot of really useful stuff on the sorted site as
1:01:42
dennis commented we do actually have information on the force financial hub and you can also access milestone direct
1:01:50
limited that's our financial advice service you can use them they actually have
1:01:55
information on um you can either access them directly
1:02:01
through the force financial hub or through their own site milestone direct limited but you'll see they also provide
1:02:06
information on investing and they actually do also provide an investment service for people who are
1:02:13
wanting to invest but are a bit anxious about it and not sure how to go about it doing anything else so milestone will do
1:02:19
that for people they do actually charge for that service so that's one of the factors that you weigh up but they will
1:02:24
then help you select what may be the best you know companies for you given your circumstances and and everything
1:02:30
else but thank you very much everyone and i'll stay on the line with dennis to answer any questions that people may
1:02:35
have cool thanks mark um oh thanks cameron not not sure how it worked depending on
1:02:40
the crypto um yeah and it does sort of um i mean we talked about you know how do
1:02:46
we earn an income of shares and dividends there is the other aspect around capital gains
1:02:52
um excuse me and and then you start looking at other
1:02:57
investment classes like gold for instance this is why people say there's no utility in it because you buy gold
1:03:05
and you have to rely on the price going up to get your money out or get a return
1:03:11
out of it there's no other return on the money um oh what i've got here can you explain
1:03:17
the pharma analogy again please with the investors oh yeah cool no worries um so
1:03:22
i mean the farm analogy is hopefully so it's it's the reason why we buy an
1:03:30
investment so if i bought i don't know the farm and popcorn which is just outside where we
1:03:36
live and i bought it for the fact that i
1:03:41
could put sheep on there and derive an income and that income's going to you know hopefully add to the pot and keep
1:03:48
me happy then i've invested because i'm probably going to improve things and make sure
1:03:54
that the lambs or the sheep or whatever derive a good income from me and my
1:04:00
family and provide for our future so that's that's an investment decision because i bought something that can
1:04:06
return me an income if however i bought that same plot of
1:04:11
land then that there was like i bought it because oh my god there's there's urban
1:04:16
creek and i just know it's going to be rezoned at some point you can you can argue it's an investment
1:04:23
but i don't know it's going to happen so i'm speculating that the land value will
1:04:28
go up because it's going to be rezoned
1:04:33
yes there might be an income from it but it's not my whole reason for investing initially and it's the same with our housing market at
1:04:40
the moment a lot of people have moved away from okay well what's the rent return i get
1:04:46
on it versus they're all looking at well what's i've seen the capital gains 30
1:04:52
last year i don't i definitely want a piece of that so they're investing for capital gains which is not a given
1:04:58
that that is definitely speculating we're actually hoping that the next person will come along and pay us more for our house so that we can
1:05:04
get more of it by the cherry or more return on our money so to speak hopefully that answers
1:05:10
a little bit better about the farm analogy cool yeah good um yeah gareth morgan's
1:05:16
quite open about the fact that he has a variety of properties around the place ten plus houses he doesn't have any
1:05:22
tenants on them because he doesn't want to have them damage the place but he holds on to them because he knows you'll
1:05:28
get a capital gain when at some stage he sells in the future yeah yeah well i look at my little cul-de-sac um
1:05:36
there's two um i don't know reconcile type unit type things sold on the corner
1:05:41
uh that was settled three weeks ago both still empty um so i'm sure that what they're going
1:05:47
to do is knock it down and put a little development on it but that's two houses taken off the market then
1:05:53
yeah yeah which is going on all around the place yeah going back to the gold thing dennis just
1:05:58
looking at our report um commodities for the year end of the 31st
1:06:04
of october actually increased by 35 sorry 43.1
1:06:10
and that was a combination of gold silver and oil because oil prices started shooting
1:06:18
up but again uh there's always that that reference to being that if you want
1:06:23
something really safe and you can't go wrong investing in gold and silver and things like that
1:06:29
well it's it's a sign of times too because you know when inflation goes up commodities are the first thing you look
1:06:35
at to benefit from you know inflationary pressures um i saw a graphic today and
1:06:41
you know copper i was going to ask you copper made up quite a bit of that as well because copper over the last 12 18
1:06:46
months has just been skyrocketing and there was one graphic that showed you know with all this
1:06:52
uh talk and turning to efficient
1:06:57
like solar energy wind power you know non-non-fossil fuel dominated stuff
1:07:02
um the copper piping from one um wind turbine to generate and was about
1:07:09
that thick and if you think of these wind turbines that's got to go from the bike to the base of it to the generator
1:07:14
whatever up to the top and it's that thick and that's all pure copper
1:07:19
it's just amazing how much demand there's going to be for these sorts of things now and you see a lot of
1:07:26
investment managers maneuvering to you might have seen news about cobalt
1:07:31
so cobalt's going to be a very very important ingredient to electric vehicle manufacturers
1:07:38
so you know the u.s has almost closed their eyes to it not really seeing the potential but
1:07:45
china sort of moved in and trying to close down all the cobalt supply so it's just going to be an interesting world
1:07:50
next five ten years oh and the other one is lithium uh for um conductors and things like that um because again longer
1:07:57
term uh that's what people are looking at and where there'll be um a requirement and
1:08:02
things um going back to the milk thinking to milk and
1:08:07
that sort of thing um again long term uh i think we've got about seven and a
1:08:13
half billion people in the world now it's projected to be about 12 billion by 2050 and those people all want to be fed
1:08:21
uh they want access to clean green products and things so that's where
1:08:27
food things like a2 milk and things probably longer term have a good future because purely of demographics and the
1:08:33
fact that as people get more middle classes and you see that in china and india as an example they actually want
1:08:39
to have access to better quality food and they also want the nice things in life that the cheeses and all that sort
1:08:45
of thing that all comes from from dairy products as well so longer term i think there's you know if you do your research
1:08:51
and everything else i think there's probably reasonable uh reasonable long-term investment things like investing in in
1:08:58
the dairy industry and things like that yeah well it raises a very interesting point because
1:09:05
um if you look at dairy and who knows i mean does it sit on the side of being very natural or is
1:09:13
it very environmentally damaging based on the amount of nitrates and stuff that goes in the soil so you think okay well
1:09:19
what's the what's the best sort of outcome there but then you also look at
1:09:24
i think we got given a free bottle of oats soy and some other
1:09:31
thing as a milk derivative so it's caramel obviously it's not normal but now they're looking at growing meat
1:09:38
or milk in petri dishes so effectively you're going to have the same tasting thing but grown in a lab
1:09:46
so then it becomes a margarine versus butter argument which one do you have and yeah it's just
1:09:52
gonna be quite exciting in this future hopefully i've got another 50 odd years to to see what comes up
1:09:58
um good luck to good luck to living in south auckland with another one and a
1:10:03
half million people did get us i know well there's going to be houses right up to the bombays no doubt no time at all
1:10:10
um uh oh someone just commented what would be classed as the safest place to put
1:10:15
your money when the proverbial hits the fan ha ha gold precious metals is one just answered anymore wow
1:10:22
well i think what's if we looked at the the gfc back in 0.70809 when things
1:10:28
really hit the fan and that was when everyone thought that capitalism was just going to end overnight
1:10:36
there wasn't really a safe place you maybe could be in gold but the reality is
1:10:42
we operate on cash cash is what we use um and cash is what sits in our bank to
1:10:48
our name so you've got to have faith that i don't know i i have that faith that our system
1:10:56
still rely on the fact that i've built up a certain amount of money in my check account that is still valuable to me
1:11:02
in a week or two's time if you're going to hide i think fund managers do try and protect passive ones
1:11:08
can't because you've just got to ride the market active ones can depending on what their
1:11:14
rules say what we've seen japanese yen gold maybe
1:11:20
u.s government treasuries again you're still at the whim of a government once needing to pay you back
1:11:26
so i don't know if the proverbial sky fell i don't know if there's too many safe places out there but
1:11:33
i think the other thing though dennis is i've got a book here called a random walk down wall street which is
1:11:40
written by a champ called burton mayfield and it's very a very good read and he talks about the historical
1:11:46
american share markets going back to 1865 the end of the u.s civil war and um since since that period
1:11:54
about on average every seven years there'll be a downturn whether it's a global financial crisis an asian crisis
1:12:01
twin towers attack or whatever else about every seven years on average there'll be an animal
1:12:07
turmoil and the markets go down and then they bounce back and they start recovering and so the
1:12:13
over the last 150 plus years um people who've invested long term in the
1:12:19
share markets have continued to do well but you have to ride out the
1:12:24
um you can you can expect every five to seven years there'll be a downturn for
1:12:29
whatever reason and you just ride it out you don't panic and then hey presto over
1:12:35
a period of things start start recovering and and they bounce back again exactly and jonathan grows that point
1:12:42
just now i think it's important to not react compare and trust your plan lots of money i've lost selling time yep
1:12:48
exactly um and jonathan that's a really good point so last year at the height of the downturn with the
1:12:54
onset of covert in that period late january through to i think it was the almost the end of march
1:13:00
we had about a thousand people who changed their investments in our schemes
1:13:05
and they tended to go for more aggressive growth poor photos down to conservative
1:13:12
um and what the and we were putting out bolotns every two to three days advising people don't do anything the world's not
1:13:18
going to end um don't panic or anything else but unfortunately a thousand people what a reason they decided to make the change
1:13:25
and what they did then is they turned a paper loss into a real loss by making
1:13:30
the time and making the change at that particular time now people have to be comfortable if people are losing sleep
1:13:36
with their investments and stuff like that then obviously you you you go to
1:13:41
something that you feel comfortable with but we do provide a financial advice
1:13:46
service to help you with all those sort of things as well and so we do encourage people that if you're feeling unsettled you're nervous
1:13:52
or anything else then pick up the phone and give our financial advice service a call and have a chat with them before
1:13:58
you do um anything that you may sort of come to regret yeah yeah always always get advice and
1:14:04
just i'd be wary about reading um well even watching the news at night
1:14:11
because you know if it bleeds it leads almost and the bad news that gets presented would make anyone never ever
1:14:18
want to invest ever again um and mark gets a really important point
1:14:24
that you know the value does go down but if you have a look at what was on the top five of that manager it was
1:14:30
alphabet amazon apple so these are companies that are
1:14:36
not um fly-by-nighters they're not the the one that's on trial at the moment
1:14:41
where they came out with a blood diagnosis machine thing that doesn't work these are companies that have got proven
1:14:46
cash flows that are sitting on i don't know billions and billions and hundreds of
1:14:52
billions of dollars worth of cash that they could just use in times of need
1:14:59
so you know whilst the sentiment may be that apple drops 20 30 because the work
1:15:05
the world was caving in the fact is apple will recover and sell more apple stuff i mean
1:15:11
crunkies they're selling little apple cloths now like where does it end there was a there was a great comment
1:15:18
too um mark louise suggested that we should do a podcast
1:15:24
talk for africa so you may regret that noise um beneath mate yeah some lost in an
1:15:31
area of 30k were changing well actually personal example for everyone here i was at westpac at the time
1:15:36
and when i resigned to go somewhere else i had to take my um super policy out and
1:15:41
guess what time it was it was the gfc i lost you know 30 odd percent pulling
1:15:48
it out and by the time i got it invested that's how much well 30 percent loss is what i had because i obviously had to
1:15:54
reinvest in somewhere else but that's at times um but yeah it's just it's
1:16:00
it taught me a valuable lesson i couldn't help it but b um you know having that time frame is
1:16:06
really important it can't be understated um if you go back to your comment earlier about warren buffett you know
1:16:12
bachelor hathaway which is his main company i think for memory they invest in something like 50 main stocks
1:16:18
and they hold on to them long term and that's things like apple and alphabet google
1:16:24
coca-cola outfits like that and very much long term and now they're up and uh
1:16:32
his personal worth is over 100 billion but berkshire hathaway is worth in the sort
1:16:38
of um almost at the trillion dollar mark i think um now in terms of and that's just
1:16:43
mind-boggling when you think about in terms of the number of laws um but again what he's done is very much taking a
1:16:49
long-term perspective and he looks very much you know where does he see growth coming and and so
1:16:56
coca-cola as an example is a good example where um the the first world i guess is
1:17:02
getting more and more nervous about coke because of all the sugar content and everything else but
1:17:07
um asia and africa um are now seeing the opportunity and they love coke and so
1:17:12
while must one market shuts down there's another market that um opens up um as these countries become
1:17:20
more middle class and everything else and things and so it's it's very much again you know taking a long-term
1:17:25
perspective yeah exactly and like i said he's making an active
1:17:31
decision to to invest in those companies but the only difference being is he just buys and holds for a very long time and it's
1:17:38
not often themselves out of the holding and they did a couple that we
1:17:44
thought it felt things were wrong um but yeah it's um it's a testament to their
1:17:50
research and uh stickability i guess really yeah and they of course they don't pay dividends
1:17:56
either so very much the focus for the organization is on the capital growth
1:18:01
that one gets longer term rather than getting an income stream coming in each year that's one of the
1:18:08
things you weigh up if you decide to invest in them is how important is their income stream to you yeah yeah yeah yeah
1:18:14
that's actually one thing i forgot to mention if you do buy individual shares uh through a platform um
1:18:21
a really cool thing because i've bought my own shares and you know because you're in the industry you've
1:18:26
got to do this otherwise you don't know you can't really talk to what you're talking um but it's really cool that you get voting
1:18:33
rights so you can you know for us companies you're getting sent papers to you know
1:18:40
vote yeah on director's remuneration or increase the direction of administration or changing directions of a company
1:18:46
and it actually makes you feel really really involved and it can
1:18:52
mean a world of difference for someone that does want to you know invest ethically um
1:18:58
try and affect change on an individual level um those sorts of things you can achieve by investing directly into
1:19:04
shares and it's also if you want to do it through your fund manager
1:19:09
ask your kiwisaver manager how what they do with their their votes how do they
1:19:14
support your you know delve into tomorrow about their investing but how they support your own sort of views on
1:19:21
the changing world order or the changing use of fossil fuels or those sorts of things
1:19:27
so yeah lots lots of things come into play with um you know kim's having to be thought of as a nice
1:19:33
simple thing but man there's lots lots in the background that can really show that yeah so what happens we we look at
1:19:39
dennis with uh because i'm cdf's representative on the investment board so our funds we've got
1:19:45
666 million it's part of a 12 billion dollar pool invested by mercer new zealand and
1:19:52
there's an investment committee which i'm cdf's representative of when we meet about every five weeks um
1:19:59
and one of the things that we look at is how active are the managers in terms of trying to influence decisions around
1:20:05
esg factors environmentally socially governance factors and one of the things we ask is do you
1:20:11
actually attend will you get allocated so many seats on a board how active you are are you and
1:20:18
participating in the board decision making to try and influence behaviours longer term and that's one of the one of
1:20:24
the things that we actually look at um around how we write particular managers from an esg
1:20:31
perspective oh it's brilliant it's really good because that's the sort of thing that
1:20:37
you know it may come out once a year in an annual report but you know when you're looking at your
1:20:42
monthly report it's not something that gets talked about too much is it so that's that's brilliant
1:20:48
um anyone else have any questions i think we've dried up in questions
1:20:55
oh there we go good on you cameron what is the best way to buy shares in overseas markets well
1:21:02
hatch is limited to us at the moment but through that you can buy
1:21:09
etfs that have access to different markets if you go to sharesies
1:21:15
they have australian new zealand and u.s markets on offer
1:21:21
and again they have etfs that can access different markets invest now is not direct shares but they
1:21:28
are more managed funds and all you just quickly google the name invest now and you'll see what i mean uh but they're
1:21:34
all managed funds and they actually have a crypto fund in there cameron i think would you ask about
1:21:39
crypto or talk about crypto um a crypto etf that's been constructed in new
1:21:45
zealand um so there's that um so different flavors and i think steak i don't know much about steak do you know
1:21:51
much about steak mark um a little bit um don't have access to the same or more
1:21:58
markets that one i think they have access to more yeah
1:22:03
the only thing to keep in mind with stake is it's an australian-based company yeah
1:22:09
offering their services here so just um obviously in order to do that they have to be signed off but it's still another
1:22:16
layer of well they're not in new zealand so perhaps there's a bit of a risk to
1:22:21
just be eyes wide open really but also you also have to be mindful of the tax
1:22:28
implications yeah good point um scott mentioned steak has an app so there you go i know i know
1:22:34
hatch doesn't because i use hatch but um they don't have an app you have to load the page shares is i think hasn't
1:22:40
happened yeah yeah they do yeah and invest now i don't think does uh but cameron hopefully that answers
1:22:46
your question about that um cameron if you're going to google money
1:22:53
hub and you can sign up for that that's a free service and they wrote a column i think it was
1:22:59
around august september comparing the different platforms um and so have a look at that that'll
1:23:05
give you some information around the plus and minuses of each of the different um platforms
1:23:11
just cuts down the amount of time you have to do spend on your own research
1:23:16
thanks mark all right any others we've still got 12 they're all just quietly listening to
1:23:21
what's going on they must be our voices [Laughter]
1:23:26
but any other any other questions tomorrow we're covering well you know what we're covering optimizing your investments
1:23:32
um so yeah just some just some key points i really and then then friday obviously
1:23:39
we're talking about um buying shares i think what do we call it getting started with shares
1:23:45
that's right brian like being called a gent it's because i'm old now this week for me
1:23:50
uh thank you um cool all right well i think the questions are done and dusted so thank you so much all thanks mark
1:23:57
yeah dennis um unfortunately i've got a double booking tomorrow because i'm
1:24:02
doing a navy presentation at the same time so what maybe it's picking rights over us
1:24:08
my apologies my apologies but i'm sure i have no doubt that you will do a fine job um but please just remind people
1:24:15
about the benefits email address and anything that people want so just email benefits at ncdf.net nz
1:24:22
uh and but i look forward to joining you again on friday great look forward to that then and enjoy your meeting with
1:24:27
the navy and let them know that you've missed a really important meeting for them oh well indeed okay
1:24:33
take it easy thanks very much everyone have a good afternoon see you all keep safe stay well see you tomorrow

0:02
uh any recording is um the presentation and micro itself uh and mark had
0:08
mentioned that they'll probably be uploaded usually five ten working days they may
0:13
well wait until all these sessions are done tomorrow um and then get them all
0:19
uploaded so yeah just give it a week or two and it should be there um
0:25
what else what else no i think if we look at this session uh
0:30
there's eight slides in total we're looking at the first one and the last one is like a farewell slide so there's
0:36
not many slides so hopefully you've brought your uh discussion discussion
0:41
booths with you um uh so yeah we'll kick start now my offer is open as always does anyone
0:50
want to take us through the karakia feel free to raise your hand and i'll
0:56
happily unmute you uh but if you don't raise your hand then i will take us
1:02
through it again and oh we've got one calling listener welcome um
1:08
nobody's gonna do it oh so close i was feeling confident um tomorrow tomorrow
1:14
is our last chance for someone else to take us through it um you know i am slowly getting better
1:19
at this but i'm sure there's someone out there in the crowd that can do better than me uh
1:39
so thank you for listening and it's a good way to start um and you know today's session
1:45
uh is about uh well we call it optimizing your investments but
1:50
it's it's delving a little bit better and a little bit more um some philosophical a little bit assorted
1:58
um but otherwise hopefully the content will hit the mark um
2:03
you may have picked up in the middle there as well you can probably certainly mention this uh to add
2:08
is our name for the retirement commission as such um and we provide the
2:21
been sorted.org.nbc prolific with his sharing which i greatly appreciate i'm looking forward to a bit more today john
2:27
um and you haven't missed much as well uh now also i've mentioned mark williamson
2:33
the nztf benefits manager is not with us today so if you're going to ask me anything curly about the benefits of
2:39
mgdf i'm probably going to go i don't know the answer to that one
2:44
so what i'm quickly going to type here is the email address
2:51
that you can send any queries to dot in zip
2:57
benefits at nzda dot mil dot nz send your queries to that email address and
3:03
uh mark will definitely answer it within a day or two he's very uh on tour in that respect
3:09
um so what actually because we've uh we've only got a limited amount of size i just
3:14
wanted to touch on did anyone do any research from sort of yesterday's
3:19
discussion points because we talked about active and passive and you know what what different
3:25
investment strategies and philosophies that investment managers might have did anyone do some delving and figure
3:31
out what their what their manager is like and any surprises just ask that question because i'm quite interested
3:47
so plug in the internet is just like a delay again that's cool what i might do while i wait
3:52
for any answers to come through uh you've got an average price of a loaf of
3:58
bread on your screen so you can sort of see you know a loaf of bread back in the day
4:04
um well equivalent 10 cents because back in 1940 we've been using since
4:09
um but you know you can see it's steadily rising so we're going to talk a little bit about inflation
4:15
does anyone care to sort of quickly type in what inflation means to
4:20
us and why is it important to be you know just aware of what inflation does
4:26
so what does inflation mean and um why do you think it's important that when we look at our investments we need
4:32
to keep one eye on inflation as well the life bread that you can see might
4:39
actually give a little bit away
4:47
oh we're on pause here come on come on oh here we go here we go dinho good
4:53
first well done uh dollar value of goods and services increases over time
4:58
uh and owen the value of the dollar chance yes yes exactly right so our our humble loaf of bread
5:04
from 1940 has gone up in cost to well 2018 to 3.20 and you know that's
5:12
three years old so uh chances are i think a loaf of bread might be slightly more expensive than that so it's the that's the cost of
5:19
goods and services going up in value but also it's our currency our dollar
5:28
devaluing over time because what it means is you can't buy as much as you once could
5:36
and what have we got here we've got some comments coming through uh reading quit like a millionaire
5:41
currently very pro efts but like warren buffett oh okay yeah yeah um uh etfs i'm
5:48
guessing exchange trader funds yeah um yeah we talked about those yesterday and
5:54
i can't say the first day because it just sent it to me but that's cool um we talked about um managed funds exchange traded funds and
6:01
index funds yesterday and managed funds because you're buying reports and manager experience and
6:08
research and all that sort of stuff in the one tend to be uh a lot more expensive than say an
6:14
exchange traded fund or an index fund um but uh yeah quite like a millionaire
6:19
there you go there's a recommendation from someone uh we just had a comment come through as well if you don't earn
6:24
more interest capital gain on your investment in inflation then your investment is actually
6:29
declining exactly right so and it's something that we always find hard to explain because
6:36
if you look at your bank statement you'll see it's about 100 bucks and in 20 years time if you did nothing to it
6:43
there would still be a hundred bucks so it's hard to see well i've still got a hundred dollars but it's we call it
6:49
the sort of the stealthy ninja that just come along and steal your money very quietly but it
6:55
just happens slowly over time it's really really important so if we're
7:00
investing long term um yeah medium term yeah really to long term so let's take
7:07
as an example our accumulators are very invested long term the last thing we want is to get to the end and find that
7:14
we've got i don't know let's say half a million bucks in our kiwisaver but actually that half a million only
7:20
buys half that value maybe 250 000. there's nothing worse because we've spent a
7:27
lifetime building it up but inflation just nibbled away at it
7:32
over time so there was a really great comment that yes you need to make sure your investments can generate a return
7:38
over and above inflation as well um us jonas is on the boil here uh
7:44
inflation occurs primarily as the reserve bank prints more money each year this is necessary to encourage spending
7:50
and borrowing uh reserve bank aims for two percent massacre both too high and too low is dangerous exactly right
7:57
so let's run a quick poll uh where are we polls
8:02
and and i know i know i'm not bathed in orange it's a different poll so
8:08
hopefully on your screen now i know it says untitled but it's a little bit separate um how much would a dollar one dollar
8:15
from 1967 be worth today so feel free to click your answer if you
8:20
can see it uh 1 cent 5 cents 20 cents 56.
8:32
all right we've got nine nine of 10 24. again i can't see who's voted i always like to say this
8:38
um we've got seven to go six to go keep them coming keep them coming and
8:45
what we're actually going to do is um i'm going to show you a cup inflation calculator on the reserve bank site give
8:51
you the link as well because it's quite a useful exercise to look at things uh four to go four to go
8:58
and i know one person can't do it because they've rung in so that's that's cool so
9:04
give it three seconds two seconds one okay all right there we go let's just
9:10
share the results so we've got one oh three at one cent um 11 of us at
9:15
five cents you know so that's where the majority sits at five six um four at 20 cents
9:22
and three of us are 50 cents so you know even at 50 cents uh i know 67 to now is a lot of time but
9:30
that's half the value of your money which is gone it will still show a dollar in your bank
9:35
account though that's the difference so you'll still see a dollar there in your investment or your bank account but
9:41
the reality is being able to buy stuff with it is only going to get you 50 cents worth of stuff
9:47
and to jonathan's point yes inflation is generally accepted as a as a thing that
9:55
needs to be in the money system so to speak um too much is not good because that's what
10:01
we've got at the moment but also going the other way going negative and they call that deflation
10:07
that's not good either and that can happen when people expect prices to go down and then they think oh well i'm going to
10:14
wait and then they hold off their buying decision which means that you know if people hold on to buying decisions
10:20
especially as a mass businesses aren't generating enough revenue they may have to lay off people
10:27
unemployment rates go up and it just becomes a bit of a spiral downwards which is not a good
10:32
thing so it's a very finely tuned balancing act so here we go what i'm going to do is hopefully this will work
10:38
because i've never gone off prezzo to a website to run it through with you so
10:45
you can see here um can i just quickly confirm you've got the reserve bank
10:50
web page on here at the moment yes cool thanks sam um so you've got here inflation and what
10:58
i might do is i will copy this link
11:03
and just paste it there so if you do want to have a look at it at a later date can uh now you can see this is from
11:08
2000 to now and to jonathan's point or yeah i think
11:13
with johnson's point inflation's quite high in mind it's 4.9 according to the reserve bank right
11:20
um you can see that just off here 4.9 and you know there's all sorts of
11:26
reasons for that i won't go into it but it is high it's the reserve bank has a um
11:32
has a mandate to keep it between one and three percent on average two percent
11:38
uh and remember it's over the medium to long term so they don't they don't worry too much about it in the next six twelve
11:44
months but further out they want to know that it's going to be between one and three percent
11:50
um so that's where just jonathan's comments talk about two percent that's the midpoint just so we know but you can
11:56
see over time it's gone up come back down gone up come back down let's meet some
12:02
peaks so four percent in 2007 then it reached five percent sort of in the just
12:10
before the global financial crisis so 0.709 uh then dropped back and then 2011
12:16
peaked again and dropped right back and it's been quite sort of flat for a period of time
12:23
and then obviously oblate 4.9 what's one thing you don't see on this
12:29
graph so we're seeing all sorts of positive numbers but what aren't you seeing
12:35
anyone click it
12:45
exactly grime perfect chocolate fish to brine gets top marks there's nothing negative
12:50
so negative means that inflation well it's become deflationary so prices have
12:56
actually reduced so it's really important to know that because you're starting to see now
13:02
i was 4.9 this year and maybe it was what one and a half percent last year
13:09
so you start adding these numbers up and i'm going to show you a calculator in a second when we work out our dollar from six and seven that these numbers start
13:16
accumulating and unless you've got your investments working harder for you especially more so in that growth side
13:23
remember the two levers then it's going to be very very hard for your money to grow ahead
13:29
of inflation does that make sense has it anyone got any questions on this
13:35
so i'm going to skip out of this one i'm going to go to our little calculator um
13:40
so what you've got here is the reserve bank calc and it's on the same website but i'm
13:45
going to give you a link here with me so that should be showing for you now
13:51
and this little inflation calculator you can basically say on the drop-down box you can
13:56
specifically pull out certain areas of the consumer price index the cpi
14:03
um or you can just do general so i'm going to put a dollar we got it in
14:09
1967. always go too far
14:15
there we go 1967 and we want to compare it to today yep
14:21
oh no how can that be
14:27
service says unavailable due to technical issues please try again later that's so
14:32
um all right so yeah actually what we might try and do is
14:38
let's just see if we can change it no no okay all right well i was going to be all
14:43
whispering and show you what the value of that dollar back then um
14:49
has reduced to now so ah that's not yeah exactly exactly gotta
14:55
love technology at least it wasn't me this time um so someone asked why not aim for zero so no
15:02
pricing or no inflationary pressures in there what do we reckon why don't why not aim for zero
15:08
because at the end of the day if you think about inflation affects me it affects you because we're out there buying stuff
15:16
and what i might just show you actually i'll get this off the screen because i'm sure it's clogging up the screen
15:24
as the consumer price index itself cpi so you probably if you haven't delved
15:29
into it it's a figure you see on the news sometimes and they talk about oh the cpi today from reserve bank because
15:35
they're 4.9 meaning and what does it mean um so you can see
15:40
on the screen here the consumer price index and i might just share this with you as well because it's slightly different to the reserve bank
15:47
um it's from stats and zed it talks about 11 consumer price index groups so you've
15:54
got food housing health recreation education communication clothing for air transport
15:59
alcohol uh household content services and miscellaneous and you can see here this
16:05
goes slightly further back um
16:10
uh 2017 sorry a little chat came through i'll just have a look at that in a second but you can see again it's been
16:16
positive but in june 20 the quarterly change it actually did
16:22
get negative so it did reflect a price drop um and it could well be i don't know the
16:29
pure reasons but if it's anything in food to do with fresh veggies there may well have been an oversupply of a very
16:36
very popular product um and if that's the case then that can reduce prices and then reflect as a
16:43
price decrease um so yeah what have we got here so too much we don't have control over imports
16:50
could reduce profits um yeah it's i mean we are an importing nation
16:56
so we're sort of you know our currency is free floating which basically has an influence
17:03
because if it becomes if our dollar becomes less worth uh well
17:09
uh if there's less worth in our dollar uh overseas goods become more expensive which means the prices go up which can
17:16
be inflationary as well i won't make this into economics 101 i promise
17:21
um the key thing uh what's this here a certain amount is healthy plus zero percent is very close to negative
17:26
inflation that has bad connotations um yeah i'm not an economist i don't know why i
17:32
couldn't keep it at zero but um a certain amount of inflation
17:37
in the system um it's i think someone likened it to a um
17:42
to like attention because if you've got inflation things are growing
17:48
and it pushes demand
17:53
yes jonathan yes and an easy way to think of an inflation pressure and we can see it
17:59
as employees is if unemployment rates are very very low which they are at the moment
18:06
and it's getting very hard to find quality people to put in those jobs
18:12
then you become a very um preferred candidate to a either stay
18:18
in that job or potentially get poached by another business i'm talking very simply but on a whole this is what can
18:24
happen and you may have heard the term in the media at the moment the great resignation
18:30
so people are at the moment very much in demand experienced qualified people
18:37
are being enticed and it could be in new zealand or it could be in australia so australia is the same thing they've got
18:43
a recovery going on they want to build things and their economy is a lot bigger so they can offer a lot more wages so
18:50
you're finding people in new zealand might get poached across the ditch not at the moment it's all locked away but when it opens up
18:57
that might be a bit of a brain change so in this sort of economy it's nice to
19:02
have a good tension because costs going up um
19:07
unemployment because it's another reserve bank sort of criteria that they want to have
19:13
within a range they want to make sure unemployment is get carried away you've got a nice balance between you
19:19
know expecting things and also paying for things so to speak if that makes sense um so i'm just trying to
19:26
keep up with this chance as well so what have i got here um oh so everyone's read jonathan's comment yes if you have too
19:32
much money in the system it can push inflation up um
19:37
but like i say i promise we're not going into economics uh and one last one jake incentivize economic development yeah i
19:44
mean it's um it's one of those things and this is the last thing i talk about inflation and then we're going to link it back to our
19:50
investments but it's one of those things where if you like the us they gave
19:55
everybody a stim check they used to call it a stimulation check so people
20:01
effectively it was like a helicopter and just throwing dollars to the people so everyone got a certain amount of money
20:07
that they could do anything they like with it so that is starting to have a massive effect
20:15
uh well inflationary effect on prices because we've seen the share market go was banging away um you know crypto
20:22
currencies any sort of asset you've had all sorts of new assets come around as well uh nf teams
20:29
non-fungible tokens or web and wacky things so that is highly inflationary because
20:36
there's another component to it but how quickly that money gets into your hand and then into the system
20:42
but uh to to just jake's point if you're doing economic development
20:48
like infrastructure spending that's a slower sort of introduction of money because you're actually building things
20:55
that can last the test of time and the money is going to a few limited
21:00
areas so you it could be inflationary but it tends not to be whereas giving money to people directly and then going
21:07
spending it can be highly inflationary uh what's wrong with the uh government asked the reserve bank to print a lot of
21:12
money in times of prices so there was more for them to spend it's called qe for example the u.s treasury last year
21:18
238 of all u.s dollars on earth yes it's pretty scary um the other thing it does
21:24
for jonathan's comment is it keeps interest rates down and that was the
21:30
whether or not it was a mistake by our reserve bank they did at their version of qe they
21:35
were buying government bonds it pushed down interest rates which meant that it kept it very
21:41
stimulatory so low interest rates mean people have got more money businesses can spend more on capital acquisition
21:47
whatever it might be because the cost of borrower was lower and now we're sort of seeing the other
21:52
side of it where maybe it was a bit too stimulatory house prices rocketed away
21:57
um very very tight job market like low unemployment costs going up or we need to pull some
22:04
money out of this super into the economy but if you want to have a look at the stuff the links i've given you
22:11
can sort of talk it through but the key is i'm just going to test this again
22:18
okay all right we'll get rid of that one sorry the key is is when we're investing for inflation or
22:26
taking into account inflation we need to make sure our investments can
22:32
do the utmost to stay ahead of us does that make sense
22:39
so i'll just see if there's anything coming through um so when we're linking it back to
22:45
um our investments and i'll just get back to our presentation here now
22:50
is trying to pick the right fund for us and this is why it's so important so you've
22:57
heard me half about it oh there you go cheers sam it must be my browser got the
23:04
calculator working it sees a basket of goods and services that cost one pound and quarter 167 would have cost thirty
23:10
nine dollars um in quarter one at twenty twenty one so um a really extreme example of
23:17
inflation can be if you ask your parents or grandparents how much their house cost when they
23:22
first bought it you're probably going to get 10 000 20 000
23:28
as a purchase price i know it sounds really weird compared to the million plus prices now
23:34
but the price of a house back then is effectively what you can buy a new car at now
23:39
that's that's sort of a real bad demonstration of inflation but it
23:44
can happen like that and if inflation gets out of control you'll have things like
23:52
germany had just after was it just after world war one i think
23:58
they had hyperinflation so effectively the value of your money was dropping
24:03
hour by hour and people were buying loads of bread with a wheelbarrow full
24:09
of deutsche mark so that is not good at all you can't have
24:14
what they call hyperinflation you can't have deflation you've got to find that happy new year um so just on that note
24:21
here um and thanks so much for doing that sam it's good unless you got it working um
24:27
as if we started investing ten thousand dollars uh over 25 years adding fifty dollars from tweet you might remember
24:33
this graph from yesterday i think we sort of showed that on day before i think um
24:39
your results will probably be somewhere in the shade of the area and i do apologize
24:46
where my cursor is i think you can see my cursor the yellow line is you know
24:52
what could have happened based on figures but then based on the return estimates that may sit either
25:00
here at the lower yellow dot or here at the higher yellow dot so somewhere in between all right
25:07
um i'll click on this again so in this example ten thousand becomes a hundred and thirty one and a 000. all good
25:15
now that is a share market return after tax
25:20
after fees and importantly after inflation has been
25:26
allowed for and i don't know if you remember a long time ago we looked at a um retirement card pay remember there's a little
25:32
switch at the bottom of most calculators where it talks about inflation allowed for inflation
25:37
yes no they should always default to yes and it's really important so that the figure
25:43
you see on your screen is in what we call today's money
25:48
so if anyone's sort of stuck on this what are you talking about today's money for um send it through in a chat and
25:54
i'll happily clarify again but always always always when you do a calculation
26:00
allow for inflation so that you can see here it's been allowed for and that has still
26:06
been the return of growing ten thousand dollars to a hundred and thirty one thousand dollars five hundred
26:12
in today's money even though it was over 25 years
26:17
all right any questions
26:24
i think trust me once you get the concept of inflation when you start making investment
26:29
decisions you're going to just keep them in the back your mind so what we've seen a lot of or what i saw a
26:35
lot of in my banking games was lots of elderly people had their money on term
26:41
deposit and what they would do because interest rates were super high well super high say nine ten percent that's pretty high
26:47
for a bank term they would take some of the money from that interest
26:53
or take all of the interest whatever it might be use it to live off and then reinvest it
26:59
and what's happened since then is because remember the percentages are always positive
27:04
every year in terms of costs going up you know three four five years later
27:10
interest rates have dropped right down but what do you think costs have done had they dropped right down as well
27:20
let's see who's quickest on the keyboard
27:26
so exactly and with an exclamation mark no this uh no so you now had a case of
27:33
elderly people had weren't earning as much of their money but then also
27:38
what they had to earn off it had to be a lot more to pay for things so then what they started to do was start eating into
27:45
their investments to pay for things and too much inflation is not a good thing trust me
27:51
um it's good if you've borrowed money because that's the flip side of it jonathan do you want to sort of lend a
27:57
quick type in on that one why inflation is an okay thing for people who borrow money
28:04
so when you're considering your investments property and shares
28:11
shares you know can experience a little bit of ups and downs but those are the ones that you want to be in
28:17
if there's going to be inflation over the long term and we know there's going to at least be
28:22
2 inflation or even 1 so you want something to grow you want a little bit more in the engine
28:28
even when you retire you want to have something in growth because at 65 to
28:35
90 it's still 25 years that's still this whole time frame here that's really really important
28:43
any questions on that does anyone want to know why inflation might be good for people who borrow
28:48
money
29:01
well nothing's come through yet so i'll give that a couple of minutes oh there we go
29:07
yeah exactly so there you go residential expert jonathan you're gonna have to chuck in your phone number so people can
29:13
bring you when these sessions finished um yeah because if you borrowed money for a loan let's
29:19
say you bought a house in auckland it's a million bucks that's your loan amount so if inflation
29:25
goes higher let's say it's gone up five percent likely this year um you're earning an income
29:31
in the in a year's time you're going to go to your boss and go hmm cost living increased boss um you know
29:39
costs have gone up five percent i want my wages to at least go up five percent as well
29:45
depending on the boss then i'll be like yeah good point good point dennis i'll agree yet five percent done they might
29:50
say no um but generally speaking the salary will go up with the cost of
29:58
living so what that means is you've still got a million dollar loan but now your salary's gone up by five percent so
30:04
you've got extra money so to jonathan's point that that million dollars
30:10
doesn't look as much because your salary has gone up and you can afford to pay more onto it
30:16
if that makes sense so you know when we talk about high inflation there are some people that are like yay
30:22
can't wait for that but it's not a good thing yeah that mine now has everyone here
30:28
picked their own investment strategy or fund like what's showing on screen at the moment
30:35
if anyone hasn't just hit no and that that's all good cool one person has
30:44
i have two people we've got some hands going up yes all right cool more hands yep
30:52
i'd love my call and user to try and put their hand up but special shout out to the call-in
30:58
user because i really appreciate the fact you've made the time to dial in um and yep through keemstar awesome okay
31:05
cool so i haven't had any notes which is brilliant um and it's really important so what is the what's the lever we want
31:12
to be invested in to try and beat inflation over the long term
31:20
is there a member of the lever what it's called the engine in our car
31:25
growth awesome thank you thank you sam um i had a question there as well want to know what to do when retired or not
31:32
will not want access or money for many years um yeah exactly that's uh well i shouldn't say exactly it's a great
31:39
question um you'd want to have a chat to someone and i think
31:44
because it's milestone is the financial um planning arm or financial advisors
31:50
attached to engineer have a chat tonight because what you want to do is exactly what we're doing
31:56
now is figure out what sort of fund is right for you what's your investor profile what's your
32:02
time frame what goals do you have and map out a strategy based on that so
32:09
you know if you hit 65 let's say you retire at 65 and you've got a dollar of money there
32:14
and that dollar money realistically if you're fit and well at 65 you can live another 25 30 years easy
32:22
so it needs to last you for that time frame so it needs to have a little bit of
32:27
remember growth so thank you sam for saying growth um so where are we to get these potential
32:35
results higher so that a you can enjoy your lifestyle and b
32:40
you can continue enjoying the lifestyle into the future because you're you're making your dollars work and earn
32:48
and be valued enough five ten years in the future to keep doing what it's doing today
32:54
does that make sense and uh
33:00
cameron uh do you want to just finish off your statement there because all i've got here is does um so maybe you've
33:07
started typing that user by accident but um if you want to finish what you're going to ask or say
33:12
all i got was does sweet so yeah so really really important
33:17
level of risk for defensive but likely ups and downs is low but the potential returns are low so remembering
33:24
time frame very important versus aggressive yep great you've got
33:29
the maximum amount of growth in your engine but your ups and downs a lot more but
33:35
those potential rewards are a lot higher but again if you've got the time frame to do it oh sorry okay that's cool
33:42
all good um so just as a bit of a refresh
33:51
great question so someone just asked uh what if you're planning to use your kiwisaver to buy a first time what lever
33:56
is best for that so okay let's open this up to everybody hit
34:02
me on the chat with your answers and i'll frame it so we've got a dollop of money um to the person to ask the
34:08
question when do you think you might need that money out let's start with time frame
34:18
two to three years okay cool so let's go back all right so
34:24
in two to three years time is there a time frame on screen at the moment that sort of matches that
34:36
defensive yes yeah so defensive does so the time frame's right
34:42
but you ask what the lever is so what's the um to everyone what's the characteristic
34:49
of defensive where is most of the money in the engine or the airbags income
34:54
income assets exactly cheers sam on the button um so income assets so it's all
35:00
about protection yes i want a little bit of a return but it's about protecting my
35:05
capital first and foremost um what i would do if i was you
35:10
in terms of your kids over for your first home because two to three years
35:16
just matches up with a defensive investor i would bring up the provider and have a chat to somebody there that
35:22
is qualified to you know ask you the questions take you sort of a
35:27
risk profile just to be 100 because if we look at
35:32
um just bear with me and we can do this with the sessions a little bit more open
35:38
kickstarter
35:45
at least this website works if we look at a defensive investor
35:53
it's still a little bit of a possibility to go backwards so if for you if i was looking at that
36:00
and you think no i don't want any backwards possibilities then what you need to look at is a cash
36:06
fund does that make sense
36:14
yeah so um jonathan's great point there i'm in that situation as safe as to switch to 100 cash fund um however
36:20
personally i've had to i have a bit of buffer to weather some dips in the market and have my kiwisaver and
36:26
simplicity server fund yeah so um that's the thing as long as you can ride
36:31
it out then that's great but if you're getting very time frame
36:38
aware as in you have to settle by a certain date and it's still in the markets then yeah you can take the risk but just
36:46
know uh a defensive investor might have negative one they might have negative two negative three percent return
36:52
just at the time you want to settle um so i hope that i think i got a big thumbs up so i'm guessing that that
36:58
answers that question um very very cool now where did i go i sort of went back a page here so let's
37:04
go back so for those of us
37:10
i know everyone's i think everyone said yes but if anybody hasn't chosen their fund
37:16
we want to make sure that a we've got control over it and b
37:21
it's actually meeting our needs either now or into the future that's the key and inflation is
37:27
one of those sort of criteria in the back of our minds um so what we're going to do here is
37:36
oh cameron i'm sure you wait for me to look at the other screen asking a question um how quick can change between
37:41
funds um it's usually because don't forget you've got you your provider and then in the middle
37:48
that's iod so the process to apply to switch your kiwis over to another provider
37:55
is as soon as you do it online with the new provider and then it might take a period of time
38:02
between the old provider id giving it to your new provider in terms of switching funds in between
38:08
your new provider your same provider it wouldn't be that long at all
38:15
days if not within a week it should be pretty quick so if you're looking at things and you
38:21
suddenly got to settle on the house in three months and after this session you're thinking damn i really need to sort this out
38:28
then talk to your provider and ask them how quickly can it change and you'll probably find they can do it then
38:33
overnight the next day i think that tends to be the process does that answer that cameron hopefully
38:40
um where am i going so if we click on if
38:46
you have never done this before in terms of this profile just a bit of a recap this is so important
38:52
click on step two make the most of your kiwisaver and if you just scroll down
38:57
you can see here how long before you expect to start spending your money okay i'm going to have zero to three because that's
39:04
our um home buy what's most important getting back at least as much as i've put in
39:09
uh what range of gains or losses are they comfortable with zero to five i'm going to say that
39:14
see so here it says defensive um and then all you do is click on smart investor and remember that yesterday
39:22
today then you can start filtering down all the funds that you might be able to
39:27
or managers that you might be able to go with to meet that need of a defensive investment
39:33
um so cameron did it answer your question about switching okay i did
39:39
cool great so just as a bit of a reiteration again around keyword saver i know we focus on
39:45
keywords over a lot but it's about sharing that load over the time of your entire journey so
39:52
i don't know why we did it in different shades of orange but we did um so you've
39:57
got employee contributions you've got employer contributions so the three percent or the four percent matched then
40:04
you've got your government contributions which we're a lot higher to begin with but now 521 bucks and then most
40:10
importantly you can see the biggest factor over time is the interest or the growth you can
40:16
get on your funds so if you've got a long time frame and you haven't picked your your run
40:23
your keyboard save strategy you might well be in a very safe option when and giving up the potential for those
40:30
huge returns so to speak that might be on offer from share markets
40:36
um all right so yeah excuse this graph um but has anyone
40:43
heard term time and market versus timing the market
40:57
oh yeah we've got a couple of uses you may hear it um oh we've got a yes
41:03
for dinner on set that's awesome that's cool um you may have heard it before and thought really what does that mean uh and what
41:10
comment here if you're staying long enough then you'll make money well hopefully potentially you'll notice any good financial advisor
41:17
always says potentially we just can't give guarantees um
41:23
is you know there's no shortage um yeah exactly if you're trying time
41:30
getting in and out then you have the risk that you get it wrong aka catching a falling knife exactly yes
41:36
exactly right um there's no shortage of people on the internet on tiktok on youtube on instagram on the
41:43
news no less that seemingly think they could predict when markets are going to
41:48
take off or when markets are going to crash trust me i get lots and lots of research
41:54
and you know some of them are a little bit like oh it's going to crash it or everything's right for crash it's
41:59
exactly like it was back in 2001 and it's exactly like uh pre 1929 uh the
42:05
market's going to crash and and the reality is someone will get it right at some point if you keep saying it long
42:10
enough they'll get it right but no one knows that's the key so when we're um putting our strategies
42:18
in place putting our investments in place it's really really important to remember you're doing it for you for you
42:24
your family your whanau your needs your wants your goals and objectives that's it um the person on the news or on the
42:31
youtube channel whatever it might be doesn't know what your opinions are so they may be trying to make a name for
42:37
themselves whatever it is so the graph you can see on screen at the moment is quite a timely one
42:43
so again we've picked different shades of yellow not sure why uh market so this
42:49
is the market return drops and then and what do we think what the reason was
42:56
for dropping i mean the date will give it away
43:03
or we've got march 2020 yep covet perfect yes covered
43:11
so you know share markets dropped about 30 uh if you didn't check kiwisaver or if
43:17
you checked it a couple of months later it would have been a blink and you missed it because the chair markets recovered but that was the share market
43:24
and then interestingly this these this sort of more yellow yellow line um fun switches
43:31
out so it's actually a capture of what people do with their fund um and it's fun switching in general it
43:38
doesn't it wasn't all growth to conservative or conservative growth it's just fun switches in general
43:44
in new zealand so you can see it's quite active oh there's a there's a drop here oh there's a blip up here
43:50
uh it's sort of you know little drop but pretty flat for a period of time
43:56
there was a massive uh push on fun changing then not quite sure why may well be a
44:03
concerted program to get people to change from default to their accurate profiles
44:09
excuse me but you can see here the moment um covert started wearing its head around the world
44:15
people started switching their fund and in the moment it dropped and it did drop already
44:21
people really started switching their strategies some may have switched it to be more
44:26
growth focused but a lot changed it to be more conservative because i was thinking oh my god i've lost
44:32
15 of my funds already i don't want to lose any more and it's it is in hindsight the worst thing that can be
44:38
done because here you go we've all switched and then the market bounces back and now it's back
44:44
oh this is always last year so it's come up again back to where it was pre-coded
44:50
um so trying to time it and bear in mind you're making a
44:55
decision or we if we're changing it we're making a decision after the events already happen and
45:00
markets have probably priced that in so we're we're reacting way too late
45:06
um what was the comment that came through here people have delayed buying a house for the last two years awaiting a housing
45:12
crash meanwhile house price has gone up 30 yep and to that point i won't say the person
45:17
because they've just sent it to me um i know of one uh one couple the kids of my
45:24
clients that they sold their house thinking that prices were going to crash
45:31
and this is their own family home sold it waited and now can't get back in the market
45:38
because i either there's no supply of the houses where they want to look will be the prices have just gone silly
45:45
um so to to try and do this timing with your own family home that's a whole new
45:50
level um and you just just can't pick it really um so i'm just going to show you another
45:56
quick web link i always do this i click on the zoom control and
46:01
then it drops in front of the web pages i wanted to go to um this is just a random web page so i
46:07
won't give you the link um but this is miss the worst days miss the best days
46:13
and so just illustrates the difference so one dollar from 1990
46:19
through to 2020 ish um so all day so if you are invested in the standard poor's 500 s p
46:27
500 for all the time between 1990 until 2020 you would be up here somewhere
46:34
yeah if you missed just the 25 best days
46:39
you can see the difference it's read your return you would have been better taking no
46:45
risk and just invested in u.s five-year government bonds
46:50
so that's just 25 days over where we talk about 30 years
46:58
can you see that the reason why we don't want to try and time things does that blow anyone away
47:08
time in the market beats timing the market uh it's why it's important not to create a plan exactly exactly right
47:14
you've got to stay focused um and this is why we um
47:19
i think there's another graph here
47:25
so this particular graph is all days so here we are uh missing 25 best days obviously
47:33
missing 25 best and 25 worst days so yeah you do come out ahead
47:39
so that's basically missing the uh what's added into that mixes missing the 25 wastage markets drop
47:46
um but here's the question i'll pose to you we'll go back to this graph is let's say
47:52
you called it right you got out of the market just before the pandemic
47:57
my question usually is well how do you know when to get back in
48:03
so how what what is there a value you wait for is there
48:09
good news you wait for or what how do you get back in because the risk is
48:14
just like our presentation graph you know you might have timed it
48:19
perfectly let's say you've saved 30 you're in the money you're in cash
48:25
markets start recovering and then they take a step back because do you pull back out again because things are looking bad
48:31
so it may be easy to make the decision to get out but when do you get back in
48:40
yeah there's all sorts in the us around so cameron ray's point about when insiders are
48:45
buying and selling on the market again it's a it's a human being unless it's inside of trading which is highly highly
48:52
regulated against you would like to say um it it's still a human being
48:59
making a bet effectively okay well they might know microsoft's going to buy some extra widgets
49:05
and they might do better next year but you're talking about if you're trying to avoid crashes you're talking about
49:12
massive massive market movements uh in the industry we say stuff like
49:19
yeah you can you can pick some of the micro movements some of the more immediate movements but
49:25
it's notoriously hard picking macro and macro is big stuff
49:30
big movements um how does that happen and over a very long time frame as well
49:36
uh so yeah you can find a website that does that i think it's in the us there's something that shows and there's
49:41
research things that you can access as well that shows inside of buying and selling
49:48
might be an independent who knows
49:55
a good point good point um so to cameron uh jonathan raised a good point to
50:02
counter that one uh but yeah so you can see trying to time the market is it's a false error
50:08
and if someone gets it right yes they'll trumpet it loud but to do it consistently over a long time very very
50:14
hard to do uh almost almost impossible so uh to jonathan's great point remember
50:20
why you invested remember your strategy um and you know stay the course
50:26
because if your time frame hasn't changed if your needs haven't changed and remember as well remember here where
50:33
it dropped you're on kiwisaver your money is buying more so when things do recover as they did
50:42
you're because you bought more that was worth more um as markets recovered as well
50:47
any questions so far no i'm just talking
50:52
infinitely at the moment so i just want to make sure are there any questions this session's a little bit more open
50:59
but it's it's just you know getting around the i guess more the philosophy and
51:06
more of the thinking about the things we need to keep in mind i don't think anything's come through
51:15
all right that's cool um so what i'm going to show you now is
51:21
a little piece on ethical investments so um
51:27
of course under sorted there's something called the kingsaver
51:32
fund finder all right so if you go into that i'll show you i've got the other side of it here you'll see it looks very
51:39
similar to the smart investor where you can
51:45
do how it's invested fees and performance they can see it
51:50
except the only extra thing here are services so it's another way to filter a
51:55
short list of candidates and what i might do is oops
52:01
just give you that link as well okay um so what you can see here is what
52:08
sort of funds such best and you can put growth and suddenly it comes up a lot quicker
52:14
69 funds and you might want to have services as first
52:21
so new zealand funds kiwisaver scheme their services are 100 so they have really good service and
52:27
support all right and then the next one down is asb balanced at 93
52:33
or you might say no i want to find out lowest fees first so there you go it's the invest now foundation series growth
52:40
fund 0.37 simplicity 0.38 juno point four seven smart shares point
52:47
four one or you might wanna do returns and you can see here key strength is an
52:53
equity fund i think this is the one that came up when we were doing it last time uh 14.47
52:59
um anyway it's a quick easy way to figure out a list but the one thing i do want to show you
53:05
is ethical things and when you see ethical ones it will
53:10
mean different things to different people and their show details so these are um
53:16
now this is probably the only page oh jake now you're getting technical
53:23
i'll um talk briefly to that after i just finish this piece um these are the funds that you can access where
53:30
um oh it's probably the only page on the sorted site that will actually sort of list providers surprisingly
53:39
following schemes have a framework in place to filter out investments that can that could be considered unethical such
53:45
as tobacco weapons so it names all the fund managers that have framework in place
53:50
um and then you can also go through specifically um specific ethically
53:56
orientated funds and i'll just pick out one amana growth fund
54:03
so hopefully this comes up
54:09
oh there you go um it takes you through to the
54:16
smart investor just trying to find where is it
54:24
oh it doesn't say oh you have to go to the website um the reason why i clicked on this one is it's a muslim
54:31
um faith-based fund so it just means there you go strictly uh sheree
54:40
so they won't invest in companies that lend money out and charge interest um so it's
54:45
uh according to muslim uh based faith and
54:51
uh morals as such um so yeah that's a different type of ethical front i don't
54:56
know if that surprises some people but that is out there as well but there there is a list of some of
55:01
them the other one is well we don't tend to the one thing we'll caution against
55:07
using this particular website is that everybody that's listed on here
55:12
pays a fee to be listed on here so it's not quite a capture all
55:18
but it is a useful um sort of questionnaire where you can actually filter down
55:23
you know i might be not don't want fossil fuels but or tobacco pornography but heck yeah
55:31
let's go weapons and i want a real alcoholic company type thing
55:36
um you answer some more questions here that suits best yep uh yeah low fees
55:43
yeah i actually will make low fees a little bit more important my risk profile i'm going to be
55:48
high returns 30 to 100 21 plus years
55:57
and what you can do is quickly click on it and then based on your ethics that you've answered it'll
56:03
give you a bit of a short list well a list of funds that may actually match up so you can see here pathfinder kiwisaver
56:12
meets my void's concerns pretty well and applies higher standards no three-year data and their fees and
56:18
you can easily see okay great i've got a bit of a short list so that is mindfulmoney.nz
56:25
but like i say we don't like to recommend that one too much because
56:31
they only have a very small assortment of investment managers that pay to be part
56:36
of it but it can be helpful in trying to start a bit of a short list has anyone
56:42
actually invested with a manager because of their ethics
56:58
oh quiet on that one i thought it better say something because i don't think i'm frozen uh
57:04
no okay that's all right is ethics important to you
57:09
like knowing how your money is invested and it's very personal like in terms of
57:16
you know if it's important to you if it's invested in fossil fuel companies or are you
57:22
invested in more pv uh solar alternative energy based
57:27
companies so you know do you do you have a stance on that does anyone have a stance tonight
57:36
uh i had no idea about choosing basically thanks okay you know it's cool it's just it's the great thing about the
57:42
kiwisaver market is becoming more and more developed but now we actually do have a choice about who
57:47
manages our money um now one thing i should point out as well
57:52
not go back to our presentation is that um
57:58
there we go is um the default kiwisaver if you're a
58:03
default kiwisaver provider the government has mandated that those fund managers have to abide by
58:10
um almost a government exclusion list so there's no fossil fuels
58:17
no armaments and a couple others so if you're in a default fund you can be
58:22
assured that it meets a little bit of that criteria however if you want to have more control over it you'd have to
58:28
go out and choose your own provider based on those things um that is cool but if you have to go watch
58:34
the recording again i don't think there'll be too many questions but there might be um
58:40
so we are you know that's the that's the end i told you this session was a little bit more
58:46
well not loose but um only a few slides and was more about getting your opinions and feedback on
58:52
things uh now jake asked the question um where are we
58:59
how can you calculate the tax leakage of respective funds
59:04
um and probably let's start at the basic level and say if you're in a pip
59:10
investment scheme a portfolio of this entity or a pie not your apple pie or mince pie
59:16
um but a pie investment now all kiwisaver investments are pies all right you need to make sure you get your pir
59:23
rate uh at the right rate all right um now i might just
59:29
stick around if you can i'll just quickly show you where that is so on here is get your kiwisaver right
59:36
remember the six steps and getting your kiwisaver on track
59:44
and if i scroll down check your tax rate and it's really easy
59:50
to do so is your income less than 48 000 each year oh let's hit sometimes you may be paying too much tax in the
59:57
kiwisaver have a look here and contact cubesat right so if you look here we'll take you through the iod
1:00:07
and then it's a tax page which is not exactly
1:00:12
helpful because you don't want to go to a tax page what you want to do is search pir
1:00:24
find my prescribe and destroy and let me do that as a link
1:00:35
so work out my prescribed invest rate you can say what type of best are you
1:00:41
can you save a member what's your tax residency new zealand
1:00:46
kiwisaver and then it's going to ask you do you receive income from overseas
1:00:51
no and either last two income years watch your taxable income less than 14 no
1:00:57
in either the last two years what's your tax will income less than 48 and if you have no
1:01:03
you have few outcome and it says you should be on 28 if however you answered in this and you
1:01:10
had one year where your income reduced you know it then asked you an extra question and either the last two years
1:01:18
was your taxable income plus your income less than 70 000 and you could say yes
1:01:24
and look it's a difference so you've now 17 and a half percent
1:01:30
versus 28 so that's let's just call that 11 saving
1:01:35
that's an extra 11 that you're going to generate right that's cool uh thank you you've got to
1:01:41
go you've got to go hopefully we'll see you tomorrow um so always always always as a first step make sure you're on the
1:01:47
right pir rate because you may be paying too much especially if you haven't actually um
1:01:53
chosen your provider and you're in the default scheme the ird did do a bit of a cleanup a
1:01:59
while back but you want to be in control of these things nothing worse than that paying too much
1:02:05
tax and not being able to get it back so that's the first piece jake's question about tax linkage
1:02:12
is about how investments are managed in the fund and i think without me boring everybody
1:02:18
in detail i would ring the fund manager because depending on how they've structured the fund
1:02:24
in terms of costs and how they invest the money offshore some fund managers and funds are very
1:02:32
very tax efficient and others not so much so
1:02:37
i think bring the fund manager and ask that question sorry jake i can't probably answer that question
1:02:42
what's this question can a family trust invest in a pie managed fund and pay just 28 um yeah they can it's a family trust is
1:02:50
another legal entity and you know you've got choices in terms of what the ir rate can
1:02:57
do you can't do kiwisaver obviously because your family trust but your pir rate can be anywhere from
1:03:03
zero up to 28 uh and zero tends to be for charitable
1:03:08
um or charities i should say um or it can be for where people have
1:03:14
losses accrued and they get zero percent so that they don't pay
1:03:21
tax because it's an efficient way because they've got losses to use but again that's getting into
1:03:27
complicated tax arena so we might go there um cool all right that's good
1:03:32
then answer that question um any other questions on just while i wait i'm going to pop up a link
1:03:39
now do do send us feedback about content about these things because
1:03:45
it is a what we call a pilot what we've tried to do is
1:03:51
break up the um the old get invested course which was
1:03:56
over two days and a lot of employers found it quite hard to commit two days to a big topic like
1:04:03
that um so what we're trying to do is break it up into five modules alright stacy see you tomorrow um five modules
1:04:10
so please do send us feedback that the contents hit in the mark or if we could add more to it
1:04:16
um because it will be really really helpful which will be cool all right
1:04:22
any other questions for me it's a little bit different without mark because marks and all these sort of banters are going to have a break
1:04:34
i don't think there's any questions all right so keeping in mind uh inflation
1:04:41
so all good nathan uh keep keeping the vacuum on inflation and the need to grow
1:04:46
your money ahead of it uh and remember as well that if we're picking our
1:04:52
investment strategy or the type of investor we are um that a we're comfortable with it and b it matches our
1:04:58
time frames um and just making sure that it's got enough of a
1:05:03
bit of oomph in there and the engine to grow ahead of inflation and remember if
1:05:08
you're ever using a calculator just even play with the button turn it on and off the inflation button just to see the
1:05:15
difference but always always leave it on that would be the key
1:05:20
and the last bit really to end it off is time in the market not time in the market
1:05:26
all right nobody can pick it and as long as you stay invested up till this point in time it's rewarded
1:05:32
those people brilliantly who knows what happens in the future but you've got to work on something
1:05:38
much better work off that um cheers jack all good um very good so i will leave you all to
1:05:44
it so tomorrow don't forget it's at two o'clock and it's starting on ah
1:05:52
jonathan the key session oh you'll have to watch the video then um sorry i can't make it but i've really
1:05:58
appreciated your input over the last few days it's been awesome
1:06:03
um and uh yeah i think you should open up a little little office on base
1:06:10
steam financials or something like that that would work quite well but no no but seriously really appreciated that so
1:06:15
thanks jonathan thanks so much um and um yeah all right i think we're
1:06:21
there all right well um i'll bet everyone if you're well you'll probably see me heating up because it's getting quite warm in this room uh but keep well
1:06:27
stay safe and uh we shall catch up tomorrow at two o'clock for getting started with shares
1:06:34
oh you love it cheers then all right we'll catch you then