NZDF Debt

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there we go uh and also importantly if
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you do want to send me something on chat
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that you do want to share but not have
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your name called out to it so to speak
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uh this recording does not capture any
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of that just captures my mug
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and these slides on screen now as is
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often the case i'd like to offer this
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i'm still hopeful that someone wants to
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run through the kadakia please raise
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your hand and i'll unmute you and you
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can have the floor
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um i tried last time
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no one
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and this looks like it's going the same
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way i'm hopeful that tomorrow or we have
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a message here
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uh oh it's just mark so talking about
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the benefits at
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nzdf.nil.net thanks mark um so any
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queries about today's uh webinar or any
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queries in general um feel free to send
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it to that web address that's on your
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chat
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and the team there will get on to that
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uh within 24 hours so that's pretty
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quick smart uh right someone's
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volunteered so i will take us through it
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and i'll say it properly this time i'm
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not trying to say the next lying down
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the wahoo
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so thank you and um
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as
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i've often said
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and happily we run the sorted site so if
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you haven't seen this before this is a
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sort of that work presentation because
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technically you're at work
01:37
defending our
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wonderful country
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uh whether by sea
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uh air or land
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um but yes so sorts provides free
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independent
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um
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and importantly impartial information so
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we're never ever going to recommend a
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particular bank or provider to go
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through and the beauty of having the
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sorted website at your disposal is there
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and it's been designed to empower you to
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make your own great financial decisions
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and choices in life but you can also
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complement that with your false
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financial hub which um you know mark's
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been a great
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deal of
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blood sweat and cares putting that thing
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together getting it ready so that
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everybody has one portal to access all
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the benefits available through
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and it's not just benefits it's also a
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lot of
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information there as well
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which can be accessed including these
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videos whenever they get uploaded so um
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brilliant stuff so four things today
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always four things
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um
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let me just slide my participant window
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across here
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so keep the chat coming if you have any
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questions as i go along
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um so we're just touching on true cost
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of debt so getting our heads around you
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know if we're going to borrow money
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is it going to cost us and just i i
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think creating that that little
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pause and thinking to make sure
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is debt the best option to actually use
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to get what we want to get so to speak
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a couple of debt strategies and i think
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in the last session someone mentioned uh
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debt snowballing um which is brilliant
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because actually that is one of the debt
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strategies and the beauty of these debt
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strategies is that
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it doesn't just have to be
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um
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if you have you know lots and lots of
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little loans it can also be for your
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mortgage as well so
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we're going to look at two of those the
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debt snowball and the debt avalanche
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um i don't know why they packed the
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winter winter type things because we're
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in the spring now but anyway um meeting
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my commitment so looking at the other
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side of it the more um
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unfortunate side where if we're looking
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at stroke or not looking but if we're
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finding we're going to be struggling
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with our debt commitments
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what are the
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obligations that the lender has but also
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what are our rights and where we can go
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to to get some advice and get some help
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as well uh and then last but not least
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rounding out goals for git
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so ask away uh any questions that you
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have because
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uh you've got mark who's an expert
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and
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also an expert in all things in the df
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benefit orientated
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and then my good self who's been in the
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industry for 30 odd years now because
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it's showing on my chin how old i am um
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should be able to sort of just guide you
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through and point in the right direction
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more often than not a lot of the answers
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and a lot of the places to go to are
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through the uh
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in the air force financial hub portal
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funnily enough um so our polls aren't
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working there seems to be an upgrade to
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zoom
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in the last few days and ever since then
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the polls has just gone completely
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um so the question
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and i'm looking at the trumpet
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um what is your attitude
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so
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chuck it on the chat i'll see if i can
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capture it and keep up with it um i
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ignore it uh b
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all crikeys uh b overwhelming c
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stressful d avoid it and e it helps to
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increase my opportunities so
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we've got some
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we're gonna go back here a b e d
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a d d
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so it's
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um you know this is a very very
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well-designed polling system that i've
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got
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i think we could judge the average
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kiwi in new zealand to be feeling the
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same way
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but no seriously
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great to see some bees coming through so
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we don't just view debt as a as an evil
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so to speak or to avoid at all costs we
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actually can use it to give us some
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opportunities
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um during our financial journey
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um we had some
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some c's and d's
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uh avoid it completely and uh you know
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it's it's still a great philosophy to
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have
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um
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it's just that when we want to make that
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big jump um say for instance buying a
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house
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we need to use debt to get us into that
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house unless we save
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or if we've been fortunate enough to
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have inherited
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i myself had to save or deposit then use
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it well my wife and i did i shall kick
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my butt but she knew it was just me
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saving it saying i saved it um we both
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saved for a deposit and then took
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mortgage out to buy a house so we you
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know we had to do it
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we it just gave us that opportunity
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straight away
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but then since then since buying a house
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what we do
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[Music]
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is avoid debt so any other debt so we
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don't go and do hps or
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have credit card debts outstanding
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because we're our focus is on getting
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the mortgage
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to put we don't want a mortgage when we
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retire that's basically our goal
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um so yeah appreciate that and then we
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also had some serious saying it can be
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stressful and we had a b a b in there as
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well which is it's overwhelming and it
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can be so hopefully you know after today
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we've got some a couple of strategies
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around repaying debt
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um and
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some more information about your rights
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and obligations and lenders and
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hopefully that just adds a bit of
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comfort to things as well
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but if you want uh feel free on the chat
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just to send me a message around
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what you may find overwhelming about
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death or stressful and i'll see if we
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can add any two cents to that um i might
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yeah send it on the message just above
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this little drop down box send it to
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hosts and panelists which will come to
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me nobody else see it
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and i might share it with the group and
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there might be some
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that have been put or feedback from
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other people on
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as well to help out which we call
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so we have 26 of us on at the moment
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which is pretty good
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um all right question for you all bathed
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in orange again what do we need to
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consider when taking on debt
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what do we think what are what are some
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ideas of what we need to worry about
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well not worry about but think about
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before we take on debt
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um love it time to pay it back yeah
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definitely uh can you service it
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uh the ability to pay it back yep
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sustainability
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brilliant
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uh how long it would take yeah so that
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time is a big feature isn't it how long
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is it going to take
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um
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sabrina with repayment length uh
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interest love the typing sabrina the old
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s went walk about on your interest there
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but i i knew what you meant
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um
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ian term rates startup cost hey yeah
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great point startup cost what are the
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fees to start thing up
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uh especially if you're looking at a
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person wanting to buy a car with a bank
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you might be stunned for an
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establishment fee and then also really
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important figure out are there any early
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repayment fees because if you want to
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pay the thing off quicker you don't want
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to be stunned for it as well
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um
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make sure how much the interest is yes
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how much it's going to cost you
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oh b hit us with opportunity costs
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love it
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just in case anyone doesn't know what
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that is basically it means
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what is the cost
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of doing this loan over something else
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what is the opportunity i'm giving up by
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not doing
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that option and i'm doing this option
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um
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what do we got here what the interest
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rates are
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and additional fees brilliant love it
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um
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i've got lengths and working life
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remaining yes love that too that's
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really good um jared ryan digging it out
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with does total expense generate capital
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or cash flow exceeding debt the payment
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total
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that's a very accounting friendly term
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there jared love it it's good yes no
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you're exactly right
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and the reason why we ask this question
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is
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it's not just what the bank or the
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lender assesses
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because they have a calculation and you
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know their calculation might be
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you need a minimum monthly net surplus
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sphere after paying for everything
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or they might say yep okay
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for this amount of borrowing you need to
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have um
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five month million months in that
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surplus obviously but maybe you might
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need to have
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a certain amount of other money
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available or emergency funds whatever it
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might be so there's different rules that
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lenders apply
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in assessing lending especially with
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mortgages they don't just apply whatever
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the lowest fixed rate is they apply
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maybe a five or six percent interest
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rate just to make sure that we can
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handle an increase in interest rates
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but that's the lender
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so the reason why we ask this question
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and all of you touched on this that um
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shared your
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information
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is it's also on us
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so we need to figure out can we afford
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it because we have a standard living or
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a way of living that may be impacted by
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having loan commitments that might be
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too large
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or we might be in a job that we don't
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feel too happy with you know before
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probably being there somewhere where
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we're working with someone and we really
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can't stand it and the last thing you
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want to be is in a you know an indebted
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situation where you're forced to work
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through those sorts of things so there's
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other things that play for us personally
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uh well us personally in our whanau and
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our people around us so to speak
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um so brilliant yes so you've all
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considered that which is good and i
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reckon you're all going to nail these
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quizzes pretty easily
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we should make them a little bit more
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complicated because i think they're
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pretty pretty there um so
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a b of c someone's always going to have
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me with us probably uh if you put 20 000
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on
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the paper of well-deserved holiday
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on the islands on your mortgage and look
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at that this is how old this question is
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six percent for 20 years what do we
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think is the true cost of that holiday a
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at 25 b 28 c 34
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i'm guessing for the delay people have
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calculating on a calculator right now
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so what do we reckon you put 20 grand on
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six percent for 20 years
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b's hit us with c 34k yep
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actually if that's right b then you take
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the
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gold platinum medal because you're first
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vixx gets
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silver
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alex gets bronze with c
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ah thanks jared that clarifies that one
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um
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time added to working life yes
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a little winky emoji as well um yes
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perfectly right so
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misha just rounded it out there c is
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correct so
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you know putting a holiday and you know
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we all need a holiday on the home loan
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over 20 years
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makes the repayments very very small
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and like oh my god we've had a massive
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blowout on the holiday we're already
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paying 20 bucks a week for it it's
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fantastic but the reality is
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we've uh what now paid 34 000 back
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so
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that's money that could have been in our
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back pockets but no it's gone to
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some big old bank out there uh now
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here's a question for all us aucklanders
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uh i only say this because um there
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seems to be so many suvs in auckland
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city which is not really a farming city
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anyway so 80 000 on your mortgage six
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percent for 20 years again
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uh what do we reckon what's true cost
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92 100 430 a b or c
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delay on this one
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maybe the internet's gone slow
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i think i think um zoom holds the
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answers and then sends them all through
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it once
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uh i've got a couple of bees i love that
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b with a question mark
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sure
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uh we've got some c's coming through 138
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uh another c a couple two capital cs and
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a little c's here you go
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um yes there you have it it is c so
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um eighty thousand six percent twenty
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years um
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138 thousand dollars
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again who gets rich out of that
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it isn't the
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car company
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it isn't
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us
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uh it's definitely going to be the bank
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i mean that and that's assuming the
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interest rate for 20 years stays exactly
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the same
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um oh yeah great point mark
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especially for a car or even a holiday
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you know because the holiday is great
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while you're there and you come back
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it's great memories but within 12 months
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it's a bit of a distant memory
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but more to the point with the car 80
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000 on an suv how much is that worth
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after
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i don't know well how much is it worth
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the moment you drive off the car lot and
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then how much is it worth in a couple of
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years time or five years time
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let alone 20 years time um so it just
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puts it in perspective that if you're
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going to put a loan payment over that
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long
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um
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yeah it's not going to be terrible uh
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terribly good fun at that point in time
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so hopefully that sort of illustrates
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that side of things
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um i'm going to touch on an important
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tip as well
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but
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i'll do that
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we're going to calculate now
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um oh what's this here try paying 23
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interest rate for a mortgage when i got
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my first one late 80s
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i know well not saying i got my mortgage
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in the 80s but
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when i joined the red bank when i was 18
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mortgage rates were
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like 18
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19
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and then it's just been one-way traffic
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but there was a period of time where
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they were dropping away and then they
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jumped up just before the global
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financial crisis and lots and lots of
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people came and go oh my god i need to
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fix my loan i can't be paying this
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double digit interest rates and they all
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fixed for like three four five years
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real long terms and then what happened
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with interest rates they dropped and
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then they wanted to break and man some
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of the penalties to break were just eye
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watering expensive
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oh mark's just rounding up the car
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coming after five years probably
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worthless for 40k um
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and oh we had a great comment here a
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lesson i was taught don't get into debt
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for liabilities
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so
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liabilities is basically something
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that's going to
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cost you money
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so you know you could argue a car
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does turn out to be a liability because
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you've got to pay to have a service
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to maintain and at some point in time
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there'll be wear and tear and so forth
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and generally speaking cars don't go up
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in value unless you don't drive them
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which sort of goes against the grain
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really doesn't it um sure
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um
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oh okay yes good good point um yesterday
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i mentioned uh about some other good
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mortgage calculators we've got to ask
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again for the links i was regarding
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seeing the impact one of additional
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payments do so um what i'm gonna
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good point perfect segway so here we go
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uh under sorted so if you are new to my
17:56
particular or to our particular webinar
17:59
here i've just shared the link for
18:02
sorter.org
18:04
but under tools all these tools are
18:06
completely free and i encourage you to
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sign up if you can
18:09
we have something called a mortgage
18:11
calculator
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the only problem with this one is it is
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a cool calculator it's very simple shows
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you you know what things cost
18:19
um five hundred thousand
18:23
um let's just call that uh three percent
18:25
because i've been an example for three
18:28
30 years
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and it's 973 dollars per fortnight so
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you can quickly see
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i've borrowed 500 000
18:37
it's gonna cost me an eye watering
18:40
259 000 of interest or 258573
18:44
and they'll pay it in 30 years time
18:48
what a happy thought
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um so totally your pay is 758 000. so
18:53
half a million is what you've got to pay
18:54
back so whatever you borrow you have to
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pay that back
18:57
and the thing that we can control
19:00
is how much we pay of this guy interest
19:03
so by paying extra back we can actually
19:05
shorten the loan term and pay less
19:08
interest which is really important so to
19:10
the person that asked about the loan
19:11
calculators uh this particular one i've
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picked out um it's just
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you know i'm not recommending them per
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se but it's just the calculator i found
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uh westback i'll just put it on here i
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think mark have you got some calculators
19:25
on the
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force financial hub that people can use
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or is that linked through to
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providers
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oh lymph disorder okay so yeah i mean
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you can just punch in mortgage
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calculators and you'll come up with a
19:39
whole raft i've just put the link to the
19:41
westpac one
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um which funnily enough you do have a
19:45
package through them for nzdf employees
19:50
oh mark shared another couple of ones
19:51
anz then msn money both have good
19:54
calculators as well
19:56
now one thing i will touch on is tip
19:59
number one for the debt webinar is you
20:02
see this one here
20:05
interest dot co dot nz now if you've
20:07
never heard of it just click on the link
20:10
i'll show you the link yeah this
20:12
unchecked
20:15
there you go
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um but it's basic it's not linked to
20:19
sorting anyway so be aware of that
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um yeah jared awesome you know the
20:24
website by the sounds of it
20:26
but it's basically a
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repository of all interest rates in new
20:31
zealand
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and look what happens if i click on
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borrowing so
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you know
20:38
let's close this ad
20:40
let's close it
20:42
because we're doing a debt session we're
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not doing mathematics unfortunately um
20:47
so here we go and now it's chewed up
20:49
some of my system resources that's
20:50
really handy um but i clicked on
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borrowing rates and the first thing
20:55
that's come up
20:57
is i might just switch off my video
20:58
because this website seems to be chewing
21:00
a little bit of my
21:02
resources um
21:04
what's come up is the mortgage rates for
21:07
all the banks and yeah as you can see
21:08
you've got anz asb bnz
21:11
um bank of rota bank of china if you
21:12
want to go there ccp co-op heartland
21:15
ages all the banks in new zealand and
21:17
then if you keep going down then you've
21:19
got the building societies credit unions
21:22
so you've basically got access to all
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the interest rates
21:26
in new zealand all at once and if you
21:28
want to do a quick check of what you're
21:29
paying or what you're about to pay from
21:32
your bank um then you can go into this
21:34
website interest.
21:36
find it all out and actually handle
21:39
negotiate because you've always got that
21:41
power to negotiate with your
21:43
if you don't want to do that um
21:45
milestone direct who
21:47
work closely with things at deer they
21:49
have
21:50
a mortgage advisory component as well
21:53
so you get them to work on your behalf
21:55
so we've got a couple of options here
21:56
which is brilliant and then importantly
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if you wanted to on the other side
22:01
you could look at savings rates then it
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summarises all the interest rates
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for your bank accounts with all the
22:07
major banks and all the other
22:09
ones as well so if you never knew about
22:11
that website
22:14
oh magic gone back again um if you
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didn't know about that website then um
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yeah such a great um tool i have just
22:22
get a bookmark and you can always go
22:23
back to it when you need to um excuse me
22:27
but one thing i do want to get across i
22:28
don't think i've had any questions on
22:30
this yet i hate it when that drop down
22:31
box comes down go away
22:34
um is
22:37
so here's our loan here's our five
22:39
hundred thousand dollar loan three
22:40
percent thirty years it's gonna cost me
22:43
nine hundred and seventy dollars a
22:44
fortnight now it's a bit hard to sort of
22:47
draw
22:48
live
22:49
but i just wanna show you that
22:51
remember how we talk about or you may
22:53
have heard how compounded growth or
22:55
compounding interest is the best thing
22:57
since spread for your investments
23:00
that's the worst thing since slight
23:02
spread for your loans
23:05
so quick question for you all how often
23:08
is interested act interested how often
23:12
is interest calculated
23:14
so see if we can come up with that
23:20
enjoy some measure daley
23:22
anyone else want to venture array
23:25
b daily as well awesome
23:28
daily daily
23:30
i'm sorry to catch out yes interest is
23:32
calculated daily and charge i don't know
23:35
it might be weekly fortnightly monthly
23:37
so the more you can bring your balance
23:39
down regularly
23:41
the better it's going to be for you over
23:43
the long run so as a quick example
23:46
you'll see here but the fine-tuned loan
23:48
this is why i like this particular
23:49
calculator it's just easy to use
23:52
um instead of paying 970 fortnight let's
23:56
pay an extra i don't know 100 bucks a
23:58
fortnight so what does that make a
24:00
thousand and seventy
24:02
yeah and then we're going to hit save
24:06
all right so
24:08
this is how
24:09
powerful it is to just pay a little and
24:12
long
24:13
to a home loan i mean you can have the
24:15
same sort of effect if you're saving
24:17
money but we want to pay the home loan
24:19
off quicker
24:21
so you can see here we're originally 30
24:23
years stroller 30 years but by paying an
24:26
extra 100 bucks a fortnight
24:28
they've shortened it by four years and
24:30
four months
24:32
so the interest we've saved is forty
24:34
thousand dollars
24:36
so think about it
24:37
hundred dollars
24:39
forty thousand dollars saved
24:42
now another way of thinking about this
24:44
as well is where it says you're going to
24:46
be debt-free four years sooner
24:49
is that's four years and four months
24:52
worth of
24:54
uh
24:56
970 dollars
24:57
so what's that that's um just shy two
25:01
grand
25:02
a month so
25:03
which is what 24 000 a year
25:07
so you know your cash flow that you're
25:10
going to benefit from so extra money
25:12
you're going to have in your hands is
25:14
about what 48 to 50 000
25:17
that's how much of an effect
25:19
making an extra repayment um can have
25:22
and and
25:23
it's and it goes a lot to do with our
25:25
first session around getting our money
25:27
lines around it we're not wired to think
25:29
about the extreme long term we're wired
25:32
to think about the here and now
25:33
immediate changes so you know
25:36
paying out extra hundred bucks now is
25:38
like ah really what's the point
25:40
but the point is
25:42
in 25 years time or sorry 25 years time
25:45
in eight months time you're going to be
25:47
debt-free how awesome is that and this
25:49
is only a hundred bucks a fortnight
25:52
for the next 25 years imagine if you
25:55
i know in five years time change drives
25:58
went up ranks whatever it might be you
26:00
had an extra 150
26:02
what effect that could have
26:05
so yeah hopefully that's a little bit of
26:07
a
26:08
tip there to get you thinking about
26:10
paying a little bit more on their own
26:11
ones um any questions
26:14
just conscious of them
26:16
yep and on a bit and um
26:30
uh so quick video now and this is um
26:34
uh
26:35
bronze one uh
26:36
just a personal story around
26:39
um oh what's this so we've had a shared
26:42
here after sitting on that question last
26:43
night i googled and found money hub
26:45
overpayment calculator it gives a visual
26:48
graph to show where it cuts and allows
26:50
one-off payments in regular edition oh
26:52
cool all right hang up i'm going to copy
26:56
that comment
26:58
only because i've sent it to me i don't
27:00
want to share the name
27:02
um but i've sent it to everyone so if
27:04
you want to google it it sounds like
27:05
it's a calculator that can show it in a
27:06
picture form and i
27:08
prefer picture forms because it's just
27:10
so much more powerful
27:12
but so thank you so much to mr
27:14
contributor for that one awesome
27:17
so francoise
27:19
personal story here is about getting out
27:21
of debt and this leads perfectly into a
27:23
couple of different strategies we're
27:24
going to talk about
27:30
hey i'm francoise and my husband and i
27:34
live in pattone and
27:36
i guess we've
27:37
always had debt it started like
27:41
16
27:42
000
27:43
gradually got bigger and bigger it sort
27:44
of grew like mold and then we're like
27:46
wow yeah at forty thousand dollars we
27:49
had three credit cards a store card and
27:52
a finance company loan i just sort of
27:55
thought well enough's enough
27:57
so the first step was to sort of sit
27:59
down go through all of our debts and
28:02
work out like a bit of a weekly budget
28:04
once we've done that we looked at
28:07
saving up a safety net so when things
28:10
come along as they always do we wouldn't
28:12
have to turn to the credit card
28:15
and um oh i've also got these envelopes
28:17
this is just
28:19
a small selection i have about nine of
28:21
them but um this is my clothing fund
28:23
this is
28:24
a special events fund so christmas and
28:27
birthdays and easter there's
28:29
entertainment funds it's really good
28:31
because it um having to hand over cash
28:35
you sort of think more about
28:37
what you're doing
28:38
we could pay it off faster if we just
28:40
went completely bare bones but we sort
28:42
of want to live too
28:44
there's some things you have to do that
28:46
just make life worth living
28:48
we want to start saving up a bigger
28:50
safety net so probably like three months
28:53
worth of our salary so that we've sort
28:55
of got security there and then after
28:57
that it's a look at making a big dent in
29:00
our mortgage and just getting rid of
29:01
that so it's a long way to go but
29:04
it's good to kind of feel like we're in
29:06
control
29:09
[Music]
29:15
so yeah um
29:17
paying it off fast which is a perfect
29:20
need into this so i mean i showed you a
29:22
quick example and the person that shared
29:24
that particular money hub overpayment
29:27
calculator
29:29
i might actually give that a go after
29:31
today's webinar
29:32
just to see how it works and then maybe
29:34
share it with next week's
29:36
debt lucky recipients
29:38
uh webinar um but yeah though so
29:41
hopefully it just shows you the power of
29:43
just making a very small change to your
29:45
payments
29:46
i mean i use the hundred bucks just to
29:48
make a little bit dramatic but even 10
29:50
20 30 bucks a fortnight
29:53
per week can have quite a massive effect
29:56
um are there any other ideas for paying
29:59
off loans quicker does anyone want to
30:02
share any
30:04
by chance
30:08
so we're going to talk about just in
30:10
case they come up uh dead snowball and
30:12
one called get avalanche
30:15
oh yeah
30:17
that's a good strategy when lotto
30:20
um definitely unexpected uh we would
30:24
remember from earlier this morning that
30:26
that would be a financial
30:29
tailwind yes exactly right
30:32
um
30:33
oh yeah yeah good example too if you've
30:35
accumulated quite a bit of lead cash in
30:37
some leave and use that as a as a lump
30:39
sum repayment love it good
30:42
um and hitting us with pay the cheapest
30:44
one first so on and so on put money into
30:47
the next one
30:48
love it and and you've stolen our
30:50
thunder for um get snowball but that's
30:52
cool um yes no brilliant
30:55
uh i think that might be it for them
30:59
ah good question so what about
31:02
refinancing regularly
31:05
and it's gonna be both sides as well it
31:07
doesn't just have to be home loans it
31:09
can also be
31:12
personal loans or
31:14
consolidating loans as well so
31:17
tip number two well i'm not tip number
31:20
three i'm not quite sure um the one
31:22
thing to remember when you if you are
31:24
refinancing or consolidating loans
31:28
is that you want to be very very sure
31:30
that you are on either the same term
31:33
at a lesser interest rate
31:36
or
31:37
using yours your repayments that you've
31:40
saved to actually pay down that loan
31:42
quicker than the original term because
31:45
it ensures that you're going to pay less
31:46
interest because the key
31:48
thing um like
31:50
you know that we can get called out on
31:53
is if a bank or lender goes hey come to
31:55
us we'll consolidate all your loans to
31:57
fund easy to manage payment well that's
31:59
great why wouldn't you do that but the
32:01
fact is
32:02
if you took your you know let's say you
32:05
have three loans and they each have
32:07
three four or five years to go
32:09
and you went to your bank put it on your
32:11
mortgage and put it over ten years
32:13
that will cost you probably more
32:15
interest putting it over a longer term
32:17
yes you save your repayments
32:19
but the fact is you'll pay more in
32:21
interest because you put it over a
32:22
longer term
32:25
originally
32:26
so be very careful and so to the person
32:29
that asked about refinancing regularly
32:31
yeah it can work but the key would be
32:34
keep your repayments at least the same
32:37
and be very careful of those
32:40
unexpected costs that come into it
32:43
so if we're looking at a home loan and
32:45
refinancing um your solicitor your legal
32:48
fees any valuation fees any sort of bank
32:52
fees that might be applicable
32:54
and also looking at the bigger picture
32:56
as well so what other things do you get
32:59
as part of your package so specifically
33:01
nzdf
33:03
employees you get a banking arrangement
33:05
through anc of westpac
33:08
what am i going to lose if i left those
33:09
two banks or left one of those banks
33:11
into another one as well so just always
33:13
look at that with the picture hopefully
33:15
that answers your question about
33:17
refinancing
33:19
um
33:20
hey there's another good idea offset
33:22
account for mortgage which we can talk
33:24
about that and yes there was an answer
33:25
as well so
33:26
snowballing debt and i think it was that
33:30
that was pan um so anne
33:32
gets the chocolate fish it's coming your
33:34
way in
33:36
here it goes
33:37
um so let's watch a quick video this
33:39
paul in case you saw him at the
33:40
beginning uh
33:42
and it's in his younger unshaven days
33:45
um but he's talking about jet snowball
33:47
what it means here we go
33:56
with a dead snowball you knock out the
33:59
smallest debt first
34:00
move on to the next smallest and keep
34:03
going until you've got the momentum of a
34:05
snowball rolling downhill
34:07
eventually taking them all out
34:09
there are two advantages to this
34:12
you get the boost of seeing one of your
34:14
deaths disappear sooner
34:15
and that sense of progress propels you
34:18
towards eliminating the next one and so
34:20
forth
34:22
much about money depends on how we think
34:24
about it
34:25
and getting on a roll with a debt
34:27
snowball can really work for some people
34:30
and since some of the small debts may be
34:32
to family or friends
34:34
paying those back early can benefit
34:36
those relationships too
34:43
yeah so
34:44
you know for those of us
34:50
jared hitting us with complex questions
34:52
i love it um so we just had a question
34:55
as well just comment about offset
34:57
account for a mortgage and a question
34:58
mark so i'm guessing what that means is
35:00
uh offset accounts for mortgages any
35:03
good and what do you think so i'll
35:05
answer that with that one
35:07
and then jared hit us with would you
35:09
recommend using time as a metric
35:12
when deciding on repayment options for
35:14
cross-reference between loan providers
35:18
um
35:19
jared crikey love it um what we'll do
35:22
we'll just watch this other video
35:25
called the debt avalanche which is the
35:27
other debt
35:28
strategy and then we'll have a sort of a
35:31
good mull through the
35:33
options and such and answer those two
35:35
questions here we go
35:39
[Music]
35:44
a debt avalanche is where you take out
35:46
the debt that's costing you the most
35:48
first
35:49
you start with the high interest debt
35:51
like credit cards or a car loan and as
35:54
soon as that's taken care of move on to
35:56
the next highest interest rate
35:59
rinse and repeat
36:00
financially speaking the avalanche is a
36:03
quicker way out of debt since we can
36:05
save more on interest it's the most
36:07
efficient way to repay
36:09
[Music]
36:14
long outro music
36:17
um i won't click on the next one because
36:19
there's a slide coming up on sound of
36:21
music
36:22
so just just to those points and
36:24
especially to the dead avalanche it is
36:26
definitely the most efficient way
36:28
uh to repay debt um but be very careful
36:31
of it because you know this is the sort
36:33
of maths thing that says yes you must
36:36
repay the highest interest rate debt
36:38
first
36:39
then move to the next one
36:41
both strategies have one thing in common
36:44
and that is once you've paid off one
36:46
loan and you move on to the next one you
36:49
take the save repayments and put it on
36:51
the next one i know it sounds obvious
36:53
but trust me when i say and i've worked
36:55
in banks where people have paid loans
36:57
off and the temptation
37:00
to use that extra money for i don't know
37:03
oh we need to have a truck
37:05
just saved so much for so long paying
37:08
this loan off we just need to treat
37:09
ourselves it's easy to fall into the
37:12
habit of using that save money
37:14
for other things so try
37:17
very hard to ensure that the save
37:19
repayments
37:20
go on that next loan that's that's the
37:22
key one across both of these strategies
37:24
using those saved repayments um so we've
37:27
referred to the debt avalanche as being
37:29
the most efficient
37:31
but psychologically it can also be
37:33
the one that takes the longest to
37:36
achieve and the reason being is that
37:38
some loans that we hold that are higher
37:40
interest
37:41
might actually be larger balance loans
37:44
as well
37:45
and it can be very psychologically
37:47
rewarding to actually do the debt
37:49
snowball where you concentrate on the
37:51
small loans and then as you get steam up
37:54
as in you get confidence motivation
37:57
paying those small loans off start
37:59
working through
38:00
the other loans and it just it becomes
38:03
self um fulfilling self reinforcing and
38:06
it keeps you focused on the task
38:08
versus the dead avalanche which like i
38:10
say
38:11
an excel spreadsheet says to do that you
38:14
might be spending um you know five years
38:17
paying one big loan off before we move
38:19
to the next one
38:21
and i would say if you are going to do
38:22
that method try and incorporate maybe
38:24
some mini goals along the way so that
38:27
you don't feel as if you're waiting five
38:28
years to get to that point maybe give
38:30
yourself a goal in six or 12 months that
38:33
if you get to a certain balance
38:35
uh that you give yourself a reward so to
38:37
speak
38:38
hopefully that makes sense so um just
38:41
for home mortgage
38:43
people
38:45
the offset account um yes it can work
38:48
and what an offset account is is
38:51
if you hold your loans with a bank i
38:53
don't think all banks offer it under
38:54
some
38:55
um but
38:57
banks normally give you interest in bank
38:58
accounts and what an offset account does
39:01
is say okay well instead of paying you
39:03
interest
39:04
you will get a deduction for your
39:06
balances so let's just say
39:08
in my left hand here all my balances
39:11
with my
39:12
bank adds up to ten thousand dollars
39:15
across my check my savings and other
39:17
savings ten thousand dollars then what
39:20
the bank does on this side with the
39:21
mortgage and say okay well
39:23
ten thousand dollars of your um
39:27
on a 500 000 loan
39:30
is not being charged interest so your
39:33
balance is here offset the interest
39:35
on the mortgage hopefully that makes
39:37
sense so it can work it does save
39:39
interest that's exactly what you want to
39:42
do you want to save interest and it's
39:44
good for people that don't want to use a
39:46
revolving credit or
39:48
a floating mortgage type arrangement
39:51
where they're paying money and having
39:52
access to it
39:54
so it's a great question thank you
39:55
hopefully that answered that
39:57
um and then jared's question around
40:00
using time as a metric
40:02
um
40:03
yeah
40:04
in financial circles we talk about
40:08
return on investment roi
40:10
so that figures out your true cost of
40:13
the investment so
40:15
for a if you're comparing loans what you
40:18
want to do is do the same sort of thing
40:20
so what's the return
40:22
on paying that loan off so how much
40:24
interest am i going to charge
40:26
what are the costs i'm going to face
40:28
getting in there unless some of the
40:29
benefits are going to give me like a
40:30
cash back whatever it is and then what
40:33
you can do is compare the two because
40:36
then time doesn't come into it what does
40:38
come into it is how much interest you're
40:40
going to pay
40:41
um and you'll notice
40:43
that
40:45
you might
40:45
get tongue tied here but
40:47
that way if you add up all your costs
40:50
less the benefits they're going to give
40:51
you
40:52
should by the end get up get two amounts
40:54
and say okay well bank a
40:56
is going to cost me
40:58
150 000
41:00
but bank b is actually going to only
41:02
cost me 135 000 so over the life of the
41:05
loan
41:06
i'm going to be better off with bank b
41:08
so it works for long term
41:10
if it's shorter term
41:12
um like as in it's maybe for a one to
41:15
three year fixed term then what you want
41:17
to look at is maybe the difference in
41:19
interest rate
41:20
so what are you saving on that balance
41:22
for that term
41:25
list of benefits
41:27
and mark's brought up a great point
41:29
that's what a mortgage broker is for
41:31
they can sit there and they get paid by
41:32
the banks to do this you don't get
41:34
charged
41:36
they can sit there and work through the
41:37
numbers with you and come up with the
41:38
best
41:39
potential deal so hopefully jared that
41:42
answers your question
41:44
um
41:46
cool
41:49
i don't think i've seen anything come
41:50
through my right eyes keep my eye on the
41:52
chat um
41:54
now there is a very simple
41:57
uh depth calculator here if i can find
41:59
it there we go
42:00
uh an assorted
42:02
ah mark love it you see that
42:05
we're extremely helpful um
42:08
which is good that's great this is
42:10
exactly these webinars we want to want
42:12
to put you in the best financial
42:13
situation possible and i should
42:16
i might be biased but we should shout
42:18
out to nzdf as a whole for making these
42:21
available because
42:23
you know that's a sign of a great
42:25
employer that they've given the time
42:29
to have these sessions being run as well
42:31
which is awesome love it um oh mark you
42:34
can answer this one on chat uh does the
42:36
nzf have a preferred mortgage broker
42:40
there you go you can answer that one
42:41
mark i know the answer but i'm gonna let
42:42
mark write that one out um but you can
42:45
see here on this this is a quick
42:46
calculator
42:49
all right um mark said yes we do and i
42:52
know who it is it's milestone direct and
42:54
if you go to the force
42:57
for families let's just get this link up
42:59
for you
43:04
of course financial hub
43:06
mortgage brokering i'm going to stop
43:07
told you a second
43:10
here we go
43:11
um there's a little video on it as well
43:14
um
43:15
from milestone direct as well um but you
43:17
can see here free mortgage brokering
43:19
here you go
43:20
you have access to free mortgage brokers
43:22
you can assist in getting a good deal
43:24
first time um happened through the
43:26
process keemstar advice that type of
43:28
thing as well
43:29
and then obviously if we're leading into
43:32
doing a bit of planning around that you
43:33
get discounted financial painting as
43:34
well so
43:36
perfect
43:37
combination
43:38
um cool all right so this is just a
43:41
quick highlight of uh like i say it's a
43:43
simple calculator but it's a quick easy
43:46
way and an independent calculator to
43:49
know how to compare between different
43:51
thinking deals effectively so that's
43:53
available to you as well
43:55
on the sorted website
43:58
um
44:01
yes sound music who's watched sound of
44:03
music
44:04
that feeling you get when you pay off
44:07
your credit card debt you know
44:09
free brilliant
44:11
the hills are alive all that look trust
44:13
me i don't put these slides on here i
44:15
just talk to what's being put together
44:18
yeah for as long as i can remember
44:19
that's that's been like that so someone
44:21
obviously liked the sound music at the
44:23
time
44:25
now question for you all you've got two
44:27
two descriptions on screen now we're
44:29
going for time for me to speed this up a
44:31
little bit um productive unproductive
44:33
yet what do we think we mean by those
44:36
two terms
44:49
and whilst
44:50
i've just had a drink but um
44:52
honestly wait for some answers to come
44:54
through um
44:57
let me pose to you would getting a loan
45:00
for a car
45:01
being
45:03
productive or unproductive or student
45:05
loan be productive or unproductive
45:08
um so cool they're coming through now
45:09
here we go so misha productive improves
45:12
your current position yes great love it
45:14
yep
45:15
um i always like asking this question
45:17
because it's it's your words and not
45:19
somebody else's it's brilliant
45:21
um
45:22
house increase in value versus car
45:24
depreciate yes brilliant fix love it uh
45:27
mark buying an asset versus buying
45:29
something of no value yeah exactly right
45:32
uh make sure if you need a card to get
45:34
work yes yeah exactly right so
45:37
what we're trying to say and there's no
45:38
right or wrong or you know
45:41
people's opinions on this but
45:43
what we're trying to get you to think
45:44
about
45:45
is productive debt is exactly to those
45:48
words trying to improve
45:50
your position over time
45:52
so what can you can you use a debt if
45:55
you have to
45:56
to increase your opportunities
46:00
so the
46:02
uh the reason why i chose that car
46:04
example sorry to scroll back to the
46:05
right right chat
46:07
is yes
46:09
if you need car to get to your job to
46:12
earn an income to have more
46:13
opportunities to do other things
46:16
then yes borrowing to buy that car is a
46:18
sign of productive debt
46:21
but the lens we would ask you to look at
46:24
is that if you then decided
46:26
i'm going to buy an 80 000 suv
46:29
um
46:30
to get to
46:31
my job uh to
46:34
get those opportunities that we were
46:35
talking about um the reality is
46:38
probably
46:39
could you buy a cheaper car that's just
46:42
as reliable
46:43
but it doesn't cost you that much so it
46:45
could be that eighty thousand dollars
46:47
might be unproductive it's sort of a
46:51
shooting too far in the dip
46:54
mark brought up a good comment there
46:55
warren buffett mantra one never needs to
46:57
buy a car that costs more than ten
46:58
thousand dollars
47:00
uh so that's warren buffett the
47:02
sage of omaha
47:04
uh iggy hit me with something that can
47:06
make me money versus something that will
47:08
lose me money yes
47:10
uh then somebody else said compared to
47:12
public transport etc exactly right so
47:15
if you can use public transport to
47:18
get to your job
47:20
then
47:21
do you really need to borrow
47:23
probably not because you know let's
47:25
let's assume public transport is perfect
47:28
um you can get your job using other
47:30
means which may be cheaper as well than
47:32
actually having a car as two so just
47:34
weighing up that and the one i mentioned
47:37
about education
47:38
is
47:39
that can be productive debt because
47:40
obviously you hear that you know zero
47:42
percent but the fact is
47:44
if i study five years to become a vet
47:47
and by the end of it clocked up i know
47:49
100 000 plus worth of debt and then
47:52
decided man i don't want to be
47:54
a vet i want to be a financial advisor
47:58
then all those qualifications that i
48:00
just got to get for a hundred odd
48:02
thousand
48:02
is not going to do anything for my
48:04
future as a financial advisor so you
48:07
could construe that as unproductive so
48:09
it's not making a judgment it's more
48:10
about just
48:12
applying that lens to before you go into
48:15
the step is it productive or
48:17
unproductive does that make sense
48:20
oh i've never been to london to be
48:22
honest i've been lived in holland but uh
48:24
mike just said in london you don't need
48:26
a car and you just hire one wins theory
48:28
and you've noticed that around auckland
48:30
it's been coming out as well
48:32
so what happens if i miss a payment what
48:35
do we reckon
48:40
whoops i just got some answers away
48:45
so yeah what do we reckon happens if we
48:46
miss a payment
48:48
yeah yeah
48:50
this person saw that string pretty quick
48:51
ouch fees yes
48:53
fees definitely do kick in yeah
48:57
and don't be misled by the old buy now
49:00
pay later you don't pay anything yeah
49:02
you don't until you miss the payment and
49:04
then you can be stunned very severely
49:07
until you catch that missed payment up
49:12
uh okay i won't wait for things to come
49:15
through oh here we go
49:16
brilliant joyce love it beans credit
49:18
score impacts future finance and it's an
49:20
important consideration i might just
49:22
click through on this um
49:24
right down the bottom bullet point it
49:26
can affect your credit score i think
49:27
it's important because you know you
49:29
might pay fees and things and guess
49:32
you'll pay it move on and be done with
49:34
it but missing a payment can affect your
49:37
credit score for a lot longer
49:39
than
49:40
the length of time that you might have
49:42
missed the payment for if that makes
49:43
sense
49:45
so really important in case you weren't
49:46
aware
49:47
you don't have to have a loan to have a
49:50
credit score you can you can still have
49:52
a really good credit score
49:54
if you
49:56
pay your bills on time maintain your
49:58
accounts
49:59
um and when i say bills this is your
50:01
phone with power
50:03
um maintain accounts is like you know if
50:06
you've got a check account with no
50:07
overdraft you operate and credit you
50:09
don't miss payments
50:10
so even though you don't have debt you
50:12
can still have a credit score that that
50:14
moves up and down
50:16
um
50:17
your payment has to be so to speak
50:19
um
50:21
okay great question vixx um thoughts on
50:24
buy now pay later if you choose to keep
50:26
that money invested until payment due
50:29
so basically the question is and it's
50:32
about opportunity cost
50:35
if you've got the money invested and buy
50:37
now pay laters effectively i don't know
50:40
maybe five
50:41
weeks five fortnights type thing maximum
50:44
so they're very small loans over a very
50:46
short period
50:47
um
50:49
if interest rates were a bit higher i
50:51
guess you know having the money in the
50:52
bank earning a little bit before you
50:54
have to pay it out yes there's a benefit
50:58
at the moment you probably won't see a
50:59
lot of benefit
51:01
and
51:02
yeah there isn't supposed to be any
51:04
price difference between someone buying
51:06
cash and someone paying for it on a
51:08
contract type thing
51:10
but i i think and i've seen this through
51:13
my father-in-law go in and negotiate
51:15
just say hey look if i'm going to pay
51:16
cash because it's a lot easier not to
51:18
have to fill out paperwork or do
51:20
anything that involves extra time and
51:22
effort on the shop the retailers part
51:25
um
51:26
great question there
51:30
paying cash you might be able to get a
51:31
bit of discount
51:32
as well so
51:34
yes definitely if you've got the money
51:36
in the bank
51:37
and using somebody else's money for zero
51:39
cost is a better option because you're
51:41
not using your money
51:43
but just be aware you're creating an
51:45
obligation to meet that payment over the
51:47
next five weeks
51:49
you can't pay it off any quicker i don't
51:50
think
51:51
and you have to make the payment every
51:53
five weeks the moment you miss you get
51:54
stung for costs and you've got to be
51:56
very careful because the moment you miss
51:58
it that can unwind any benefit you keep
52:01
keeping the money in there hopefully
52:02
that answers your question fixed
52:04
um ah sweet thanks
52:07
uh ian yes you can check your own credit
52:09
score so what i might do stick around to
52:11
the end because i know we're just coming
52:13
up to time soon um i will
52:16
find a couple of sites on the um on the
52:19
web and give you those links as well so
52:22
yeah extra fees differently
52:24
can be charged a higher interest rate on
52:26
the missed payment amount
52:29
going down the line obviously here a
52:31
repo of items
52:33
guarantor if he's a guarantor gets asked
52:35
to repay
52:38
and that can happen and it does happen
52:40
and linda may take you to court as well
52:43
so it can
52:44
potentially
52:46
uh stick with you for quite some time if
52:49
that payment isn't caught up
52:51
um
52:52
so that's your commitments your
52:54
commitments are that you agree to make
52:55
the repayments so i'll skip to the next
52:58
one here the lender also has commitments
53:01
to you or to us as borrowers so they
53:04
have a responsible lenders act which
53:07
basically means they have to assess the
53:08
loan at the beginning make sure it's not
53:10
too onerous and can afford it and then
53:13
they also have obligations after the run
53:15
to be approved they've been approved
53:18
so you can see here act carefully and
53:20
responsibly at all times
53:22
and treat you reasonably and with
53:23
respect
53:25
consider a hardship application if you
53:27
make one so they need to show that
53:30
they're trying to help you through it
53:31
you still have to pay the money back
53:33
there's no getting out of that
53:35
but they need to put things in place to
53:37
help you through what is hopefully a
53:39
tempo situation get you back on track um
53:43
not act oppressively so they can't
53:45
suddenly start demanding forward payment
53:47
they can't force things on you they have
53:50
to work with you
53:51
but the really important point i want to
53:53
get across having been a lender and a
53:55
few different banks
53:57
is
53:58
always always always be as
54:00
honest and upfront as you can so if you
54:02
are going to start seeing a bit of
54:04
trouble maybe other times being cut back
54:06
whatever it is always talk to your
54:08
lender and say hey
54:09
this is coming up let them know they're
54:11
not gonna
54:12
as you can see they can't act
54:13
aggressively and suddenly shut down
54:15
everything um they need to work you
54:17
through it but
54:18
the sooner they know the quicker they
54:20
can give you some information around you
54:22
know this might be an option or this
54:23
might be an option um and as a case in
54:25
point you saw this last year with the
54:27
first lockdown where the banks all got
54:29
together and said right all mortgage
54:31
holders we can put you on a
54:34
repayment holiday for two three months
54:36
whatever it was you still get charged
54:38
interest but didn't have to make the
54:40
payment
54:41
so that was on maths done but those are
54:44
the sorts of things that members can
54:45
look at doing
54:47
so goals for debt just to reinforce
54:50
do the counts read the fine print who
54:52
reads the fine print
54:54
you should read the fine print um
54:57
pay off an extra 50 bucks where you can
54:59
or 20 bucks or 10 bucks because it will
55:01
shorten the term and remembering
55:04
the shorter the term the more money
55:05
you've got at the end
55:07
to invest for your own self not for the
55:10
lender for you that's really key
55:12
um
55:14
and if you're on a fixed rate loan with
55:16
your legacy if you can increase the
55:17
payments some of them allow it up to
55:19
five percent
55:20
um
55:22
excuse me
55:23
but always talk to your lender because
55:25
they'll come up with the options around
55:27
uh making extra payments and things
55:29
and you'll just see their clicked on it
55:31
now but
55:32
the rule of thumb is you know you've
55:34
always got to pay it back with interest
55:36
and it's the interest that we control
55:39
how much it costs us
55:42
and yes it might be a sweet deal over 20
55:44
years but if we can pay it over five or
55:46
ten
55:47
do it because it'll save you so much
55:49
money and you'll be so much
55:51
wealthier for it down
55:53
down the track where our minds aren't
55:55
really thinking about that type of thing
55:58
so two-thirds of new zealanders with a
56:00
credit card paid off in full each month
56:02
quite surprised by that i thought our
56:04
credit card balances were held for a lot
56:06
longer
56:07
and also interestingly enough um
56:10
credit banks and those in credit card
56:12
balance is coming down because the whole
56:14
final pay later is actually
56:16
stealing a bit of their business really
56:18
interesting
56:19
anyway so key things calculate it how
56:22
much is it going to cost you and to
56:23
jarob's point compare those costs
56:26
because it's money out of your pocket if
56:28
you are starting to pay extra to another
56:31
particular lender
56:33
plan it so what is your goal for it do
56:35
you want to pay it off sooner
56:38
do you want to
56:39
pay the minimum but use that extra money
56:41
to invest in something else you know
56:43
what is your goal for the money what are
56:45
you going to do
56:46
and then
56:48
pay it off get it underway get it paid
56:51
look at that a minute ago
56:53
so that's basically get feel free to ask
56:56
any questions i'm just going to unmute
56:58
mark might just gonna have a quick chat
56:59
with you all
57:03
you're all good
57:04
thank you for that dennis dennis can you
57:05
just bring up the force financial hub
57:07
page again please yep
57:11
there we go okay and uh go back to the
57:15
um uh cover page please where it's got
57:17
other other resources but pieces just go
57:19
up to that yeah
57:22
uh how can
57:24
force financial hub help click on there
57:26
and then there's the financial advice go
57:28
under resources click on that please
57:31
oh yes the booklet okay financial guide
57:34
so look dennis thank you very much again
57:36
for a very well run webinar that was
57:38
great just to recap there are a range of
57:41
resources available to help people with
57:44
budgeting debt management and things
57:46
like that
57:47
in this guide here there is actually a
57:50
simple budgeting template to help people
57:52
with their budgeting type things there's
57:54
also a depth reduction template there as
57:57
well if people want to use
57:58
use that right at the end and the
58:00
annexes i think from memory
58:02
dennis has also made reference to
58:06
sorry the other thing about the
58:07
budgeting services is all the camps and
58:09
bases and head offices actually have
58:12
access to free budgeting services that
58:14
are available there to help uh defence
58:16
community members in their households
58:18
cope with budgeting issues so
58:20
please feel free have a look at the
58:21
guide they're all listed there again in
58:24
terms of contact details and all that
58:25
sort of thing have a look at them and
58:26
feel free to give them a call or or
58:29
email or text if you're wanting to
58:31
access those budgeting services
58:33
the other thing is dennis mentioned we
58:35
do provide a financial advice and
58:36
mortgage broker service through
58:38
milestone direct limited they provide
58:40
very good services for our people so
58:42
please feel free to access them
58:45
they are even though they're actually in
58:47
lockdown like the rest of us
58:49
um they are still working and working
58:51
very hard and they're more than keen to
58:53
hear from our people both from a more
58:55
mortgage perspective and from
58:58
um you know helping with financial
59:00
advice and financial plans and all that
59:01
sort of thing
59:02
and they're also happy to help people
59:04
who are negotiating there or
59:06
renegotiating their mortgages always
59:08
keen to talk to people as well because
59:10
often they may be able to get better
59:11
deals not just in terms of the mortgage
59:14
rate you pay but in terms of the time
59:16
frame and the sort of mortgage whether
59:17
it's a table mortgage or a
59:19
interest-only mortgage they're able to
59:21
help people
59:22
negotiate those sort of
59:24
things
59:24
as well
59:26
so um i'll stay on the line for a little
59:28
while and please happy to take any
59:30
questions that people may have around
59:32
this or anything else we covered so far
59:34
this week thanks very much for that
59:35
dennis cool cheers mark brilliant um so
59:39
ian to your point around uh checking
59:41
your own credit score i've just put the
59:42
link up there
59:44
gopt.nz and this is it here
59:48
and you can check your own credit uh for
59:50
it to be free you just have to wait for
59:52
them to send it to you and you can
59:54
request it quicker but
59:56
they are allowed to charge you for that
59:59
but the centrics ileon and equifax are
60:01
the three
60:03
and then it just really tells you about
60:04
okay well actually if there's something
60:06
wrong on there um how can you correct it
60:08
so ian hopefully that answers your
60:10
questions right
60:12
uh what do we got here iggy paying cash
60:14
walk in with a notebook ask 3 000 cash
60:16
deals write it down
60:17
get a name and walk away to the next
60:19
place i'll offer to better any other
60:21
deal save myself 400 bucks on my new tv
60:23
it's also fun empowering it's brilliant
60:27
love it love it it's really good i mean
60:29
if you can work that confidence up to do
60:31
it it gets easier over time
60:34
um and at the end of the day
60:36
they're not going to take it personally
60:38
unless you're nasty but you can be good
60:39
about this and just say hey look what's
60:41
the best deal he can give me
60:43
and to iggy's point write it down and
60:45
you know in a shopping mall there's
60:46
probably two or three retailers that
60:48
have exactly the same product
60:50
um and see how you go
60:53
and don't be shy about telling people
60:55
you work for defence because there's a
60:58
lot of
60:59
retailers out there who want our
61:00
business
61:01
and they're happy to offer discounts and
61:03
just don't be shy about it and so just
61:06
just say your defense and what sort of
61:07
deal you're prepared to do
61:09
yeah brilliant
61:10
like harvey norman and noel lemmings and
61:12
places like that are good for that
61:14
yeah good um just wanted to say as well
61:16
misha just shared something there uh
61:18
free service credit simple dot co dot nz
61:21
for credit score um so
61:23
be aware as well with a credit score um
61:26
by you checking it
61:28
can
61:29
unfortunately lower your credit scores
61:31
don't go in and check it every month
61:33
or ask to have it checked every month
61:36
because it can have effect on the credit
61:37
score so just bear that in mind
61:40
uh in the old days it used to be the
61:41
number of inquiries but now it's an
61:43
actual scoring system so you want i
61:46
think to be in the green zone the good
61:49
zone
61:50
um you want to have a figure
61:53
700 and above i think
61:55
um and if you're in the
61:57
red zone i think it's below
62:00
500 or below 600 i think somewhere
62:02
around there
62:03
um but yeah just be aware and it's tip
62:07
number four for today you do not have to
62:09
get into debt
62:10
to start building your credit score and
62:13
i think mark shares a sentiment too by
62:16
you know being in the flexi saver buying
62:18
and keep by being a kiwisaver by having
62:21
savings accounts showing that you can
62:23
save money i think that's much more
62:25
powerful than
62:26
than paying a loan off that you have to
62:28
pay off the fact is that you're giving
62:30
up some of your
62:32
your funds so to speak from the pay to
62:34
save it
62:36
um is much more of a discipline than
62:38
paying a loan that's my personal
62:40
thoughts mark anything there i don't
62:41
know i totally agree what they want to
62:42
know is how disciplined are you with
62:44
your money
62:46
exactly
62:47
um oh thanks jared did you see that
62:50
comment mark so much better thank you
62:51
gents that's good that's really good
62:53
please help spread the word jared yeah
62:55
yeah good man um any questions everyone
62:58
we've still got 20 on board so
63:00
um oh there we go we have an agreed oh
63:03
crackers here we go what's this one just
63:05
a long comic
63:06
um
63:16
just reading through sorry
63:17
uh
63:20
yeah it's uh um
63:23
the person just said may not want to
63:25
read out but there's nothing um
63:27
bad in there but i will read it out in
63:29
it and i hope that it's okay with you
63:31
because i think it is good you said i
63:32
may not read it but it's just a
63:36
a
63:37
perspective on it as well and it's
63:38
really important really interesting to
63:40
learn that people
63:41
who willingly take out a loan have more
63:43
rights than someone who finds themselves
63:45
with an unjust bill through the court
63:47
where no questions asked you have
63:48
warranty's bail of summon support
63:50
potential warrant for arrests
63:52
despite which of the payments
63:54
um very interesting and yes it can be
63:57
and it the
64:00
whole
64:01
reason for bringing in this this
64:04
regulation around responsible lenders
64:06
act like i say it's not just about at
64:08
the beginning when you first take out
64:10
alone it's also after the loan is in
64:13
place
64:14
uh because some of the things you've
64:15
mentioned there you know it sounds like
64:17
it's a
64:19
foreign oppressive that some of the
64:20
lenders have actually done which you
64:22
know under the current act
64:24
would look be frowned upon quite
64:26
strongly
64:27
but you know i get your point and thank
64:29
you so much for sharing that
64:31
um and hopefully that's cool that i read
64:33
it out it's it's so important to be
64:36
aware of our rights and obligations
64:39
and more so when we enter into
64:43
joint loan arrangements
64:46
and you may have heard the lender say to
64:48
you your liability is joint and several
64:52
and what that means is that if
64:54
mike and i'm talking back in my early
64:56
days my ex and i had a personal loan
64:59
together
65:00
then we broke up
65:02
but joined several means
65:04
she's just as liable as i am for all of
65:06
the debt the bank doesn't care who's
65:08
going to pay it they just want to know
65:10
they're going to be paid so be very very
65:12
aware of your obligations and also
65:15
um the
65:16
act also allow the credit contracts it
65:18
allows you a cooling off period so you
65:20
know you can sign but you can still go
65:24
i think five working days to exit that
65:26
contract
65:28
so just be aware of your rights and have
65:30
the confidence i guess to just say
65:32
let me think about it and talk to
65:35
somebody that you trust and just see
65:36
what they think about it as well
65:38
um
65:39
cool all right got some comments here
65:42
um i feel like in recent times people
65:44
then responsibly end up potentially
65:46
going backwards
65:47
um
65:50
oh and then another comment compared to
65:52
others who are mortgaged up large over a
65:53
couple of properties thoughts i guess
65:55
this person's reward
65:57
yeah
65:58
i mean this whole cover business has
66:01
really shown a light on it because
66:04
what we noticed um last year was
66:08
the you know lockdown it was all like oh
66:11
this is cool we're all at home for four
66:13
weeks but the reality was
66:15
uh overtime got stopped people
66:19
employers found they couldn't pay
66:21
full wages so yes they were getting the
66:23
subsidy but they were clipping people
66:25
down to 80
66:27
there were all sorts of things happening
66:29
that affected our ability to earn
66:32
so
66:33
you know from that perspective it pulls
66:36
money away but yet we still have the
66:38
same loan commitments to make
66:41
but just to your comment that the people
66:43
that borrow and you know they might have
66:45
two three to four different properties
66:47
they're still in that same boat as well
66:49
because at the end of the day the bank
66:51
only worries about
66:53
dns you're going to pay me my monthly
66:55
amount you need to pay that because if
66:56
you don't you're going to go into the
66:58
rears and if you don't pay that we're
66:59
going to sell the house under your
67:00
mobility sale any shortfall we'll will
67:03
give to you and potentially there might
67:05
be no bankruptcy the bank's always going
67:07
to look at us so
67:09
to your point around risk versus reward
67:13
people that leverage up and buy multiple
67:15
properties and buy lots and lots of
67:16
properties
67:18
that can always come unstuck and they
67:21
are taking a lot more risk
67:23
borrowing a lot more money
67:25
property is not a sure thing i hate to
67:28
say it but it's never a short thing no
67:30
investment's a sure thing um so
67:32
they're just taking a lot more risk and
67:35
unfortunately some people don't know
67:36
that there is a risk and it's got even
67:38
riskier now the tax rate even has
67:40
changed as well so
67:42
yeah yeah yeah great point
67:44
um thoughts uh misha asked thoughts on
67:46
using credit cards your advantage i.e
67:48
use them for daily spending and paying
67:50
off every month but earning monetary or
67:52
points rewards what do you reckon mark
67:55
uh fine as long as you're disciplined to
67:57
pay off everything every month that's
67:58
that's as good as gold
68:02
the problem is when there's an
68:03
unexpected illness or something like
68:05
that where you're not able to pay and
68:06
that's when people come across it so um
68:09
yeah yeah great great great comment um
68:13
and
68:14
some people use it with the revolving
68:16
credit so if you've got a mortgage
68:17
revolving credit if you don't know what
68:19
it is have a talk to the mortgage broker
68:22
milestone and they'll happily explain
68:24
what revolving credit is but effectively
68:26
you're trying to drop the balance with
68:27
your pays
68:28
and pay your bills on your credit cards
68:30
so that
68:31
every month or every up to 55 days
68:35
you can pay your credit card off and
68:37
fall from the balance in your loan so
68:39
you're saving interest
68:40
so that's the whole concept um it does
68:42
work the only thing i'd say measure and
68:44
then it's to mark's point i remember
68:47
when my wife and i got married we got a
68:48
credit card for our honeymoon for a just
68:51
in case
68:52
we've still got that credit card would
68:54
you believe yes we pay it off but we've
68:56
still got it it's amazing how it sticks
68:58
around
68:59
it's like a psychological connection you
69:01
just don't want to part with it and i
69:03
think that might be dangerous but
69:05
yeah discipline definitely applies
69:11
question here where do i find
69:12
information on the force financial hub
69:14
site for home insurance so here you go
69:17
i will show you so let's go back
69:21
i'm such an expert in negotiating this
69:23
website now
69:24
um
69:27
so here you go enforce
69:28
domestic insurance scheme so that's your
69:30
home insurance
69:32
and then couple that with medical
69:34
insurance and in ibp as well so
69:37
hopefully that answers your question
69:43
now one of the things we look at very
69:45
carefully
69:46
is the number of financial hardship
69:48
claims for both our kiwisaver scheme and
69:51
the defence force superannuation scheme
69:54
uh and we get a report from mercer and
69:56
trustees executives who are the
69:58
supervisors for our scheme
70:00
and the latest report from trustees
70:01
executives they actually comment that
70:03
our number of financial hardship claims
70:06
is um
70:07
considerably below the
70:10
average across the industry so in other
70:12
words our people our people seem to be
70:15
better at managing money than uh perhaps
70:17
uh other sectors of the economy
70:20
that's good to hear yeah
70:22
it might be a testament to these
70:23
webinars we're doing that
70:25
i i've tripped it all to you dennis no
70:28
no not me not me i'm just i'm just the
70:31
mouthpiece for uh this information
70:33
that's all
70:34
um
70:35
all right that answer that question got
70:36
answers that's brilliant uh any other
70:38
questions still got 18 of you hanging
70:41
around
70:42
that's a good thing
70:43
but if there's no questions we'll close
70:44
it off and don't forget that tomorrow
70:47
uh we have ten o'clock uh retirement and
70:50
cadence over and then at two o'clock
70:52
again the
70:54
introduction to investment
70:56
um webinar as well
71:00
okay lots of thanks thanks for the
71:02
briefings really looking forward to
71:04
tomorrow awesome love it
71:06
good session once again thank you very
71:07
much thanks guys until tomorrow
71:10
um really important question that
71:12
jared's asked and the answer is yes
71:14
jared
71:15
um they will look very carefully at your
71:17
cash flow and the ability to
71:20
make payments
71:22
and what you also need to if you're if
71:25
you're talking about buying your own
71:26
property that's one thing but if you're
71:27
talking about buying an investment
71:29
property
71:30
uh you'll need to think very carefully
71:32
about impacts of losing tenants and how
71:34
long something may be empty because the
71:36
place been vandalized or flooded or
71:38
something else all those sort of factors
71:40
the bank take into account in terms of
71:42
your ability to to sustain an additional
71:45
mortgage and so they look at how much
71:47
they'll borrow uh lend you on that basis
71:50
yeah and to your point uh jared it's
71:54
just run it treat it like a business
71:56
because you know investing in a rental
71:58
property is not guaranteed it's a great
71:59
investment for the long term and bear in
72:01
mind you now have a 10-year almost
72:04
lock-in period
72:05
uh in terms of the brightline test so
72:08
that just means if you're going to buy
72:10
an investment property
72:11
you don't really want to sell it in
72:14
that 10 year period because any gain
72:16
that you potentially might make
72:18
you could be stunned up to 39
72:22
because they treat it as income
72:25
uh and don't forget our income the top
72:28
income tax bracket has
72:30
bumped up or will be bumped up from
72:32
there it has it has
72:35
so um yeah treat it like a business and
72:38
is there an accountant that is attached
72:41
to milestone director anything um
72:43
they'll give you advice on that because
72:45
one of the things you want to take into
72:46
into account is yield so in other words
72:49
will you get it what what sort of return
72:51
you'll get longer term
72:53
and they do have comparators between the
72:55
yield you'd get on investment properties
72:57
and um buying a shares portfolio as an
73:00
example or all that all that sort of
73:02
thing because it is really important
73:03
from an investment perspective that you
73:05
take all those sort of things into your
73:06
account
73:08
that's good
73:10
but the other thing you have to factor
73:11
in with investment properties i think is
73:13
the is the stress factor
73:15
um if you're managing a property
73:17
yourself as an example and you're
73:19
dealing with row tenants
73:21
it's incredibly difficult now a to get
73:24
rid of them
73:25
and b you may actually have a period of
73:27
time where you're not getting any income
73:28
coming in you've got some people are
73:30
just staying in the place and
73:31
vandalizing it so you've got all the
73:32
stress and everything else that you have
73:34
to factor in and so that's why many
73:36
investors actually choose to pay
73:39
a property management firm to manage the
73:43
property on their behalf but of course
73:44
that that incurs an additional cost as
73:46
well
73:47
yeah yeah no it's all good points yeah
73:51
very knowledgeable on that uh front
73:52
there mark
73:54
oh yeah i look at all these sort of
73:55
things dennis
73:57
good man good man
73:59
um i've just oh sorry yeah you go no
74:01
when you're when you get to my age then
74:04
and you're having to assume that your
74:05
money's got to last for another 30 to 35
74:07
years then you look at how you're going
74:09
to um
74:10
maintain the income stream that i need
74:12
to to have the lifestyle that i want to
74:14
have dennis exactly exactly i think a
74:16
lot of people call that wisdom
74:19
yeah um now i just
74:21
forgot to put this on before because we
74:23
were chatting but um the link is there
74:25
i'll remind everyone tomorrow that joins
74:27
about the link for feedback so please
74:29
let us know your feedback just put it up
74:31
there
74:31
um
74:33
oh awesome jared i think milestone
74:34
direct was getting called haha
74:38
from a personal perspective what kind of
74:40
assets do you both look to develop
74:42
property shares business etc there you
74:43
go
74:45
um i'll give you information rather than
74:47
advice so i actually have i have a
74:50
spreadsheet that dentist knows me i love
74:52
my excel spreadsheets i have a
74:54
spreadsheet set up with my asset
74:56
allocation and i go through and review
74:59
it normally about every six months i
75:00
have a target and then at the end of
75:03
each year i look at what i need to do to
75:05
make adjustments to get more aligned to
75:07
my target
75:09
because you as an example
75:11
and i do actually have shares
75:13
but you don't want to share you don't
75:14
want to sell shares at the wrong time
75:16
purely because you're trying to achieve
75:18
your your target asset allocation and so
75:21
that's why you you again you're always
75:23
taking a long-term perspective and there
75:25
is a lot of information out there around
75:27
what you can expect longer term to get
75:29
in yields in other words the return for
75:32
both property residential property
75:34
commercial property um all those sort of
75:36
things um and so you'll and the
75:39
financial advice service will be able to
75:41
help you with that as well
75:43
yeah yeah and i think importantly as
75:45
well do
75:46
do what you're comfortable with as well
75:48
because there's a whole range of options
75:51
um you know it could have been in rental
75:53
property and and if i look back and
75:55
thought wow i should have done it
75:57
because look how much money i would have
75:58
made
75:59
but it it just didn't feel right both my
76:01
wife and i didn't want to be in
76:03
investment properties we just didn't
76:04
want to be landlords
76:06
um not for any other
76:08
altruistic motive apart from we just
76:10
didn't want the hassle so yeah i invest
76:13
in shares i really make my kiwis over
76:16
hum
76:17
and we're still paying our mortgage
76:19
that's the that's the three i guess
76:21
priorities that we have
76:23
um but each to their own and working
76:25
with an advisor will get you to the
76:27
point where you know your options and
76:29
then it's just a matter of figuring out
76:31
okay well what am i comfortable with and
76:33
if i pick that one where is it going to
76:35
take me
76:37
hopefully you're going to come to our
76:38
investment webinar tomorrow because we
76:40
actually cover off
76:41
different investment assets and asset
76:43
allocation and
76:45
expected returns again from a long-term
76:48
perspective because remember what we're
76:49
talking about is long-term we're not
76:50
we're not talking about you know short
76:52
term
76:54
exactly it's really important to
76:55
remember that
76:57
and um
77:00
most of our regular force um are
77:03
youngest and by that i mean less than
77:05
50.
77:06
um our civilian the the age of our
77:08
average civilian member is about 52 53
77:11
so you're still very much talking about
77:13
a long-term perspective when we talk
77:15
both about from a regular force and from
77:17
a civilian perspective
77:19
i love that last comment mark because
77:20
you said youngest because they're less
77:22
than 50 that's me
77:23
[Laughter]
77:26
well i'm 62 dennis and i still think of
77:29
myself as young oh that's good i'll
77:31
happily claim that when i'm 62 then as
77:33
well so i'll i'll be happy
77:35
60 is the new 50.
77:37
exactly well the new 40 45 maybe 40
77:40
months
77:43
i know you're welcome we just had a
77:44
thanks gents um
77:46
very useful info jared
77:48
you're under pressure tomorrow you have
77:50
to attend the two sessions tomorrow
77:52
uh hopefully so that'll be good always
77:54
young yes
77:55
um
77:56
oh yeah i wouldn't call it lodge we just
77:59
called it wisdom jared that's what we've
78:00
got
78:03
very good all right well um
78:05
everybody we're all set have a great
78:07
evening well well done well done yes uh
78:10
thank you uh stay safe and uh we shall
78:12
all see you tomorrow bright nearly at 10
78:14
o'clock for the uh the retirement
78:16
kingdom server have a good afternoon
78:18
everyone thank you
78:20
thanks mark see you mate next bye
78:29
you