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Battle of the index funds: Australasian property and Australian resources

Battle of the index funds: Australasian property and Australian resources

Welcome to round 5 of the battle between the heavyweights. If you haven’t done so already, check out the introduction that sets the tone to this heavyweight battle.

Today we are comparing the costs of investing in Australasian property and Australian resource funds. We will be comparing the cost between 4 of the lowest cost fund providers that can be summarised in the table below […..]

Battle of the index funds: New Zealand Bonds

Battle of the index funds: New Zealand Bonds

Welcome to round 4 of the battle between the heavyweights. If you haven’t done so already, check out the introduction that sets the tone to this heavyweight battle.

Today we are comparing the costs of investing in a NZ Bond index fund between 5 of the lowest cost fund providers that can be summarised in the table below […..]

Battle of the index funds: United States top 500 fund

Battle of the index funds: United States top 500 fund

Welcome to round 3 of the battle between the heavyweights. If you haven’t done so already, check out the introduction that sets the tone to this heavyweight battle.

Today we are comparing the costs of investing in a United States top 500 stock fund between 4 of the lowest cost fund providers that can be summarised in the table below […..]

Battle of the index funds: Australian top 20 fund

Battle of the index funds: Australian top 20 fund

Welcome to round 2 of the battle between the heavyweights. If you haven’t done so already, check out the introduction that sets the tone to this heavyweight battle.

Today we are comparing the costs of investing in a Australian top 20 stock fund between 4 of the lowest cost fund providers that can be summarised in the table below […..]

Battle of the index funds: New Zealand Top 50 fund

Battle of the index funds: New Zealand Top 50 fund

Welcome to round 1 of the battle between the heavyweights. If you haven’t done so already, check out the introduction that sets the tone to this heavyweight battle.

Today we are comparing the costs of investing in a NZ Top 50 stock fund between 5 of the lowest cost fund providers that can be summarised in the table below […..]

Battle of the index funds: Introduction

Battle of the index funds: Introduction

I used to bury my head in the sand when it came to investing because it seemed there were too many options that I stopped trying. It is paralysis by analysis. Well, today I am here to help make things easier. I would hate for you to steer clear of investing because it seemed too difficult. It really isn’t once you get started, and the long term benefits can help set you up for life. Index funds are a big part in my path towards financial independence.

Let’s take a look at the main index fund providers in New Zealand and how they compare […..]

Reader case study 2: Can Stu retire in 7 years?

Reader case study 2: Can Stu retire in 7 years?

Welcome to our second reader case study. This is where I encourage you, the readers, to write in with your situation that you want looked at.

I do my best to answer your questions and provide recommendations for your situation. I also encourage you all to post your thoughts in the comments sections to help out our subject.

Today, we have Stu (not his real name) wanting to know if he can reach financial independence before the age of 55 (7 years) […..]

Know your numbers part two

5/. Net worth

This is the difference between what you own and what you owe. Basically, if we sold everything we own how much money would we have. Bob has $100,000 in investments, $20,000 in savings, $200,000 in house equity, and $50,000 in Kiwisaver. His assets total $370,000.

He owes $10,000 on his student loan and $350,000 on the house mortgage. His liabilities total $360,000.

Bob’s net worth is total assets ($370,000) minus total liabilities ($360,000) = $10,000.

Net worth is a good indication of what position of financial strength we are in. At age 23 a lot of us will have a negative net worth thanks to a student loan.

Some people do not include their house as part of their net worth calculation. The reason being that we all need somewhere to live and if we sold our house we would still need to pay for housing. I understand the point of view, but I still include housing. The reason being that equity in our house can be turned into cash by downsizing, renting out space, or even a reverse mortgage. I don’t include vehicles in my calculation though because I will always need a car and I can’t turn my car into cash flow.

It is your decision on what to include and what not to include, but the key is to keep your calculations consistent. If we keep the variables the same, then we can get a good gauge of our progress. It is quite motivating watching net worth go up. I calculate mine once per month, but you can choose any time frame that suits.  

 

6/. Insurances

It is important to revise how much we are paying in insurance each year. Situations change and if ignored, we may end up paying for far too much or too little insurance. With the birth of our daughter we have had to reassess our life insurance premium and decided we need to add more cover. Whereas, our savings have increased over the last year so we have decided to have higher excesses for our house and contents insurance to save cost.

 

7/. Interest rates

This could range from savings accounts to mortgages to debt. We need to intimately know the interest rates we pay and when they have changed. We need to make decisions on whether to invest or pay off debt on a regular basis, or which debt to pay off first.

 

8/. Kiwisaver fees

For someone investing $10,000 per year in Kiwisaver at 7% returns with annual fees of 1.5%, they will pay $282,000 in fees over the course of 40 years. If we instead only paid 0.5% in annual fees, our fees would only be $112,000. Just by shopping around and paying attention to fees we have saved ourselves $170,000.

 

9/. Emergency fund

It is handy to know how much we have saved in our rainy-day funds. If we don’t know and something bad happens we could find ourselves having to go into bad debt. For more on ideal emergency fund numbers read this article. We all should know how much we have saved so we can determine how many months we can survive on our savings should something bad happen such as a job loss.

 

10/. Mum’s number

I know, not a financial number but still very important nonetheless. Our family is the only one we have, and we should keep in regular contact.

 

Final Thoughts

So there we have it, 10 important numbers that will get your personal finances on track. By tracking our numbers, we can save a lot of money. We can pick up mistakes in our pay checks. We can stop overpaying on certain expenses and fees. We can get better interest rates and credit scores. Not only can we save money, but it is also motivational. Watching our numbers get better ever year is a great motivator once we can see the progress being made. They tell us that we are heading in the right direction. If we don’t know what our numbers are then how do we know we are moving forward?

 

 

The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here

 

Comments welcome below. How well do you know your numbers? Are there any other important numbers I have missed?

Is a house a good investment?

Is a house a good investment?

This week I had the privilege of being invited to write a guest post on the blog of a fellow kiwi doing great things.

Peti at The Leveraged Mama quit her full time job to allow her to be at home with her child. She is now finding creative ways to earn income from home and you can follow along on her journey as she documents her experiences.

If you’ve ever wondered if your house was a good investment, then look no further. I have collated 25 years worth of regional data and compared this against investing in the stock market.

For the results, you can view the article here.

The beginners guide to retirement part 12:Stress test your retirement plan

The beginners guide to retirement part 12:Stress test your retirement plan

he best retirements are planned. You know what you want to do in retirement. You know how much it will cost. You know how much you will need saved. Less surprises will mean less stress and a greater likelihood of outliving your money.

The problem is life doesn’t always work as planned. We may […..]

The beginners guide to retirement part 9:Do I need life insurance?

The beginners guide to retirement part 9:Do I need life insurance?

Life insurance deserves a topic of its own as it is such as a large amount of money. The cost of life insurance grows at a rapid rate once we hit the age of 50. Many of us don’t question this cost though. Yes, we know it is increasing, but many of us don’t believe we can […..]