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If we have choice that means we have control over our decisions. That is a fantastic thing, as many cultures do not have this luxury. Take arranged marriages in India for example.
The power of choice can be very powerful indeed. Imagine inheriting 2 million dollars […..]
Lucky you, three posts this week.
I was invited to do a guest post at the ESI Money blog where I discuss the decision to pay off the mortgage or invest. Check out the comments as well for more thoughts on the matter.
While here, check out the ESI Money millionaire series of interviews. If you want to increase your net worth there is no better way than to learn from those who have already done it.
Have a great weekend.
It seems nowadays we are inundated with options. Hundreds of TV channels, online clothing stores and many investment options. Even once we have finally chosen on a mortgage provider for example, then we have another set of decisions. Do we fix? Do we float? Both? Revolving credit? Interest only? Decisions within the decision if you will. This may seem like a good thing on the surface. More options mean more competition for our attention, which should result in a greater quality of product or service at a lower price.
However, the end result can make us tired of thinking and analysing, and potentially making a sub par decision. Or no decision at all
There are 3 things to consider whether a financial adviser may be worth while or not. Whether we have the […..]
We have all been sold on the dream of owning a home. It is a national obsession. If we don’t own a house, we should be striving to own a house. Get a good job, work hard, start a family and buy a house.[…..]
What if I told you that dollar coin in your hand is not actually a dollar? You will look at me like I am crazy. More so than usual anyway. If you would just give me two minutes to explain before judging me […..]
This is the million-dollar question – quite literally in many parts of the country.
Buying a home is probably going to be the single biggest purchase we ever make, so it needs to be well considered.
The number one consideration we should make when looking at buying is […..]
Habits are what get us from point A to point B in the quickest amount of time and can be both fantastic and crippling. They are the actions we can do without even […..]
I can’t count how many times I have seen or heard someone say: “I bought my home for $400,000, and sold it for $700,000. We made $300,000”.
On the surface, it looks like a fantastic result for the homeowner and it may well be, but it is not the whole story. What is the story missing? […..]
With the rapid rise of smartphones and the internet, we are inundated with information on a daily basis. This is both a blessing and a curse.
Readily accessible information is fantastic to discover new information that will improve our lives. The problem is that we are easily distracted. I am anyway. I’m sure I’m not the only one? Echo, echo, echo.
These distractions take us away from the valuable information we should be paying attention to and […..]
When reviewing our investment results, all may not be as it seems. Is that 7% return, actually 7%? Not if you have left out fees and inflation in your calculations. Two small, but not insignificant considerations that can eat away at […..]
Whether you are a buy and hold investor, or a buy and sell investor you will still be interested in reviewing your stocks. It is not as simple as it first appears.
We will often receive an annual report from our stock broker or online provider of how your stocks have done that year. 5%, 9%, 2%, -5% and so on. So, if our stocks over 10 years have returned 70% in total, that is 7% per annum right? WRONG. […..]
One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute
Markets go up, down and sideways. Why, for how long, and when, is the big mystery. No one knows. It’s easy to say after the fact, but knowing the trigger for market changes beforehand is anyone’s guess. Strategies of trying to time the market are often […..]
If we are picking individual stocks then we must decide whether to pick our own stocks or have an investment manager/adviser pick them on our behalf.
A self-managed portfolio has the benefit of allowing flexibility, in the sense that we get to choose every company we invest in. We also have significant cost savings, due to[…..]
Every investor will get things wrong. Not just once either but frequently. Heck, even full time professional investors consider 60% success rate as very good. This means that there are many professional investors hitting 50% or less. That is just as well as flipping a coin. The key to a good portfolio is […..]
So far in this series we have covered the different terminology used in investing, dispelled some common investing myths, different types of investments, how to approach the sharemarket, how to reduce our exposure to risk, and what impact our own behaviours have on our investments. Now we can discuss the different types of stocks available to invest in […..]
“The Behaviour Gap” is a fantastic book by Carl Richards. The premise is that despite knowing better, people continue to make the same mistakes over and over with their money. It is our emotions that get in the way of […..]
There are some things we can’t control when investing in the sharemarket. We can’t control interest rates, inflation, exchange rates, company bankruptcies, and so on. This is why many stay away from shares. The unknown. This is a shame, because returns from shares over the long term are arguably better than other accessible investments.
How can we reduce the risk of the unknown? […..]
“Theories that are right only 50% of the time are less economical than coin flipping
— George J Stigler
Let’s dive straight into it and briefly explain the 5 main asset classes […..]
We can invest in the top 50 companies in NZ or the top 500 US companies with as little as […..]
Today, we start a 14-part series that will aim to educate investors that don’t know where to begin investing their spare cash. For a new investor, it can be intimidating to invest money. A lot of the intimidation comes simply from […..]
2015 started like any other year for me […..]
Over recent years, there has been an explosion (excuse the pun) of internet bloggers retiring early and writing about the world of FIRE. It means Financial Independence Retire Early, or FI for short. The RE part is really optional.
So, what is FI? My interpretation of Financial Independence is […..]
Before we move on, emergency savings is a certain amount of money that is held in a safe, easily accessible place, such as a bank account, to be used in an emergency.
An emergency is something that is truly unpredictable such as […..]
The word ‘budget’ has many negative connotations. It is one of those words that make us squirm. It brings feelings of living cheaply and not getting to enjoy life. It’s no wonder budgeting is one of life’s least enjoyable tasks.
If I offer you one million dollars cash now or 1 cent that doubles in value every day for a month, which would you choose and why?
When choosing between more than one debt, there are two common schools of thought on repaying debt. One school is adamant that the best method is to pay down the highest interest debt first – called the debt avalanche. The other school is adamant that paying the smallest debt is best – this is called the debt snowball.
Life goals are not sexy. Prove me wrong J Money :)
To try and convince someone who doesn’t set goals to set goals is a very difficult proposition. There are so many other seemingly more important things competing for our time. Why would I want to waste it sitting down writing goals?
So you’ve decided you want to purchase a car. We can easily shop around by looking at the advertised sale price of the vehicle. That is fraught with danger though, as there are […..]
Transportation is most people’s second largest expense, behind housing. If you are wanting to get in control of your finances and accelerate your savings, saving money from owning a car can be a […..]
When we make investing decisions, there is a cost that is frequently ignored. It is called […..]
We all know that we should be saving for our future but a lot of us don’t. Why? […..]
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 importance of a healthy mind and body as we approach retirement cannot be under-estimated. Your biggest asset is not your house or your bank balance. Your biggest asset is you and you need to take care of it. Just like any other asset, you need […..]
Show of hands how many readers have a written will or trust of what will happen when you get sick or die? I can’t see your hands but the statistics show […..]
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 […..]
Myth 1 - NZ Superannuation will not be around when you retire
Maybe, maybe not. It could still be available in 40 years but it may be modified. The age of retirement could be 70. There could be a tiered a structure, where the longer you delay […..]
Retirement is often looked upon as an escape. An escape from work. An escape from routine. An escape from structure. It is seen as a new stage of life. A life where we have a bit more freedom to do things we have been waiting 40 years to do. To […..]
The landscape for retirement is not the same as it used to be. James is retiring today (born in 1953) and has a life expectancy of 78 years. Kevin is born today and can expect to live to age 91.
James has just 13 years of retirement for his money to last. Kevin has almost double the time – 25 years. He needs […..]
Running out of money in retirement is a real concern for most. As discussed in the previous post, sequence of returns can be a major determinant of whether our money will last our lifetime. If we are unlucky enough to retire just before a recession, or worse, a depression, then our chances of outliving our money drop substantially. Particularly if we […..]
Let me explain using two fictional employees – Mike and Jacob. They worked for Megacorp Inc and were identical in all aspects of their job. They both started working at age 25 and both worked for 40 years. Their salary and salary growth were identical, along with their Kiwisaver contributions. They made the same investments with their savings during which they both earned […..]
There are two commonly dispelled methods that tell you how much you need to retire. I will go over why they may be wrong for you and how to calculate a more reliable number […..]
If I am being honest, I never thought that early retirement used to even be a possibility on an average middle-class income. I thought we HAD TO go to university, get a job for 45 years and then retire. End of discussion.
But I am here to tell you early retirement is a definite possibility and I have […..]
Retirement is a big change in our lives that cannot be underestimated. Generally speaking, we transition from working for 40-50 years according to someone else’s timetable. Our days are structured. We know exactly […..]
In 2017 an Australian rich lister named Tim Gurner made headline news proclaiming that millennials can’t afford homes because they spend too much money – mainly on avocados apparently!
I don’t know if I am supposed to be offended. You see […..]
In a world full of Twitter, Facebook, Instagram, and reality TV, we all love a bit of voyeurism. Looking at other people's lives from the outside seems to interest us. Maybe because we like to learn from other people - what we want to do., what we don’t want to do. Maybe we just want a bit of excitement and feel like we are living vicariously through them. Either way, it is a bit of pastime.
So today is a special day my little voyeurs. I am going to open up on a step by step level, how I got to where I am today […..]
I’m pleased to present our first reader case study on this blog. 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 Jim (not his real name) wanting to know what he should do next in order to achieve his goals of marriage, kids and retirement before 60 […..]