Throughout my 20’s I spent every dollar I earned. I’d tell myself things such as “I deserve it” or “it doesn’t cost much”. The problem is these times became too frequent. I was telling myself I deserved something new every single week. I’d hardly been in the workforce for one year, yet here I was […..]
Stock index funds are all the rage these days. They occupy about 20% of the global market and this amount is increasing every year. The main driver of the conversion of investors from active to passive stems from the fact that many active funds (after fees) are delivering worse results than passive index funds.[…..]
Index fund investing can offer good results for two reasons. Low costs can save you hundreds of thousands over the long term and index funds tend to perform better than actively managed funds over the long term. Better performance at […..]
As a volunteer budget adviser, I often see clients that ignore their debt problem. Their theory is, “If I ignore it then I won’t know there is a problem.”
I have had clients come into the office with a pile of unopened envelopes. They know it is bills inside but by not opening the mail, they convince themselves that there are no bills to pay and there is no problem. But guess what? It doesn’t […..]
Credit card debt has become so normal that we no longer call it debt. It is called a credit balance. Sounds much nicer doesn’t it? This was no doubt rephrased by the credit card industry to normalise debt. In a similar way Kentucky Fried Chicken rebranded to KFC because they didn’t want people thinking of the word ‘fried’, the credit card industry doesn’t want […..]
I have an extremely difficult time being OK with paying life insurance.
On the one hand, if I don’t pay for insurance my family will not be taken care of upon my departure from this planet. On the other hand, if I stick around like a bad smell, then all this cost is wasted, right?
I find it rather sad that after all is said and done, after 40 years of working at our job we are just an employee file number to our employer. Our employer moves on. They usually replace us, and we are all but a distant memory. Yet for us, our time in employment […..]
Tax is often a bit of a sore point in many conversations. Most people think they are paying too much of it. Without getting too political in this blog, many people don’t like paying taxes to people on benefits. Read some of the […..]
I’ll admit it. I used to be a chronic procrastinator. It was just too easy to put off things I didn’t want to do until the last minute. The last minute has seen a lot of action over my time. In this last minute of getting things done there is a lot of stress and anxiety, not to mention […..]
You may not be the CEO of your workplace, or even your marriage. But you are the CEO of your life. Many people go to jobs they don’t like to finance life’s they don’t like. To continue living this life we […..]
I was recently in the hospital waiting room with 12 other people. Do you know how many of these people had their head down on their mobile phones for pretty much the whole duration? 10 out of 12! I have seen similar numbers in airports too. It is not just the young either. The older generation have also managed to pick up this habit of […..]
There are so many people retiring early and living the life of their dreams at the same time there are so many people struggling to save enough for retirement. How can this be? How can we have so many people struggling, yet so many succeeding?
Why is it that over time, socks mysteriously disappear? I’m sure I’m not the only one that experiences this. I now have a collection of single socks divorced from their significant other. They are not in the house, in the washing machine, in the drawers, or […..]
When I was growing up I used to love computer games. My favourites were the strategy role playing games, where you had to make strategic decisions as a main character. Each decision lead you down a path to a new bunch of challenges. Some paths would lead to […..]
Just over a month ago I published an article about the sale of my apartment. I have had a couple of clients and readers comment that I must have done well from the sale.
Well here I am to pour fire over popular opinion of housing. The housing market is so hot because of all these stories we tell ourselves. I made $100,000 in 10 years sounds pretty exciting doesn’t it? But it doesn’t tell the whole story […..]
The difference between millennial's and previous generations is not minor. The difference is the world is currently a much tougher place financially.
I can hear boomers spitting out the coffee as they read the opening sentence. “Honey, I can’t believe what I am reading. Look what this clown is saying about those entitled, selfie taking, avocado eating, Laté drinking, slackers. He is saying they are the same as you and I were at that age. Unbelievable […..]
We live in a very pro housing society here in New Zealand. Everyone wants to get on the property ladder, even if houses are relatively expensive. We are told that houses double in price every 10 years and you are a fool if you don’t buy. All the while, conveniently forgetting about […..]
One Saturday morning last year, my wife and I drove past a man on the side of the road in obvious pain. As concerned citizens we spun the car around and pulled over to make sure he was ok. He was bleeding from his face and […..]
So often self-control is seen as a negative act. Where we are depriving ourselves of something fun or something so good, but oh so bad for us. We are taught from an early age we can’t have ‘bad’ foods all the time, even though we want them. As adults, the list of things that are supposedly ‘bad’ for us grows exponentially. Ironically, these are also the things that […..]
Many of us lead comfortable lives. We have shelter, are well fed, we have jobs that we are good at, and a close group of friends. In our spare time we tend to follow the same routine and do the same things. Over time we find […..]
With so many options we can’t always make the best choice. It would require far too much time and effort deliberating even the smallest decisions and then when we make the wrong decision we will beat ourselves up over it. Once we have finished giving ourselves the uppercut then next time we may be too scared to even make a decision at all in fear of getting the bash again [……]
The title may sound a bit strange if you have been following my blog for some time. I am forever singing the praises of saving and investing your money so that you can gain financial freedom and free up your time to do what you want. Time on earth is finite and the more of it we can use on our own terms, the better. In fact, the whole reason I am […..]
Most of the time, index fund investors will invest at regular intervals, such as weekly or monthly. Occasionally though, we may be lucky enough to come across some extra money. This may be from the sale of a house, or maybe you are thinking about starting to invest.
Naturally, this leads to one of the most common investing questions. Should I invest it all at once (lump sum), or spread the contributions out over a longer period of time (dollar cost average)?
We are born into this world as curious little things. I am sure most of you have experienced the ‘why’ game with a child. This is where you do your best to answer their question, but they are still not happy with the answer! They respond why to every answer you give them, no matter how […..]
In the last blog we discussed the results of New Zealand based research of the 4% safe withdrawal rate study. In it we highlighted how big an impact a share market crash can have on whether or not we run out of money in retirement.
I won’t be leaving this this to chance. The first ten years of retirement tend to be the most important indicator of whether […..]
There is a United States based study called the trinity study that looked into how much someone can successfully withdraw from their investment portfolio over a 30-year period. The result of the study concluded that […..]
Have you ever looked around your house and ask, “why did I buy that?”. Or come out of a shop with a new powertool and later thought, “what was I thinking?”. Chances are you have fallen prey to clever sales marketing and product placement. I think we have all fallen prey to these moments of post purchase regret. With a growing range of products now available, the marketing is only getting more pronounced and difficult to avoid.
With Christmas fast approaching, I thought it would be a good time to […..]
To change our path in life we are said to be either inspired or desperate. As a volunteer budget adviser in the community I see a lot of desperate people wanting to change their lives so money no longer controls them. They are desperate to get out of debt and desperate to free the mind from money worries. Over time it becomes such a heavy burden to carry that we […..]
I woke up on New Years day to find my ugly mug splashed across the NZ Herald webpage. I was one of the subjects on an article about kiwis planning to achieve financial independence at a young age […..]
In a recent blog article I shared my financial story to this point. I went through a plenty of ups and downs and was by no means an early starter. My goal is to make financial freedom more relatable and feel more achievable through sharing my experiences. Well today we continue the voyeurism theme. I will be exposing myself financially for you all to see […..]
For the last two years, the NZ Herald has asked approximately seven investment firms for their stocks predictions for the year ahead. Each firm picks five companies they think will perform the best and the Herald publishes their picks. Here is a link to the 2018 picks.
Well that wraps up our 9 round battle between the index fund providers. It goes to show how each fund is unique with different cost structures. If you have multiple funds then there is no reason why you have to be loyal to one provider. Analyse each fund on its merits.
Below is a summary of the results for the lowest cost index fund providers in New Zealand […..]
Welcome to round 5 of the battle between the heavyweights. If you haven’t done so already, check out theintroduction 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 […..]
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 […..]
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.
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 […..]
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 […..]
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 […..]
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 […..]
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 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 […..]
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
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 […..]
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. […..]
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 […..]
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.
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 […..]
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 […..]
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.
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?