A week ago I went to an excellent conference organised by the Commission for Financial Literacy and Retirement Income. These are the people that bring you (among other things) the Sorted website.
Inspiration can came from the most unlikely of sources. I have never really been a fan of military stuff, largely due to the behaviour and intellectual calibre of the army trainees ("squaddies") that menaced my home town at the weekends when I was a teenager. We lived a few miles away from a very large army base in England. My interactions with squaddies were usually along the lines of whether I may have spilled their pint.
So, when Air Commodore Robert Brown from the Australian Defence Force was on the list of speakers, I wasn't expecting much.
Yet he turned out to be very inspiring.
He was saying all the things I wanted to say, doing the things that I want to do and demonstrating how valuable and life-changing financial literacy is to people. That's exactly what I think, too.
If I was given his time slot, I would have said the same things and made the same points. But I wouldn't have been as effective. Nowhere near. I am about to do it...and he has been doing it for years. I think it works...he knows that it does and can prove it.
Later on in the day, like a gushing teenager, I told him he was like a big blue angel flapping down from heaven. He gave me a funny look. On reflection, I am not surprised. He's about 6 foot 6, in full uniform and halfway through his lunch. I'd have given me a funny look too.
His sessions involve no selling, no jargon and no conflicts of interest. And they are very good. You can see them here .
They tried having financial services providers doing these sessions for free - but the audience
didn't really trust that they were getting truly independent information.
I like the practical sensibleness of it all - the unrefutable good common sense that runs through
the material.
The parallels with what my company, Truly Independent Financial Advice NZ, is going to do are remarkable.
In order to make a go of this, I need employers to agree that financial health and safety is important for their people.
Work is all about money - the financial health of employees is all-important.
I can be booked in from 4 July 2013. My website is here
Friday, June 28, 2013
Friday, June 21, 2013
Get Vulcan
Mr Spock has three ears. His right ear, his left ear, and space...the final front ear.
Apart from his superior hearing, what sets him apart is his logical mind. His lack of emotion, his judgement based on mathematical probabilities. He doesn't have gut feelings or hunches. He can't be swayed or persuaded by a boozy lunch, or have his head turned by charisma, flattery or advertising.
Which means he'd be very good with money. Mr Spock would find these things simply illogical:
1. Borrowing money to buy things you don't really need
2. Having sustained credit card debt
3. Lotto
4. Buying high and selling low
5. Paying full price at Briscoes
And yes, we know this too. The drawback here is that we are human beings - not Vulcans and we have "emotions" here on Earth. Spending money on something you know to be wasteful or reckless is a very human thing to do do.
With number 1 on the list, there is a complex emotional battle going on. You may buy a wonderful item on credit and now you have it! You deserve a treat, why not? There is a brief period of rejoicing and then the sheen wears off a bit.
A more sustained way to keep that emotional high is to save up for the item and pay for it. Once the initial thrill is gone, you still have the satisfaction of knowing it's all yours.
It feels good to buy nice things, but attaching too much emotion to money all the time can be a huge financial hazard. It can also be the most illogical. Emotions have been developed (I expect) as a result of an evolutionary need to interact with each other successfully. There is no practical use for money issues to be sprinkled with emotion. Do you feel any emotion when eating toast? You don't because you don't need to.
Sales teams all over the world are in meetings right now trying to find ways to "engage" you about money. Sales professionals want to establish an emotional connection because then you get a bit more relaxed and less picky.
Remove emotion as much as you can. If a sales person is getting excited, ask them to calm down. If they are probing you for details of your school days , they are trying to establish an emotional connection via banter - politely get them back on course. You're on to them.
Get Vulcan about money and live long and prosper.
Apart from his superior hearing, what sets him apart is his logical mind. His lack of emotion, his judgement based on mathematical probabilities. He doesn't have gut feelings or hunches. He can't be swayed or persuaded by a boozy lunch, or have his head turned by charisma, flattery or advertising.
Which means he'd be very good with money. Mr Spock would find these things simply illogical:
1. Borrowing money to buy things you don't really need
2. Having sustained credit card debt
3. Lotto
4. Buying high and selling low
5. Paying full price at Briscoes
And yes, we know this too. The drawback here is that we are human beings - not Vulcans and we have "emotions" here on Earth. Spending money on something you know to be wasteful or reckless is a very human thing to do do.
With number 1 on the list, there is a complex emotional battle going on. You may buy a wonderful item on credit and now you have it! You deserve a treat, why not? There is a brief period of rejoicing and then the sheen wears off a bit.
A more sustained way to keep that emotional high is to save up for the item and pay for it. Once the initial thrill is gone, you still have the satisfaction of knowing it's all yours.
It feels good to buy nice things, but attaching too much emotion to money all the time can be a huge financial hazard. It can also be the most illogical. Emotions have been developed (I expect) as a result of an evolutionary need to interact with each other successfully. There is no practical use for money issues to be sprinkled with emotion. Do you feel any emotion when eating toast? You don't because you don't need to.
Sales teams all over the world are in meetings right now trying to find ways to "engage" you about money. Sales professionals want to establish an emotional connection because then you get a bit more relaxed and less picky.
Remove emotion as much as you can. If a sales person is getting excited, ask them to calm down. If they are probing you for details of your school days , they are trying to establish an emotional connection via banter - politely get them back on course. You're on to them.
Get Vulcan about money and live long and prosper.
Tuesday, June 18, 2013
Pricking the residential housing boil
This rise in house prices is not a bubble - it's a boil.
Bubbles are nice, clean floaty things with a rainbow of colours on the outside. When the time is right - they pop. Children squeal with delight.
Boils are horrible things that fill with angry pus until they have no choice but to burst. When they do, it's repulsive and there's an awful mess. Eww.
I wish I could do just one thing. And that one thing may help prick the boil.
Before I tell you that one wish, allow me to explain why I think the whole business of buying/selling a house is a bit shabby at the moment.
If you want to talk to someone about *perhaps* buying a house, you would, quite reasonably, talk to your bank or a real estate agent. These guys are in the business and will offer good sensible advice...won't they?
Well...
Right now, real estate agents are having a great time, sensing that while the sun is shining - it's time to make as much hay as possible. Agents can have long periods of barren times. In a way, you can't blame them for making the most of it.
Banks are offering the lowest of interest rates and all kinds of incentives. Banks will not stop doing this. Home loans are very profitable and banks have highly focused sales people, targeted to sell as many of them as possible. Previous boundaries of sensible lending are being tested - again.
Right now, both of those parties have too much of a vested interest in getting that loan and that house purchase done for you. In this current environment, you should not expect a balanced chat with either the bank or agent about whether this is the right thing to do.
Once upon a time, buying a house was quite civilised. If the parties couldn't agree on price/terms, then it was never "meant to be". This is the right outcome for both buyer and seller.
Agents prefer auctions. Most of them push this option now, to the exclusion of every other method.
With auctions, a sale (any sale) happens far more often. In the high pressure environment of the auction room, a bidder may get carried away, or there is an ugly silence. The reserve price is not met and the seller feels forced to accept a subsequent lower offer rather than go through the humiliation (and cost) of an auction all over again.
Either way, there's a sale.
That's good for the bank and good for the Agents. They don't necessarily care that much about whether the actual sale price was $50K higher or lower. It makes very little difference to the agent's commission or the bank's lending targets.
Yes, more houses get sold - and the market therefore seems to be buoyant. I think it's a murky business and I feel that the public are corralled into situations that make them pressurised, stressed and vulnerable.
So my wish is to stop banks lending for properties that are up for auction. Or at least make the lending much harder to arrange.
Bubbles are nice, clean floaty things with a rainbow of colours on the outside. When the time is right - they pop. Children squeal with delight.
Boils are horrible things that fill with angry pus until they have no choice but to burst. When they do, it's repulsive and there's an awful mess. Eww.
I wish I could do just one thing. And that one thing may help prick the boil.
Before I tell you that one wish, allow me to explain why I think the whole business of buying/selling a house is a bit shabby at the moment.
If you want to talk to someone about *perhaps* buying a house, you would, quite reasonably, talk to your bank or a real estate agent. These guys are in the business and will offer good sensible advice...won't they?
Well...
Right now, real estate agents are having a great time, sensing that while the sun is shining - it's time to make as much hay as possible. Agents can have long periods of barren times. In a way, you can't blame them for making the most of it.
Banks are offering the lowest of interest rates and all kinds of incentives. Banks will not stop doing this. Home loans are very profitable and banks have highly focused sales people, targeted to sell as many of them as possible. Previous boundaries of sensible lending are being tested - again.
Right now, both of those parties have too much of a vested interest in getting that loan and that house purchase done for you. In this current environment, you should not expect a balanced chat with either the bank or agent about whether this is the right thing to do.
Once upon a time, buying a house was quite civilised. If the parties couldn't agree on price/terms, then it was never "meant to be". This is the right outcome for both buyer and seller.
Agents prefer auctions. Most of them push this option now, to the exclusion of every other method.
With auctions, a sale (any sale) happens far more often. In the high pressure environment of the auction room, a bidder may get carried away, or there is an ugly silence. The reserve price is not met and the seller feels forced to accept a subsequent lower offer rather than go through the humiliation (and cost) of an auction all over again.
Either way, there's a sale.
That's good for the bank and good for the Agents. They don't necessarily care that much about whether the actual sale price was $50K higher or lower. It makes very little difference to the agent's commission or the bank's lending targets.
Yes, more houses get sold - and the market therefore seems to be buoyant. I think it's a murky business and I feel that the public are corralled into situations that make them pressurised, stressed and vulnerable.
So my wish is to stop banks lending for properties that are up for auction. Or at least make the lending much harder to arrange.
Friday, June 14, 2013
Adorable KiwiSaver advice
Hope you enjoy this. I created it for free from the www.xtranormal.com website.
The site allows you to create your own cartoon with almost infinite array of characters and situations. Given that, the fact that I chose to create a cartoon about KiwiSaver is a little sad. I know.
http://m.youtube.com/watch?v=bJICa4C_rY0
Friday, June 7, 2013
Transferring Aussie super to KiwiSaver
It was great to hear that from 1 July 2013, you can start to organise the transfer of Australian superannuation scheme benefits over to KiwiSaver. If you have worked in Australia over the last 20 years, you probably have a few thousand dollars knocking around over there.
I will have more detailed stuff in later posts, but my main general guidance at this point is to wait. The providers are now scrambling to get ready in time for 1 July. Many of them may not make it by that deadline, but that doesn't mean they're bad providers. They have been given very little to time to get the right systems in place.
Once everyone is ready, you can make a better assessment of who might be the best KiwiSaver provider to take on your Australian superannuation transfer. I would give it until the end of this year. Have a good look in 2014 - all the main KiwiSaver providers should be ready by then.
In the meantime, if you have lost track of where your Aussie super is, consider using the free Super Seeker online service from the Australian Tax Office. Here is the link:
http://www.ato.gov.au/individuals/content.aspx?doc=/content/33301.htm&alias=superseeker
I only mention this because I have noted some excitement from providers who are gearing up to charge the public to do this. Like the tax refund companies, you can do it yourself. It is all online and it isn't that hard.
In later posts, I will also ask you to consider what you might be giving up. Does your Aussie super carry with it any guarantees? For example, some funds might have built-in inflation proofing, underwritten by the Government. You will lose all of that on transfer.
The main message is not to be rushed. Be sure of these things :
1. Where it is
2. What it is (is it just super? - any life insurance in there?)
3. Whether transferring to KiwiSaver is the best thing to do.
Providers will promote it as a no-brainer. It isn't. It is your money and you should only transfer if it is the right thing to do.
I will have more detailed stuff in later posts, but my main general guidance at this point is to wait. The providers are now scrambling to get ready in time for 1 July. Many of them may not make it by that deadline, but that doesn't mean they're bad providers. They have been given very little to time to get the right systems in place.
Once everyone is ready, you can make a better assessment of who might be the best KiwiSaver provider to take on your Australian superannuation transfer. I would give it until the end of this year. Have a good look in 2014 - all the main KiwiSaver providers should be ready by then.
In the meantime, if you have lost track of where your Aussie super is, consider using the free Super Seeker online service from the Australian Tax Office. Here is the link:
http://www.ato.gov.au/individuals/content.aspx?doc=/content/33301.htm&alias=superseeker
I only mention this because I have noted some excitement from providers who are gearing up to charge the public to do this. Like the tax refund companies, you can do it yourself. It is all online and it isn't that hard.
In later posts, I will also ask you to consider what you might be giving up. Does your Aussie super carry with it any guarantees? For example, some funds might have built-in inflation proofing, underwritten by the Government. You will lose all of that on transfer.
The main message is not to be rushed. Be sure of these things :
1. Where it is
2. What it is (is it just super? - any life insurance in there?)
3. Whether transferring to KiwiSaver is the best thing to do.
Providers will promote it as a no-brainer. It isn't. It is your money and you should only transfer if it is the right thing to do.
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