The three financial bases all Kiwis should cover
Money. You either love it because you're financially organised and set for the future, or it's a cause of constant stress and worry because you're not. The latest GfK Major Causes of Stress survey shows that this is true, with most of the 27,000 respondents citing finances as the thing that worried them most.
It needn't be like that though. With just a little time spent planning and professional advice courtesy of the team here at Goodlife, you can start putting your money worries in the rear view. Let's get you started by going through three areas that you should focus on when putting together a plan for a better financial future.
1. Paying down debt
With heavy personal debts weighing you down, the journey to financial security is going to be near impossible. That's why your first priority should be getting credit card debts, personal loans and similar debts off your back as quickly as possible.
This may be a challenge, as Kiwis spent $6.7 billion on credit cards in January alone, Canstar data shows. However, by setting up a smart plan to repay your loans and potentially refinancing your debt for a lower interest rate, you can take steps in the right direction.
Kiwisaver is a brilliant tool to help lay the building blocks to buy property and retire comfortably.
Kiwisaver is a brilliant tool to help lay the building blocks to buy property and retire comfortably. Once you've taken the time to set it up, select a fund and decide how much to contribute. You won't have to do a thing except watch it automatically build up while you work.
There are several perks involved with being a member of Kiwisaver and the fact that your employer has to contribute 3 per cent of your gross salary to your fund is perhaps the best of all. It makes a real difference too – the Financial Market Authority reports that in 2016 alone employers contributed a total of $1.6 billion to Kiwisaver funds. That's over $600 per member.
What's more, the government contributed a whopping $728 million during the same period. You could also be eligible for a government contribution of $521 if you contribute a minimum of $1,042 a year. With help from both your employer and the government, the amount in your account can build up quicker than you may think. Particularly if you carefully select a well performing fund with the help of a financial advisor.
Investing in property isn't easy but if you approach it with a well thought out strategy it could be the key to retiring in the lap of luxury (or at least in comfort!). The most difficult part of this process is getting into the market in the first place as you'll need to save a hefty deposit and get your finances in order before you do so.
The fruits of your labour are most definitely worth it. Start early and it's certainly possible to own investment property mortgage-free by the time you retire. If you charge your future tenants around the average rent in New Zealand, that's $500 a week or $26,000 a year of income. That amount will go a great distance towards providing you with the retirement you deserve.
The path to a better financial future can be a little difficult to traverse without a guide, and that's where Goodlife come in. We've helped countless Kiwis build wealth and retire comfortably. Our experience and dedication to offering the best advice makes us perfectly suited to help you too.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Specialist
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