NZ Herald - Money Wise Feature October 2022

OUTLOOK forinvestors for2023

Kiwiwalletsareinforanuncomfortable

No-oneknowsexactlywherethe economyisheadedorwhatthatwill meanforpeople’sfinances.

Economistspredict,however,thatinterest rateshaven’tstoppedrising,inflationisn’t goingawaythisyear,housepricesmaynot havehitbottomyet,andmorevolatilityison itswayforKiwiSaverandsharemarkets.

Inshort,January1,2023isn’tamagicdate that’sgoingtoheraldthestartofrosytimes again.Thereis,however,lightattheendof thetunnel,mostlikelyafteracouplemore painfulyears.

MOREPAINONTHEWAY

It’stheReserveBankofNewZealand’s(RBNZ) roletoraiselowerinterestrates,whichit doesbysettingtheOfficialCashRate(OCR). WhenitraisestheOCR,thatinturnpushes upinterestratesformortgage,business,and consumerborrowing.Higherinterestrates tendtocurtailspending,whichhelpscheck inflation.

FewcouldhavemissedthattheRBNZhas beenraisingtheOCRsteadilyforthepastyear tokeepinflationundercontrol.Unfortunately economistssaywe’renotthereyetandmore risesaremostlikelyontheirway.

TheOCRiscurrentlysittingat3.5%,but isexpectedtocontinuerisingto4.5%or evennearer5%,saysWestpacactingchief economistMichaelGordon.Thepayoffis keepinginflationincheck,whichbenefits households’bottomline.

TheissuefortheRBNZandordinaryNew ZealandersishowmanymoreOCRrisesare neededandhowlongthiswilltaketoget inflationundercontrol.“TheReserveBank usesthelanguage:‘astitchintimesaves nine’,”saysGordon.“It’sdifficulttojudgehow

manystitchesareneeded.”

AGOODPANDEMIC Economieseverywherehavebetterand worseperiods.Gordonpointsoutthat hereinAotearoathebackstoryisthatNew Zealandhadaprettygoodpandemicfroman economicpointofview.

Theeconomymostlydidwellthrough2020 andthebeginningof2021.Mortgagerates werelow,businessesmadeprofits,people hadjobs,andhousepricesrose,whichmade manyfeelwealthy.Followingashortsharp correctioninMarch/April2020,shareprices andKiwiSaverbalancesroseverystrongly.

“COVIDwasakindofeconomicshockthat wehaven’treallyseenbeforeinanyone’s livingmemory,”saysGordon.Itwasn’t businessasusualforadownturn.“COVID wasquitedifferent.Thatrangedfromthings likeclosuresofglobalmanufacturers,tothe cloggedupshippingschedules,throughto workabsences,becauseofCOVIDisolations.”

Interestrateswerelowerandthe governmentpumpedmoneyintothe economyattheheightofthepandemic.It helpedthecountrythroughadifficulttime, butendedupbeingadoublewhammyfor inflation,saysGordon.

“Nowit’saboutthestoryoftryingtoget ourselvesoutofthatsituation,”hesays.“We hadaprettygoodpandemic,butweoverdid it.Andwe’rehavingtocorrectsomeofthat.”

Themedicinedoesn’tneedtoresultin recession,saysGordon.Livinginanuncertain worldandtheRBNZmakinghumandecisions involatiletimes,meansrecessioncan’tbe ruledout.

NOTEINTHE1970SNOW No-oneknowsexactlyhowhightheOCR

DavidBoyle,MintAssetManagement. Photo/Supplied

andinterestrateswillgo.Butmostexperts saywe’renotlivingthroughaperiodlike the1970s,wherehighinflationyearafteryear wasagiven.Thistimearound,atleast,there’s muchmoreconfidencethatinflationcanbe reinedin,saysGordon.Notimmediately,but overthecourseofthenextfewyears.

Backinthe1970scentralbankssuchasthe RBNZdidn’thavethejobofkeepinginflation undercontrol.Theydonow.“Wehavea frameworkforthisnow.Wehaveindependent centralbanksthataregiventhetoolstodo what’sneeded.Andthey’regiventhefreedom todoit,”saysGordon.

“Thatreallychangesthingsintermsofsort ofhowmuchrealpainIguesshastobeworn torightinflation.”

KIWISAVERCRYSTALBALLS

KiwiSaverandstockmarketshaveseenalot ofvolatility[sharpupsanddowns]inrecent months.Buttheoveralltrendhasbeen downin2022,whichmakesordinaryNew Zealanders’nervous.

Gordoncan’tgivefinancialadviceandsays thefutureisevenlesseasytopredictthan inflationandinterestrates.

What’smore,inflationandinterestrates affectthecompaniesthatmakeupstock marketindicesandfundssuchasKiwiSaver differently.“Soit’shardtogiveasingle answeraboutwhatinflationmeansforthe sharemarket.There’sgoingtobesome,some winnersandlosersoutofit.

“Ifyou’reholdingadiversifiedportfolio, likeyourKiwiSaver,thenthattendstosmooth outthehighsandlows.”

Italwaysneedstobenotedaswellthat therearetwosidestoacoin.Higherinterest ratesmeanbetterreturnsontermdeposits forthosepeoplewhoinvesttheirmoneythat way.

AGOODTIMETOINVEST?

WhenitcomestotheoutlookforKiwiSaver andotherstockmarket-basedinvestments, MintAssetManagement’sheadofsalesand

marketingDavidBoylesayssometimes ordinaryinvestorsapproachthisinthewrong way.

“I’vebeenaroundintheindustryforalong timeandseenhowpeoplebehave.”Thatcan betopanicandswitch,orstopinvestingwhen stockmarketsfallastheyhavethisyear.It’s thepolaroppositeofwhatinvestorssavingfor retirementshoulddoinmanycases.

“Whenpricesarecheap,ormarkets arelow,thatmeansyou’regettingmore value.”saysBoyle.“Thosecompanies andinvestmentsarestillproducingor manufacturing,thegoodsandservices.It’s justthatthey’re,theirshareorunitprices comedown.

“Thenaturalreactionis‘gosh,I’mgonna getmymoneyoutnowandmoveitto somethingfarmoreconservative.Idon’twant toloseanymore’,”saysBoyle.“That’sthe wrongthingtodoifyou’rethinkinglongterm. Byswitchingyou’rerealisingthatlossandit takesalongtimetogetthatmoneyback.” Knowyourtimeframeandsitoutdownturnsif youdon’tneedthemoneyinthenearfuture.

“Iusethesimpleanalogy,whenyou’re buyingbakedbeansinthesupermarket,” saysBoyle.“You’rebuyingmoreiftheprice hasgonedown.It’sthesamebakedbeans, justthevaluehasimprovedbecauseyou’re buyingthematacheaperrate.That’ssimilar tohowthemarketandKiwiSaverworks.”

No-oneknowsexactlywhenvalueswill headupagain.Itcouldbemeasuredinyears, notmonths,likeinflation.Buttheywill. Continuingtodripfeedmoneyinwhenprices arelowmakessense.Sodoesbeingwell diversified.

“I’mnotafinancialadviser,”says Boyle.“Thatsaid,withuncertaintycomes opportunity.Ifpeopleareregularly contributingthey’rebuyingmoreunits, becausethevaluesarecheaper.Andasthe marketsimprove,theirbalanceswillgrow faster.”

Photo:GettyImages

Asteadyinvestmentopportunity

FirstMortgageTrustwasestablished26yearsagoinTauranga andhasbeenprovidingconsistentinvestmentreturnstotheir investorseversince.Therearetwoinvestmentfundsavailable toinvestors,theFirstMortgageTrustGroupInvestmentFund andtheFirstMortgagePIETrust.

FirstMortgageTrustrecentlyannouncedthefunds’latest annualisedpre-taxinvestmentreturnof5.59%forthe September2022quarter.

Theinvestmentfundshavecontinuedtomaintainasteady performanceandreturnshaveincreasedeachquarterthis year.Thisshowsthefunds’resilienceandtheFirstMortgage Trustteam’scommitmenttoprovidetheirinvestorswith peaceofmindinvestingandconsistentreturnsevenduring periodsofuncertaintyandinachallengingeconomic environment.

FirstMortgageManagersLimitedistheissueroftheFirst Mortgage TrustGroupInvestmentFundandtheFirstMortgage PIE Trust.Pastperformanceisnot areliableindicatoroffuture performance. Returnsarenotguaranteed.ProductDisclosure Statementsareavailableat fmt.co.nz

Creatinglong-termprosperity

WearetheleaddeveloperforTheRangiuruBusinessPark, amodern,interconnectedqualityindustrialparkintheBay ofPlenty.QuaysideistheinvestmentcompanyoftheBayof PlentyRegionalCouncil–ourmandateistocreatelong-term prosperityfortheregionthroughadiverseportfoliothatis commercially-focusedandcommunity-minded.Quayside holdsandmanagesrealassets,equities,directinvestments andstrategicprojects.

Ourvaluesspeaktowhoweare,whatwedoandhowwedo it-PositivePeople,BoldInitiatives,ImpactfulOutcomes. Visitwww.quaysideholdings.co.nzandwww.rangiuru.co.nz formoreinformation

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Diamondsandgoldwatches.Wearingblingcan undoubtedlybeawaytoshowthatyouhave money,butasawealth-creationtool,it’svirtually useless.Ontheotherhand,andexcusethepun, investinginpropertycanbeanincrediblypowerful, lucrativewaytobuildlong-termwealthandsecurityfor yourfuture.

Whilethereisyettobeaninvestmententirelyfree fromrisk,therearecopiousupsidestoinvestingin property.Byinvestinginrealestate,youcangetstarted witharelativelysmallamountofmoney,andthe investmentwilllikelygrowovertimeiftheproperty increasesinvalue.Butit’snotforeveryone.Property investmentisalong-termplaywhichmeansifyouare lookingtomakeaquickbuck,thenit’sprobablynotfor you.

Alotofpeoplewronglybelievethatinvestingin propertyisabouttimingthemarket,butit’sactually timeinthemarketthat’smoreimportant.Logically, givenpropertygenerallyincreasesinvalueovertime, thelongeryouholdtheproperty,thewealthieryouare likelytobecome.

THERIGHTTYPEOFPLACE,THERIGHTLOCATION:

Notallpropertiesmakeagoodinvestment.Buying therighttypeofplaceintherightlocationiskey.To generatesignificantpassiveincome,smartinvestors buywell-locatedproperties,thetypethatarein continuousdemandfromrentersandarecloseto amenitiessuchasschools,shoppingcentresand transporthubs.Showusatenantwhodoesn’tlikea new,modern,warmhousetheycancallhome.

DuVal’spropertysites,whilethey’renotincentral Auckland,arelocatedinsomeofAuckland’shighest growthareasandareclosetokeytransportamenities. Thelikelycapitalgainsandpositivegrowthtrajectory forrentalreturnsmeanourhomesareattractiveto propertyinvestors.

BUYINGOFFTHEPLAN:

Whatmanyinvestorsdon’trealisearethecompelling benefitsthatcomefrombuyingapropertyoffthe planbeforeit’sevenbuilt.Tostartwith,thepotential increaseinthevalueofthepropertyduringthe constructionperiod,eventhoughit’suncapitalised,can belife-changing.TakeforexampleourRataTerraces developmentwherewehadsomebuyersexperience

capitalgainsofnearly$150,000whentheysettled.

Weknowmentioningcapitalgainandinvestment propertyinthesamesentence,canforsomeinvestors, beoff-putting,especiallywithNewZealand’sbright-line testwhichtreatscapitalgainsastaxableincome.But theupsideforanewbuildistheexemptionfromthis rulewhichmeansnewbuildsremainata5-yearperiod, not10yearswhichisappliedtopropertiespurchased afterMarch2021.So,ifyouinvestinabrand-new property,anddon’tsellitforaperiodof5years,you won’tneedtopaytaxonanycapitalgain.

Buyingofftheplanmeansyouarenotonly purchasingabrandnew,energy-efficienthouse,but loan-to-valueratiosfornewbuildsareoftenlowerand thereforetheinitialdepositpaidtosecuretheproperty canalsobesmaller.Theotheradvantageisinvestors generallyonlyneedtopaya20%depositwhenbuying abrandnewbuildversusthehigh40%depositwhich appliestoinvestorswhopurchaseanexistinghouse.

Addtothis,therearebenefitsthatcomefrom claiminginterestpaymentsonanewbuild.

LEVERAGE,LEVERAGE,LEVERAGE

Oneoftherealadvantagesofpropertyasaninvestment optionisthatbanksarewillingtolendyoumoneyusing apropertythatyouareeitherbuyingorthatyoualready ownassecurity.Propertyisoneoftheonlyinvestments thatcanbeleveraged.Infact,leverageissuchacritical partofpropertyownershipthatweoftentakeitfor granted.Whereelsecanyouborrowmoneyfroma bank,paythatloanbackwithmoneyfromatenant,and keepthedifferenceforyourself?

Thenifyourpropertygoesupinvalueyoumaybe abletoleveragetheequityitcreatedtobuyanother property.Andtheinvestmentcyclecontinuesandso toodoesyourabilitytogeneratewealth.

Sogiventhechoice,whatwouldyoudo?Would youbuyalittlebitofblingnow,orinvestinproperty tosecureyourfinancialfutureandliveacomfortable retirement?TofindoutmorecheckoutourDuVal PropertyInvestmentwebinar

The

Howto SUPERCHARGE yourKiwiSaver

Wheninvestmentsfallinvalue, humansliketosticktheirheadin thesand.Yetwhenthathappens it’sagoodtimetoensureyourKiwiSaver bouncesbackbetter.

Whenmarketsbottomoutsuddenly astheydidearlierthisyearitcanfeellike you’velostmoneyforever.Thatwasthe casein1987,2008,2020,andnow2022 whenwesawmajormarket“crashes”(aka corrections).

Failingsinthehumanbraincausepeople tomakethewrongdecisionswhenmarkets fall,orgoupirrationally.Thehumanbrain wantstoinvestwhenpricesarehigh,and stopwhenthey’redown,eventhoughthe oppositemakesmoresense.

Anexample,ishowpeoplemovetheir KiwiSaverfromgrowthorbalancedto conservativefunds,aftermarketshave fallen,lockinginthelosses.Themoney doesn’treboundasitwouldhaveifitwas keptinagrowthorbalancedfund.

Peoplewhoholdtheirnerveaftera

majorfallwilleventuallyseetheirbalances reboundtopre-crashlevels,providingtheir investmentshadbeensensibleinthefirst placeandnotsomeget-rich-quickscheme.

Historyhasshownthatinvestmentsleftin balancedorgrowthgrowmoreover10years ormorethanmoneyinconservativefunds, evenwiththesesuddendrops.

Itwillusuallytakeafewyearsfollowing amajorcrashformarketstorecoverlost ground,although2020wastheexception whereitrecoveredinmonths.

Anotherwaytosuperchargeyour KiwiSaverinbadyearsistokeepupregular KiwiSavercontributions,notstopthem. You’regettingmoreforyourmoneywhen thepriceofunitsyou’rebuyingisdown.

Infact,youmightwanttoincreaseyour contributions.Agreatwaytodothatisto increasethepercentageyoucontribute beforetax.Thedefaultcontributionis3 percentofpre-taxpay,whichismatched byyouremployer.Memberscanchooseto contribute4percent,6percent,8percent

or10percent.

ManyNewZealandersareuppingtheir regularcontributions.Accordingtothe InlandRevenueDepartmentofthose contributingtoKiwiSaverviatheirwages orsalary,61percentpay3percentandthe other39percenthavechosentopaymore. Ofthat39percentofmemberspayingmore, 20.96percentarepaying4percentandthe remaining18.15percenthavechosentopay either6percent,8percentor10percent. ThefigureswerefortheyeartoMay2022.

Ifyoudon’twanttocommityourself,you canalsomakeone-offorregularadditional voluntarycontributions.Itdoesn’tneedto bealot.Even$5aweekreallyaddsup.

Setuparegularautomaticpaymentdirect fromyourbanktoyourKiwiSaverprovider. Oryoucanmakeaone-offpaymentvia onlinebankingbychoosingtheIRDpayment optionandthen“KiwiSavermember account”asyourpayeetype.Themoneywill beforwardedtoyourKiwiSaveraccount.

It’sreallyimportanttokeepuppayments

ifyoupossiblycanwhenyou’reonpaid parentalleave,unpaidleave,orarereceiving ACCorWorkandIncomebenefits.An automaticpaymentisagreatwaytodothis. Women’sKiwiSaverbalancessuffermore fromtimeoutoftheworkforcethanmen’s inmostcases.Contributingequallytoboth partners’KiwiSavershouldbepartofthe parentingagreementbetweenyouandyour partner.

Ifyoucan’taffordthe6percentthat wouldbepaidintoyourKiwiSaverif employed,atleasttrytocontributeatotal of$1042.86byJune30eachyear,whichis $20.06caweek.Thiswillensureyouqualify forthefullgovernmentcontributionof $521.43.Startnowfornextyear.Nowhere elsewillyouearna50percentreturnon yourmoneybeforeinvestmentgrowth.

Finally,makesureyou’reintherightfund foryourlong-termgoals.Justbecarefulif that’samoreconservativefundthanyou’re inatthemoment,bewareofswitchingwhen themarketsarelow.

Photo: Getty Images

Forfirsthomebuyersoneofthemost enticingreasonstobuybrandnewisthat anewhomeisnotsubjecttotheReserve BankofNewZealand’sloan-to-valueratios (LVRs).Thatmeanstheycanbuywitha10% depositinsteadof20%.

Thechoiceswithbrandnewareeither“off theplans”beforeahomeisbuilt,ora“turn key”brandnewhomethatisalreadybuilt, providingsettlementiswithinsixmonthsof theCodeComplianceCertificatebeingissued bythecouncil.

Thenextbenefitofbuyingbrandnewis

ifthebuyerqualifiesfortheKiwiSaverfirst homegrant,it’sdoubledforabrandnew home.

Firsthomebuyerscanalsoapplytobuy KiwiBuildhomes.Developerswhoofferthese lowerpricedhomesmustsellthemwithin certainpricecaps,suchas$550,000fora one-bedroomhometo$860,000forthree bedroomsinAuckland.Othercentreshave differentcaps.Thesepricesareoftentens orthousandsofdollarscheaperthanthe identicalhomeinthesamedevelopmentthat isn’tintheKiwiBuildballot.

Anotherschemethatfavoursnewbuilds forfirsthomebuyersistheFirstHome Partnership(sharedownership).Buyers purchaseamajorityshareinanewhome, withKāingaOraowningtheminorityshare andlistedonthepropertytitleasthecoowner.KāingaOracanbuyupto25%ofthe home,or$200,000,whicheverislower.Buyers onlyneeda5%depositforthisscheme,and borrowtheremainingpercentagefromBNZ, WestpacorSBSBank.

Propertyinvestorshaveverydifferent reasonsforwantingtobuybrandnewhomes. LikefirsthomebuyerstheLVRrulesdon’t applytobrandnewhomes,whichmeansin somecasesinvestorscanbuybrandnewwith alowerLVR.

Theotherreasonsaretaxrelated.Oneis theBrightLinetest,whichisatypeofcapital gainstest.Itmeansthatinvestorswhore-sell propertyboughtafterMarch27,2021,within

10yearsofpurchaseneedtopayincometax onthecapitalgain.Investorswhobuildorbuy brandnewhomesareonlysubjecttoa5year BrightLinetest,whichismorepalatable. Thesecondtaxreasonforinvestorstobuy brandnewisinterestdeductibilitychanges thatalsocameinonMarch27.Therules meanthattheabilityofinvestorstoclaim theirmortgageinterestpaymentsasexpenses isbeingphasedoutfrom30September21 throughto1April2025.Newbuildproperties areexemptfromthisrule.Investorscanclaim theirinterestcosts,whichmakesnewbuilds moredesirablefinanciallyforthem.

Withtheadvantagesofbuyingnewit hasnotbeeneasyalwaystofindasuitable property.HoweverKiwibankhasbeen predictingthatthehousingshortageinNew Zealandisfalling,whichcouldmakeiteasier tobuy,assumingbuildingactivitycontinues atcurrentlevels.

Photo: Getty Images

Mark

WHATAREYOUDOINGTHAT’S DIFFERENT?

ThewayKiwisapplyformortgagesis changing.Insteadofbeingpaperbased, Tellahasgonedigital.Ourtechnology makesthemortgageapplicationprocess easierateverystageofthelendingprocess. Itsavestime,reducesduplication,and getsridofcumbersomemanualprocesses, streamliningtheentireexperience. Customerscanapplyformortgagesfrom thecomfortofhome,fromanywhereinthe world,atanytimeofthedayornight.Going

digitaltakesawaythestressofapplyingfora homeloan.

WHAT’STHEADVANTAGEOFANONLINE ADVISEROVERATRADITIONALBROKER? Thebigdifferenceistimeupfront.WithTella youcanstartyourapplicationprocessany time,evenwearingyourPJsat11pmona Saturdaynight.There’snofindingtheright person,bookingthemeetingtime,making yourwaytoameetingplace.It’sthateasy. Whatwealsoofferisawealthofgreattools. We’vecreatedguidesandvideostohelpyou

alongtheway,andabunch ofhomeloancalculatorsto makethenumberseasy.Ourmarket interestratespageisprovingespecially popularwithbuyerswhowanttokeepupto datewiththelatestrates.

HOWDOESUSINGADIGITALBROKER DIFFERFROMGOINGTOTHEBANK? Weseethingsfromthebalcony.Tella comparesratesandtermsfrommorethan 20lenders.Wehaveagreatviewofwhat’s happeninginthehomeloanmarketplace, whichmeanswefindthebestfitforyou. What’smore,Tella’sadvisersare100% transparentwhenrecommendingbanksand products.Theotherbigadvantageofgoing digitalisonlinesigningandverification, withouthavingtophysicallyvisitabank branch.

CANYOUHELPFIRSTHOMEBUYERS? Wespecialiseinhelpingfirsthomebuyers. Weareveryexperiencedandcanadvise

onKiwiSaver withdrawalsandgrants, andKāingaOra’s5%First HomeLoanapplications.Oneof thegreatthingsaboutouronlineserviceis thatitdoesn’tmatterifyou’reinanout-ofthe-waylocationnotwellservedbybanks andbrokers.Wecanhelp.

WHOCANTELLAHELP? Tella’sgoalistoprovidegoodadvicefor all.Asabusinesswegivebackbyhelping homebuyerswhoreallyneedit,butoften missoutonadvice.Wecanhelpclientswho haveimpairedcredithistories,orreturning Kiwiswhowanttotransactoutofordinary businesshoursbecausethey’reoverseas. Ourmainaudienceisfirsthomeandowneroccupied.Butourexperiencedadvisers reviewallapplicationsandcanhelpwith secondpropertiesandcomplexmortgage needs.Welovethechallengeofmaking owningahomepossible.

KiwiSaver firsthome WITHDRAWAL

useyourKiwiSaverfirsthomewithdrawal. Mostproviderscanprovideanestimateofhow muchyoucanwithdrawwellaheadoftime. Youwillalsoneedtocompleteawithdrawal applicationformandsendthatinwithyour supportingdocumentation.Yoursolicitor shouldbeabletoassistyoutomeetthetiming requirements.

Increasingly,firsthomebuyersareturningto newbuildsfortheirfirsthome.Thesetypes ofpurchasesmaypotentiallyinvolvetwo separatecontracts–thepurchaseagreement fortheland,andthebuildcontract,which iswiththebuilder,oronecontractwhere settlementdoesn’ttakeplaceuntilthebuildis finishedandaCodeofComplianceCertificate isissued.

Forfirsthomebuyerswhoplantomake awithdrawalfromtheirKiwiSaveraccount tohelpfinancethebuild,it’scriticalto understandthat:

1.Theterm‘home’isbroaderthanjusta house.Italsoincludesland,andlandand buildpackages.

2.YoucanonlymakeoneKiwiSaverfirst homewithdrawal.

ThismeansthatifyoumakeaKiwiSaver

firsthomewithdrawaltobuyland,ortomake adepositonalandandbuildpackage,you willnotbeabletomakeafurtherwithdrawal toprogressthebuildortopayforthebuild’s completion.

Similarly,ifyouownland(whetherithas ahouseonitornot)andwishtomakea KiwiSaverfirsthomewithdrawaltofinance thebuild,youwillnotqualifyasyouneedto meetthetestofnotowninglandThesocalled“secondchance”KiwiSaverwithdrawal doesnotapplyincircumstanceswhereyou currentlyownlandorahome,orwhereyou havepreviouslymadeaKiwiSaverfirsthome withdrawal.

Giventhesecomplexitiesaroundeligibility, makesureyouspeaktoyourKiwiSaver providerandyoursolicitortohelpyou developaplanaboutwhenyou’regoingto

It’salsoimportanttounderstandthat anyfirsthomewithdrawalisnotconfirmed untilyourKiwiSaverproviderhasprocessed yourapplicationandagreedtoreleaseyour funds.Thisusuallytakesacoupleofweeks ifalldocumentsareprovidedandcorrectly completed.

Finally,ifyouplantowithdrawfundsin thenearfutureandarereliantonusingyour KiwiSaverbalance,it’sworthconsideringwhat typeoffundyouareinvestedin.

Forexample,ifyouplantowithdraw yourfundsinlessthanoneyear,youcould thinkaboutswitchingtoamoredefensive investmentoptionsuchasacashfund.This willhelpprotectyouraccountbalancefrom adverseshort-termmarketmovementsthat mayleaveyouuncomfortablyshortonthe

proceedsyouwerebudgetingon. MAShashelpfulinformationonitswebsite forfirsthomebuyersconsideringtheirfirst KiwiSaverfirsthomewithdrawalshere:Buying yourfirsthomewithKiwiSaver-MAS Thinkingthroughyouroptionscanbe tricky,butwithMASyoucantalkeverything throughwithaFinancialAdviseratnoextra costandwiththeconfidencethey’renot paidcommissiontoachieveanyparticular outcome.

Wealthis WELLBEING

word‘wealth’andwasabletoconfirmmyfriend’s advice.Theword‘wealth’indeedcomesfroman oldEnglishword‘weal’,whichmeanswelfareand wellbeing.

“Theoldestrecordedversionwastheword‘wel’, whichmeant:‘inastateofgoodfortune,welfare,or happiness’.

“Around1250theword‘wel’evolvedinto‘welth’, andtheninto‘welthi’around100yearssolater.”

Whatiswealth?Isitsimplyabouthaving accesstosubstantialmoneyandassets, whichisn’toftenvieweduponaspopularin 21stcenturyNewZealand?Orisitaboutlivinglifeto thefullest?

HobsonWealthCEOWarrenCouillaulthasoften wonderedwheretheundercurrentthatwealth isn’tgoodcamefrom.Sohedecidedtodigintothe meaningofwealthtoseewhatitreallymeant.

“Thereareanumberofaptquotesfromfamous peopleregardingtheirviewsofwealth,”says Couillault.“OnewhichIparticularlylikeisfrom AmericanphilosopherHenryDavidThoreauwho said:‘Wealthistheabilitytofullyexperiencelife’.I findThoreau’sviewratheramenableinthatthereis nosinglebestwayto‘fullyexperiencelife’.

“IfurtherinterpretedThoreau’squotetomean Icanbemyversionof‘wealthy’andsomeoneelse canbetheirversion.Thetwoarenotnecessarilythe same.”

AchanceconversationwithafriendledCouillault toresearchtheancientoriginsoftheword “wealth”. Itturnedout,asthefriendsuggested,thattheword hadamuchbroadermeaningthansimplyfinancial wealth.

“Itturnsoutthemeaninghasnarrowedovertime,” saysCouillault.“Ilookeduptheetymologyofthe

Fastforwardtothe15thcentury,whichisstill 800yearsago,andtheword‘wealth’hadsettled aroundtheideaofabundantresources,richesand prosperity,leavingbehindtheoldermeaningsof widerwellbeingandhealth,saysCouillault.

“Whew.I’mgladthat’ssorted,it’sofficial,”hesays. “Thewordwealthisnotadirty-word,buttrulymeans welfareandwellbeing.

“That’sgoodbecausethetrioofwelfare,wealth andwellbeingareatthecoreofoureffortsatHobson Wealth.Welookafterpeople’sfinancialassets.Their hard-earnedsavingswiththeobjectiveofensuring theirgoodwelfareandwellbeing.”

CouillaultsayseveryclientofHobsonWealthis “wealthy”nomatterwhattheirparticularfinancial measuremaybe.

“Ourobjectivesaretohelppeoplewiththeir financialassetsandworktowardswhatevergoalor goalstheyaretryingtoachieveforwhateverreasons.

“Thesegoalsmayincludesavingforadeposit foranewhouse,travel,retirement,orwhateveris importantforthem.

“Lookingafterourclients’investmentassets,their financialwealth,providesthemflexibilityandlifestyle optionssotheycanbetrulywealthyand,backto Thoreau,havetheabilitytofullyexperiencelife.”

WarrenCouillault —CEO

Involatiletimesconsistentinvestmentreturns arehardtofind.ThatcanbedifficultforNew Zealanderswhorelyonreturnsfromtheir investmentstolivethelifethey’veplanned.

Asequitymarketscontinuetoexperience volatilitynotallofthenewsisbad.Theannualised pre-taxreturnontheFirstMortgageTrustGroup InvestmentFundforthequarterending30 September2022issittingat5.59%andhasgrown steadilythroughoutthisyear.

After26yearsinbusiness,FirstMortgageTrust (FMT)hasneverlostacentofinvestors’money, saysPaulBendall,FMTchiefexecutive.Whileno investmentiswithoutrisk,FMT’sloanarrears currentlyarelessthan1%oftheloanbook.“Even thebankswouldbeproudtohaveloanarrearslike that,”saysBendall.

That’sbecauseinvestors’moneyisFMT’s numberonefocus.“Mypredecessorimpressed onmethatinvestorscomefirst,thestaffaclose second,andshareholderreturnslookafter themselvesifyoudo1and2reallywell,”hesays.

FMTisdifferentfromatraditionalfinance company.It’safundmanagerfirst.Investors’ moneyisheldinthefundatarm’slengthandthe fundissupervisedbyTrusteeExecutors.“Ourtrust structurewithindependentoversightgivesour investorsconfidencethattheirmoneyisbeing managedwell,”saysBendall.

Thecarefulapproachextendsintomanyother aspectsofthebusinessmodel.Forexample,the fundonlylendsonfirstmortgages.

Next,theloan-to-value-ratios(LVR)are cappedat75%onresidentialpropertyand67% oncommercialproperty.TheaverageLVRis 51%currently,meaningtheborrowerrequires significantequitybeforeFMTwilllendtothem.

AnotherpointofdifferenceinFMT’sconservative investmentstrategyisthatforeverysingleloan eachpropertyisindependentlyinspectedto understandthedeal.Avaluer’sreportisn’tenough. “Weareselectiveinwhereandwhowelendto,and wehavearigorousprocess,”saysBendall

Non-bank-lenderssuchasFMToftenpickup dealsturneddownbybanksbecauseofrigid criteria,notrisk.Infactsomeofthoseloanscanbe verylowrisk.It’sawin/winforFMT,saysBendall.

Thankstothisconservativeapproach,coupled withincreasedreturnsforeachquarterof2022, FMTinvestornumbersaregrowingstrongly,and largelybywordofmouth.FMTnowhasmorethan $1.5bnoffundsundermanagementandmorethan sixthousandinvestors.

That’saccordingtoGenerateKiwiSaver Adviser,KenKnight,whosayspicking therightfundiskey.

“Kiwi’sneedtobemoreengagedwhen decidingwhichtypeofKiwiSaverfundto investin.Researchshowsthatgettingsound KiwiSaveradviceandbeingdeliberate withyourKiwiSaveraccountsetup,can potentiallyhelpyougetbetterreturnsat retirement”saysKnight.

GeneratehassixKiwiSaverfundoptions andofferstheirmemberstheabilityto investeitherentirelyinoneorspreadtheir investmentacrossmultiplefunds.

“Generallyspeaking,thelongeryouhave untilyouplantomakeawithdrawalfrom

yourKiwiSaveraccount,the‘morerisky’or focusedongrowthyoucanaffordtobewith yourfundchoice,asyou’vegottimetoride outanymarketdips.

“Butit’sreallyapersonaldecision,andif you’renotcomfortablewithmarketvolatility, somethingwe’veseenquiteabitofrecently, thenamoreconservativefundmightsuityou better.”saysKnight.

GenerateencouragesKiwistobeengaged withtheirKiwiSaveraccounts,whichiswhy theyofferno-obligationadvicemeetings tohelpKiwisunderstandalltheiroptions, beforemakinganydecisions.

Theyalsorecommendthattheirmembers completeafinancialwellnesscheckevery

yearortwo–orsooneriftheircircumstances change.

“Forexample,it’sgoodtoreview yourKiwiSaveraccountsettingsifyour employmentsituationchanges,ifyou’re savingforyourfirsthouseornearing retirement.”saysKnight.

TotalkwithaGenerateadviseraboutyour KiwiSaveraccount,call0800855322,oremail info@generatekiwisaver.co.nz.

INSURANCEWhatdo you needtocover illhealth?

Insuranceisagrudgepurchase.It’snot likeyou’retakinghomeashinynewTVor iPhone.It’ssomethingyoumaynotever use.Italsocostsalot.

Thereare,however,insurancesthatare musthaves:suchashouse,carandtravel insurance.Skipanyofthose,andyoucould losehundredsofthousandsofdollars.

Otherssuchashealth,mortgageprotection, incomeprotection,trauma/criticalillness aren’tnecessarilyessential.Orarethey?

ManyNewZealandersdothe“shouldI, shouldn’tI?”dancearoundtheseinsurances.

Somepeoplearguethatwepayintothe publicsystemandanyreallyessentialhealth careshouldgetseentointhepublicsystem.

Whilemostpeoplehavetobegtheir doctorstobeevenconsideredforawaiting list,thosewithprivatecareareinandoutof

thehospitalatpaceforwhatevermedical proceduretheyneed.

Healthinsurancepaysforthosemedical bills.Trauma/criticalillnessinsurancepays alumpsumifyou’rediagnosedwithcertain illnesses,andtotalpermanentdisability(TPD) paysalumpsumifyou’redisabled.

Thefirstquestiontoask,saysRussell Hutchinson,industryconsultantat ChatswoodConsulting,isifyouneedmedical coverinthefirstplace.“Wehaveagreat healthsystem,”hesays.Ontheotherhand, wehavehealthrationinginNewZealand.

SometimesGPsdon’treferyoutoa specialist.Ifyoudogetreferred,you’llbe ratedonaclinicalaccesspriorityscorethat determinesifyourcaseisneedorawant. Rationingisafactoflifeforallpublichealth systemsineverycountry.

Making aMint with Sage advice

Everyonehastheirownstoryaboutprivate healthinsurance.Whenitcomestothe“do Ibuyit”question,thethreebigticksinthe “yes”columnforHutchinsonare:

1.Getdiagnosedquickly.

2.Betreatedquickly.

3.Getaccessexpensivedrugsprescribed byyourspecialist,butnotavailablefree throughthepublicsystem.

Don’tassumethatallofthesefeatures areincludedineveryhealthinsurance policy.Somepoliciesonlycoversurgery,not specialists’appointmentsandtests.

Incomeprotectioninsuranceisquite simple.Ifyouloseyourincomedueto temporaryorpermanentdisabilitythrough illnessoraccidentyouwillbepaida percentageofyourprevioussalaryfora periodoftimethatcouldbetwoyears,five

years,oruntilage65.

Mortgageprotectioninsuranceisrelated, butusuallyonlycoversyourmortgage paymentsforafixedperiodoftime.

It’sworthnotingthatincomeandmortgage protectionpoliciesdon’tusuallycover unemployment.Onlymedicalcauses.

Finally,lifeinsuranceisanothercoverthat somechoosetohaveandothersdon’t.The downsideisthecost.Therearesomereal benefits,especiallyifyouhavechildren.First, itwilloftenpayoutifyou’rediagnosedwitha terminalillness,soensuresyouhavemoney forthefinalmonthsoflife.Italsoallowsyour partnertotaketimeofftogrieveandlook afterthechildren.Evenanon-workingpartner shouldbecovered.Iftheydie,theother partnerwillhaveadditionalexpenseslooking afterthechildren.

circumstances.

I

started my workcareerinthe late 1980sinLondon,witha backgroundinlawandaninitial careertrajectoryas abarrister, beforetransitioningintothe financialserviceindustry.What sparked my initialinterest in finance wasthemismanagementof trustsin my family.Thisexperience taughtme agreatlesson,thatI never wantedtobedependenton othersfor my financial well-being.

To putitinperspective,during thistimeinEngland,there were lawsstill in placeto limit thefinancialwell-beingand independenceofwomen. Priorto 1990,underthe Reformof Personal Taxation,thesystemstripped amarriedwomanoffinancial independenceand privacyintax matters. Acouple’s income was addedtogetherandtreatedasifit wastheincomeofthehusband. Underthe 1918 incometaxationact, marriedwomenwereclassedas “incapacitatedpersons”alongside, infants,lunatics,andtheinsane.

Atanearlyage, Irealised that independence ofthought

andownership wasextremely importanttogivewomen,and people, choicesandopportunities throughouttheirlife.Womenneed tobeincontroloftheirdestinyand operateindependently. Whilewe areallfamiliarwiththegenderpay gapandtheretirementsavings gap,weshouldalso be proactively lookingat waysinwhichwecan individuallymanageandcontrol theoutcomeofourownfinancial situation.

In2006, IfoundedMint AssetManagement, aboutique activefundmanagement business.To complementMint, wearelaunching awealth planningbusiness, Sage Wealth Management. Sage’s visionisto provide personalisedandholistic financialadviceandgiveclients accesstobest-in-breedinvestment productsandopportunities.Whilst Sagewillbeopentoeveryone, itwillhave astrongfocuson creating asafespaceforwomen togetsoundadviceandaccess toinvestmentproductsthat alignwiththeirgoals,values, lifestyleaspirations,andpersonal

AgaKrzeczkowska, Sage’s Senior WealthAdviser,started herworking careeras atranslator beforebecoming acertified InvestmentAdviserandChartered Fellow oftheUnitedKingdom Securitiesandlnvestmentslnstitute (CISI). Forthe past 16 years inthe investmentindustry,instead of translatinglanguages,Agahas beentranslating data,numbers, andresearchtoprovideher clientswitheasily understoodand transparentfinancialadvice.

Throughourbusinesses,we hopetobeabletohelpNew Zealanderswiththeirfinancial well-being journeyand helpthem growtheirfinancestoreachtheir goals,whetherthat be asafety netsavingsaccount,retirement, orfamilywealthplanning.Ifthere isonepieceofadvice Icanpass onfrom my journey,itisthe importanceofinvestinginyourself andyourfinancialfuturethrough professionalguidanceandfinancial adviceinplanningforallstagesof life.

Photo: Getty Images

RebeccaThomasis

Aga Krzeczkowska Senior Wealth Advisor

Rebecca Thomas Founder & CEO

FirstLightCapitalhasrecentlyappointedShaneScottas itsnewCEO.Hebringsmorethan25yearsofrealestate experienceinNewZealand,theUK,EuropeandtheMiddle East. ShanehasbeenapartnerofResolutionPropertyin Londonforthelast13years,helpingthecompanytoacquire, develop,financeandmanagemorethanNZ$6.5billionofreal estateassets.ShaneScottshareshisthoughtsonthecurrent commercialpropertymarketwithMoneyWise.

WHATARETHECHALLENGESFACINGTHECOMMERCIAL PROPERTYMARKETATTHEMOMENT?

It’salmostclichétosaywe’recurrentlynavigatingaunique economicclimate,andcommercialpropertyisn’taloneinwhat it’sfacing.

Mostnotably,inflationhascreatedadual-edgedswordin theNewZealandcommercialpropertymarketforassetowners whosetenantsareonleasesinwhichfuturerentsarebasedon CPI.Withtheconsumerpriceindexsittingat7.2percent,rental returnshaveincreasedconsiderablyonlevelssettwoorthree yearsago.

Intheshortterm,CPI-basedleasescomingupforrental reviewsoverthenextsixtoninemonthswilldeliverevenmore improvedoutcomesforowners,untilinflationsubsidesfromits currentpeaks.

Atthesametime,mortgageinterestratesthathave beendrivenupbymultiplerisesintheOCRhaveseenloan repaymentlevelsincrease.

Theriskoftenantfailuresisofparticularconcernfor propertyowners.Businessesarebeinghitwithhigher costsoneverythingfromrent,rawmaterials,fuel,wages, householdlivingexpenditureandprocessedproducts,whether manufacturedlocallyorimported.

Addtothatresidualsupplychainissuescomingthrough China’sports,andit’satoughtimetobeinbusiness.Small businessesthatrunontightmarginsarebeingsqueezedfrom allsides,andthisincreasestheriskofdefaultingontheirlease obligations.

HOWHASCOMMERCIALPROPERTYPERFORMEDTHROUGH THECHALLENGESOFTHELASTFEWYEARS?

Differenttypesofcommercialpropertyhaveperformedin differentways.Industrialpropertycontinuestooutperform othersectorsofthewiderpropertymarket.

Infact,premiumcommercialbuildingswithstrongtenancy profiles–usuallylargecorporates-havenegotiatedthepast twoyearsofeconomicandworkplaceturmoilbetterthanmany otherassetclasses.Thesetenantsarebetterabletoabsorb

risingcosts,whichfeedsbackintothereliabilityandqualityof thepremisestheyoccupy.

Propertyassetsintheindustrialsector,andlarge,premium A-gradecommercialpremisesareholdingtheirvaluebetterand willrecoverfasterduringthiseconomicdownturn.

Elsewhereinthecommercialpropertysectorthough,many smallertenantsarefindingtheirbottomlinesbeingsqueezed astheycopewithrentandcostincreases.Thismayleadto agrowingnumberofvacancieswithinB-gradestock,again underpinningthevalueofthepremiumandA-gradesector.

ISCOMMERCIALPROPERTYSTILLAGOODINVESTMENT? Forscaledpropertyowners,thebestapproachtonavigatingthe currenteconomicenvironmentisverymuchacaseofadhering totheclassiccommercialpropertyclichéofbuyingquality propertyingoodlocationswithstrongtenantsonlongleases.

Afterseveralyearsofbeingasellers’market,theproperty marketasawholeisswinginginfavourofbuyers,andthere arerealopportunitiestobuyintostandoutA-gradecommercial properties.Nowisaverygoodtimetodiversifyinvestmentrisk acrossmultipleproperties,sectors,andtenants.

Asanexample,ourFirstLightPropertyFundOfferhas recentlyacquiredathirdpropertyat57ForgeRoad,Silverdale, Auckland.

Thisindustrialpropertyisthefoodgrademanufacturing facilityforDad’sPies,whichwaspurchasedinlate2021by AlliedFoods,asubsidiaryofGeorgeWestonFoods.Theaddition ofanAuckland-basedindustrialfacilitybothstrengthensand diversifiestheFundwithanotherpremiumtenantonalongtermlease.

ItaddstotheFund’sexistingpropertiesinEastTamaki andcentralHamiltontocreateaportfoliothatlivesuptoour location,tenant,yieldandpotentialgrowthcriteria.Asaresult, theFundoffersareliable6%p.a.monthlyreturnpayable monthly;excellentreturnsinanyclimate,letalonethecurrent one.

Webelievethisconservativeinvestmentstructureenablesus toprovideourshareholderswithsuperiorsecurity,andwe’re currentlyactiveinthemarketlookingfornewacquisitionsfor bothourFirstLightPropertyFundandothersyndicates.

The FUNDAMENTALS ofDIYinvesting

DIYinvestorswhoplaytheshare markets,crypto,derivatives,and preciousmetalsneedtobecareful. Goodinvestinghasreallongtermbenefits. Smallamountsinvestedfrequentlyingood qualityinvestmentscanadduptoabig chunkofmoneyoveralifetime.

Firsttimeinvestorsoftenpatthemselves onthebackaboutgainsoveraweekortwo andreallycan’tenvisagetheirinvestments goingdown-althoughmosthavehadto cometothatconclusionin2022.

Theymaybedoinglittlemorethan placingbetsonindividualsharesorhighly volatilecryptocurrencies.Somearewalking afinelinethatcouldleadtobiglosses.

Everynewboomcreatesacropoffirsttimerswhothinktheycanplaythemarkets betterthantheexperts,orsimplyhavea knackforpickingwinners.Askthesame individuals10yearslaterandfewwill haveactuallybeatenthemarketsifthey’re truthful.

“Trading”formostfirsttimeinvestorsis basedonaone-waybetthattheirchosen investmentissogooditcanonlyevergo

upinvalue.Theyfallfornearlybehavioural economicsfailingknowntomanand woman.

Watchinganinvestmentgoupandup oftenmakesnewinvestorsthinktheyhave aspecialtouch.Anyonewhohappenedto buyBitcoinonJuly16lastyearwhenitwas tradingat$45,041NZDwouldhavewatched theirmoneygoupandupandupto$86,493 byNovember5,2021.That’sa92%rise. Theonlytroublewasanyonewhodidn’t sellonthatdatesawtheir‘investment’go intofreefalldownto$30,046onJune17, meaningthey’dlostmoney.Attheendof Septemberitwashoveringaround$33,000. It’snoticeablethatsomeofthebigswinging cryptoinvestorsfromlastyearhavegone quiet.

Sometradersaresuccessful.Butthey’re sittingthereinvestingfull-time,watching themarketsdayin,dayout.Rarely,however, cantheyoutguntheanalystslongterm. Professionalshavestudiedfinanceor business,workinteams,havethebest softwaretotrade,shortthemarketand hedgetheirpositions,saysAndrewBascand,

managingdirectoratHarbourAsset Management.

Unfortunately,the“research”that somenewinvestorsuseissocialmedia commentary,whichisn’tmuchdifferentto thevaccine“research”thathassentmany aNewZealanderdowntherabbithole.The FinancialMarketsAuthority(FMA)published researchaboutthenewbreedofDIYonline investorlatelastyear.Mostareembracing thepositives,notfallingforthepitfalls.

However,theFMAurgesinvestorstofollow thefiveDsofDIYinvesting.Theyare:Dodue diligenceandlearnaboutthecompaniesor currencies;drip-feedmoneyinovertime, acceptingit’simpossibletopickthetop andbottomofthecycle;diversify,across multiplecompanies,investmenttypesand geographicalmarkets;don’tfreakoutif marketsgodown;andifindoubttalktoa financialadviser.

Investorscanbeluckywithonecompany. Orunlucky.Backin2003,investorsin FletcherBuilding(FBU)probablythought itwasoneofthestrongestcompaniesin NewZealand.Yetthesharepriceroseby202

percentinthe19yearsfrom2003to2022, comparedtotheoverallNZXthatroseby morethan600percent,morethanthree timesthereturnofFBU.

Buyingadudisoneofthereasonspeople buyfundsof,say,theNZX50orS&P500. They’respreadingtheirriskacross50or500 shares,sotheoddFBUisn’tgoingtodingthe overallreturns.

There’salottobelearnedfromhavinga flutterthroughSharesies,HatchorStake. Losingasmall,orevenrelativelylargesum ofmoneywhileyoungcanbeanextremely valuablelearninglesson.

Thereisnothingwrongwithputtinga fewbucksinRocketLab,AppleorevenFBU shares,providedit’snotsomeone’shouse depositorretirementfund.

Ifyouwanttotryoutshareinvesting,pick onestocksuchasXero,AucklandAirport, Apple,orTesla,andreadabsolutelyevery reportthatcomesoutaboutitandlearnasit risesandfallsinvalue.Thendipatoeinwith asmallamountofmoneyandwatchwhat happensovertime.

Photo: Getty Images

Thingsdon’talwaysgotoplan,though, andthat’swhereAsteronLife’sinsurance productscomein.Ourpoliciesare designedtohelpyouthroughthetoughtimes allowingyoutofocusonrecoveryandthethings youlovethemost.

Themostdifficultthingaboutinsuranceis thatyou’repayingforsomethingyouhopeyou neverhavetouse.Nobodywantssomethingbad tohappentothem.Butsufferingalosswithout insurancecanputyouinadifficultfinancial situation.

AsteronLifeworkswithadvisers,soyouget expertinsuranceadvicethatcanhelptomatch youwiththerightinsurancetohelpyoulivelife tothefullest.Withalong-standinghistoryof supportingNewZealanders,AsteronLifeoffers arangeofcoveroptionswiththeflexibilityto createtailor-madepoliciestomeetyourneeds.

Recoveringfromaseriousillness,injuryor medicalprocedureoftentakestime.Trauma RecoveryCoverpaysyoualumpsumtohelpyou

recoverphysicallyandfinanciallyfromaserious illness.Themostcommonillnessesclaimedon traumainsuranceinNewZealandarecancer, heartattackandstroke.AsteronLife’sTrauma RecoveryCoverhasbuilt-incoverfor48medical conditionsandsurgicalproceduresaswellasall early-stagecancers.

AsteronLifelaunchedtheContinuousTrauma benefitin2018meaningitwasoneofthefirst NewZealandlifeinsurersofferingeligible customerstheopportunitytomakeuptothree fulltraumaclaims.

Continuoustraumaisoneofthosethings youreallyhopeyouwon’tneed.Foryouto experienceaseriousillnessorinjuryonceis enough,letaloneexperiencinganotherserious medicaleventdownthetrack.Ifthingsdogo wrong,youcanhelpprotectthelifestyleyou’ve workedsohardtocreateandthepeoplethat youlovewhenyouneeditmost.

Thisisbecominganincreasinglyrelevantand usefulcoverforNewZealandersaccordingto

AsteronLifeExecutiveManagerClaireSutton.

“There’sabsolutelyvalueincustomershaving coverinplaceforfuturetraumaevents.Canceris theleadingcausefortraumaclaimsatAsteron. Infact,morethanhalfoftraumaclaimsarefor cancer.”

“Whatthismeansforcustomerswith Asteron’sContinuousTraumabenefitis,three yearsafteryourclaim,anewinstanceofthe sameorarelatedmedicaleventwillbecovered again,providedit’snotacontinuationor recurrenceorspreadoftheoriginalcondition. Ifyougoontosufferanothercancerthatisn’t linkedtoyourpreviousclaim,youwillstillhave coverinplace.”

Additionally,weallknowsomeonethat’s beenimpactedbycancer,buthowmanyofus knowsomeonethat’shadcancerandthenbeen impactedbyanewinstanceofanunrelated medicaleventlaterdowntheline,likeastroke orheartproblem.Ifyoudogoontosufferan unrelatedmedicalevent,coverisreinstated immediately.Thethreeyearperioddoesnot apply.

“It’sthesecircumstancesthatreallycreate valueforAsteronLife’scustomerswhooptfor theContinuousTraumabenefit.”Suttonsays.

AsteronLife’sdatashowsthatin2021the

averageagefortraumaclaimswas55andthe youngestpersontobepaidaclaimunderan AsteronLifetraumabenefitwas25yearsold.

“Thisisnotveryoldforpeopletohavealready hadatraumaeventintheirlivesthatthey’ve hadtoclaimfor,andagainreinforcesthefact thatcustomersmayneedtoarrangecoverthat protectsthemagainstmorethanonetrauma eventintheirlifetime.”

Suttonsaysoneofthebenefit’sparticularly strongfeaturesisthatitworkssimplywith standardtraumacover,andthatitgiveseligible customerscontinuoustraumaevenimmediately afteraclaim.

“Asinglelumpsumtraumapaymentisnot goingtobesuitableforeveryone,andcustomers shouldspeaktoanadviseraboutwhattypesof insurancecoverbestmeetstheirneeds’.

Therearetermsandconditionsthatapplyto ContinuousTraumabenefitsopleasespeakwith anadvisertodiscusswhetherthebenefitisright foryou,includingtheconditionscovered, policy structureandsuminsuredthatwillbestsuit yourneedsandyourbudget.

outmore.

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