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Business theforgotten asset class
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Business the forgotten ASSET CLASS
WhenNewZealandersthinkof investing,it’susuallyKiwiSaver, property,shares,bonds,funds, termdeposits,andthesedays:crypto.
There’sanother,sometimeslucrative investment,thatpeoplemaynotconsider. That’sbuildingorbuyingyourownbusiness.
It’smoreriskythanpassiveinvestments suchasKiwiSaver.Andit’snoteasytoget yourmoneyout.
Butrisktendstobecommensuratewith returns.Returnslongertermfromthose businessesthatdon’tfailinthefirstyear tendtobehigherthanmostotherassetsthat investorsploughtheirmoneyinto.
Businesses,likeshares,payincome,and shouldovertimebuildupcapitalvalue. So,aswellastakingasalarytoliveon,you shouldbeabletosellagoodbusinessatthe endandcomeoutwithsomecapital.That meansbuildingsomethingthatissaleable, notjusttradingyourlabourasacontractor.
Start-upsandbusinessexpansionsare probablythemostprofitablefromthepoint ofviewofcapitalgains.Somepeoplealso buildtheircapitalinfranchisesbybuyinga newfranchise,whichgrowsinpopularity,or takingafailingfranchisebranchandturning itaround.
Somepeoplealwaysplantogointo business.Othershaveanopportunity presentitself,suchasbuyingthebusiness theyworkin.
SiblingsandsalonownersCraigGullett andMichelleVanStadenusedsavingsto buytheupmarketSalon1925inAuckland’s NewtonRd.Gullett,whopreviouslyowneda businessinSouthAfricahadbeencollecting acustomerbasesincehe movedtoNew Zealandandbuildingareputationfor himselfthathetooktoSalon1925.Buying anexistingbusinesswasmoreexpensive thanstartingfromscratch,butmeanttaking onmanyofthepreviousowner’sclientsina provenlocation.
Somecapitalisneededtobuyabusiness, althoughsometimesitispossibletoborrow thatfromlenders.GullettandVanStaden putin$50,000betweenthemandborrowed tocovertherestofthecostofgettingupand running,whichamountedto$90,000.As theybuildupthebusinesstheyareearning anincomeaswellincreasingthevalueof theircapital.
Noteveryoneiscutouttoownorruna business.Peoplewhokeepsavinginshares/ fundsandothergrowthinvestmentswillalso buildcapitaloverthelongterm.Housing marketsdogoincyclesandlongterm ownershipisanotherwaytobuildcapital.
through life’s ups and downs
Life’s full of upsand downs and most of us wouldn’t have it anyother way.
Things don’t alwaysgo toplan, though, and that’s where Asteron Life’s insurance productscome in. Our policies are designedtohelpyou throughthetough times allowingyou to focus onrecoveryand the things you lovethe most.
The most difficult thing about insurance is that you’repayingfor somethingyou hopeyou never have to use. Nobodywants somethingbad tohappentothem. But sufferinga loss without insurance can putyou in adifficult financial situation.
Asteron Life works with advisers, soyou get expert insurance advice that can helptomatch you with the right insurance to help you live life tothe fullest.Witha long-standing historyof supporting New Zealanders,Asteron Life offers a range of cover optionswith the flexibilityto createtailor-made policiestomeet your needs.
Recovering froma serious illness, injury or medical procedure oftentakes time.Trauma RecoveryCover paysyou a lump sumtohelpyou recover physically and financially froma serious illness. The most common illnesses claimed on trauma insurance in NewZealand are cancer, heartattack andstroke. Asteron Life’s Trauma RecoveryCover has built-incover for 48 medical conditions and surgical procedures aswell as all early-stagecancers.
Asteron Life launched the ContinuousTrauma benefit in 2018 meaning itwas one of the first New Zealand life insurers offering eligible customers the opportunitytomake up to three full trauma claims.
Continuous trauma is one of those things you really hopeyou won’t need.For youto experience a serious illness or injury once is enough, letaloneexperiencing another serious medicalevent down the track.If things dogo wrong,you can help protect the lifestyle you’ve workedso hard to createand the people that you lovewhenyou need it most.
This isbecoming an increasinglyrelevantand usefulcover for New Zealanders according to Asteron Life Executive Manager Claire Sutton.
“There’s absolutelyvalue in customers having cover in placefor future trauma events. Cancer is the leadingcause for trauma claimsatAsteron. Infact, more than half of trauma claims are for cancer.”
“What this meansfor customers with Asteron’s ContinuousTrauma benefit is, three years afteryour claim,a newinstance of the same ora related medicalevent will becovered again, provided it’snot acontinuation or recurrenceor spread of the originalcondition. Ifyou go on to suffer anothercancer that isn’t linkedtoyour previous claim,you willstill have cover in place.”
Additionally, we all know someone that’s been impacted by cancer, but how many ofus know someone that’s hadcancer and then been impacted by a newinstance of an unrelated medicalevent later down the line, like a stroke or heart problem. Ifyou do go on to suffer an unrelated medicalevent, cover is reinstated immediately. The three year period does not apply.
“It’s thesecircumstancesthat really create valuefor Asteron Life’scustomers who opt for the ContinuousTrauma benefit.”Sutton says.
Asteron Life’s data shows that in 2021 the average agefor trauma claimswas 55 and the youngest persontobepaida claim underan Asteron Life trauma benefitwas 25 yearsold.
“This is not very oldfor peopletohavealready had a traumaevent in their lives that they’ve hadtoclaimfor,and againreinforces thefact thatcustomers may needtoarrange cover that protectsthem against more than one trauma event in their lifetime.”
Sutton says one ofthe benefit’s particularly strongfeatures is that it works simply with standard trauma cover,and that it gives eligible customers continuous traumaeven immediately aftera claim.
“Asingle lump sum traumapayment is not going to be suitablefor everyone, and customers should speaktoan adviser about what types of insurance cover best meetstheir needs’.
There areterms andconditions that applyto ContinuousTrauma benefit so please speak with an advisertodiscuss whether the benefit is right for you, including theconditionscovered, policy structure and sum insured that will best suit your needs andyour budget. Ifyou don’t have an adviser, we can helpyou find one. Visit www.asteronlife.co.nztofind out more.
Helping our customers through claims payout (1 JANUARY 2021 – 31 DECEMBER 2021)
93%
OF CLAIMS ACCEPTED
$100m
PAID IN CLAIMS
Life $53m
IN CLAIMS
Average age at claim
74 74
FEMALE MALE
Age range at claim
21 99
YOUNGEST OLDEST Leading claim cause
41% cancer
terminal illness stroke cancer cancer
heart heart
Majority of claims – by age group
Trauma $23m
IN CLAIMS
Average age at claim
51 55
FEMALE MALE
Age range at claim
25 63
YOUNGEST OLDEST Leading claim cause
42% cancer
brain or stroke cancer cancer
heart heart
Majority of claims – by age group
Photo: Getty Images
Monthly Income Covers
including Income Protection
Average age at claim
$23m
IN CLAIMS
47 44
FEMALE MALE
Age range at claim
22 68
YOUNGEST OLDEST Leading claim cause
42% accident or injury
