YO U R I NVE STI N G
Investing Across Generations Many people want to see their children and grandchildren well set up for life. Scott McKenzie says that’s why PMG started the Generation Fund.
In March, Florida governor Ron DeSantis signed legislation into law requiring high school students in the US to pass a financial literacy course to graduate. DeSantis said: “This will provide a foundation for the students to learn the basics of money management, understanding debt, understanding how to balance your chequebook, and understanding the fundamentals of investing.” Florida joins seven other states that already require a personal finance course before graduation. In New Zealand, financial education is not mandated as a part of the school curriculum, and a recent survey of 2646 young New Zealanders by the New Zealand Council for Educational Research* shared these sobering results: •
35 per cent of pupils felt they had learnt “almost nothing”.
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38 per cent learnt “some things” about money at school.
Couple this information with the crippling effects of a pandemic, and we see why the gap between the haves and the have-nots has accelerated at an alarming speed. Can we stop this spiral? I believe we can – and it starts with early education and investment accessibility. It starts at home Financial literacy is key to building wealth, and can be summarised as making money, saving money, and investing money. If children are not learning basic financial skills at school, the baton then passes to parents, who have a responsibility to educate their children and have ‘The talk’. WI NTE R 2 0 2 2 | I N F O R M E D I NVESTO R 8 8
Obviously, this talk should be straightforward and appropriate. A three-year-old does not need to know the differences between fixed and variable annuities or the impact of rising interest rates on a home loan. At PMG, we have fourth-generation investors, and these families discuss regularly the importance of saving, planning, and tracking investments. In fact, most of the families in our investor story videos repeatedly say you should start your investment journey young, compound returns, and plan ahead. Generational wealth At PMG, we’re seeing a growing demographic of investors who’ve benefited from generational wealth creation. These families have a focus on education and a mentality of ‘custodianship’, which has allowed them to ensure that multiple generations of their family can thrive. A driving force behind investing in property is to create both a passive income (monthly or quarterly cash income) and capital gain (increase in property value) to provide a comfortable lifestyle.
At PMG we’re walking the talk. We feel a deep responsibility to our investors, tenants, suppliers, contractors, and community to provide financial direction, so we created a PMG Charitable Trust that’s committed to supporting financial literacy programmes across New Zealand. We also have a strong commitment to educational content. We use: •
Website tools, creating online compounding and cash return calculators that help those seeking to invest, to gauge what their investment really looks like for them.
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Multiple free and downloadable educational series that cover the current economic environment.
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Free investor seminars through the year, normally with high-profile economists who educate and provide a unique perspective.
This growth acts as a future nest egg for their beneficiaries, so they too can enjoy a similar lifestyle as their parents and grandparents. Why property works Historically, property has been, and will likely continue to be, one of the more successful long-term investment platforms for building long-term wealth – and in high inflationary environments it performs well as an inflation hedge.
