Can’t afford KiwiSaver or saving elsewhere?: You should still join. Close to half of New Zealanders 18 and over who haven’t yet retired say they are unlikely or very unlikely to join KiwiSaver, a recent AMP survey shows. But a glance at their reasons for not joining suggests they don’t yet understand the scheme’s flexibility. They are missing out needlessly.
The Other B Word. Budgeting is rather like eating healthily or exercising. Some people like to do it, but for others it’s a chore. And for many it’s a source of guilt. They think they should do it, but they don’t. This article could be yet another telling the laggards how they will be much better people if they keep track of all their spending. But that’s hardly likely to make any more difference than other such articles. As poet Robert Frost wrote: “Nobody was ever meant, to remember or invent, what he did with every cent.”
KiwiSaver survives readers’ challenges. It must be the noisier people who criticize KiwiSaver on the grounds that they don’t trust the government. Such mistrust has been a common theme in readers’ letters. And yet a recent AMP survey of non-retired people 18 and over shows just 3 per cent of those unlikely to join KiwiSaver say it’s because they don’t trust the current or future government. I was surprised, too, that only two readers responded to the challenge in my last column “to come up with a government change — that’s at all likely to happen in a democracy — that would make KiwiSaver members regret having signed up now.”
Highlights from Holm Truths. For a few weeks, this column is running highlights from Mary Holm’s quarterly newsletter Holm Truths. Mary’s regular Q&A column will resume on October 27. STAY AWAY: New Zealanders’ increasing tendency to travel overseas is a wonderful development. We enjoy it, we learn tolerance and we pick up ideas — ranging from what to eat to how to make a living. The trend has made us all more aware of the changing value of the Kiwi dollar. When it rises, we perhaps take a longer or more expensive trip. But when it falls, we don’t all stay home. Some of us modify our plans; others carry on regardless, maybe spending less on other items. Over the years, too, we’ve become more likely to own international shares — directly or by investing in a world share fund or a managed fund that includes international shares.
Highlights from Holm Truths. Over the next few weeks, this column will run highlights from Mary Holm’s quarterly newsletter Holm Truths. Mary’s regular Q&A column will resume on October 27. MORTGAGE MOVES: You’ve probably got the message by now: It’s a great idea to pay off your mortgage as fast as possible. Paying off a 9 per cent mortgage, for example, is equivalent to making an investment that pays you a guaranteed return of 9 per cent after fees and taxes. And it’s risk-free. But not everyone is in a position to pay extra off their mortgage. There are other ways you can make the big loans work better for you. Here are some FAQs…
Big bad government unlikely to spoil KiwiSaver. Every now and then, someone says to me, “The government must be paying you for all that favourable publicity about KiwiSaver”. It’s not, of course. And in any case, my coverage has been far from totally positive. As I’ve often said, KiwiSaver distorts savings decisions, because you can save only in certain types of vehicles. Also, the government — in other words the taxpayers — is paying many KiwiSaver members thousands of dollars to do saving they would do anyway. True, other members will save more because of KiwiSaver, but whether the whole thing is cost effective remains to be seen. The scheme is far from perfect, then. However, I can’t go along with some of the cynicism I’m hearing about how current or future governments might treat people who have signed up for KiwiSaver — with the speaker concluding that it’s not a good idea to join.