This article was published on 2 September 2006. Some information may be out of date.


  • Some options for a whinging woman who can’t afford a home.
  • Is wealthy couple wise to do it themselves when it comes to their investments?
  • Reader who dislikes “that word” boycotts Toyota.
  • Getting mean over medians and averages.

QI feel that your statements regarding settling for a humbler home ignore the realities of the over-inflated real estate prices we are living with.

I earn $1200 a fortnight after tax and student loan deductions, entitling me to a mortgage of around $180,000.

As a single woman, there are areas that I do not feel safe living in, but this is irrelevant as the properties that I can afford (around $200,000) do not exist. There are no properties for me to be fussy about, as sections alone often go for the amount I have for a whole house.

I think your advice is unrealistic. Like many other disgruntled people, I paid full interest while I was studying and despite making payments of over $15,000, owe more than I borrowed.

Staying in New Zealand after graduating from university was the worst financial mistake I will ever make, and one that I have no intention of continuing with. The only practical advice I have received is to leave a job I enjoy and move overseas.

Australian cities like Adelaide have an average house price of $300,000 and nice properties available for much less. I, like many other professionals, will be also paid substantially more. So my question is why should we stay?

APerhaps for our natural environment, social attitudes or foreign policy. Or the desire to make a contribution in a country you love. Or wonderful friends and family.

There are multiple reasons people prefer New Zealand over Australia or elsewhere. If none of them applies to you, please do go. We don’t need whingers.

Maybe that’s a bit harsh. People who paid full interest on their student loans did get a worse deal than those before them and those after them.

But there are probably many ways in which you are luckier than others. You were able to get a university education, you have a job you enjoy, you probably have reasonable health, and so on. A little counting of blessings doesn’t do any harm.

Having said that, house prices certainly are high these days — the highest they have ever been, relative to rent and incomes. But that means they are likely to either fall or stay fairly constant for a while, as wages rise. So if you hang about, they should become more affordable.

In the meantime, you can certainly buy an apartment for less than $200,000.

There’s been much talk that the apartment market is wobblier than the house market. But that very fact should mean you can bargain pretty hard and get a good low price.

Another option: Move out of Auckland. Prices elsewhere are considerably lower.

If none of this appeals, perhaps a move across the Tasman is, indeed, a good idea for you.

QMy wife and I are somewhat risk averse but, unlike “Jane”, are content with the return we get from term deposits across three New Zealand banks, in roughly equal amounts at each institution.

It is normally possible (especially with a million dollar portfolio) to negotiate a better rate than the “posted” rate for the day. And if all else fails, one can take some of the money to another bank with a better rate — as one of our banks found to their chagrin on one occasion.

We have now, for a long time, managed our own financial affairs without any outside or “independent” help — other than one three-year excursion with an organisation that was so upset when we ended the relationship, that they were evidently “benefiting handsomely” from our business — thus explaining the very poor performance of the investment they were “managing”.

There are three points to this message:

  • You are likely to be much better off becoming competent and well informed and managing your own affairs.
  • If you do prefer to engage an adviser, listen to her/his advice, but keep the decision making in your own hands. You worked hard to get the money in the first place, so you are presumably capable of making well informed decisions.
  • A plea to educators to include personal financial affairs as a curriculum topic in secondary schools. We might have done some things differently had we been exposed to that kind of information at a much earlier age.

Oh yes, and the fourth point is that it has always been difficult to buy a first home, unless you consistently put away the deposit money instead of buying too many consumer goods, as some of your correspondents have been pointing out.

That is no less true today than it was 45 years ago when we bought our first home.

AGood tip about being able to negotiate with banks if you have large deposits. And I’m sure you’re right, that you can run your own investments if you stick with bank term deposits.

But if you try something more adventurous — which is likely to bring higher returns over the long term — you will probably benefit from the guidance of an adviser with competence and integrity.

Sure, you tried it and it didn’t work well. And the poor return might well have been because of high fees. But it might have been because the markets happened to do badly over that period.

I guess that’s where more financial education in schools comes in. If everyone better understood how the markets work, they would be in a better position to judge the financial advice they receive.

On house affordability, it’s fair to acknowledge — as above — that prices are extraordinarily high right now. Still, saving can work wonders.

QThe Toyota ads may have liberated that ‘word’ for some. Myself, I boycott advertisers who see fit to use offensive language in their ads.

You will understand then that I do not drive a Toyota vehicle and have no intention of ever doing so. Seeing the tyre covers on the rear of some Toyota vehicles makes me cringe. They are probably driven by people who will then complain about the language used by youngsters (other people’s).

I thought I was the only person left in NZ who felt this way, but reading your writer’s comment I suspect I am not.

I also boycott advertisers who are too lazy, stupid, or think themselves too cunning, to indicate the full product price in their advertising. Consequently you will understand I do not fly Air New Zealand. Some of the other airlines are getting marginal in this areas as well.

It will get to the point when I will need to take a train. Oops! I almost forget that passenger services are not in Toll’s future.

Apologies for being off-topic.

ANot at all. The topic of this column is “Money”. And I think it’s a great idea to express your negative feelings towards a company by not buying its products or services.

My only worry, with so many Toyotas on the road, is that you might be so busy cringing that you drive dangerously.

QJust a correction regarding your mathematics regarding “average household income” in a recent column.

You’re correct in stating that (according to Statistics NZ) the “mean” average household income was $1260. However, this does not equate to 50 per cent of households earning less than that figure.

In the same report from Stats NZ they quote the “median” average figure as $1040. This is the figure that should be quoted if you want a 50/50 split.

It’s still more than the $500 quoted by your correspondent (although that is about right for a single income family) but $11,440 per annum less than your figure.

For an example of how mean averages aren’t always the best measure of what is actually “average” please consider the number of legs you have.

I’m pulling numbers out of the hat here (what do they say? About 45% of all statistics are made up on the spot!?). But based on the fact some New Zealanders unfortunately have only one leg or no legs, the mean average number of legs per capita is 1.9993 — which means you and I are above average (lucky us!!)

As they say there are lies, damn lies and statistics!

AI could argue that the first meaning of “average” in my Oxford dictionary is “generally prevailing rate, degree or amount; ordinary standard; middle estimate.” Not everyone uses the word in its strict mathematical sense.

But, given that I was using a precise number, I guess that won’t wash. Statistics NZ would have arrived at the $1260 by totalling all household income and dividing by the number of households.

And, I admit, stats like that can be quite misleading. The lowest anyone can earn is zero, but the highest is many millions of dollars, which pulls the average upwards.

I should, instead, have used the median, as you say. That is the middle number, with half of all incomes below it and half above it.

My only excuse is that the correspondent wrote about “average New Zealanders” and so I rang Stats NZ and asked what the average income is, without giving it enough thought.

I don’t quite buy your legs example, though. I don’t think using a median would work well there either.

No paywalls or ads — just generous people like you. All Kiwis deserve accurate, unbiased financial guidance. So let’s keep it free. Can you help? Every bit makes a difference.

Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.