NZ Herald 23 December 2023

AIndeed! Thanks for telling us about it.

Other readers — inspired by your story — don’t have to wait for their bank to contact them with similar news. They can check here on Inland Revenue’s website, to see if there is similar treasure awaiting them.

“When a bank, insurance company, or other institution holds money and has been unable to contact or locate the owner for 5 years — it is treated as unclaimed money,” says the website. That money is transferred to IRD.

Other examples of money that might be sitting there include: holiday back pay from an employer, victim support payments, royalties from something you created years ago, overpayment of bills, money you have inherited — and much more. It’s worth a quick look.

Footnote: By its very nature this column can tend to be negative — about people’s worries, mistakes and so on. But today, because it’s Christmas, I’ve included only inspiring letters — plus one short explanatory one at the end.

AYour email certainly qualifies as Inspiring Letter Number Two!

The secret to your home buying success seems to be saving almost half your take-home pay in that first “proper” job. It’s a great idea to put aside heaps at that stage, before you get used to having it. After all, you had managed on a lower income before then.

What’s more, you bought a smallish, cheap house in a relatively low-priced town.

What next? Let’s look at your three options:

• Paying down the mortgage is the simplest. And reducing, say, a 7 per cent loan will improve your wealth as much as an investment that pays you 7 per cent after fees and tax — with no risk. That’s a great deal.

  Also, it puts you in a strong position for whatever comes your way. Your accommodation costs will be relatively low, and you can always borrow against the house again to make a new investment or perhaps start a business.

• Investing in shares — perhaps through low-fee share funds — will almost certainly give you higher returns than your mortgage interest rate in some years. But in other years it won’t be so good, and sometimes there will be losses. On average, who knows?

  Stil, it will be more exciting than reducing your mortgage, and you’ll learn about market ups and downs. But promise yourself to stick with it through thick and thin.

• Buying a rental property has worked really well for many people over the years, although I suspect those who haven’t been so clever or lucky are quieter about it.

  In a way, investing in rentals is a lifestyle choice. You would be much more involved than with shares — doing maintenance, choosing tenants, chasing up late rent and so on, or finding and paying someone to do that for you. Some people thrive on being landlords. For others it holds no appeal.

There’s no way to predict which option would work out best, so go with what appeals to you. You’ve already made a brilliant start. I can’t imagine you ever in financial difficulties

AI reckon we can call this Inspiring Letter Number Three because of your son’s enthusiasm.

It seems he can use an online share trading platform. There are kids’ accounts on Hatch, Investnow, Sharesies and probably others. Check their websites.

With these accounts, you will be responsible for what your son does. But I suggest you let him make the decisions. If he chooses just one or two shares, or he wants to trade frequently, let him!

Of course there’s a “danger” he will do well with these worrying strategies for a while, and start thinking he knows how to pick shares — a rare gift. But it would be astonishing if he keeps doing well. He will almost certainly learn some valuable lessons while there’s not too much at stake.

Your son can also learn from KiwiSaver. He could, for example, put half his contributions into a low-risk fund and half into a high-risk fund, and watch how the latter will be wobblier but will probably grow more in the longer run.

Who knows? By 23 he too may be buying his first home. And perhaps, some decades from now, he’ll be shouting Mum and Dad a world trip!

Please let me know how he goes — or he could tell me himself.

AYours is clearly Inspiring Letter Number Four. Interesting to read about your “tactic” from back in the days when the local bank manager knew his — sadly it was almost always “his” — customers.

Thanks for two strong messages:

• Don’t give up.
• To the partner in a marriage or relationship who doesn’t run the money: Please insist on knowing about family money issues. Who knows? You might be the more capable one, as our correspondent found. In any case, you never know what lies ahead.

AYet another inspiring letter. I love your attitude. Enough is indeed enough.

AYour letter doesn’t quite fit in the inspiring category, but perhaps growing $229,000 in a year does. The only trouble is, as I explained last week, the reader whose shares rose 1.5 per cent in a day has zero chance of that continuing.

Anyway… in reply to your question, I pretended a day was a year. I put 1.5 per cent as the yearly return in an online compounding returns calculator, and asked how much I would have after 365 years.

I should add that I checked with a mathematician friend that that was valid.

Be Kind, Be Relaxed, and Be Merry!

To all you regular — and irregular! — readers, thank you. And a special thanks to those who have sent letters for the column this year. Sadly, most don’t make it into print, but they all give me insights into what people are thinking and worrying about — and sometimes rejoicing about. I especially appreciate hearing from people who disagree with me, and almost all their letters make it into the paper.

By the way, don’t give up if your letter doesn’t get into the column in the following few weeks. I answer some letters months later, often because they fit in with what someone else has written about. So keep watching.

It’s been a landmark year for this column. In April, we marked the 25^th anniversary. Gosh — quarter of a century has flashed by. It was heartwarming to receive so many kind comments at that time.

And at the end of this year we are farewelling Mark Fryer, who has subedited the column for much of its history. Without Mark, quite a number of errors would have slipped into the paper over the years. And he’s chosen many eye-catching pictures, and written many snappy headlines.

Mark will still be compiling the quiz in Canvas magazine, though. So I’ll be continuing to curse him for his hard questions!

Time for a break. See you again on January 20. In the meantime, be kind, be relaxed and be merry!