Q&As: 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.
Q&As: The average New Zealander can’t afford to buy a house, or can they? The poor don’t stay poor; How one man keeps his costs down; Flaws with a tax parable? And a man living on $1,000 a year?; An investment adviser gives us inside info on commissions.
Q&As: A few fewer luxuries and many New Zealanders could afford to buy homes; 2 Q&As on whether the Reserve Bank got it right with the new coins; A financial planner objects to what I said last week about how to choose an adviser.
Q&As: Typical but rich women ask how to find an adviser; Does local government keep house prices up? And will they ever fall?; Let’s not have the government meddling in the housing market; Doing your homework doesn’t necessarily help share investment.
Readers’ questions on renting v home ownership. My last column — which said that you may do just as well renting as owning your home, provided you are disciplined about saving elsewhere — brought interesting questions from two readers. The first one is 40 and planning to return to New Zealand with his family. “I would be happy renting until I retire whilst growing our capital in areas other than property,” he writes. “At some time later I might buy a small place to live in. However, do you think in 25 years that ownership of property might be out of reach?”
Q&As: Should we have a new 25c coin instead of a new 20c coin, and also a $5 coin?; Is tithing the way to go? One reader says yes, another no.
Owning your home not always the best option. Most New Zealanders grow up expecting to own their own home, but soaring house prices have made it harder for people to get into the market. Does that matter? Is home ownership all it’s cracked up to be?
Bigger and better houses distort numbers. Readers keep sending in thought-provoking letters about the shares v rental property debate. It’s central to the question of how to invest long-term savings, so it’s worth continuing to explore the issues. Today, excerpts from two letters: “Your reader who commented on comparisons between housing price indexes and share market indexes has overlooked many points. Sometimes very large amounts are spent on home improvements without being considered when calculating house price increases. “With new houses, a trend for larger houses and obviously the higher cost for more square feet will also distort the figures to indicate asset value growth where there is none.
Property backers underplay risk. Property backers seem to go in for hyperbole. Two examples from readers’ letters: “Shares are not and have never been as lucrative as property…. We now know why the richest people in the world and in NZ are property investors.”; “The average person can quietly work themselves into a residential property portfolio worth several million dollars with a decade or two of judicious acquisitions…. People putting a portion of their income aside to buy into share funds are left in the dust.”
Index distortion not what it seems. A reader’s point about the ongoing shares v houses debate sounds fair enough. “Your comparisons do not compare like with like,” he writes, “because you are using an index for shares, which only covers some companies, whereas for housing, you are using the average over all houses.”