Informed Investor - Summer 2023 - Money Personalities

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THE DRIVING SEAT EVs and the global car economy

NZ$11.95 INC. GST

MASTER PLAN The importance of goal setting

SILVER LININGS How the right mindset creates opportunities


Contents IN THIS ISSUE 8.

Contributors Meet some of our expert contributors.

10. What We Like Martinborough’s new cellar-door dining experience, portable workstation solutions and must-have European kitchen tech.


Essentials We look at what’s hot for summer.

16. Where Our Money Personalities Begin Lynda Moore, Money Mentalist explores how our money mindsets – good or bad – are formed in childhood but can be reprogrammed.

22. What’s Your Money Personality? Take our quiz for a bit of holiday fun and maybe some useful insights too.

24. Investing vs Gambling We’ve all heard the two being compared by hesitant investors – Victoria Harris lays out the facts to dispel those myths.

26. Economic Pessimism Could Cost You Amy Hamilton Chadwick investigates the results of analysis paralysis, hesitation, listening too closely to the media and daily-balance checking when it comes to investment.

30. Going Up, Going Down Economist Cameron Bagrie has the latest on the NZ economy.

32. It’s All in the Goal Setting Martin Hawes explains the SMARTI acronym and how it can keep you on track with your investment and maybe even your golf-score goals.

36. Gender Pay Gap Nobel Prize winner’s ground breaking work uncovers the hidden influence of “greedy work”.

38. Are you Living with Confidence? A recent study confirms young people are more likely to insure their home and contents than themselves.

40. Building Management Software ‘Frankie’ is Taking Off

Joanna Mathers meets Georgie Fenwicke – Frankie’s creator – and learns how this Kiwi large-scale building management platform works and where its headed.

S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 2

42. Property Investing Like a Pro Ed McKnight shares the four mindset shifts needed to become a successful property investor.

44. Crypto Rollercoaster The past year has been typified by market ups and downs.

46. How Gratitude can Help us Manage Money Lynda Moore explains this concept and how it can help us all have a longer, more successful, relationship with our money.

48. Electric Vehicles are Changing the World Andrew Kenningham looks at the future impact of EVs from a political, economic and planet perspective.

52. Snapshot What’s impacting the global economy right now?

55. A Review of Exposure for Guarantors Wynn Williams’ Jenny Turner and Michael Brennan have a timely look at points to review if you guarantee a loan.

56. Is Property Investment Still a Good Bet? Simplicity's Sam Stubbs takes a deep dive into our longterm relationship with property investment to find out.

58. The Lowdown on KiwiSaver Withdrawals Dave Copson unpacks the facts on withdrawing money from your KiwiSaver, when it’s possible and how you go about it.

60. Getting Savvy with Your Day to Day Spending Booster’s new smart account keeps an eye on your spending, saving and gives a good rate of return – it even remembers when the power bill’s due.

Redefine your trading strategy. Master every wave.

Pricing correct as of August 2023 and is subject to change.

With derivative products you could lose more than your deposits. You do not own or have any interest in the underlying assets. Investing in derivative products carries significant risks. Seek independent advice and consider our PDS and the relevant Terms and Conditions of Trading at when deciding whether to invest in CMC Markets products. CMC Markets NZ Limited (CN 1705324). Past performance is not indicative of future performance.


Contents 64 62. A 2024 Outlook to NZ Real Estate David Findlay of Harcourts Mt Albert has a look at likely trends for the property market from 2024 and into the future.

64. The Property Market is on the Move Kelvin Davidson from CoreLogic reviews the early signs of recovery in the market and how this might continue to play out.

66. Understanding the Psychology of Investment PMG Funds’ Matt McHardy considers our unconscious biases and how they can influence our investment outcomes.


69. Award-winning Auckland Painters Scope Painting, led by Dave Bell, take out awards for their work for a second year.

71. Getting Ready for a New Tenant Sally Lindsay has five top tips to help attract and retain good tenants for your rental property.

72. An Alternative Type of Property Investment As Kiwis we love to invest in property. Oyster Property Group enables those with $10k or more to get a slice of the action.

76. The Risk and Return with Short-term Rentals Stefan Nikolic from Zodiak dispels a few myths we might have believed about the short-term rental market.


79. Things are Looking Up for Forestry The outlook for the forestry investment sector is greener than ever thanks to changes by the new government which have removed some of the potential handbrakes on the industry.

80. Our Ever-changing Money Mindset Andrew Nicol looks at how money mindsets change through our different life stages.

82. Fashion Update Summer wardrobe must-haves.

84. The Benefits of Hitting Refresh Stephanie Bryant takes a weekend break with Resolution Retreats and discovers the benefits of self-care.

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86. Motoring: Mini Cooper S Convertible Liz Dobson has always been a lover of Minis and this one doesn’t disappoint.

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A Good Time for Reflection

Published by: Opes Media Informed Investor 33 Federal Street, Auckland Central, Auckland.

Everyone has a different attitude to money, but to make it work for us it’s important to explore how we relate to it. It’s nearly holiday season (the year has flown by) and a good time for reflection. I’m not one for new year’s resolutions, but I do love a bit of soul searching during the spacious summer holidays. This year I’m going to take a long, hard look at my predisposition to spend. I love shopping (books, clothes and music are my obsessions), but this has got me into a lot of trouble in the past. Now I’m older (and a little wiser) I make sure saving comes before spending, although my current house renovations are certainly stretching the family budget. Money is a potent force. It can be used for good or evil and without doubt profoundly influences the trajectory of our lives. Everyone has a different attitude to money. Some (like me) see it as a ticket to good times; others scrimp, save and fear to touch it. Our attitudes are based on a raft of factors – upbringing, financial history, pessimistic or optimistic outlooks – but to make money work for us it’s important to explore how we relate to it. The lead story this issue, written by “money mentalist” Lynda Moore, delves into our “money personalities” – the way in which we relate to money.

and develop over our life, and explains how people can develop better relationships with money. We’ve also modified a quiz taken from Lynda’s website ( so you can discover your own “money personality”. It’s quick, easy, and a bit of fun, but it should also get you thinking. This is a great Christmas holiday activity to share with friends and family over a glass (or bottle) of bubbly. Amy Hamilton Chadwick delves into another sort of money personality this issue: the financial pessimist. If you’ve been stung before, it makes sense that you’d be cautious around investing. But as Amy explains, fear of doing anything (or “analysis paralysis”) can prevent you from embracing a brighter financial future. We also check out the new convertible Mini, the importance of goal setting, and how electric cars are changing transport economy worldwide. We really hope you find inspiration in the pages of our magazine and wish you all the very best for this festive season. Take care and happy holidays.

Based on extensive research and the contents of her excellent book, Conversations with Money: A Love Story, she digs deep into our histories, explores how our attitudes change

Joanna Mathers Editor

Editor Joanna Mathers

Resident economist Ed McKnight

Art Director Mark Glover

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Account Manager Stephanie Bryant – 021 165 8018

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Subscriptions Jill Lewis – This magazine is subject to NZ Media Council procedures. A complaint must first be directed in writing, within one month of publication, to the email address, If not satisfied with the response, the complaint may be referred to the Media Council PO Box 10-879, The Terrace, Wellington 6143; Or use the online complaint form at Please include copies of the article and all correspondence with the publication. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 6

Informed Investor is an investment magazine published quarterly by Opes Media. You need Informed Investor’s written permission to reproduce any part of the magazine. Advertising statements and editorial opinions in Informed Investor reflect the views of the advertisers and editorial contributors, not Informed Investor and its staff. Informed Investor’s content comes from sources that Informed Investor considers accurate, but we don’t guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk: Informed Investor magazine is not liable to anybody in any way at all. Informed Investor does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. Informed Investor magazine does not give any representation regarding the quality, accuracy, completeness or merchantability of the information in this publication or that it is fit for any purpose. To advertise in Informed Investor, you must accept Informed Investor magazine’s advertising terms and conditions. Please contact about advertising. Informed Investor is printed on environmentally responsible paper. The paper is produced using elemental chlorine-free pulp, sourced from sustainable and legally harvested farmed trees. The magazine is recyclable. PRINT ISSN 2744-6085 DIGITAL ISSN 2744-6093

Meet Savvy: Your money. Smarter.

Savvy’s debit card and smart account learns how you spend, then helps you save and spend better.

Available on the

Booster NZ app The Booster Savvy Scheme (‘Savvy’) is not a bank account and Booster is not a bank. Savvy is a managed fund and Booster Investment Management Limited is the manager and issuer of Savvy. Savvy’s Product Disclosure Statement, and other important information about Savvy (including a comparison highlighting some of the differences between Savvy and a bank account) is available at


Meet Some of Our Contributors CAMERON BAGRIE


Cameron is the managing director of Bagrie Economics, a boutique research firm. He was previously chief economist at ANZ, a position he held for over 11 years.

Kelvin joined CoreLogic in March 2018 as senior research analyst, before moving into his current role of chief economist. He brings with him a wealth of experience, having spent 15 years working largely in private sector economic consultancies in both New Zealand and the UK.



Martin is the chairman of the Summer KiwiSaver Investment Committee. He’s an authorised financial adviser and offers his services throughout New Zealand.

Andrew is the chief Europe economist for Capital Economics.He was previously an economic adviser for the United Kingdom Foreign Exchange.



Andrew is an authorised financial adviser and the managing partner of Opes Partners. He has more than 15 years’ experience in banking, finance, and property.

Sam is the founder and MD of Simplicity, New Zealand’s only low-cost, nonprofit funds manager. Previously from the banking world having worked for Goldman Sachs and NatWest Markets in London and Hong Kong, Sam believes the finance industry should be as much a force for good as a source of profit.

S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8




David owns Harcourts' leading Auckland Central office, JK Realty Group, and recently won REINZ’s Top Manager of the Year. With 20 years’ experience, he is also the MD of Development Projects. His passion, propelling growth in his clients’ real estate portfolios.

Former portfolio manager at Devon Funds, Victoria is co-founder of The Curve, a digital platform aimed at educating women around money.



Rich is the retail investment manager of Oyster Property Group. He is responsible for overseeing both retail and wholesale equity raising for transactions, the growth of Oyster’s investors, and continuing to improve Oyster’s service offering to investors.

Lynda Moore spent 20 years in her own accounting practice before co-founding Money Mentalist. She blends psychology and neuroscience with money coaching.



Jenny Turner is a partner with Wynn Williams, specialising in property law, including residential development.

Ben is an Auckland-based but not Auckland-bound property investor and freelance writer. He’s travelled and worked across Asia, Europe, and Australasia, writing for some of the biggest names in property and finance.

S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 9


What We Like A showcase of trends, technology and luxe living.

Stylish heart The kitchen has always been the heart of the home, but it hasn’t always been this stylish. Owned by Sophia Bristow, Eurotech Design is a company that’s focused on bringing the best international brands and appliances to New Zealand and pairing them with thoughtful design to create spaces with “wow factor” in spades. Sophia believes the design of this most functional of rooms should be based on inspiration. “Design inspiration comes in all shapes and sizes,” she says. “It doesn’t matter if you’re an interior designer, building developer or simply renovating your home. The right kind of inspiration will always help you come up with creative and unique ideas for your projects.” When it comes to design tips, Sophia acknowledges there are a wide range of considerations, catering to form and function. Harmonious integration: It’s important to seamlessly incorporate top-end whiteware and appliances from the get-go. You want to achieve a flawless blend of luxury and utility. Optimised layout: Maximise kitchen space and workflow efficiency, while maintaining design aesthetic. Ensure every square foot serves a purpose. Materials of distinction: Enlist experts to select high-quality materials, finishes and textures so you can elevate the visual appeal and ambience of your kitchen space. Illuminating brilliance: Craft a lighting scheme that enhances functionality and ambience, adding just that extra layer of sophistication. Sustainable elegance: Incorporate sustainable features; it’s more important than ever to be environmentally responsible. Cutting-edge innovations: Look at the latest trends and technological advancements in kitchen design, including smart appliances and integrated solutions that take your kitchen into the future. See for more information. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 1 0


Have desk, will travel Hybrid working has “made itself at home” in New Zealand with new research finding two in three Kiwis currently work a mix of in-office, at home and on the go. Taking “the best of both worlds” approach to the next level, Logitech has released a new hybrid tool that allows workers to pop up a desk anywhere. The Logitech Casa Pop-Up Desk is an all-in-one desk that opens up to a laptop stand with a wireless keyboard and intuitive touchpad. This innovative workstation folds down to a notebook size. It’s travel friendly for those that work on the go or hop around working spots. Wellington-based flexible work specialist (or “flexpert”) Gillian Brookes upskills businesses in implementing hybrid structures and approves the Logitech Casa Pop-Up Desk as an ergonomically approved set-up for those also needing to create boundaries between work and home. “Hybrid puts those boundaries under pressure so the more you can do to define them, the better off you’ll be. My advice is to pack away your work things once you’ve finished for the day, so work isn’t taking over your home life.” The Logitech Casa Pop-Up Desk is now available at local tech retailers for RRP$329.95. Visit www.logitech. com/en-nz/products/combos/casa-pop-up-desk. html for more info.

New dining destination A new home and cellar door dining destination for wineries Te Kairanga, Martinborough Vineyard, and the Lighthouse Gin distillery is now open. The new home for the three brands offers an “elevated but not overstated” hospitality experience with three unique internal dining areas seating over 100 in spaces that span casual to intimate, alongside a sun-soaked outdoor terrace which provides the perfect summer spot. Named The Runholder, the restaurant, tasting room, cellar door, distillery, and barrel hall space is nestled on a run of land at Te Kairanga vineyard, a plot originally held by Martinborough’s pioneering namesake, John Martin. Its name is an ode to the richly historied run of land the building now sits on, originally home to sheep and now vines. The interior is inspired by the region’s iconic woolsheds too, with aged linear timber and open ceilings giving a sense of space and intimacy. It will be the largest cellar door restaurant in Martinborough, celebrating local produce from the farm, vine, and beyond, and affording some of the best views and vinos the region offers. Bookings are recommended on S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 1 1


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Personality /per·son·al·i·ty/noun

‘The totality of an individual’s behavioural and emotional characteristics.’ Merriam-Webster Dictionary

‘We continue to shape our personality all our life.’ – Albert Camus


Foundations of Your Money Personality Our childhood plays a key role in shaping our money mindset in later life, writes Lynda Moore.

You may not realise it, but the longest relationship we have in our life is with money. Before we were born, our parents were thinking about it. How were they going to fund this little bundle of joy for the next 20 years or so? When we reach the end of our days, and everyone is gathered at our funeral saying fond farewells, through the tears some will be wondering how much of your money they will get! So, it should come as no surprise that the way we handle money as adults often comes from our early years. Those little money memories, that seem insignificant at the time, can have a big impact on how we deal with finances later in life. In other words, our money mindset will dictate our money behaviour and all the decisions we make. Let’s start by exploring how those childhood money memories shape our adult money lives. I’ll share some personal stories and reflections along the way, giving you a front-row seat to the journey from piggy banks to credit cards. Early money memories What is your earliest memory of money?

For me, it was four-year-old Lynda who wanted something; the pink umbrella with all the frills, or the Barbie doll, and my parents coming back with a very firm “no”. Those moments stuck with me; as an only child I was supposed to be spoilt, supposed to get whatever I wanted, right? By the time I was 12 I had figured out how to turn a “no” into a “yes”. Anything that was related to education got a “yes”. So, I became very clever at putting an education spin on everything. As I grew up I made up all sorts of stories about money that set the stage for the next 40 years. Those early experiences formed my money mindset and beliefs. I tossed out the fundamental money lessons that my parents taught me, which were: 1. Handle money with care: Money doesn’t grow on trees and should be used wisely. 2. Skip the splurges: Flashy stuff isn’t always necessary, be practical with your money. 3. Invest in what matters: Whether it’s a great education, experiences, or your retirement, save and invest your money in what is important to you.

‘As I started to earn my own money, things took a very different turn.’ S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 1 7


‘Money isn’t just about the numbers; it’s about feelings too.’ The great money shift As we move away from the influence of our parents and immediate family, we meet new friends and have new experiences. We either reinforce the learnings from those early days, or we start to test those beliefs and start to form our own, often flipping the total opposite to what we were taught. For me, as I started to earn my own money, things took a very different turn. It was like being handed the keys to a candy store. Suddenly there was this newfound freedom, and credit cards started whispering sweet nothings in my ears. I was off on a spending spree, and I went from being careful to careless with my money. My mindset went from “I can have whatever I want” to “I can have whatever I want whenever I want it, and credit lets me do it”. When you are young and have no responsibilities in life, this is a common belief. It becomes an issue, however, when we do have responsibilities for a partner, family and putting a roof over our heads. The Freddie Mercury moment of “I want it all, and I want it now!” can lead to maxed out credit cards, and the sinking feeling of debt. It’s all too commonplace. Rediscovering beliefs Eventually, there comes a moment of reckoning. For me, it was finding myself servicing $600,000 of debt on my own. I found myself looking back at those childhood money lessons and realising that my parents were onto something. It was a lightbulb moment when I saw that Mum and Dad were careful with money for a reason. It hit me, they weren’t saying “no” because they didn’t want me to have a good life; they were saying “no” because they wanted me to have a great education so we could have family time together and fun holidays. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 1 8


‘The belief of being hopeless with money was planted, and it became a selffulfilling prophecy.’ unpaid. It’s not pretty. Why? Because deep down they believe they can’t handle their own money. There’s a twist to this story. This belief didn’t come from nowhere, it came from her father who always managed the money, and a mum who (apparently) wasn’t capable of managing money either. The belief of being hopeless with money was planted, and it became a self-fulfilling prophecy. We can easily put systems and processes in place to make sure everything gets paid on time. Changing a money mindset takes a little longer; it’s about rewiring your brain and thinking differently. Money isn’t just about the numbers; it’s about feelings too. It’s all wrapped up in emotions, memories and stories which create the rich tapestry of our financial life.

They were spending their money according to their values. It was time to start looking at my own life, my own values and what was important to me. It was time to rewrite my own money story, based on what was important to me, not what I thought I should be projecting to the world. I took a deep dive into my own spending behaviour and realised I was so far out of alignment with my values. I felt ashamed that I had been so reckless with my money. Not only did I have to change what I was doing on a day-to-day basis, I also had to make very tough decisions to deal with my financial position. It felt like I was growing up all over again, but this time I was the one in charge of setting the rules and making the financial

decisions, not four-year-old Lynda. Money mindset calls the shots Your money mindset (your beliefs) is like the director of a show, and your money actions are the actors on stage. What you believe about money drives how you behave with it, and the results you get. It’s a bit like an equation: Beliefs drive behaviours; behaviours drive results. To make changes in your financial life, you’ve got to dig into your beliefs. Here’s a real-life story that shows just how easy it is for your money mindset to tangle up your life. Imagine someone who just can’t bring themselves to open their mail or look online at their money. Bills pile up and go

And guess who adds all that emotion to money? Take a look in the mirror, that face staring back at you, that’s who complicates money. When it comes to money 1+1 can equal anything you want it to. Money is a very versatile tool for expressing what you are all about. You can use it to: 1. Show off success: The fancy car. It isn’t just to get around in, it’s a statement. 2. Spread the love: Tossing a few coins into a street musician’s hat shows appreciation and care. 3. Control and manipulate: Money can be used as a power play in relationships for better or worse. Healthy money relationship After looking at where our mindset comes from, how do we know when we have a healthy money relationship? 1. Money awareness: You don’t avoid money. You know what you owe and


‘Before we know it, we have reached all those milestones, and we still aren’t happy.’ what you own. You keep tabs on what’s happening in your accounts. You know what is coming in and what’s going out. This doesn’t mean you always get it right, but if something unexpected happens you are able to deal with it, and you don’t bury your head in the sand. 2. Living within your means: You’re not spending like there is no tomorrow; you have a money plan and it's working for you. You enjoy saving for holidays and other larger purchases. Your debt levels are under control; you pay your bills and your credit card in full and on time. This doesn’t mean you are living a frugal lifestyle (if that isn’t your thing). You are having fun; making wise decisions with your money is enabling you to be relaxed and not stressed about money. 3. No money secrets: You are open and honest with yourself and your partner about your spending. No hidden stashes of shopping bags in the wardrobe or shed that you “have had for months”, but you really only bought yesterday. The only things hidden are birthday and Christmas gifts for your partner. 4. You have aligned your money mindset and your behaviours: You’ve taken a peek under the hood, and you understand why you do what you do with your money. You know where your money mindset has come from. You’ve challenged and reframed those that aren’t working for you, and you are focusing on what does work. If you get derailed, which happens to us all, you can pick yourself up and dust yourself off and take responsibility for getting back on track. Money and happiness Have you ever day-dreamed about just how fantastic life would be if you won Lotto and didn’t have a financial care in the world? For many, happiness is tied to financial milestones; we tell ourselves the “I’ll be S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 2 0

happy when ...” story; when we earn more, we have the house, then the holiday home, then when the kids leave home, or when we are retired. Before we know it, we have reached all those milestones, and we still aren’t happy. You start to realise that no matter how long and hard you’ve worked, most of the time what you have “right now” isn’t enough to feel that the money and happiness thing is working. It’s called the “hedonic treadmill”. Basically, it means when something good happens – the raise, the new car – we are happy for a while then we get used to that level and we start wanting more. We upgrade, and the cycle begins all over again. How do you get off the hedonic treadmill?

Realising you are on it is a good start! It’s great to be ambitious and, yes, you do need to keep up with growing families and cost of living increases. But it’s also equally important to appreciate the here and now. In addition to using your current financial situation as a yardstick for happiness, add to it your sense of well-being using nonfinancial measures. Here are a few to think about: 1. Cherishing relationships: Spending time with loved ones can light up your life like nothing else. 2. Embrace those special places: Exotic travel and places overseas are amazing, but there’s also places close to home that give you a sense of contentment and build precious memories.


3. Celebrate the milestones: We are so busy looking forward to the next milestone we often forget to celebrate and pat ourselves on the back for what we have achieved so far. 4. Feel grateful for something every day: Jot down one thing you’re grateful for each day, and you’ll be surprised how much good is already in your life. In the end, our childhood money memories and beliefs play a massive role in our adult money mindset and the games we play with money. When we recognise and dig into those beliefs, we can make smarter money moves. Money isn’t just about dollars and cents; it’s about the stories we tell ourselves. If you aren’t where you want to be with your money, start unravelling your money stories. It’s like discovering a hidden treasure within yourself. If you need help with your journey of discovery, reach out to me.

A new way to invest in property

We're Simplicity, New Zealand’s nonprofit KiwiSaver and Investment Fund manager. We think Kiwis get short changed when it comes to mortgage rates (too high), term deposit rates (too low) and access to warm, dry homes (too few). We need a New Deal. One where investors can benefit via good risk-adjusted returns, and more New Zealand families get into a home. And after three years of preparation, we think we’ve cracked it.

The Simplicity Homes and Income Investment Fund We’ve launched a new fund focused on residential property sector investments. It does this by investing in: • Shares of Simplicity Living, which builds and operates quality homes for long term rental • Mortgages for first home buyers • Community housing bonds And this fund will target to maintain 40% in cash and equivalent investments to provide for withdrawals, so you have full access to your money at any time. We already invest this way with some of our KiwiSaver and Investment funds. And in the long term, our vision is for this investment to help thousands more families into homes across New Zealand. So if you're looking for a different kind of investment - one that we think works harder for you and helps solve New Zealand’s housing crisis, then look no further. Making money and doing good is the Kiwi way. And it’s Simplicity itself. Check out our new Homes and Income Investment Fund at

KiwiSaver Plan | Investment Funds | Mortgages Simplicity NZ Ltd is the issuer of the Simplicity KiwiSaver and Investment Funds. For product disclosure statements, please visit our website Mortgage loans available to Simplicity KiwiSaver members buying their first home, subject to lending criteria.

Scan to check out the new fund


z i u Q d

Are you a saver, spender or money monk? Complete our quiz to find out … Over-all my financial objective is …

Saving. Here’s how I feel …

A. To have enough that I can buy whatever

A. I have trouble saving money, this bothers

I want

B. I’m not sure C. To save enough money now so I never have to work in my old age

D. To have enough to satisfy my basic needs, and then give the rest away

E. To make as much of it as possible as quickly as possible

Budgeting. Here’s how I feel ... A. Budget? Yuck! Just hearing the word makes me want to rebel

B. I wouldn’t know how to start making one. I hope money will take care of itself

C. I take pride in following my budget closely

D. I take pride in living simply so I’ve never needed a budget

E. I take a lot of time figuring out how to have more money to spend and save

me sometimes

B. I know I should, but I never seem to get around to it

D. If I had enough money to save, I’d give it

C. At least twice as much as I’m earning now

away instead

E. I really enjoy saving – the more the better

Borrowing. Here’s how I feel …

E. I love to look at my old statements and compare how much more money I have now S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 2 2

D. I’m fine the way I am. More money is not the answer

E. My employer to match every dollar I put into KiwiSaver

Investing. Here’s how I feel …

B. I’ve borrowed money quite often, but I

A. I love it. I might end up rich

track of paying it back

can’t say I’ve always paid it back

C. I don’t borrow money because I always have enough saved for emergencies

D. It would only be for absolute necessities E. I’m willing to borrow money to make

money, but I dislike having lots of debt

If I were to experience a financial emergency …

B. I just hope for the best. I don’t know if I

don’t keep records

have no idea how much

A. I try not to borrow money. I easily lose

A. I keep track of things on and off

D. There are more important things in life. I

to pay all my bills, although I might spend that too

B. I’m sure I could use more money, but I

regular and consistent about it

Financial records. Here’s how I feel …

C. I enjoy keeping careful records

A. One that I can spend all of and a second

C. Saving comes naturally to me. I am

A. I never have enough money left over to save for emergencies

B. Which record should I be keeping?

To feel totally satisfied with my income, I need ...

have enough saved

B. If I were to invest, I need someone else to decide which options are best

C. The only safe investments are cash deposits or something similar

D. I would only choose socially responsible companies

E. I always try to find a way to maximise my returns

You really want to buy something that’s not in your budget, what do you do? A. Buy it! Everything will work out alright

C. I’ve put aside a sizeable amount for

B. I’ll buy it and think about it later

emergencies, but I’m not sure it’s enough

C. Have a good hard think before I give

D. I hope I could rely on friends, family or

D. I don’t buy expensive things, so I can

E. I’ve saved for almost any emergency.

E. If it’s important enough, I’ll tweak my


I hope I never have to spend it

myself permission to spend the money afford to buy them

portfolio. Otherwise, I’ll forget about it


Money in general, represents … to me? A. Happiness, pleasure and excitement B. A source of anxiety and conflict C. Security D. A sense of greed and possible corruption E. Power, prestige and freedom

I would apply for a bank loan under these circumstances: A. A holiday or to buy something I really

RESULTS As you will see from your results, you may have more than one money personality. Have a read through and see which ones you have identified with the most.

As = Spender Spending gives you pleasure, when buying for yourself as well as when buying gifts for others. Why budget when you can use a credit card? Buy now, pay later is your weakness. You find it easy to overspend which results in debt.

B. Only in a dire emergency. I hope I’ll never

Saving for your retirement is achievable, however. Find a way to automatically deduct the money as it comes into your account.

C. To make essential repairs, pay for an

Bs = Amasser

D. I don’t know

The more you have the happier you are. You can easily choose to spend, save or invest. You have the options at your fingertips and are organised about it.


have to borrow money

education, or increase my future security

E. To invest in a business or some other high-yielding opportunity

Do you worry about money? A. Ha! I just enjoy spending it B. Only if I have a financial crisis C. Always, it’s the main thing I worry about D. No, we should be more concerned about the planet than money

E. I think about it, but I’m doing all I can to look after it

Some Amassers like to flash the cash, or some people may call you stingy. But you have goals and will do your very best to achieve them. You may even reward yourself when you do.

Cs = Hoarder Your financial goals are important to you. These are a priority in your life. Planning and reviewing your budget and goals makes you feel fulfilled. Spending on holidays just feels unnecessary. Long-term security is of utmost importance to you, even if you go without to make this happen.

How prepared are you for your money future?

Having easy access to your money when you need it is important to you. Structure your portfolio this way and you will feel much safer with your money.

A. I hope the future will take care of itself

Ds = Money Monk

C. I have a plan I stick to, the future will

A Money Monk has a very strong social conscience. Sourcing natural and ethical products is important to you. You relate more easily to people of modest means, and you may feel that money is bad.

D. Focusing on the good things in my life is

The saying “the root of all evil” is one you have heard many times before.

E. I’m confident, I’ve been saving

You are concerned that having money may mean you lose sight of your values.

B. I’m concerned, it has been hard for me to save

probably be fine

far more important

systematically for years

If you won a million dollars in the lottery, your first reaction would be ... A. I’m excited. Now I can buy anything I

Looking into ethical investment options would suit you well. There are many great companies out there offering good advice in this space. Don’t be put off.

Es = Avoider

B. I am overwhelmed. How do I handle this?

It’s often hard for you to manage your money. You might know how much you earn, but you’re not entirely sure where it all goes.

C. I feel relieved. I’m secure now

Saving can be hard as you may not monitor it all that well.

D. I feel guilty. There are those who have

You will often do anything to avoid budgeting conversations. They may feel overwhelming and all too tricky.

E. How can I make it grow?

Having a good financial adviser in your corner will help a lot.



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Isn’t Investing just Gambling in Another Suit? There are three key reasons the two are very much from a different tailor, writes Victoria Harris, of the Curve. Honestly, I have lost count of the number of times I have been asked, isn’t investing just the same as gambling? So, I thought I would address it once and for all: investing is not gambling. My least favourite description of the stock market is that it’s just a casino where the house always wins. Let me explain the three key reasons why: 1. When you invest, you get to own something When you throw $20 into a slot machine or choose black over red, you’re not buying anything of value. You’re simply buying the opportunity to potentially make money if that bet ends up working in your favour (and that’s a very big IF). When you buy stocks, ETFs or bonds, you’re buying an asset (or a thing) of actual value that can be measured. If you put $20 into shares of a given stock, you own those shares, meaning you own a stake in the company you’re investing in. This isn’t to say that you’re guaranteed to make money on your investment. Your $20 in stock might end up being worth $15, but either way investing means actually getting to own assets. When you gamble, you don’t own a thing. 2. You can reduce your risks Investing and gambling carry risk, but with investing you can mitigate your risk by diversifying and taking a long-term view. Over the past 50 years the stock market has delivered an average annual return of 10 per cent as measured by the S&P 500 index’s performance (the top 500 companies in the US). But this doesn’t mean the stock market has returned 10 per cent every single year during that period. In fact, during the global financial crisis (December 2007 to June 2009), the S&P 500 fell roughly 38

per cent. So, someone who invested money in November 2007 and sold their stocks two years later would’ve been feeling some pain. However, the market then went on to recover and deliver an average yearly 10 per cent return despite having lost 38 per cent of its value during that period. In a casino, the longer you play, the higher your chances of walking away a loser because the house has the edge. The stock market is the opposite of a casino. The longer you play, the higher your odds of success. The ability to think and act for the long term is your edge as an individual investor. Patience is key to success. Now, you can argue that it’s possible to make money by gambling, too, and it certainly is possible. But there’s really nothing you can do to mitigate your risk when you throw money into a slot machine. There are ways to mitigate your risk as an investor, and that’s an important point to keep in mind if you’re the type who insists on keeping all their money in savings because you think buying stocks means gambling your money away. 3. Investing is empowering and positive Investing helps grow and fuel an economy by giving capital (money) to businesses, whereas gambling is addictive and has a negative impact on society and sucks money from people. Investing can empower you and help you grow your wealth, leading to financial freedom. Gambling increases debt and leads to financial strain and challenges. Investing and gambling really are two different beasts. And the sooner you realise that the sooner you might get on board with the idea of buying stocks or other assets and growing your wealth over time.

‘Investing helps grow and fuel an economy ... gambling is addictive and has a negative impact.’

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The Cost of Pessimism When the economic outlook seems gloomy it can be tempting to play it safe, but you could be making an expensive mistake, warns Amy Hamilton Chadwick.

Loss is painful, and when our investments perform badly, we never forget. A whole generation of Kiwi investors were scarred by the 1980s stock market crash to the extent that many never wanted to buy shares again. “Loss aversion affects us all – regret avoidance is a strong driver of decisionmaking,” says Tony Alexander, independent economist. “You feel like you’re safe with the herd. It’s normal behaviour to stick with the herd, and never excel or stick out.” We want to avoid loss, but in a diversified portfolio losses are typically temporary. Avoiding loss by not investing means missing out on significant potential gains over the long term. If you invested in the S&P 500 in 1930, and stayed invested, by 2020 your money would have grown by 17,715 per cent, according to research by the Bank of America. If, however, you missed the 10 best days each decade, your total return would have been 28 per cent.

this may mean having less money to live on in retirement, or missing your financial targets. “I have a close friend who, if they had taken my advice 10 years ago, would be a $1 million dollars better off by now,” says James Blair, wealth director at Lighthouse Financial. “Instead, his money has stayed in term deposits going backwards. Obviously, if you have too high a risk profile you can lose a lot of money, but if your risk profile is too low you can lose just as much.” Even if a downturn happens, and you’re patting yourself on the back for avoiding it, you may still be worse off. One JP Morgan analyst found the average return for the two years preceding a downturn is almost 45 per cent, with a 14 per cent return for the six months before the downturn.

House prices, too, have traditionally risen over time. Returns are lower than returns from shares, but the trend over the long term is for property values to increase. The average New Zealand house price in 1960 was around $6,500; it’s now over $900,000.

Waiting for the market to improve When there is a market downturn or crash, investors’ expectations become more pessimistic despite evidence that when prices fall, your chance of strong returns increases. On average, the S&P 500 has increased 29 per cent in the three years after a decline of 20 per cent or more, dating all the way back to the 1950s.

Waiting for the “right” moment to invest, or avoiding investing altogether, is likely to mean you miss out on returns. Over decades

Knowing this, Blair finds it frustrating when people tell him they’re waiting for the market to improve before they invest again.

‘Right now there are huge opportunities for first-home buyers and longterm investors in shares.’ – James Blair S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 2 7


“In 2021, at the top of the market, everybody had FOMO [fear of missing out] and they wanted to get into the market even though property and share prices were overvalued. Everybody wants to get in at the top. “Right now there are huge opportunities for first-home buyers and long-term investors in shares, but people are scared. They’re waiting for the prices to go up, which gives them confidence – but their returns will probably be lower. We do what makes us feel safe, not what’s best for us; it’s just wired into our decision-making.” Waiting for more information can also be a trap. “Analysis paralysis” happens when you keep researching investment options, or looking at properties, but never make a move. “In the end you’ve got to make a decision – jump and do one thing or the other,” Alexander says. “Most people are happy with mediocrity in their lives, then they read the media and believe it when it tells them they’ve been hard done by. If you want to do better, maybe start by seeing a financial adviser.”

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Can you overcome hesitation? Talking to a financial adviser is an excellent step if you’re stuck in an anxiety loop that’s preventing you from putting your money to work. An adviser can help guide you through other steps to prevent you becoming bogged down by pessimism, such as: Set long-term goals and make a plan to achieve them: Long-term goals help you understand your investment targets and timelines. They also allow you to model the expected returns of various investments to see whether you can realistically reach those targets. If you continue to sit out of the investment market, will you be able to enjoy the type of retirement you want? “Opportunity cost is really important,” Blair says. “Look at the projections: what is the implication of investing in an asset, and what is the implication of not doing it?” Put the risks into perspective: When you’re investing for decades, waiting six months or a year for the “right” time to buy into the market becomes irrelevant. Ask your parents or grandparents what they paid for their house and whether they thought it was expensive. Chances are they’ll tell you that what sounds like peanuts now felt like a big commitment at the time. Or look at the NZX 50, up nearly 500 per cent since its 2003 inception; or the S&P 500, with 130 years of reliable long-term returns. “Waiting a few months to get into the market is completely ridiculous when you have a decadeslong investment plan,” says Blair. “A good or bad bump at the start washes out over time.” Don’t look at your investments every day: Tracking your holdings daily is probably unhelpful for your long-term strategy. Investors who check their portfolios more frequently have been shown to invest in less risky assets and have lower returns. In March 2020, more than 40,000 New Zealanders switched into lower-risk KiwiSaver funds after seeing their balances fall, but only 9.1 per cent had switched back by August. Young people were the most likely to switch and are also the most likely to be best suited to a higher-risk fund, given their long investment timeframe before retirement. “The best clients are the ones who have lost their password,” jokes Blair. “Once you have a plan and you’ve executed it, automate it and leave it alone. Don’t get in the way of your own success.” Try to ignore the doomsayers and keep your eyes on the horizon: The news media reports day-to-day changes in markets, but this is all noise if you are a long-term investor

with a sense of perspective. If you can avoid being swayed by excess exuberance, in either direction, it will be easier to stay on track and achieve your goals. “It’s easy to gravitate towards the dark side and feed on the negativity of others,” Alexander says. During the early stages of the pandemic, panic about housing and job markets was widespread, but Alexander kept pointing out the protective economic factors that made the worst-case scenarios less likely. “People need reminding about the natural equilibrating forces in the economy, to drag them away from unrealistically pessimistic – or optimistic – views, and I use data and surveys to back up what I’m saying. We all need to recognise that emotions play a role in decision-making. Do your analysis and try to make your decisions more dispassionately.”

‘People need reminding about the natural equilibrating forces in the economy.’ – Tony Alexander

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Going Up, Going Down Economist Cameron Bagrie takes a good, hard look at New Zealand and how we’re going as a nation.

The bigger picture Inflation is still too high, despite easing somewhat in the September quarter to 5.6 per cent (annual). Non-tradable or domestic inflation is 6.3 per cent. Core inflation measures have eased though remain elevated at around 5 per cent. Progress lower has lessened the need for the official cash rate to increase, for now.

Good news The economy has forward momentum. Growth bounced back in the June quarter after stalling in the preceding six months, house prices have risen four months in a row, and fiscal policy is adding to demand (for now). Household incomes continue to be supported by a strong labour market, although inflation is siphoning money out of consumers’ pockets.

The economy needs to experience a period of slow growth to bring demand back into line with the ability to supply goods and services. That is the basic equation for bringing inflation down. Monetary policy, via interest rate settings, is exerting a restraining influence.

Bums on seats Population growth is a major driving factor pushing the economy forward. Net migration has risen more than 100,000 in the past year, adding around 2.5 per cent to the total population. That is a lot of additional demand.

The slow road The economy is expected to continue growing but experience subdued growth and go backwards when adjusted for population growth. A technical recession has been averted, but not a per capita one. Indicators such as a large current account deficit, which is 7.5 per cent of gross domestic product, also signal an economy living beyond its means and requires spending realignment. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 3 0

Higher for longer Longer-term interest rates have been rising around the globe. Investors are requiring more compensation for risk, even in lowrisk assets such as bonds. You can now get 6 per cent on a term deposit. Getting rid of inflation is proving to be challenging, requiring high interest rates for longer. Central banks, including our own central bank, are singing to a similar tune. Interest rates need to remain at a restrictive or elevated level for a more sustained length of time. Interest rate relief does not appear to be around the corner. This will turn attention to the maths and cashflow on investments.



Non-performing loans

Geopolitical and geostrategic issues risk interfering with central banks’ plans to bring inflation down. Oil prices have risen to US$90 a barrel at the time of writing, which has seen fuel prices in New Zealand rise to just above $3 a litre (discounted regular price). Higher oil prices risk adding persistence to inflation.

Bank non-performing loans remain low at 0.5 per cent of total loans and 0.4 per cent for housing loans. There were $3 billion impaired loans (a loan not likely to be fully repaid) or loans more than 90 days past due at the end of August. That is low, but up from $2 billion a year ago, so the direction of travel is higher. Those numbers will continue to rise with around half of all mortgages due to refinance in the coming year and refinancing also happening in the commercial and agriculture sectors.

Split personality Building consents continue to ease (down to around 35,000 annualised compared to 50,000 two years ago) while house prices have found a base. Interest costs impact both. It may be that inflation (construction costs) discourages building new and encourages buying existing stock.

This lag between monetary policy and the economy is a key reason the OCR is on hold. Debt servicing costs as a share of income continue to rise.

Education Poor education is a wrecking ball for economic performance and social outcomes. A quarter of school leavers recently left without NCEA level 2, considered the minimum level for work/ study, and 15 per cent didn’t get NCEA level 1, including 27 per cent for Māori and 20 per cent for Pasifika. Let’s hope education receives the attention it deserves by the new government.


The new government faces complex challenges just like the previous one. Getting rid of inflation can be assisted by tight fiscal policy, which means less spending. Tax relief adds to demand just like more spending. The health sector is under pressure, and we have huge infrastructure deficiencies. NZ has been living beyond its means with a large current account deficit. There will be tough trade-offs ahead as we navigate a reset. While Bagrie Economics uses all reasonable endeavours in producing reports to ensure the information is as accurate as practicable, Bagrie Economics shall not be liable for any loss or damage sustained by any person relying on such work whatever the cause of such loss or damage. Data and information have been gathered from sources Bagrie Economics believes to be reliable. The content does not constitute advice. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 3 1

Correct as at 15 November 2023.

The election has delivered a new government. Their policy platform looks more supportive of the property market via various policies, including reinstalling tax deductibility of interest costs. Business confidence tends to be higher under a right-leaning government, but that confidence is not well correlated with the economy’s performance.


Winning the Financial Game is all About Goals Martin Hawes offers some useful coaching advice from the investment sidelines. Goal-setting is for those who are serious about what they want to do. If you are half-hearted about doing something (saving for a holiday, losing weight or having enough in retirement) you should probably not bother about setting goals ... chances are you are not going to achieve your outcome anyway, so setting a goal is just a further waste of time. However, if you are serious about doing something, setting goals means you will be much more likely to achieve them. Being serious about an achievement will mean commitment and setting goals helps with that commitment. Commitment and serious purpose are the important things for achievement. You don’t hear someone like Sam Cane saying: “Oh yeah, it would be kinda nice to win this game – well, to get pretty close, anyway.” You don’t hear such wishy-washy nonsense from people who are committed to something and really want to do it. Instead, you hear laser-like focus on what they want to do: achievement and nothing else. Financial freedom is something worth taking seriously. Over the years as an adviser, I helped many people set goals to be financially free and to have the life of their dreams. Financial freedom is a state where your time is your own (ie, you do not have to work) and your money is your own (ie, you have little or no debt). S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 3 3


‘You don’t hear someone like Sam Cane saying, ‘Oh yeah, it would be kinda nice to win’.’ The taste of freedom It means that you have sufficient capital and passive income to fund a good lifestyle. For many, retirement is financial freedom, and a few fortunate others have a sort of early retirement as they have accumulated wealth early in their lives. Whether you think of financial freedom as early retirement with millions, or just as retirement at 65 with enough to supplement New Zealand Super to afford a good lifestyle, they are both good and serious undertakings. They are good in the sense that they are well worth having, and serious in the sense that for most they take a good bit to achieve. Quite a lot of my clients were already where they wanted to be – enough for a comfortable retirement or quite wealthy. These people usually needed to invest for income. However, there was a constant stream of ambitious people who approached me with a fair way to go before they could say they were financially free. Usually younger, they often wanted not just a mortgage-free home but a holiday home and an apartment in Melbourne.

This entailed understanding what financial freedom looked like for them and then putting that down on paper as a goal. (I always spent some time telling them there would be bumps along their chosen roads.)

As such, the goal will be mostly numerical: We will have a mortgage-free house in St Heliers and $2 million invested by December 2039. You can’t wriggle out of that one – you have either succeeded and achieved it, or you have failed. This clear definition is very powerful. A goal like this should keep you going, driving onwards, and ensure you do not try to move the goal posts by saying or thinking something like: Well, we said we wanted $2m as well as the house, but perhaps $1m would be enough.

Always be specific Goals should always be SMARTI (specific, measurable, achievable, relevant, time bound and in writing.) The main point of this description is to make a goal which is completely unambiguous. This is a goal that demands your commitment as there is no way you can fudge achieving it.

A SMARTI goal is very powerful as a motivator. Do not ignore the “T” (time bound). You must put a time for when the goals should be achieved – again, you need a goal that is not easy to wriggle out of. Also, be sure to do the “I” (in writing). My best performing clients wrote their goals down and kept them somewhere so they

Perhaps the best thing I could do to help these people was, firstly, make sure they were determined to achieve financial freedom, and second, to help them set the goal.

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could see them regularly (the top drawer of their desks seemed the most popular). Commitment, motivation Setting goals for the smaller things also works (eg, your golf score). However, it is the long-term big goal for your later life that is most satisfying and, for a lot of people, most important. Goals that are set in the right way give commitment and motivation which make a powerful combination to achieve the things that you really want.

Martin Hawes is a financial author and speaker. He is not a Financial Advice provider nor a Financial Adviser. The information contained in this article is general in nature and is not intended to be financial advice. Before making any financial decisions, you should consult a professional financial adviser. Nothing in this article is, or should be taken as, an offer, invitation or recommendation to buy, sell or retain a regulated financial product.


The Obstinate Beast that Refuses to Leave Joanna Mathers examines research by a Nobel Prize winner in Economics, who has attempted to clarify why women still suffer in the salary stakes. The gender pay gap is an obstinate beast. Stubbornly sitting at 8.6 per cent in New Zealand, the factors underpinning it have always been somewhat elusive. Historically, the gender pay gap was due to obvious factors – educational differences, the traditional roles men and women held in the workplace. But, according to the Ministry for Women website, these factors only account for around 20 per cent of the current gap – 80 per cent is driven by “unknown factors”. In October, Claudia Goldin, Henry Lee professor of economics at Harvard University, won the Nobel Prize in Economics, only the third women to win a Nobel prize in this discipline. Her research explores the history of women in the workforce, and the “unknown factors” that lead to the gender pay gap. It may go some way to explaining why that obstinate beast refuses to shift. Labour market Goldin’s decades of research focused on a historical analysis of women and work. She delved deep into the socio-historical forces underpinning women’s place in the labour market, and questioned why, in a world with more female graduates than ever before, the gender pay gap still exists. While her research was undertaken in the United States, her analysis of the gender pay gap, and the history of women in work, can be extrapolated to the New Zealand context. Women in western society have faced the same forms of discrimination in a raft of deeply unfair work practices: unions set female wages at half those of males and restricted where they could work, for example. Early in her career, Goldin focused on understanding these historical issues. She S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 3 6

immersed herself in archives; exploring the statistics around the unacknowledged work that women undertook in industries like agriculture and manufacturing. In these historical records, women were often listed as “wives” – their true place in the workforce obfuscated by the biases of the day. She was able to highlight the place these women actually held in the labour market, in farms and factories. And accordingly, redressed some of the misconceptions around women’s representation in the labour force at the turn of the 20th century. Goldin went on to analyse the evolution of women’s workplace participation, and how this changed over time. The “women’s liberation” movement of the 1960s and 70s saw huge changes in this space; shifting expectations saw workforce participation booming. The social mores and forces at play historically – ideas around a “women’s place”, childcare and religion – are important when seeking to understanding of how we live today. It can help us understand how we “got here” and the biases and stereotypes that still exist in contemporary society. In-depth analysis Goldin’s most recent book, Career and Family: Women’s Century-Long Journey toward Equity (2021), provides an in-depth analysis of how men and women – with the same level of education – can end up with very different financial outcomes. She uses the example of a young couple, recently graduated, with equivalent degrees. They both start in the same job on the same salary. Everything is going along nicely until they decide to have children – and the “motherhood penalty” kicks in. “The motherhood penalty”, a phrase

created by sociologists, investigates how women are penalised at work after they have children. According to data from Global Women ( the experience of having children negatively impacts a women’s potential earnings by up to 12.5 per cent over a lifetime. In Goldin’s analysis, this “motherhood penalty” occurs when one of the couple is forced to take on what she refers to as “greedy work” to progress their career. Extremely high paying jobs (such as work in commercial law, medicine) suck up far more time than average work. This “greedy work” gobbles up weekends, evenings, holidays and is compensated by very high salaries. Couples with children can’t both have “greedy work” – one of them needs to be available for their offspring. They need work that is flexible, less demanding, and pays less. And most of these parents are women. “Women are generally the ones who are on-call at home, and that produces what I call couple inequity,” Goldin explained in


a podcast with her publishers, Princeton University Press. “Thus, the flipside to couple inequity in heterosexual couples is gender inequality [in the workforce].” Penalty to pay A genuine 50/50 partnership is possible, she acknowledges, but there will be a penalty. “If they did this, they would probably be leaving some amount of money on the table.” So “greedy work” – work that gobbles up time and is necessary for career advancement – is generally undertaken by men. And the flexible work (generally undertaken by women) comes at a price – a smaller salary. The space between these two salaries in the gender gap. Progress of sorts In Career and Family, Goldin explores the lives of five successive cohorts of women; from the early 20th century until today. The first group (born in the opening decades of the 20th century) had to choose

between work and family. Her research shows that 50 per cent of women who graduated from university and undertook work didn’t marry or have children. The second group graduated in the interwar period, with a small amount of progression in the workplace and the desire for more autonomy. By the time the third group graduated (between 1940 and 1960) most would have a career and family, and the fourth group (graduating in the 1960s and 1970s and living through the heady days of revolutionary changes to women’s rights) saw vast increases in workplace participation and family. But the career came first, and often ended with family. Those who graduated in the 1980s and 1990s, the fifth cohort, had careers early and then had children, continuing their careers after their children were born. The combination of family and career was enabled by the move towards flexible working conditions, through technology, which was further consolidated during Covid-19 lockdowns. This flexibility allows

women to work, but it can also lead to what she calls “a female ghetto” with women locked away at home and still doing the lion’s share of childcare. But Covid-19 revealed that flexible work was possible for everyone, even those on the highest salaries. “It’s actually reducing the price of flexibility,” she explains in the Princeton University podcast. “But certainly, the fact that in many jobs that handshake that you used to have to do in person in Korea […] is being done in a range of different means. And that is one aspect of reducing the price of flexibility; there are jobs that parents (particularly women) couldn’t take because they knew that they couldn’t fly overseas every other weekend. And now, they will be able to take those jobs.” Goldin’s analysis is pertinent and timely. The Nobel prize will do much to extend its reach and advance our understanding of how we can move forward and close the gender pay gap. *Data sourced from Ministry for Women website S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 3 7


Assessing Your Attitude to Risk and Living with Confidence A recent study of young people and the cost-of-living crisis highlights a paradox that seems to exist around attitudes to insurance. Recent feedback on insurance* suggests 37 per cent of people would forego life insurance entirely and 52 per cent would say the same about income protection and disability insurance. However, only 9 per cent of respondents said they would forego home and contents insurance, showing New Zealanders appear to value their belongings and physical assets more than themselves. Insights from a range of sources indicate a potential underinsurance issue for many New Zealanders. A belief that ACC will cover all sickness or that “she’ll be right” can lead to concerning attitudes towards money and risk protection. A recent study of young people and the cost-of-living crisis by the Financial Services Council highlights a paradox that seems to exist around attitudes to insurance. In a year where the value of general insurance (the cover you place on your physical assets) has been clear, Claire Sutton, executive manager, Life Portfolio and New Business for Asteron Life, is keen for New Zealanders to remember that insurance to protect your income, lifestyle and livelihood are as critical as general insurance at a time when financial pressures are real.

that life insurance companies only provide cover for when you die and that insurance is to help your whānau after you’re gone, or if you become terminally ill. Asteron Life, she says, believes in living with confidence and there’s a lot of living to do before you’ll be needing to claim on your life insurance.

prioritise themselves can also sometimes come through at claim time.

“Life insurance is only one component of overall financial wellbeing and living with confidence encompasses having the assurance of protecting yourself now and for the future.”

She says whether a customer is calling to claim on a policy, or they are finding things tough and are thinking of cancelling their policy due to financial pressures, or even wanting to check on something about their policy they feel is obvious but are unsure, the team at Asteron Life are available to help.

In addition to life insurance, Asteron Life offers cover to protect your income or your mortgage if you’re unable to work due to sickness or injury. Asteron Life also offers covers which provide lump sums if you are diagnosed with specific medical conditions or if your sickness or injury leaves you permanently unable to work. There are also covers available for business owners to protect key people within their business and the employees of large employers. All these products protect the living! Prioritising yourself Sutton says a financial adviser can be incredibly valuable in helping people understand risk as it relates to their life and health.

Valuable asset The value of good financial advice for life and living insurance can sometimes be the last thing people think about while they are healthy until it is too late, and their ability to get the cover they need and want is compromised. There’s never been a better time than now to talk to a financial adviser about how best to protect your most valuable asset – yourself.

“In many ways, living insurances such as income protection or trauma are about prioritising yourself and the life of your family and whānau right now. If something happened to you or your partner and you were unable to continue to work temporarily, needed time off to help recover from a temporary illness, or you needed ongoing care, how would you support your living expenses and lifestyle needs?”

Sutton points to a common misconception

Claire says this reticence for people to

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“Customers apologise for getting in touch, telling us they’re sure that we have other customers that may need assistance first or more urgently – many New Zealanders are modest to a fault.”

“Asteron Life products have flexibility built into them, designed so they can flex with the needs and objectives of individual customers. There has been a lot of change economically and globally in the past three years and changes in circumstance can often mean a change in the back up you need from your personal insurance, and the way your insurance should best be structured. “A registered financial adviser will be able to provide advice around the best options for you at any stage of your life.” *A Vero Insurance New Zealand affordability survey conducted in May 2023.

Asteron does not provide financial advice in relation to life insurance cover. This content is for information purposes only and is not financial, legal, or medical advice, nor does it offer any opinion or recommendation about whether a particular policy is right for you. You should consult a qualified financial adviser for advice specific to your personal situation and needs. Excesses, terms, conditions, limits, and exclusions apply to all policies. Please check the policy wording for details of cover. The provision of cover is subject to the underwriting criteria that apply at the time.

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Bringing Order to Everyday Chaos Georgie Fenwicke’s ingenious new property management software solution, Frankie, is such a success it’s now ready to take on the world, writes Joanna Mathers. “You’re seeing 10 different systems, here. You’ve got extraction fans, an HVAC system, ducting, lighting, sound. Roofs are fascinating.” Georgie Fenwicke is giving me a lesson in the anatomy of roofs. We’re sitting at Ozone café in Grey Lynn, Auckland, necks craned, eyes raised skywards. The deconstructed, industrial-style interiors of the space are ideal for such a lesson; all the components of usually hidden ecosystems are on display. And this is what Fenwicke’s ingenious new property management software solution, Frankie, has been designed to manage. Fenwicke is the CEO and co-founder of Frankie, and she has spent the past few years learning how large-scale buildings tick. To bring all the aspects involved in the management of buildings under one umbrella and bring order to the chaos of the everyday. And three years on from its launch, she’s ready to scale up, and launch Frankie into the wider world. A lot to learn Frankie’s story can be tracked to Fenwicke’s early work within supply chain and logistics. Her first role after graduating from Otago University (with an arts and commerce degree) was within the strategy and operations consulting department at Deloitte in Auckland. “It was all about supply chain – transport, logistics, everything. There was a lot to learn, and I loved how real it was.” Moving to London in 2014, she gained a job at the fledgling Uber; a company creating sparks as it jostled with traditional London cabbies for space in the ride-hail market. “Yes, it was quite controversial,” she admits. But it was also an introduction to the transformative possibilities of digital; how structures and services can be improved via technology. “I was working with some super smart

people from around the world; really talented individuals who understood product, technology, operations and scaling. I had four roles in four different years and because the business grew so quickly, it was completely different year after year.” But after four years she was ready for a change, and she decided to take six months off to consider her future – and how things worked. “I started asking myself questions like ‘how do cities work?’ ‘What does a waste stream look like?’ And some of these questions would become the foundations for my research papers in my next job.” Talented team This role, at Rush Digital (the Auckland-based software company that developed the Covid app) provided Fenwicke with the chance to progress some of those ideas she’d been developing. As product lead, an R&D role that involved “exploring what the future of the world looks like, what problems we have,” she had the time and resources to flesh out new concepts with a talented team. They explored many “problem spaces” in their search, but large-scale property management loomed large. “I always had an inkling that this [management of large properties] was an idea or a problem that could have a big, wide-open story behind it. And this is what you’re looking for when you’re looking for the application of technology.” Once they completed researching a set of ideas, and presented to the Rush board, the property management concept won out. But instead of being taken on by Rush, the concept ended up “spinning out into a different company. We incorporated the idea, established an IP contract and started my own company.” The early stages of Frankie involved a lot of meetings with people in the industry, establishing what they felt was needed, and

working with an engineer to get the idea off the ground. “I was just talking to everyone who would f listen,” she says. “I knew a bit from looking at this in the past, being familiar with how properties are leased and owned and all that sort of thing, but I did talk to a lot of people.” Development, fine-tuning The development and fine-tuning took time. It was vital the platform resolved the problems managers of large properties experienced; juggling of maintenance, adherence to compliance, ensuring issues were resolved quickly and efficiently. And this would have a positive flow-on effect to the client. Fenwicke explains that from the beginning they had clients who were willing to give them a try. “We had one customer who said, in May 2020, that they’d be keen to start with us. So, we were so happy with that!” The first year of operations was spent understanding whether there was actually a market, and what the market needed. There obviously was; Frankie is now being widely used across the country. They have a variety of different secondary school clients, like Rutherford College and Epsom Girls. “It’s pretty cool, because those are massive building complexes and very actively used by students on a daily basis, so they need to be effectively managed.” Fenwicke is still constantly asking questions: “But the questions in our third year of operation are completely different to the first year, and that’s so good, so exciting.” Now, Frankie is ready for expansion, and there are plans to launch overseas. It’s been quite a ride; there’s been a lot of cold calling and shoulder tapping. Her passion for the project is tangible: “We have so much further to go with this business ... we’re only just getting started with it.” S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 1


How to Box Like a Pro Investor To be a successful property investor you’ve got to have a bit more than money and a few savvy moves on a spreadsheet, writes Ed McKnight.

Investing demands a particular mindset; one that keeps you steady as the market tips up, down and side to side. The way we think influences the decisions we make. This means adopting the right mindset can be the difference between success and failure, at least when it comes to property investment. Here are the top four mindset shifts needed to be a successful investor. #1 How you: view gains Say you buy a share for $10. Then, over the next three years, it goes up to $20. You doubled your money and you’re feeling pretty good. Now let’s say you buy a share for $10. Over the next three years, it goes up to $30. This time you’re ecstatic, but then it drops back to $20. Now, how do you feel? Chances are (if you’re like most investors) you feel stupid and think: “I should have sold when it was at $30.” Even if you’ve made the same amount of money, in the same amount of time. Because in the second scenario you’re more likely to feel like you lost $10 instead of making $10. Property investors can fall into this negative mindset. Since the peak last year, property prices have fallen 18 per cent. Ouch. But initially, they’d gone up by over 40 per cent. So, investors could still be up by about 20 per cent (depending on when you bought). That’s still an enormous return. #2 How you: see lower prices There are always investment opportunities in any market. When prices go up, most people think: “The price of houses is going

up, I should get in the market now so I don’t miss out.” If prices go down, the same people think: “Oh, it’s a bad time to buy a house, property prices are going down.” Winning investors see property prices falling and think: “Properties are now on sale. They are cheaper, there are more options, and I face less competition.” It’s such a different mindset, but it makes sense. If tins of tomatoes were on sale at the supermarket – you’d buy more. What if we thought about a market crash as a property sale? #3 How you: view risk Most investors think assets like cash in the bank and term deposits are “safe” investments, whereas they think managed funds, property and shares are higher risk. But it depends on how long you plan on holding the investments. That’s your investment horizon. Term deposit – lower-risk short term/higherrisk long term. Over the short term, keeping cash in a term deposit is not very risky. This is because the likelihood the investment will decrease in value is very low. And the likelihood that the bank pays you back the money with the agreed interest rate is very high. But over the long term, things like term deposits become risky. Inflation makes your cash worth less. On top of that, you miss out on more and more of the gains from assets that grow in value faster. Shares and property are risky over the short term. The prices of these assets are volatile. They can go up and down very quickly. This

means the value of your investment could go down within the next year. If you sell you could lose money. But over the long term, the share market tends to increase faster than term deposits. So if you hold for longer, the risk goes down. You just have to deal with the ups and downs of the market in the meantime. #4 How you: look at the ups and downs of the market When you invest the price of your assets will go up and down. That’s part of investing. But you’ll often get more returns if you can accept more volatility. For instance, if you take $100 a week and put it into the bank for the next 10 years, you might get a 2 per cent return (on average). At the end of that 10 years, you’ll have $58,000. Great. But if you invested that same money in shares, you’d have just over $78,600 in the New Zealand stock exchange. That’s over $20,000 extra, which is 36 per cent more. Over time that difference compounds and you’ll often have more money if you invest in assets. That’s things like shares and property. Yes, the price of assets go up and down more than just having your money in the bank, but you’ll often be ahead when you model it out over the long term. How can I apply this to my investment journey? These four mindset shifts will change the way you invest, particularly as a property investor. Once you start thinking like a proinvestor, you set yourself up to make those long-term gains. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 3


Making Sense of the Recent Spike While crypto markets are known for their volatility, the question always asked around any major market movement is what’s driving this ... and what’s next? The past year has been one of polar opposites for the cryptocurrency market. After peaking at US$3 trillion in November 2021, the value of the overall crypto market plummeted through 2022, hitting a twoyear low of US$796 billion a year ago as FTX imploded. As investors held on for dear life (or as the investment community call it HODLed), reporters declared June 2023 to be Bitcoin’s “worst month on record” with the digital currency losing more than 38 per cent of its value. Just five months later sentiment on the “fear and greed index” pointed resolutely to just the right amount of “greed” (a theory based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect). The released top tips to help investors prepare for the next crypto bull run and Morgan Stanley declared the “crypto winter” was over. Aside from proving that dollar cost averaging works (if you had started investing regular small amounts in Bitcoin from November 2021, the last all-time high, you would have made 30 per cent in returns), many everyday investors have been left scratching their heads. “What happened?” We must ask. And, more importantly: “What’s next?” Monetary tightening cycle While the crypto markets are known for their volatility, the question always asked around any major market movement is “what’s driving this?” A trifecta of macroeconomic shifts in 2023 affected Bitcoin and the wider crypto market’s price. Firstly, there are growing signs from the US and European central banks that they are S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 4

ending their monetary tightening cycle. Bitcoin, like shares and other risk-on assets, has historically been stronger when the global economy is stronger and interest rates fall. Lower interest rates make it harder to get a good return from things like cash, and it is also cheaper to borrow. This means that investors turn to other, higher risk assets like Bitcoin in their search for better returns. In addition, data from blockchain analytics provider Chainalysis shows increasing institutional investment in the crypto space across multiple geographies. These professional investors love asymmetric bets where they have the potential for outsized returns from small outlays. We also saw a more tightly regulated environment increase adoption among consumers, businesses and institutions. Clear regulations help prevent future instances of fraud and protect consumers from financial loss, further bolstering trust and confidence in the industry. Up, up and away Encouragingly, 2024 promises more good news for crypto. The first big news event set to positively impact price is the longanticipated announcement of a Bitcoin spot exchange traded fund (ETF). Exchange traded funds (ETF) are a financial product that allows people to buy Bitcoin through investing in a managed fund, similar to a KiwiSaver product. ETFs would allow hundreds of millions of investors around the world who can buy American ETF products to have access to Bitcoin as easily as they can purchase managed funds and would give big investors (like pension funds) access to the Bitcoin market for the first time.

While many companies have attempted to register a Bitcoin ETF in the past, none have succeeded. This time, however, things look different, and Bloomberg has the chance of a successful application this year at over 90 per cent. Timing is rumoured to be mid-January and is expected to fuel a bull run. In fact, one news outlet erroneously tweeted that the Blackrock ETF had been approved, sending the price of Bitcoin pumping until the tweet was corrected. Another important event on the calendar for 2024 is the excitement and hype around the next “Bitcoin halving” which happens about every four years and is forecast for April. Unlike traditional currencies, which are controlled by central banks and governments, the supply of Bitcoin is programmatically limited and there will only ever be 21 million Bitcoins. When a halving event happens, the miners who operate the Bitcoin network receive less Bitcoin as reward for their efforts. This means less new supply coming into the


market which affects the classical supply and demand price curve. Halving events are now widely covered by media outlets, further contributing to the hype and excitement within the crypto community. Uptick in innovation Alongside price increases, we’re also seeing an increase in the launch of innovative products built using blockchain technology. Bitcoin itself emerged in the wake of the last global financial crisis in 2008 as a response to the need for a decentralised, secure alternative to traditional fiat currencies. Likewise, consider the remarkable rise of Ethereum born during a period of crypto-market turbulence. Ethereum’s visionary founder, Vitalik Buterin, chose to be bold when others hesitated with an innovative smart contract platform that not only weathered the storm but became the foundation for countless decentralised applications, solidifying its position as a crypto titan. Similarly, over the past 12 months the

industry has used what some called Bitcoin’s “longest bear market” in history to implement forward-looking strategies which will improve crypto uptake for everyone. Their collective mindset? Innovate or evaporate. In New Zealand, Easy Crypto has focused its attention on solving two of the most common “crypto woes” over the past 12 months – volatility and complexity – with two brand-new launches. Its NZ-dollar backed stablecoin called NZDD offers a stable entry into the digital marketplace, marrying the trustworthiness of the NZ dollar with all the benefits of blockchain. And to store the asset they’ve launched a brand-new crypto wallet offering one easy wallet for all your cryptocurrencies. Stablecoins represent a category of cryptocurrencies backed by reserve assets, such as fiat currency or precious metals. They have gained popularity for their ability to combine the rapid transaction processing, security and efficient features of crypto with the reliability of the

underlying asset; in this case the NZ dollar. For crypto investors and traders, NZDD is a stable store of value and liquidity. Beyond the crypto market the applications for a digital NZ dollar include international remittances, peer-to-peer payments and “programmable money” that fintechs can use to build new financial products and services. While only time (and the market) will tell if Morgan Stanley was right, a convergence of factors are driving crypto’s surge in price as crypto continues to move on from nascent to mainstream. The market is full of anticipation around a potential boom in crypto prices in the coming year as larger institutional investors and groups show signs of laying the groundwork for scaling up their crypto holdings. One thing’s for sure: we’ve well and truly left HODL territory, with investors starting to quote Bezos: “Given a 10 per cent chance of a 100 times payoff, you should take that bet every time.” S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 5


How Gratitude Can Help You Manage Money Is it really as simple as counting your blessings, then counting a healthier bank balance? Lynda Moore investigates. What on earth does gratitude have to do with managing your money? Is it really as simple as counting your blessings? Research seems to be saying that yes, a mindset of gratitude helps you handle your money better due to increased patience. Not only that, but gratitude also helps increase your happiness and decreases the likelihood you’ll succumb to temptation. We know money is emotional. And many emotions can have the effect of making us spend more. It’s a bit like comfort eating when we’re upset; when we’re upset or angry the temptation is to spend more. So, it’s really good news that a positive emotion like gratitude (and one that we can easily evoke in ourselves) has a positive impact on how we spend. What did the researchers do to come to this conclusion? The study had a group of 75 S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 6

participants. The purpose of the study was to test financial self-control, or in other words the ability to delay gratification. The participants were placed in one of three emotional states: grateful, happy or neutral. They were then told they could have $54 now, or $80 in 30 days. If you do the calculation, that’s a 48 per cent return on their money. That’s very good, but money isn’t about maths … it’s about emotion. Money behaviour Those in the happy and neutral group showed a strong preference for having $54 now. Behavioural economics tells us this is quite a normal response. The temptation to have something immediately is very strong, and we don’t tend to think about the maths unless it’s a great deal more that we’ll receive later.

However, those in the gratitude group were much more likely to wait for the $80 a month later, and the greater gratitude they were feeling, the longer they were prepared to wait. An important point to note here is that just feeling happy wasn’t enough to delay gratification; it was the specific feeling of gratitude. This result is interesting not just in terms of money behaviour, but it also has implications for obesity and smoking. The next question has to be, how do we cultivate this emotion of gratitude, particularly when the temptation to spend our money is at its greatest? Here are a few suggestions: Try keeping a gratitude journal. Each day you jot down two or three things that you’re grateful for. It could be as simple as being grateful that your train was on time, or your baby smiled at you, or your teenager said


actual words to you instead of grunting. Reducing the desire If keeping a journal isn’t your thing, then when the impulse strikes, take a 10-second break and think about two things you’re thankful for. Quite often, being grateful for what you already have is enough to reduce the desire for more. Social comparison, FOMO and seeing what everyone is up to on social media isn’t a good use of your time when you are wanting to be more mindful of what you are spending. So, stop doing it! Focus on your own goals, your own now and your own future, not everyone else’s. We often forget to track our progress; when you reach your goal, celebrate it. Then move on to the next one. This helps you stop, take a breath and feel a sense of achievement. So now you have the warm fuzzies, and are

diligently keeping your gratitude journal, and FOMO is a thing of the past, in a practical sense how does this feeling help you be better with your money? You know the dreaded budget that you hate and can never stick to? Well, once you have reframed it to being a money plan, gratitude helps you stick to it. Instant gratification You know what enough is for you, so you are less likely to want to keep up with the Joneses or succumb to instant gratification, which keeps more money in your bank account and reduces financial anxiety. You can set goals with more clarity about what is right for you and your family, so saving becomes easy and a bit more fun. You get an extra layer of gratitude as you see your savings grow, whatever it is you are saving for.

Forget making rash decisions; you will be more considered in making decisions as they won’t be just about the money. You are able to weigh the pros and cons and come at a decision from a more rational perspective than fear of “not enough”. Feeling gratitude won’t only impact your money, it will help increase your overall feeling of wellbeing, which flows into your health and your relationships. So why not give it a go, come up with one thing right now you can be grateful for. For me, I’m looking out my office window and the sun is shining. I’m very grateful for that. If you need a bit of help to start your money gratitude journey, drop me a line, I’d love to help. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 7


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How Electric Vehicles will Change our World Andrew Kenningham takes a close look at how EVs will affect who’s in the driving seat of economies and politics. We are getting used to seeing electric vehicles and charging points on our streets, but the roads are not the only things that will be transformed by the EV revolution; it will have huge implications for the world economy and even politics. Four big trends are particularly worth highlighting. Emergence of China as a vehicle superpower: China is already the world’s second largest economy and its manufacturing prowess and size is visible everywhere, but until recently it has had virtually no presence in the global car industry. Electric vehicles are changing this. China has now overtaken Germany to become the second largest vehicle exporter in the world, and it is poised to overtake Japan to bag the number one slot. When they attended the Shanghai Motor Show in April, European and United States car executives were reported to be open-mouthed at the progress Chinese firms had made during the pandemic. Not only were Chinese EVs cheaper, they were also better. As well as being a good drive, they had more advanced “infotainment” features, fashionable designs and sensors in anticipation of autonomous driving. Even karaoke comes as standard in many Chinese cars. Industry experts suspect that, over the next few years, Chinese cars will increasingly dominate the markets of South-East Asia

and make inroads in Japan, Europe and the US. Decline of some big auto brands: Some fear that China’s success will mark the end of the road for traditional German, Japanese and US manufacturers, whose models could become collectors’ items, like the original Volkswagen Beetle or even the Soviet-era Trabant. This threat may be greatest in Japan, whose firms currently account for nearly a third of all global vehicle production. While they do manufacture some EVs, Japanese firms invested much more heavily in hybrids which have had a good run but seem increasingly out of sync with the plug-in future. Vehicles directly account for 3 per cent of the Japanese economy and a lot more if supply chains and accessories are included. This share could be halved by around 2030, with big implications for the economy. German manufacturers such as Volkswagen and Mercedes-Benz, and the big three US car firms – Ford, Chrysler and General Motors – face a similar existential threat. They were also late to join the race to make EVs. Changing direction will be a huge challenge. Of course, these traditional firms will not disappear overnight given the brand loyalty and political backing they can draw on. And it will take time for new EV manufacturers to build networks of charging points and dealerships before they can really rule the roads. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 4 9


‘European and US car executives were open-mouthed at progress Chinese firms made during the pandemic.’

But the EV revolution has made it possible for challenger firms to succeed – not just because of Elon Musk’s drive and vision but also because EVs are much simpler to produce. A traditional VW engine has over 100 moving parts; the electric motor typically has less than 10. Change in global trade rules: Advocates of free trade have been on the defensive since Donald Trump was elected US President in 2016, and the fear of Chinese competition in the EV market has reinforced the move towards protectionism. Supporting the traditional car firms is one motivation for the US Inflation Reduction Act, which offers subsidies to US producers. Meanwhile, the European Union is investigating Chinese car producers for unfair subsidies and may impose tariffs on Chinese cars. These developments have parallels with US and European policy towards Japanese car firms in the 1980s, except this time the disputes will be harder to resolve. This is because, whereas Europe and the US encouraged Japanese firms to invest and assemble cars in their own markets, they

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will be less welcoming of Chinese firms in the 2020s. Greening the economy: Vehicles account for nearly 10 per cent of global greenhouse emissions, so shifting away from the internal combustion engine could make a big contribution to the green transition quite apart from any benefits for air quality in urban areas. That said, EVs are not carbon-free. Making an EV typically produces twice as much greenhouse gas as manufacturing a conventional car, although the numbers vary depending on how the minerals used are mined and electricity generated. The benefit comes only over time as emissions from running the car are lower. That benefit depends on how long the car is used and, again, how electricity used to charge it is generated. All in all, the EV revolution is much more than a change to our driving habits. It will help restructure the world economy, create new protectionist and geopolitical tensions and, hopefully, significantly accelerate efforts to limit the damage from climate change.

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Snapshot News, events and innovations from around the world that grabbed our attention and are likely to impact the global economy going forward. ISRAEL

Businesses have shut in the zones that locals evacuated in Israel, DW reports. Since the Hamas attack on October 7, tourism has ceased, cutting off one of the country’s main sources of income. In the past, the tech industry has buffered the worst effects of economic crises, helping Israel emerge from recessions more quickly to avoid economic downturns that hurt other parts of the world. But many tech workers are young and are now serving in Gaza or on the Lebanese border, and it’s possible GDP could drop significantly.


Egyptian Prime Minister Mostafa Madbouly believes fintech and sustainability will be key drivers of change. He was addressing the Growth and Emerging Markets Committee and the Africa/Middle East Regional Committee under the International Organisation of Securities Commissions. With Egypt experiencing significant economic struggles, compounded by the Israeli/Gaza war, he emphasised the vital role of the non-banking financial sector regarding the local economy, with the government implementing support reforms.

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US Secretary of Commerce Gina Raimondo and Union Minister of Commerce and Industry Piyush Goyal have launched the ambitious Innovation Handshake agenda. At an event co-hosted by the USIndia Business Council and the Confederation of Indian Industry, CEOs from major ICT companies, executives from venture capital firms, and founders of startups in the critical and emerging technology space, discussed how to enhance US-India technology collaboration. The Innovation Handshake forges a critical tech partnership that will further strengthen inter-connected innovation ecosystems, said Raimondo.


Mineral and gold-rich desert in Western Australia is the site of a new speculation boom, due to large amounts of lithium based here. According to Financial Times, this key material (used to create batteries) is seeing multinationals clash for control of land containing this element.

Correct at Nov 20, 2023.



The Technology Investment Network’s annual TIN200 survey of the country’s 200 largest and fastest-growing tech exporters shows the sector is thriving. Job growth is slowing, however, and it’s unlikely the sector will get everything it wants from the incoming government. The report reveals total revenue in the sector rose 11.8 per cent to $17.1 billion in the 2023 financial year. Exports jumped 13.1 per cent to $13.05 billion, with North America the fastest growing market, and fintech the fastest growing sector.


According to Guardian reports, the United Kingdom faces a potential battery “gigafactory gap” that could undermine the electric car industry. MPs on a parliament business committee have said the UK has a “limited window in the next three years to attract further investment into this sector” or else face the prospect of a gradual decline in the car industry. The global car industry is gradually increasing sales of electric vehicles and winding down production of traditional petrol and diesel models in an effort to lower climate-heating carbon emissions. Electric cars are expected to make up 20 per cent of the car market by the end of 2023.



Argentina’s new president-elect has indicated he plans to shake up the status quo with a slew of privatisations. Javier Milei, a libertarian economist, won a presidential runoff in November with 55.7 per cent of the vote. He said he would move to privatise the country’s state-owned media outlets and look to do the same with other public companies, ABC reports.

Auto and shipping exports rose in Japan by 1.6 per year-onyear, ABC News reports. While exports to the rest of Asia fell, those to the United States and Europe grew. This has led to a trade deficit decrease of 70 per cent year-on-year in October.

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Guarantees – When the Rubber hits the Road In the current economic climate, a review and pre-emptive action over exposure as a guarantor won’t be time misspent, writes Jenny Turner and Michael Brennan. Most investors will be familiar with guarantees. Guarantees are common between related parties to unlock funding off a broader asset base for an investment company or trust or, in the traditional sense, for one generation to help the next onto the property or business ownership ladder. And that comes with legal responsibilities and personal risk. A guarantee is a contractual arrangement where someone enters into an agreement in favour of a bank or lender recording that if a borrower fails to meet their loan obligations, then the lender can recover the debt from that person (the guarantor). They are typically joint and several and provide for the guarantor to also be a principal for the borrower’s obligations. If there are multiple guarantors, each guarantor is fully liable for the entire debt. If the borrower doesn’t meet their payment obligations, the lender may in the first instance pursue the guarantor instead of the borrower for the debt. With the squeeze of higher interest rates and increased repayment obligations, and property prices and LVR ratios falling – coupled with the rising cost of living – some lenders may do just that if a borrower defaults. So how to reduce the impact of guarantee enforcement? It’s never a bad idea for guarantors to review their exposure and look to reduce their future liability in the event of a guarantee being enforced. First things first, request the lender supply an update on the current debt secured by the guarantee. From there, your options include: Guarantee release: Ask the lender whether

the borrower’s debt and security position is such that the guarantee can be released. Limit guarantee amounts: A lender’s preference is for guarantees to be unlimited to secure not just the initial loan but any future lending and related obligations entered into by the borrower. However, they may agree to limit liability to a particular loan or to a fixed amount, particularly if the borrower has reduced their debt in the time the guarantee has been in place. Review shareholders’ agreements: If you are a co-guarantor check that your risk exposure matches your ownership interest (if any). Lenders often seek guarantees for company borrowing from directors and shareholders. A lender will seek recourse from the easiest source. It will then be left to that guarantor to rely on internal company documentation from their co-shareholders. If there are multiple guarantors for company obligations to a lender, a shareholders’ agreement could set out limitations on a guarantor’s liability linked to their shareholding. It should also set out that if one guarantor is called on to meet debt the parties will fund that in proportion to their shareholding.

Move from secured to unsecured guarantee: If the guarantor has a mortgage in favour of the creditor, another option is to explore having that mortgage discharged. While this won’t reduce a guarantor’s liability under the guarantee, it is a practical way of reducing the consequences of the borrower failing to meet its loan obligations and mitigating the risk of the lender initiating a mortgagee sale on the guarantor’s home. Change lenders: If an existing lender won’t work with the guarantors to limit an existing guarantee or future exposure, explore refinancing to another bank. In our experience it’s often easier to negotiate limits on a guarantee at the outset, rather than move to them late with an existing lender. In the current economic climate, a review and pre-emptive action taken now won’t be time misspent. If you’d like independent advice around mitigating your exposure as a guarantor, please get in touch. Jenny Turner is a partner with Wynn Williams, specialising in property law, including residential development. Michael Brennan is an associate in Wynn Williams’ Property team. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 5 5


Does Property Investing Still Make Sense? Simplicity’s Sam Stubbs explores the trials and tribulations of the country’s housing market. The recent drop in the value of homes across the country will have come as a surprise to many property investors, who for a long time saw the property market go only one way. And for those who leveraged up to buy investment properties when mortgages were 2-3 per cent, paying twice that rate now and seeing the value of the house they bought go down, will hurt. But long term (and for perhaps the wrong reasons) it seems housing investment will make sense for quite some time yet. I’m bullish for two very fundamental reasons. The first is supply and demand. For 30 years successive governments have failed to build enough state houses for the demands of a rising population. Dwelling consents per 1,000 residents averaged around 30 from 1920 to 1980, but have been around or below 20 since then. The big shortfall was in state housing consents. Politically this has been no bad thing. Governments have realised that a tight housing market drives up prices, which keeps the home-owning majority of New Zealanders happy. And the advent of mortgage-linked financial products has allowed Kiwis to buy things and “put it on the house” for more than a decade, further pumping up consumer demand. Keeping house prices high as a way to win elections is becoming more problematic for politicians. This is because home ownership rates peaked in the 1990s at 74 per cent, but are now down below 65 per cent. That means while most voters may be happy with rising house prices, the vocal minority of those who can’t (or don’t want to) afford them will get louder over time. And children relying on the “bank of Mum and Dad” will be OK, unless mum and dad don’t have the money to be their kids’ bank or were relying on their wealth for retirement.

Approval rates But the property price party is far from over. Political parties from both sides of the aisle still get higher approval rates when property prices go up. Over on the supply side, things look very grim. Because New Zealanders want to live in a standalone home (no matter how far they have to commute), and because we love to design our own homes, build costs are very high. It’s now common for an average Kiwi home to cost $4,500-plus per square metre to build. That makes the average new home an expensive reality for many. As a nation we have not embraced largescale housing, especially apartments, as a lower-cost alternative. The building industry has not yet properly embraced technology, innovation and scale. We are simply too small for modular and manufactured housing to get traction, without the government getting serious about it. It hasn’t. And because successive governments know that GDP always gets spruiked when immigration goes up, they encourage our population to rise. Last year our net migration was 90,000, twice the rate of growth of 25 years ago. Nothing the incoming government has said indicates they want immigration to go down. The flow-on effects of high immigration are increased demand for housing, higher house prices and a GDP and spending boost. GDP up? House prices up? What politician wouldn’t want that? The tax scene The second reason I’m bullish on housing is tax. Kiwi homeowners have been encouraged to leverage and buy homes for decades. Up until recently, the mortgage was deductible against income, and all capital gains (no matter how short-term) were tax free. Much has changed since then, but the rules don’t

apply to new builds, and the recent changes don’t seem to have seriously discouraged investment in rental property. And regardless of who’s in power it’s clear that no political party wants to overly punish residential property investment with capital gains or wealth taxes. So, there we have it: high demand, expensive build costs, and advantageous tax treatment ... all powerful reasons property investors should probably feel positive, despite challenges around current mortgage rates and capital values. But in thinking property will remain a good investment, I’m not so sure it’s so good for New Zealand. One of the reasons we’re an unproductive economy is that so much capital and energy goes into building and investing in expensive housing. Houses are not companies; they don’t employ people, invest in R&D, or export. And while homes have wonderful attributes (like keeping us warm and dry), excessive investment in housing will help keep NZ closer to the bottom of the OECD league tables for productivity and growth. To see the long-term effect of this, look at where we rank wealth-wise. In 1953, NZ had the third highest GDP per capita in the OECD. Now we rank 33rd. To reach the productivity of an average Irish worker today, the average Kiwi would have to work another 10.7 hours a day. That’s not a typo. The average Kiwi worker has to work almost 19 hours a day to achieve what the average Irish worker achieves in eight. So, until the politics, immigration policies, tax incentives or excessive building costs change, residential property is likely to make sense. And who wouldn’t want some exposure to an asset class that’s as safe as houses? S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 5 7


Show Me the Money! When can you get your hands on your KiwiSaver funds – and what do you need to know about withdrawals? Dave Copson, head of Booster’s business development and advice, explains.

You can see your KiwiSaver balance at any time, but it’s not easy to get your hands on the money. That’s by design, of course; it helps you keep saving for retirement. But you can get access to your funds under certain qualifying circumstances: •

To use as a deposit on a first home.

In a case of severe financial or medical hardship.

When you turn 65.

If you are permanently moving overseas.

If your situation fits one of these scenarios you may qualify to withdraw some, or all, of your money. So, what do you need to know before you make a withdrawal, and when should you review your funds?

WHAT HAPPENS IF YOUR BALANCE FALLS WHEN YOU WITHDRAW FUNDS? When you apply to withdraw your funds, it can take a day or two to process your application and get the cash into your account. The fund provider needs to verify your ID and your bank account, and then sell down the units, which usually takes around 48 hours. At the end of those 48 hours, the balance of your fund may have changed. It might go up or down, leaving a gap between what you thought you were going to receive and what ends up in your account. Usually the gap is tiny, but sometimes there’s a bit of back and forth to get the correct paperwork. If it takes several weeks to lodge your signed declaration and other documentation, the market shift could be more significant. That’s why fund selection is so important: a defensive or conservative fund is designed to be less volatile than a growth-orientated fund, so it will typically be a better choice to preserve your balance when you are nearing or in the process of withdrawal.

START THE PROCESS BEFORE YOU NEED THE MONEY Whether it’s for a first house, or that 65th birthday celebration trip, apply to withdraw your funds at least two weeks before you need the money. We recommend home buyers talk to us as soon as they see a house they definitely want to make an offer on. For those approaching 65, start a few weeks before your birthday if you want some, or all, of your money immediately. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 5 8


‘Ideally, you should review your fund every three to five years.’

MEDICAL OR FINANCIAL HARDSHIP WITHDRAWALS Obviously, you should try not to withdraw your KiwiSaver funds – NZ Super isn’t enough for a comfortable retirement, so you’ll be relying on those funds in future. If you really need the money, though, your first step should be to check your provider’s list of requirements for withdrawal. They’ll have a list of paperwork to complete, and following those guidelines is essential.

CHECK PROVIDER CAN MOVE AT YOUR PACE We get quite a few first-home buyers switching to Booster because their advisers know we take action on withdrawals quickly and have processes in place to efficiently provide all the necessary information. Some of the traditional institutions can be slow to react compared with boutique or smaller funds, which can be frustrating if you want to move quickly on the right property. It’s worth checking on the timeframe before you start the home-buying process, so you can switch funds if required.

Also, make sure you’re only asking for the funds you need. A parent whose car has broken down might just need $15,000 for a new people mover. If they apply to withdraw their entire $50,000 fund, the answer you get back may not be the one you’re after. Read the requirements and be reasonable in your request.

WHEN SHOULD YOU REVIEW YOUR KIWISAVER FUND CHOICE? Ideally, you should review your fund every three to five years. You should definitely review it when: •

you are planning to buy a first home – balance preservation will be important so you can rely on your deposit

you’ve just bought a first home – it’s time to reassess your timeframe now you’re saving for retirement

you reach age 60 – have a plan for what you’ll do at 65

you reach 64 – does your plan need a tweak?

you’re 65 – making a plan for the future.

By choosing the fund that works for your timeline and financial goals, you’re putting yourself on track to get the most from your KiwiSaver account. Booster is the issuer of the Booster KiwiSaver Scheme. Product Disclosure Statements are available at S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 5 9


Time to Get Savvy with Your Money There’s a new tool on the block to help manage your money, reach savings goals, and much more. Booster has just launched an innovative new smart account and debit card that helps you manage your money automatically and provides personalised insights on your spending and saving.

On the savings side, each of your Stacks can be allocated a goal. For example, you might have an emergency fund Stack, a holiday Stack, and a Christmas presents Stack, says Papadopoulos.

You can use a Savvy account to do your usual transactional activity including online bill payments and transfers, and you get a New Zealand account number, so anyone can deposit money in your account.

Savvy is an investment account that lets you set up savings “Stacks” with their own goals, then rounds up purchases and allocates the difference to a specific goal. It lets you know when you have money left over at the end of a pay cycle so you can sweep it into the Stack of your choice. You can pay out of the account and use your debit card either physically or digitally.

“Savvy makes it visual and tracks how you’re going. You set a deadline and an amount to save for each Stack. If you fall behind, Savvy will let you know. Plus, it gives you an automated mindless way to save, by rounding up purchases and pushing the difference into your savings accounts.”

Booster is exploring the ability to link Savvy accounts to other products. This could allow extra benefits like being able to sweep or round up into your Booster KiwiSaver fund or Innovation fund, for example.

Automated saving can be powerful; when money is allocated before it reaches your account, it can make the process of reaching your financial goals comparatively painless. Savvy’s Salary Split can also help by automatically diverting part of your pay into one or more of your Stacks as soon as it lands in your account.

“I’ve been using it for a year as my primary account, and I love it because it works intuitively. Within the Booster office we all have our quirks in the way we want to manage our money, and Savvy flexes to meet everyone’s different money personas. We’re getting great feedback and we’re excited to see that people are really loving it.”

“We have 20 years of experience in listening to our customers talk about how they save and spend, and what their challenges are,” says Diana Papadopoulos, Booster’s chief customer officer. “We all want to achieve our long-term goals and aspirations. To get to those goals you’ve got to manage your money well today. If you can spend well and save well – which is really hard to do – retirement starts to take care of itself.” AI provides customised insights Savvy uses AI and analytics to learn how you’re spending, so it can make recommendations that will help you stay on track. For instance, it learns when you have upcoming bill payments, and will forecast a “safe to spend” amount that ensures you keep enough in your account to meet expected outgoings. “This was a big insight from our customer research,” Papadopoulos says. “You know you have to pay your power bill every month, but somehow it still comes as a surprise every time and you don’t always have the cash on hand.”

“We hear first-hand about the challenges and successes people have,” says Papadopoulos. “Because we understand our customers’ perspective, and the technology is now available, we’re at the perfect point to be able to offer a product like Savvy.” Competitive return, no fees Savvy pays a competitive rate or return on every dollar in your account (currently 5 per cent), with all your money available on call, and almost no fees (you’ll only incur a fee for a chargeback, card replacement or international transaction). You can apply through the Booster NZ app, which is available through the Apple or Google stores, and be up and running in minutes.

Savvy has been piloted to Booster’s existing clients, and the response has been positive, Papadopoulos says.

The Booster Savvy Scheme (‘Savvy’) is not a bank account and Booster is not a bank. Savvy is a managed fund and Booster Investment Management Limited is the manager and issuer of Savvy. Savvy’s Product Disclosure Statement, and other important information about Savvy (including a comparison highlighting some of the differences between Savvy and a bank account) is available at

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Navigating the New Zealand Real Estate Rollercoaster: A 2024 Outlook As we usher in the summer of 2024, the real estate landscape in New Zealand seems to be emerging from an 18-month-long winter, having experienced unprecedented lows following exceptional highs. David Findlay, who recently earned REINZ’s prestigious Top Manager of the Year for the country, and a veteran in the real estate sector with over two decades of experience currently leading Harcourts’ top Auckland Central office, JK Realty Group, shares insights into the market’s rollercoaster ride and what lies ahead for property investors and homeowners. The past: peaks and valleys Over the last three years, New Zealand’s real estate market has witnessed significant turbulence. Interest rates skyrocketed from 3.5 per cent to 8 per cent, house prices surged by over 25 per cent, only to plummet just as swiftly. Development costs soared by 50 per cent, yet pre-sales nearly disappeared for the past year. These fluctuations may shock those examining the market on a yearly or micro-level, but when viewed over the long term, the market appears more like rolling hills than towering mountains. Despite recent challenges, individuals who entered the market pre-2020 continue to enjoy a positive position, according to the Real Estate Institute of New Zealand (REINZ). OneRoof’s statistics suggest that we stand at the onset of a new cycle, prompting the question: What does the real estate market have in store for 2024 and beyond? The current landscape: signs of positivity There is enough on the horizon to give investors and homeowners confidence that S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 6 2

the market will move in a positive direction over the next few years. This isn’t an economist or financial advisory piece, but rather a finger on the pulse from Harcourts’ number one office in Auckland Central, with hundreds of listings and sales each year. We are hearing the commentary from other business owners, top agents and big developers in the Auckland and wider real estate space, and are uniquely positioned to comment on real estate in New Zealand. Open home numbers have more than doubled in the past four months, and auction clearance rates surged from 32 per cent to 64 per cent in the last quarter alone. Buyer sentiment has shifted towards the fear of missing out (FOMO), instead of fear of overpaying (FOOP), and developers are reentering the market with a positive outlook for the short to medium term, feeling that land prices are at a level where they can now confidently buy and develop. QV and REINZ report positive movements in prices and attitudes, with a 2.1 per cent growth in the last three months across the country, translating to an annualised growth rate of over 8 per cent. Auckland slightly outpaces the national average with a 2.7 per cent growth for the quarter. I've spoken with Nick Mattison, director of Civix, one of the top planning and surveying companies in the country, and they are seeing uplift in the number of companies

approaching them for consenting and due diligence, which is an optimistic sign for the upward movement the development market is indicating. Classic Group, one of New Zealand’s largest, top-quality construction and development companies, are similarly witnessing this uplift in enquiry and sales for their sites throughout the country, of which we are responsible for selling down the majority of their Auckland stock. The future: a double-digit lift? There is talk in the market of a double-digit lift in property valuations in 2024 and 2025, providing hope for property owners. However, contradictory to this, the media can bring about confusion regarding market sentiment, highlighting articles referencing a stagnation of high interest rates and “blood in the water” in this competitive market, and to add to that a high inflation rate. For those new to the industry, or in the infancy of their development or property flipping journeys for example, this can be a fearful position to be in, especially with a shortterm outlook where the risks of the project being undertaken are not fully understood, and potentially greater compared to that of an experienced developer with a solid track record and overall long-term stance. The development rollercoaster ride: a case study Examining the transformation of Mt Albert,


Above: David Findlay, recently titled winner of New Zealand’s Top Manager of the Year for Real Estate by REINZ. Left: David Findlay, owner of Harcourts’ top Auckland central branch, JK Realty Group, and MD of Development Projects Ltd.

an affluent neighbourhood where Harcourts JK Realty Group is based, illustrates the market’s volatility. In 2020, 1,000m2 houses sold for $1,500/m2 or $1.5 million, reaching $3.5 million at the peak, and stabilizing around $2.5 million today. Developers played a pivotal role, as high-level property sales cashed up families, creating a cycle of rapid growth. In 2018, “entrepreneur” was the buzz word, with many believing they could take the digital world by storm and become successful. In 2021, “developer” was that buzz word, with many property novices believing it would win them easy money. But just as quickly as making money, you can lose it. I have personally dealt with over a dozen pseudo-developers in 2021, who then asked us to on-sell for them in 2022, and unfortunately, this was at a loss of many hundreds of thousands. Many hard conversations were had. Considering a development? The learnings The learnings for anyone wanting to get into development, always have a plan B, don’t put all your eggs in one basket, and seek out an experienced, trusted real estate partner before you begin your project to best guide you on the market fluctuations, and most importantly, to support you with the design of the product for the demographic buyers in mind - so that come sell-down day, your

agent can confidently bring you the best price to make all your hard work worth it.

trend in the coming months, following their key cities.

The present: an upward trajectory OneRoof/NZ Herald, REINZ, and economists all point to July 2023 as being the turning point for the New Zealand real estate market. We have, in the residential and development space in Auckland, seen that as well.

Final thoughts: navigating real estate uncertainty Having worked in the industry for 20 years now, I can assure you that it’s never a bad time to buy if you’re not looking to flip and sell within 24 months; and it’s never a bad time to sell if you’re buying and selling in the same market. While expectations are for stable growth in the coming years, the unknown factors of inflation and interest rates loom, and we all can’t help wishing we had a crystal ball. As the market continues to evolve, staying informed and strategic remains key for homeowners and investors navigating the New Zealand real estate rollercoaster.

But as I write this, in mid-November ‘23, it’s been a bit of a false start in terms of volume. We’ve seen a positive change in enquiries in many of the buyer categories: first-home buyers, investors, up-sizers, down-sizers and developers. But I estimate that only around 20 per cent of this increase in enquiries will end up as purchases. There are a huge number of properties coming to market early 2024, and this will release some of the bottleneck that has been caused by the pent-up buyers and sellers of 2023, with the buyers who have had the luxury to negotiate price to date but haven’t had a fair selection of choice; and with the sellers who have been hesitant to move forward with the sales of their properties due to the uncertainty in the financial market and change of government. Leading NZ’s market charge Queenstown leads the market resurgence, closely followed by Auckland, Christchurch, and Wellington respectively. Surrounding regional areas may experience the positive

Planning to succeed: your real estate goals I’m passionate about the industry, so if you are interested in further discussions on the New Zealand real estate market or would like to discuss your specific situation and goals, please don’t hesitate to drop me a line at David.findlay@ or give me a call on 020 444 5550. Visit us at S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 6 3


Navigation the Key as Market Sets Sail Again Kelvin Davidson pilots the 'housing ship' for a while so he can examine the incoming tide.

Property values have begun to turn around in key parts of the country, including Auckland, Bay of Plenty, Wellington and Canterbury – reflecting the “fundamentals” (eg high net migration and a broad peak for mortgage rates) that have been signalling this upturn for some time. However, the early signs of recovery are not universal yet, with some areas still seeing property values fall further in recent months. This “patchiness” may remain a feature for a while, keeping the wider upturn fairly subdued by past standards. The market in numbers Taking a quick look at the key market metrics, sales volumes started to turn around in May, and have now risen for five months in a row (compared with the same month last year). However, it’s important to acknowledge they’re coming off a very low base: a 40-year low for sales volumes in the 2022 calendar year, so a return to “normality” will take some time. We may only see volumes of around 66,000 this year (64,000 last year), before getting closer to 70,000 or above in 2024. Given the normal lag from volumes to values, it’s no surprise that property prices have now started to show signs of a lift, while part of that re-emergence of competitive pressures has also stemmed S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 6 4

from the still-subdued flow of new listings coming to the market. Weekly listings flows have been running 15-20 per cent below normal levels lately, which means stock on the market is not being replenished, and buyers are having to bid a bit more strongly. Who are those buyers? The CoreLogic Buyer Classification data shows first home buyers remain a very strong presence, taking a record high 28 per cent of purchases in September alone. They are using KiwiSaver for at least part of their deposit, and also fully utilising low-deposit lending allowances at the banks. On the flipside, relocating owner-occupiers (movers) and mortgaged multiple property owners, including investors, are quieter than normal, especially the smaller players, ie the cliched “mum and dad” investors.

been able to feel secure in their jobs and make the necessary adjustments to their household finances as their mortgages roll off from older, lower rates onto the current, higher market levels. Beware the idea of a fast upturn However, just because prices have started to rise in some locations, it doesn’t mean we’re about to see a rapid or widespread upturn. After all, affordability hasn’t really improved (even after the recent price falls), mortgage rates aren’t set to drop anytime soon, and caps on debt-to-income ratios remain a possibility for 2024. To my mind, although house prices will probably drift higher over the next 12-18 months in many parts of NZ, the growth may well be slow and patchy.

What’s under the surface? In addition to record-high net migration inflows, flatter mortgage rates, and tight buyer choice, the slow turning of NZ’s housing market ship has also been underpinned by slightly looser credit rules – CCCFA from May 1 and LVRs from June 1 – as well as the robust labour market.

For property investors, yes, a change of government tilts the landscape, and tax bills will be smaller in future for existing owners and new buyers. But none of that changes the fact that rental yields are low and mortgage rates high (at least for the next little while), so even with less tax to pay, large top-ups from other income will still be required on the “typical” investment purchase.

New entrants to the labour market have been able to secure jobs and, if desired, mortgages, while existing borrowers have

We expect some investors to start buying again, but more of a trickle than a torrent.


Average Property Value


$722,546 -1.7%

CoreLogic House Price Index Percentage change last three months

Bay Of Plenty

$885,403 0.5%


$1,268,012 0%



$588,749 -1.1%

$779,414 -2.0% Taranaki

$632,499 -1.4% Manawatu/Whanganui

Hawke’s Bay

$542,122 -1.0%


$738,814 1.0%

$768,738 -2.1%


$891,991 0.9% Nelson

$772,465 -2.1%


$694,734 0.7%

West Coast

$355,203 -2.5%


$712,032 0.9% Southland

$465,821 0.4%


$846,059 -1.4%

New Zealand Average

$905,906 -0.5% S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 6 5




Understanding the Psychology Behind Investment Behaviour PMG Funds’ Matt McHardy delves deeper into our unconscious biases and how we can overcome them. What shapes our investment decisions? Research suggests it’s an intricate interplay of our innate instincts, personal experiences, and the people who mould us that shapes our financial choices.

the “anchor”. For instance, a real estate agent knocks on the door and tells you they can sell your house for $1 million. You successfully achieve that million-dollar sale – but could you have got more?

Our unconscious biases can result in us making unhelpful choices throughout our lives, and this topic is particularly well studied in the field of investing. By educating ourselves on the bias that influences our thinking, we can equip ourselves to prevent it derailing our investment goals.

Home country bias: We favour investing in local companies, potentially causing a lack of diversification. You see Mainfreight trucks on the road, or drive past the Port of Tauranga, and that gives you a sense of comfort when you come to invest in companies like that. This bias becomes higher risk if you live in smaller countries like New Zealand, where you’re typically isolated and with less alternatives available.

There are five common biases we encounter among our clients: Confirmation bias: We tend to find and prefer information that supports views we already hold. For example, you enjoy an article about why your tech sector stocks are about to boom, and skim over a headline that says, “Tech stock lay-offs continue”. Loss aversion: Losing is disproportionately painful – a loss of $100 hurts far more than the enjoyment we get from a $100 gain. Loss aversion also leads into the sunk cost fallacy, which refers to the idea that you have already invested so much in something that you can’t bring yourself to sell, even though it would be a more prudent strategy. Disposition effect: We tend to prematurely sell investments that have made gains, while holding on to investments that are losing money. This typically occurs when you need cash: you sell your A-grade stocks and you’re left with a portfolio of lowgrade investments, hoping they come right eventually. Anchoring bias: We rely too heavily on the first piece of information we receive,

The good, the bad and the ugly What’s “the good” when it comes to biases? One upside is that they may create a positive filtering effect. For example, if you prioritise responsible and sustainable investing, you will have a tailored ESG portfolio that excludes certain types of companies. This can lead to strong returns if those sectors outperform the market. “The bad” is how biases result in lower returns. Stats from JP Morgan’s Guide to the Markets report show if you had invested in the S&P 500 and held your investment for 20 years, you would have achieved an annualised return of 9.5 per cent (Principles for successful long-term investing, 2023). But the average investor is achieving only 3.6 per cent, thanks at least in part to biased decision making. “The ugly” is the potential for lost opportunities and dramatically lower returns. Consider a 25-year-old Kiwi who saw their KiwiSaver balance plummet in

the early days of the pandemic. Some people may have switched out of a growth or aggressive KiwiSaver portfolio into a conservative or defensive one. Others may have sold off their investments at lower values, crystalising losses, then bought back in at higher values. These are a few examples of knee-jerk reactions based on fear that create poor performance outcomes. Long-term view To achieve solid returns over a lifetime, investors need to create a long-term strategy and stick to it throughout the ups and downs of the markets. The good news is that the risk of biases influencing your investment strategy can be managed. That’s where involving an independent third-party can be invaluable – they can prevent you from making potentially expensive mistakes by offering an objective, non-emotional view. When you want to deviate from your plan, they’ll say, “This is not what we talked about. If you make this change, this is the impact it could have on your future." These conversations, and continuous self-education on the areas you are investing in, can keep you on track for a brilliant lifestyle in retirement, instead of one where you’re forced to make big compromises. Disclaimer: The information in this article is of a general nature and was current as at Wednesday, 23 November 2023. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013 and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licenced financial advisor before making any investment decisions.

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The information in this advertisement is of a general nature and was current as at 22 November 2023. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013 and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licenced financial advice provider before making any investment decisions.


Master Stroke Repeated at Top Awards Scope Painting has once again secured its position at the top of the industry by clinching not one, but two awards in Auckland. September proved to be another successful year for the team at Auckland’s Scope Painting as they took out two awards at the 2023 Master Painters Awards of Excellence. In their second year of participation in these prestigious awards, Scope Painting once again secured their position at the top of the industry, clinching not one, but two awards. Their Gold Award recognised their exceptional work on a repainting project for an early 1900’s Clevedon Interior Character, while their second award came with the title of Overall Category Winner for a Contemporary Exteriorof a home on Victoria Ave, Remuera. The Master Painters Awards of Excellence, an annual event, serve as a grand stage for painting businesses across the nation to showcase their finest craftsmanship. The judging panel, comprising Ash Leatherby and Murray Gray, undertook the substantial task of personally evaluating each of the hundreds of projects to select the Gold Award winners (finalists) and the Overall Category winners. This year’s awards ceremony was held at Christchurch’s Te Pae Convention Centre, a glittering affair hosted by Mike McRoberts. The event saw painters from all corners of the country trading their overalls for elegant tuxedos, coming together to celebrate excellence in their field. Scope Painting, led by director Dave Bell, was established in 2012. What began as a “one man in his van” operation has since evolved into a team of 12 professionals specialising in high-end residential homes.

Turning point Bell’s journey to New Zealand started in Scotland, where he relocated with his family at the age of 11. Eight years later he embarked on his painting journey while working at a Resene Paints store in Mt Eden. The turning point in his career arrived when Clint Wheeler, then owner/operator of Sunwest Painting, approached him with a painting apprenticeship offer. Bell, inherently creative, found the prospect of beautifying homes appealing. After honing his skills with Sunwest Painting for five years, Bell developed a deep appreciation for the meticulous preparation and attention to detail that defined their work. “The one thing I loved about the trade was the preparation and attention to detail we would put into every project. It was a lot of hard work, but the results were stunning, and it really gave me a new perspective on the skill set required to be a quality tradesman,” reflects Bell. Following Sunwest’s relocation to Rukaka, Bell took charge of multiple projects in the north before returning to Auckland, where he worked with various painting firms. It was during this period he recognised the distinctiveness of his experience with

Sunwest. “It wasn’t until I had ventured away from Sunwest and worked with other companies that I could see we had been operating in a niche part of the market and that there was potentially a gap in the market for high-end finishing as well as a level of service that made people feel valued.” Chasing a dream In 2012, Scope Painting was born, and despite having no prior business experience, Bell fearlessly pursued his dream of operating his own painting business and delivering exquisitely painted homes. “The first five years or so were really tough. As much as we wanted to deliver a great job, it was also hard to bring in the work at that price point. There were many unprofitable projects, although we stuck to our guns, and as our client base grew, so did our team.” Scope Painting’s success is attributed to their ongoing commitment to challenging their staff to achieve excellence, equipping them with the necessary tools and, more importantly, providing them with the time needed to excel. Bell expresses his gratitude for his hardworking staff and acknowledges the Master Painters Awards of Excellence as a valuable platform for celebrating their dedication and outstanding work. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 6 9

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Getting Ready for a New Tenant

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Many landlords do the bare minimum before a new tenant moves in, but there are tricks that can make it easier to attract top renters, writes Sally Lindsay. Getting a property ready for tenants can be at times a frustrating and overwhelming process. Most landlords are not experts, but presentation and location dictate the rents they can charge. A clean and well-maintained property and garden attracts tenants, and it also sets the standard of how you would like the rental to be kept. When a tenant moves out many landlords do the bare minimum before a new tenant moves in, but there are some tricks that can make it easier to attract top tenants and make the property more profitable long-term. 1. Allow three hours-plus for professional interior cleaning. There is nothing worse for a tenant than moving into a rental where there are still crumbs in the oven. Included in cleaning should be the oven, dishwasher, windows and sills, curtains or blinds and tracks, carpets, walls, rubbish or recycling bins, filters, extractor fans and heat pumps. Outside, a gardener should be engaged to weed, mow the lawns, check fence lines and gates and pressure wash the paths and decks to make sure they are not slippery. If there are spiders or ants around the house get them sprayed at least once a year, if not more often for ants. Tenants don’t want their kitchen surfaces infested with ants every time they bring food out of the fridge or pantry. 2. Allow half a day for a handyman to make any repairs and make sure everything is working after the property manager has done an exit report on the state of the premises. Property managers are amazed at the number of times tenants forget to change light bulbs or not report simple things like door handles falling off or loose brackets and screws on bookshelves, for instance. Good property

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managers will have a list that can be filled in of jobs to be done on their exit report to landlords. It is highly recommended a handyman checks the premises after each tenancy for issues such as broken or chipped tiles, jammed locks, broken electrical fittings or even rotten floorboards. 3. Presentation is key, even if the property is furnished. Aside from cleanliness, tenants want to envisage themselves living in the rental. Owners selling a property spend thousands of dollars on getting the property dressed, putting in furniture and accessories to attract a buyer. It’s no different for rentals. One property manager was recently trying to rent a Parnell flat where smelly food had been left in the kitchen. Prospective tenants were walking through holding their noses. The vacating tenants were sent a note asking them to make the flat more presentable.

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4. Price correctly for the market. Landlords often have a misconception that the higher the rent, the better the calibre of tenants. The Rental Bureau’s managing director, Victoria Heyes, says this is not true. Either a landlord will end up attracting more tenants than they want living at the property or, because the property has sat unrented for a long time, people who cannot secure other properties. Rents have to be on a par with market rates in the immediate area because the right tenants will not pay over the odds. The right tenants can get any property they want. If a landlord is unsure what rent their property should be priced at, they should get a professional property manager to do a rental appraisal. 5. Leave a small gift for a new tenant. Leaving a gift (not cleaning products) says welcome to your new home and sets up the landlord/tenant relationship in a nice, positive way.

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Finding an Alternative Path to Owning Real Estate Many investors are realising unlisted commercial property funds are an attractive way to get involved.

New Zealanders have long favoured property ownership as a key part of their investment strategy, but with hefty down payments many find themselves locked out of the market or unable to invest on their own. So, while residential property investment is typically the more mainstream choice, unlisted commercial property funds offer an alternative path to owning real estate that is increasingly attractive to many investors. Contrary to popular belief, commercial property investment isn’t exclusively designed for institutional investors with bottomless pockets. Oyster Property Group is one of New Zealand’s leading unlisted commercial property fund managers that provides access to quality commercial property investments. For more than 20 years, Oyster has managed a variety of commercial property funds to cater to a diverse range of investors, from everyday New Zealanders who can invest for as little as $10,000, through to wholesale investors. Oyster buys quality office, industrial, and large format retail properties, which are managed in-house by a team of experts with deep sector knowledge. Oyster manages a property portfolio of

around $1.9 billion, mostly concentrated in Auckland with some assets in other regions across New Zealand. Rich Lyons, retail investment manager for Oyster Property Group, says the benefits of unlisted commercial property funds can be numerous for those looking for a long-term investment and stable returns over time. “We regularly hear from investors seeking quality investments with the potential to make long-term capital gains while generating a stable monthly income,” Lyons says. “Opting to invest in a commercial property fund over investing in a standalone property often has a lower minimum investment and can reduce the administration burden of owning a property yourself. Choosing to invest through Oyster also means you can sidestep the complexities of buying and managing the property investments yourself. “These investment structures are big drawcards for investors.” Oyster’s investment philosophy is to target quality commercial property in soughtafter locations with enduring occupier demand. For example, properties that provide great occupier amenity and excellent transport links, as well as in locations where appropriately zoned land is in tight supply.

Industrial: A robust asset class Oyster’s industrial assets comprise logistics, manufacturing and warehouse facilities across New Zealand. Fabio Pagano, Oyster’s general manager property, says there are multiple factors that make this commercial property asset class robust. “Industrial land is currently scarce, with relatively few newly zoned areas popping up, which is driving up demand in the existing available stock,” he says. “While industrial buildings are being developed, it has not yet caught up with demand. Rising building costs also play a role.” Together with a significant skills shortage in the construction industry and supply chain constraints, this lengthens the pipeline of potential for sufficient supply, further heightening demand. Growth in online shopping, particularly during the pandemic, has accelerated the need for logistics, warehousing, manufacturing and storage facilities. As a result, vacancy rates – especially in premium spaces – are historically low. “The outlook for the industrial property sector is positive,” Pagano says. “The allure of this asset class is heightened by the low vacancy rates, solid occupier demand and the prospect of sustained rent increases with room for further growth.” S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 7 3


‘The outlook for the industrial property sector is positive.’ – Fabio Pagano He adds that Oyster’s sustainability strategy encompasses a commitment to position its industrial assets in a way that supports its tenants to achieve their own sustainability goals, today and in years to come. Resurgence of the office While the pandemic triggered a reevaluation of work practices, with discussions about the “death of the office” becoming widespread, there is evidence that New Zealand and the wider AsiaPacific region has not experienced the same decline in this sector as some other markets, like the United States and Europe. Pagano says businesses have had time to analyse the impact of the pandemic on their workforce and now see that while we are redefining how we use offices, their role as the cultural hub of an organisation is more important than ever. “We continue to see enduring demand for high quality, sustainable office spaces which are well located, particularly those close to public transport links and with quality onsite amenities including food and beverage offerings, end-of-trip and gym facilities,” he says. “From SMEs through to large multinationals, businesses continue to seek and sign longterm office leases at Oyster’s properties, but the way they use this space is changing as they adapt and embrace flexible work styles. “As a landlord and a fund manager, our focus is on being responsive to this environment by supporting our tenants to create modern workspaces that suit new organisational and operational structures, and which foster connectivity and attract great talent.” Ensuring Oyster’s assets contribute to a more sustainable New Zealand plays a key role in growing its position as a landlord of choice and unlocking further value for investors. Nineteen of Oyster’s office assets have achieved a 4-star or higher NABERSNZ S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 7 4

rating, which is the industry benchmark for assessing energy efficiency and performance of office buildings. In October 2023, it partnered with Ecotricity, New Zealand’s first and only Toitū climate positive certified electricity provider, to supply sustainable electricity to most of its tenants. Large format retail Oyster’s large format retail properties are home to some of the country’s most trusted retail brands, including several Woolworths supermarkets and Mitre 10 Mega stores. Pagano says: “The changing economic landscape highlights the enduring resilience of large format retail properties. Properties such as supermarkets, shopping centres and DIY stores play a crucial role in the daily needs of all New Zealanders. “They are both important places to shop, and logistics hubs linking suppliers to the local consumer. Brands are continuing to

seek tenancies to enhance their control over product supply and delivery to consumers. “We target large format retail properties in strategic locations, with easy accessibility and high visibility to ensure a steady flow of consumer traffic,” he says. “This attracts long-term tenants, providing a stable investment and reducing the risks associated with frequent tenant turnover.” Oyster is currently pursuing Green Star certification across several of its large format retail assets, demonstrating its commitment to sustainability and minimising its environmental impact across its entire portfolio. To learn more about Oyster Property Group or adding commercial property to your investment portfolio scan our QR code or visit


The Risk and Return Debate for Airbnb When managed well, short-term rentals can provide a very predictable stream of increased income at possibly lower risk than having a tenancy, writes Stefan Nikolic. Short-term rental properties (aka Airbnbs) are seen as higher risk mainly due to the horror stories we hear in the media, and because they are treated as a commercial activity by IRD for GST purposes. However, when managed well, short-term rentals can provide a very predictable stream of increased rental income at possibly lower risk levels than having a tenancy in place.

profile to check for any issues former hosts have experienced, or you can even block guests from booking your property unless they have only positive reviews from their past stays. Just a side note – parties and meth contamination happen in a tenanted property as well. This is just a risk of renting out property in general, not specifically to Airbnb.

Higher Return? Definitely Higher returns are definitely achievable with Airbnb compared to a long-term rental. For example, we are able to earn our clients an average of 52 per cent more income compared to long-term rental rates for their properties after all fees. Even after GST is taken into account (if applicable), income is still far higher than a long-term rental.

Pro tip: you can get a carbon dioxide detector installed in your property which will alert you if there are too many people inside the property at the same time.

It’s best to speak to a property accountant on how GST applies in these cases so you can understand the implications. Many traditional landlords shy away from Airbnb simply because of this difference, but knowledge is power, so it’s worth learning about how GST works in this situation so you can make a more informed decision. Of course, GST would only apply if the Airbnb turnover is $60,000 or more per 12 months. Higher Risk? Hmm There are a few reasons property owners may consider short-term rental a risky business, so we will go through these one by one and dispel the myths. 1. Parties and meth contamination Although it does happen, it is very rare that there are parties in an Airbnb property as the guests coming to stay would have been vetted if the property is well managed. To screen guests, you can read previous reviews under the guest’s S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 7 6

2. Damage to the property Similar to the above, this is another risk of owning property in general and not specific to Airbnb. With Airbnb though, good guests will admit if they damage something or break a bowl and are happy to pay for the replacement cost. We just had a guest recently leave a $10 note and a letter apologising for breaking a glass! Because you are going to be charging a lot more per night, you will generally attract a higher quality person than you can with the lower weekly rental amount. These people are usually business travellers or tourists so are good to deal with in most cases (tourists are happy as they’re on holiday, and business travellers are usually professional and hardly in the property). As above, collecting the guest’s credit card details for a security deposit is always a good idea in case there are any issues, and you can use an online payment processer to place a temporary hold on a security deposit amount you are comfortable with. This can then be automatically released after you inspect the property when the guest leaves and are satisfied there are no damages (same as in a hotel).

Pro tip: if you decide to get contents insurance (recommended), set the security deposit equal to your insurance excess to save you from having to pay this if there are claims. 3. I won’t get any bookings! This is pretty much impossible, but it can be scary to see an empty calendar for months ahead if you’re new to Airbnb. Just think about it – people always need accommodation for short-term stays and always will. Hotels and lodgings have existed for hundreds of years, and they’ll still be around hundreds of years from now because we all love and need to travel, whether it’s for pleasure or business. You just need to make sure your listing is set up correctly from the beginning so it’s as attractive as possible compared to local competition. Completing the listing information in full, getting professional photos taken, making sure you’re responsive to guest’s messages and undercutting the competition for the first few weeks are a few things to focus on that will help you get things off the ground quickly. Once you get those first few reviews, the listing will start to rank better in the online search


results and you’ll start getting more bookings coming in over time at higher prices. Pro tip: read your reviews and make the suggested improvements. This is valuable customer feedback. Always thank your guests for leaving a review as replying helps with your credibility as well as your online ranking. What can be done to mitigate these risks? Properly vetting guests that book or enquire with you is essential. We don’t have the ability to perform background checks, like a potential tenant in the short-term rental industry, but what we can do is send the guest an online check-in form they must complete before giving them access to the property. This form asks them to submit their IDs and credit card details for a security deposit hold. They are also asked to sign an online rental agreement which makes clear all the rules and associated fines, their full contact information and a few other things. We can then check the information with other online sources, run a check on their credit card for fraudulent activity or any other

issues, and ask the guest more questions if anything looks suspicious. This thorough process acts to deter guests looking for somewhere they can easily get away with breaking the rules. These types of guests will most likely cancel the booking at this point and find somewhere else to book, which is what we want.

you’re getting quality guests.

Another way to make sure your property stays risk-free is to furnish and market it to a higher quality guest – in other words, charge more per night and justify it. If your property is well maintained, you are a responsive host that fixes any issues as soon as they arise, and you’ve put in effort to make your Airbnb special, you will attract the best guests on the platform. They don’t mind paying a little extra for quality and they will treat the property and you with respect.

Of course, if all of this sounds like too much but you still want those higher returns, then just get in touch with us for a hands-free service instead.

With pricing, you need to continually monitor your future occupancy levels and adjust the nightly rates to make sure you’re not missing out on bookings, but also to make sure you’re not charging too little. Keeping an eye on upcoming events is crucial as these dates can be risky unless you’re charging a premium to make sure

Demand also changes a lot over the year, so you should never set your prices the same across all dates. Having the correct nightly rate is crucial to your online ranking. Charging too much can push you further down in search results, which will be difficult to recover from quickly.

Simply scan the QR code here to visit our website and get in touch for more information. We can create a free short-term rental appraisal for your property so you can get an idea of the potential returns when an Airbnb is managed professionally.

Zodiak Management w: p: 0800 333 325 e: S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 7 7

GET READY FOR TOMORROW’S MARKET TODAY Being Build Ready is about doing the groundwork now, so you can move forward with your new build when the time is right. As end-to-end experts, we will guide you through every step of the process, and by starting now, you’ll save time down the track by being in a position to start building faster.

Visit or call us on 0800 377 588


Things are Looking Up for Forestry The outlook for the forestry investment sector is greener than ever thanks to changes by the new government which have removed some of the potential handbrakes on the industry. The Emissions Trading (ETS) has been controversial in recent years because businesses have been buying up carbon credits as a shortcut to achieving carbon neutrality. Instead of making efforts to decarbonise their own operations, they’ve used carbon credits to offset their use of fossil fuels. That was a source of frustration for the government, knowing more action is needed to achieve net carbon zero by 2050, as we’ve pledged to do under the Paris Agreement. That frustration meant the ETS was about to be reviewed, and fears were that forestry carbon credits might be capped, limited or even removed altogether. That would have put a real dampener on the forestry sector. “We’re optimistic with this new government because, assuming everything goes ahead as announced, they’ve removed a lot of uncertainty,” says Gordon Wong, co-owner and Legal Services Director at Forest Enterprises. “They have decided to scrap the review and they’ve removed the brake on the carbon price. That certainty gives investors and forestry companies more confidence.” Forestry and climate change New Zealand must reduce its greenhouse gas emissions, and businesses need to step up their decarbonisation efforts – but forestry is one of our major tools in the battle against climate change, says Wong: “The Paris Agreement gives us a challenging and ambitious goal, and there’s no way it can be achieved without forestry.” Sustainable forestry is an important way to reduce atmospheric carbon dioxide;

trees sequester (“soak up”) carbon as they grow, with forest biomass consisting of around 50 per cent carbon. Every ton of carbon sequestered in forests earns one New Zealand unit, or NZU, which currently trades at around $70. Carbon forestry earns around 800 to 900 NZU per hectare. “Carbon credits are a valuable asset that can be monetised,” Wong says. “Certain types of forest, like our Bideford Forest, earn NZUs throughout the life of the forest. Then, if the trees are cut down, the NZUs are surrendered – but that’s limited because the roots and trunks are left in the ground, still sequestering CO₂. As long as we retain enough NZUs to surrender when we harvest and replant, we can trade them. That gives us flexibility.” Bideford Forest is an example of how forestry investors can “hedge” their investment. Because it’s 80 per cent carbon forestry and 20 per cent timber forestry, there are two potential income sources. The money from harvesting and selling the timber gets added to the revenue generated by the carbon credits. And if there’s a drop in the price of timber or carbon credits, there’s flexibility around when the trees can be harvested. Patient, forward-looking investors Careful, sustainable management of a forest investment can pay regular dividends to investors and then provide a lump-sum payment at harvest time. It’s a long-term prospect, because trees take time to grow. This means the investment has low liquidity. Although there is a secondary market, it’s much less liquid than an investment in shares, for instance.

But, like being locked into KiwiSaver provides a degree of security, that lack of liquidity can also be an upside. It means the investment keeps growing – literally and figuratively – and the temptation to cash it in is extremely low. “For those who had the foresight to invest in forestry 25 or 30 years ago, they’ve been enjoying good distributions along the way,” says Wong. “Then, by the time the seedling turns into a mature tree and it’s harvested, they’re often close to retirement age and their patience pays off. It’s a great form of retirement saving or saving for your kids’ first homes.” He says forestry is well suited to patient, forward-looking investors who appreciate the way forestry doesn’t follow other market trends. It has long been seen as a hedge against inflation, as well as being one of the most sustainable investments on the market. “This is a traditional, tangible investment,” Wong adds. “There’s no AI that’s going to come along and disrupt the industry – everyone knows timber is the best and most ethical building material.”

For more information and a copy of their latest Product Disclosure Statement, contact Forest Enterprises – Forest Enterprises is the business name of Forest Enterprises Growth Limited and its subsidiary Forest Enterprises Limited. Forest Enterprises Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) which are primarily invested in forestry assets.

S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 7 9


When Maturity Influences Your Attitude to Money Andrew Nicol has a different attitude to money these days and, as a father, that’s just fine. I was very aggressive when I started out in property investment. I’ve used flipping strategies; I’ve traded properties; I’ve signed up for a property and sold the contract to someone else, but I’m not that person anymore. Sure, I don’t need to be. But also, it’s important for me not to be. Someone’s “money mindset” refers to the mental filter you use to look at your finances. If your overall mindset is negative, it will be a big hurdle in your financial journey. But here’s the thing, as you go through life your thoughts, emotions and priorities will change … and so should your attitude to money. Here’s how it changed for me. My first investment property was a fourbedroomed property in Christchurch. I couldn’t afford the mortgage without tenants paying rent to help me out, so I agreed on a “deferred” settlement. This meant I could buy the property, but I didn’t have to pay the money for a few months. Growing wealth But it did mean I had to complete my “renovations” while the current soon-tobe-divorced owners lived there, somewhat bitterly. I use quotation marks for the word “renovations”; it was just ugly wallpaper and terrible paint choices. But the reason for all this was to grow my wealth.

I grew up in a working-class family in Waltham. I had nothing to start with except my own savings, but I realised somewhere along the way that I didn’t necessarily get rich by starting with lots of money. But I needed to take some risks. And I made a lot of mistakes doing so. This was the case for my first investment property. My cockiness to shun a property manager backfired, and my tenants were awful. I sold that property six months later, but that’s ok. At 19, I had the whole of my property investment career to make up ground. I made $27,000, having spent only $3000 on renovations. This allowed me to buy my next property. And, ultimately, a better one. The three stages of property investing (the starting blocks, running your race and crossing the finish line) is the whole premise of my book, Wealth Plan – How To Invest In Property and Retire on Real Estate. It goes almost without saying that your attitude to money will change as you move through these three steps. Where I see people go wrong is when a 60-somethingyear-old applies the same money mindset as a 20-something-year-old. The right strategy Yes, I’m generalising the age a bit. Sure, that may be fine for your particular situation but, generally speaking, that

strategy won’t be the right fit for you. My point is once you start moving past the early days and are building some wealth … you don’t want to risk losing it. It’s a bit easier when you’re 20 and you can recover from the bad things that happen. Like me, because you’ve got the benefit of time, you can look for very high-yielding risky investments when you’re younger. Sure, they carry more risk, but you have a chance to make more money. This is what you need. But once you get older, you might have to accept something lower-yielding. It’s more stable, and that becomes more important. The same goes for debt. I was talking to a journalist over the weekend who asked me: “What happens when people build a decent-sized portfolio?” Generally, their LVR position starts to decrease. This is the amount of debt they have compared to their portfolio. So, you start with a high amount of debt and it goes down. This is all because your personality should change when it comes to money. Fast forward 20 years, and I’ve now got a daughter and a fiancée. So, I need to think about money a bit differently. Yes, you’ve got to invest for your personality. This is absolutely true, but your personality is also going to shift over time … so you’ve got to be prepared to move with it. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 1


Fashion Update



The colours and styles of summer 2024. 7.






1. Moscot Rizik Sunglasses in Burgundy – $590, 2. R.M. Williams Bourke Shirt – $179, 3. Cos Elasticated Straight-Leg Trousers – $165, 4. Timberland Utility Sling - $100, 5. R.M.W. Rugby Short – $109, 6. Allbirds Tree Flyer 2 – $270, 7. Levi's Mens Vintage Tee – $75, 8. Garrett Leight Laguna Sunglasses – $580 S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 2


1. 3.



8. 4.




1. R.M.Williams Epping Skirt – $209, 2. Timberland Womens Adley Way Sandal – $200, 3. Twenty-Seven Names True Blue Shirt – $440, 4. Allbirds Tree Flyer 2 – $270, 5. Camilla And Marc Cordellia Blazer – $900, 6. Camilla And Marc Lanza Short – $420, 7. Camilla And Marc Iris Midi Shirt Dress – $780, 8. Birkenstock Arizona Big Buckle Vegan Canvas – $300, 9. Kowtow Elle Dress – $359 S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 3


Taking Time to Hit the Refresh Button Stephanie Bryant discovers a weekend at Resolution Retreats has taught her much about self-care. I have always thought that self-care was for those who had a lot of time on their hands. You know, sitting in the bath with a mud mask on or some other equally fascinating thing. Regular massages – yeah, right! Well, after only one day here, I think very differently. Self-care is so much more than the time-sucking enterprise I had it pinned as. Walking in the sunshine, cuddles with family, eating well, moving your body with purpose and when you can, taking time to learn about how to get back in touch with yourself. Day 1 My weekend started with an introduction to the other ladies beginning this journey with me. To be honest I had a healthy dose of worry that I was coming to something intensive, that I wouldn’t be able to keep up. Not at all. Some, like me, were here on their own; some were recommended by others; some were mum and daughter weekenders; others were friends that had decided to take time out and enjoy the experience together. How uplifting, how reassuring to find there were so many others, in their own way, on the same journey needing a refresh/restart, moving in stressful life circles and needing time out. My journey did have a few challenges. Changing my mindset and opening myself to explore concepts I had heard of but hadn’t practiced during my everyday, busy life. To have this most peaceful space, everything taken care of. Wonderful food and restorative treatments: heaven. The guilt about taking the time out is gone. Relaxation has moved in and it’s only the end of the first day. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 4

Burnout? Listening to comments made by other participants got me thinking about how burnout can enter our lives in a very stealthy way. One minute you have a busy, focused career, happy children, and contented family life. But all too easily “life” happens. Perhaps here is an event that occurs, or perhaps you just find yourself feeling like you’re not able to get out of bed one morning. Constant stress has left you feeling helpless and exhausted. When you think about it, fatigue set in a long time ago and you have been running on empty for a while.

Day 2 Morning exercise really wasn’t something I usually factored into my “busy” day (“Same!” I can hear you say). I have always had excuses. But this morning, exercise followed by yoga left me with a deep feeling of accomplishment and thoughts of, “Why am I not doing this every day?” In the afternoon I went swimming in the heated indoor/outdoor pool and gazed at the beautiful sanctuary, Mt Maungatautari. I had a spa and listened to the birds, and let’s not forget the massage. Pampered and indulged? Yes, I am. Day 3 This morning, on my last day, I woke up with a question: How can I make this work at home every day? My experience has given me a great sense of accomplishment: a quieter mind and the ability to create my own daily self-care routine, which just wasn’t there before. And, of course, scheduling my next retreat. After all it's progress, not perfection that we all need in our lives.

These are some of the symptoms of burnout. The term “nervous breakdown” was coined in the 1700s when scientists believed our nervous system was the cause of mental health symptoms. Today this is known as a mental health crisis. It allows us to better understand the issues surrounding burnout. Perfect time We all need to be open to discussing these symptoms with those we trust. Covid has put many of us into a heightened sense of vulnerability, which can lead to the feelings described above. Now is the perfect time to take a step back and consider the way we nourish our mind and bodies. Joelene, and the team at Resolution Retreats, have created an excellent guide for working through the symptoms of burnout. The team at Resolution Retreats are there for you every step of the way. Information is abundant: from what to bring, to scheduling your days. How to focus on what we put into our bodies and how to nurture them. The caring team will provide insight and guidance to help you through your own personal health journey. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 5


You Can Still Look Good in a Mini Liz Dobson takes a trip down memory lane when she discovers the joys of a new-generation Mini with a soft-top. My second car was a red Mini with a personalised number and it got so much attention in the late 1980s that I used to find notes under the window wipers from fans saying how much they loved it. But one fan loved it too much. I was a sports reporter for the Auckland Star newspaper, and I walked out of my suburban flat at 6am for my shift to find it gone. A 14-year-old Mini fanatic stole it. Forget about taking it for joy rides and ditching it, the culprit installed a stereo, upgraded the tyres and (unfortunately) graffitied the exterior with Michael Jackson album titles. Yes, he was Bad. I retrieved the Mini from police only to have it stolen again by the 14-year-old’s mates, who took it for a joy ride and ditched it, writing it off. I was living in Australia when the 14-yearold appeared in (the then) Youth Court so my dad attended on my behalf. He said there were 10 other Mini owners there whose vehicles had also been stolen. I often wonder where the kid is now ... maybe he’s a Mini mechanic? Despite the unfortunate end to my Mini, I’ve been a big fan of the British brand. I even bought my daughter, Grace, a 2011 Mini Countryman as her first car. (I’d like to thank low bank interest rates at the time.) I’m also a fan of convertibles. A family friend took me for a ride in his MG convertible when I was 13, and jokingly asked me if I wanted to drive it. That ride is one of the reasons I’m a motoring writer. Dream car So, combine a Mini and a convertible and you have my dream car; meet the 2023 Mini Cooper convertible. It’s based on the Mini three-door hatchback S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 6

but is 90 kilograms heavier than its sibling. The Mini Cooper S takes it a step further and is well-known for its compact size and distinctive, timeless design – inside and out. Priced from $69,300, the Cooper S soft-top is powered by a two-litre, twin-turbo petrol engine that produces 141kW of power and 280Nm of torque. Paired with a seven-speed automatic transmission, the Cooper S has a fuel consumption of 6.3 litres/100km. The ‘‘S’’ designation indicates it’s a sportier version of the standard Mini Cooper. That means a more powerful engine, sport-tuned suspension, and other enhancements to deliver a more engaging drive. Things in the Mini have definitely improved since my 1970s version – even after the installation of a stereo by my Mini fanatic. The 2023 Mini balances modern technology with heritage and has delightful nods to the Mini’s iconic history and vehicle innovations. The Mini was invented in the 1950s by Alec Issigonis, who was tasked with creating a car with lots of space inside with minimum dimensions outside, seats for four, impeccable driving characteristics and superior fuel economy at an affordable price. Those characteristics continue to this day, with the Mini soft-top becoming a legend itself and taking on the likes of Mazda’s MX-5.

While the Mini is built at the famous Oxford plant in England, the 2023 Mini Cooper S convertible can thank the BMW Group for the use of the German brand’s safety and performance technology. There is Performance Control that reduces understeering and increases traction and stability in cornering. There’s also Dynamic Cruise Control (you set the speed and distance to the car in front, and the Mini does the rest), and City Crash Mitigation with pedestrian detection, also known as Autonomous Emergency Braking (AEB). Safe city motoring Add Forward Collision Warning with a visual and audio signal, plus braking preconditioning, and you have a safe city car. When it comes to parking in the city, there is Park Distance Control (front and rear), including Parking Assistant (that helps you manoeuvre). A reversing camera with guidance lines is also included. I loved the Speed Limit Info, a camera-based system that detects road signs and displays speed zones. This was particularly useful driving in Auckland CBD with the differing zones. Then comes the notorious lane departure warning that most modern cars have (you either love or hate it). The system either


‘There’s a cute lighting design that harks to the Mini’s UK heritage.’

visually warns you that you’re out of your lane or the car moves you back into the lane with a jolt on the steering wheel. Luckily, the Mini has a more passive reminder. And talking of reminders, there’s a cute lighting design that harks to the Mini’s UK heritage with the rear Union Jack tail-lights. The overall exterior design of the Mini convertible keeps to the traditional, with 18-inch wheels on each corner to create that go-kart driving style. Inside, the Mini convertible stays nostalgic with on-off toggle switches but the modern feature of keyless entry.

The four-seater is a practical car for two people, and if you add two in the rear you’ll find seats are small and suitable for short trips when the roof is up. But retract the fabric fully and you have perfect driving conditions for four.

So, let’s hit the road in the Mini convertible – roof off. There are three driving modes: normal, sport and green. I kept it normal for most city driving and in stop-start suburb driving I’d switch to green to help fuel economy. On the motorway I’d put the car in sport mode with the steering and suspension firmer and gears held longer.

Wind-in-hair experience For day-to-day use, the four-seater is practical for putting your bags on the back seat.

A nifty addition is Mini Connected which keeps your navigation system supplied with the latest traffic data, so you’re always on the best route.

The electronic roof can slide to be open just over the driver’s head or fully retracted for that wind-in-hair experience.

The Mini Cooper S Convertible is wellknown for its go-kart handling, precise steering and lively performance. The

open-top driving experience adds an extra layer of enjoyment. But with the roof on, you have rear blind-spot issues although parking sensors help with reversing. At slow speeds the Mini’s steering is very heavy, while it lightens once you’re on the move. The Mini can be enjoyed all year round (often roof-down in even the chilliest conditions). During summer, don’t forget your cap and sunblock. Liz Dobson is the former motoring editor of the New Zealand Herald’s Driven publication and website. In 2020, she established and in 2022 was made a judge for Women’s World Car of the Year. S U M M E R 2 0 2 3 | I N F O R M E D I NVESTO R 8 7

Photos: Liz Dobson

The retro-themed dashboard includes an 8.8inch touch display for radio and navigation. As a bonus, there’s a heads-up speed display.

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