20-YEAR HOLIDAY Victoria Harris on retirement planning CRYPTO QUESTION Importance of a balanced debate
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THE ‘R’ WORD Maybe it’s time to ditch the term ‘retirement’
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START EARLY It's never too soon to start saving
A MATTER OF TIME Martin Hawes on the art of decumulation
ISSN 2744-6085
SCRIMP & SAVE Are you suited to the FIRE lifestyle?
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Contents IN THIS ISSUE 8.
Contributors Meet some of our expert contributors.
10. What We Like Must-have coffee-making accessories and an art auction you won’t want to miss.
12. Essentials Our picks for brightening up your world this spring.
14. Women and Money Victoria Harris looks at retirement as a 20-year holiday. But will you be drinking tap water or a piña colada?
16. Going Up, Going Down Economist Cameron Bagrie has the latest on the NZ economy.
20. The Art of Decumulation Accumulating retirement savings is a popular topic but Martin Hawes looks at the best way to successfully manage your retirement decumulation.
24. It’s All in the Planning Retirement can seem a long way off but the time to plan for it is now. The sooner you consider what you want your golden years to look like the better, writes Amy Hamilton Chadwick.
32. The Low-down on Reverse Mortgages Heartland Bank explains the financial relief over-60s can access if a reverse mortgage suits their situation.
34. Heard of the FIRE Acronym? Ben Tutty explains how it works and looks at the benefits and sacrifices of the FIRE way of life.
40. The Road Map to Early Retirement Pie Funds’ Mike Taylor looks at the need for diversification and due diligence when it comes to your retirement nest egg.
42. An Alternative Type of Investment A much bigger audience of art collectors has opened up through technology, Joanna Mathers explains.
45. Building Your Retirement Income New Zealand-owned Alpha First explains how wholesale mortgage investment can boost your retirement income.
46. Is Crypto Just Getting Started? Increased regulation for digital currency might lead more investors to consider this asset class, Rupert Carlyon of Kōura Wealth has the details.
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48. Alternative Words for Retirement If we can change the language around retirement maybe we can change our perception of it too, writes Clarissa Hirst.
52. AI and the Stock Market There’s no doubt AI is big news. Andrew Kenningham looks at its potential effects for investment and who the big winners and losers might be.
55. The Best Insurance Cover is Flexible Asteron Life looks at insurance needs now and into retirement and the importance of future-proofing your cover.
56. Snapshot What’s impacting the global economy right now?
58. KiwiSaver Could be Funding Infrastructure A lot of our KiwiSaver funds are being invested offshore when they could be helping with local infrastructure projects, writes Simplicity’s Sam Stubbs.
60. A Man is not a Retirement Plan Money Mentalist Lynda Moore encourages women to be savvy with money to protect their future financial security.
62. How Safe is NZ Super? Ed McKnight with a useful explanation of how NZ Superannuation is funded and why this might mean less in the pot down the track.
64. Maximising Your KiwiSaver If you joined KiwiSaver and haven’t given it much more thought David Copson’s article is a must read.
66. KiwiSaver Funds for Local Projects Booster looks at ways your retirement savings can support local innovation.
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Contents 68. Short and Long-Term Property Management Are you missing out on a side hustle with your empty spare room? Eric Hammond explains the benefits of short and long-term lets to build those retirement savings.
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71. Property Management is Changing The Rental Bureau looks at legislation, the increase in property managers, and the future for the industry with regulation on the horizon.
72. The Next Phase of the Property Cycle What might be in store for the rest of 2023 and into 2024? Kelvin Davidson from CoreLogic explores the likely future trends for our property market.
74. Shining a Light on Commercial Property If you haven’t got the deposit or time to devote to owning a residential investment property you might want to consider a ‘bite-sized’ commercial property investment.
77. Smart Property Management Alternative
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Looking for a different way to manage your rental property? Keyhook might suit you.
78. Retire Early with Short-term Rentals Airbnb could be a way to achieve financial freedom sooner, writes Stefan Nikolic.
80. What can you Spend in Retirement? Without a good nest egg it could be less than you think. Andrew Nicol has an eye-opening look at the cost of retirement life.
84. The Great Wealth Transfer Protecting your wealth and its future are important considerations. PMG Fund’s Matt McHardy has some sage advice.
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86. Restaurant Review: Somm You don’t need to travel far for a top-notch cellar-door experience, Joanna Mathers has found one in the heart of the city.
88. Motoring: Maserati Grecale Trofeo It turns out you can have it all with a compact SUV, Liz Dobson discovers.
90. Fashion Update The fresh styles of spring.
92. Retirement Wellness Starts Now Resolution Retreats’ Casey Mackwell looks at healthy habits to take us up to and through retirement.
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94. Resort Life Without the Travel A staycation at Cordis Hotel Auckland leaves Joanna Mathers feeling refreshed and relaxed.
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To find an adviser, visit asteronlife.co.nz
EDITOR’S LET TER
Published by: Opes Media
Changing our View of Retirement Retirement – it’s a word loaded with clichés and misconceptions. But with life expectancy shooting up, and the likelihood of possible decades ahead of us past retirement, it’s something we need to plan for. Retirement can be a time of joy, of reinvention. Given the right conditions, it can be a time of travelling, learning, community engagement. But without money, it can be harsh. This, our spring issue, is dedicated to retirement. It looks at everything you need to focus on to ensure financial wellbeing after work has finished, explores whether we need to reimagine what retirement looks like, and asks whether it’s a word we should ditch altogether. In our lead story, Amy Hamilton Chadwick explores the retirement question in depth. She discovers that 40 per cent of New Zealanders 65 or over are living on superannuation only; at just under $1,000 a fortnight before tax, it’s not much. Amy looks at ways in which to build wealth before retirement; and meets a man whose life and focus changed after the company he managed went under in his mid-50s, and he had to recreate a new career from the ground up. She also explores the three big life shocks that can see you heading down the path of poverty if you’re not prepared: relationship breakdowns, redundancy, and surprise health problems. It’s a must-read with plenty of useful gems.
idea, of retirement as a time to retreat from life and slowly fade away, can prevent young people from planning for it at all. Clarissa argues that we should change the narrative; looking at the opportunities retirement can bring, rather than the downsides. “If young people can envision a more optimistic future,” she posits, “maybe they’ll be more inclined to prepare for it.” Alongside our focus on retirement (or whatever else you want to call it) we have our usual smorgasbord of sensational regular features. I take a resort-style holiday in the heart of Auckland; we look at the latest spring fashions; and explore what’s been happening around the world that’s likely to shape the economy. Our amazing contributors (Martin Hawes, Cameron Bagrie et al) offer their seasonal words of wisdom, and we introduce a new contributor Rich Lyons to the team. As the retail investment manager of Oyster Property Group, he’s got many insights into commercial property funds and what they can offer savvy investors. We hope you enjoy this issue of Informed Investor and that you get a chance to spend time outdoors as we head towards summer. All the best.
Clarissa Hirst has a different take on the topic; she looks at the word “retirement” and the negative connotations around it. She explains that the word “retire” derives from the French verb retirer, which means “to retreat”. This
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Editor Joanna Mathers
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Art Director Mark Glover
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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, stephanie@informedinvestor.co.nz. If not satisfied with the response, the complaint may be referred to the Media Council PO Box 10-879, The Terrace, Wellington 6143; info@mediacouncil.org.nz. Or use the online complaint form at www.mediacouncil.org.nz. Please include copies of the article and all correspondence with the publication. S P R I N G 2 0 2 3 | I N F O R M E D I NVESTO R 6
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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 Stephanie@informedinvestor.co.nz 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
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UP FRONT
Meet Some of Our Contributors
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CAMERON BAGRIE
KELVIN DAVIDSON
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 HAWES
ANDREW KENNINGHAM
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 NICOL
CHRIS SMITH
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.
Chris is the general manager at CMC Markets. He has more than 15 years’ investing experience in financial markets, global equity, commodity, and forex markets.
C ONTRIBUTORS
CLARISSA HIRST
VICTORIA HARRIS
Clarissa is the FSC’s head of content, communications and marketing. She also runs point on the FSC’s research, diversity and inclusion initiatives, media and government relations, and consumer projects.
Former portfolio manager at Devon Funds, Victoria is co-founder of The Curve, a digital platform aimed at educating women around money.
RICH LYONS
LYNDA MOORE
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.
MIKE TAYLOR
BEN TUTTY
Mike is the founder and CEO of Pie Funds. He’s also portfolio manager of Pie Funds’ Chairman’s, Global Growth 2 and Conservative funds.
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.
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UP FRONT
What We Like
A showcase of trends, technology and luxe living.
Coffee for fashionistas Encapsulating the fusion between fashion and coffee, Dolce & Gabbana has joined forces with Bialetti to reimagine the iconic Moka Express. In celebration of the brands’ Italian heritage and shared love for the morning ritual, the alliance sees a makeover to the stovetop with Dolce & Gabbana’s vision and the charm of carretto siciliano. Bialetti x Dolce & Gabbana’s limited edition Moka Express is available now in three-cup and six-cup at Sabato or online at Bialetti.co.nz.
Objects of desire Art+Object auctions are an education in art. Their saleroom viewings are glorious affairs – displayed as exhibitions, they feature some of the best art and design works in Aotearoa. In mid-September, a significant auction will take place here, when they present Gary Langsford and Vicki Vuleta’s personal collection for sale. Gary Langsford is a New Zealand arts icon, having founded the Gow Langsford Gallery in 1987, and Vuleta is an interior designer who runs Design55. They are downsizing and moving out of Auckland and selling many of their beautiful works. This presents art lovers a with a unique opportunity to see, and bid on, pieces from some of the world’s leading artists. The collection includes works by Damien Hirst, Judy Millar, Thomas Ruff . . . even Pablo Picasso.
The auction will take place at 6pm on Tuesday, September 19 at the salerooms at 3 Abbey Street, Newton; and online at live. artandobject.co.nz. For more details visit art+object.co.nz S P R I N G 2 0 2 3 | I N F O R M E D I NVESTO R 1 0
W H AT W E L I K E
New chatbot for investors As Kiwis increasingly turn towards selfdirected investing, Tiger Brokers has launched its AI-powered chatbot TigerGPT for the New Zealand market. One of the first of its kind in the industry, TigerGPT is also available in Australia and Singapore. It introduces features that allow investors to research stocks, summarise key insights from earnings calls and releases, and extract pertinent company news and sentiment analysis in seconds based on questions asked by users in the Tiger Trade app. The chatbot is updated weekly. TigerGPT was developed by Tiger
Brokers’ research and development services and engineers to revolutionise investor experience on a larger scale. It demonstrates the crucial role of AI and machine learning in today’s investment industry and is a significant advancement in Tiger’s efforts to empower investors to increase investment efficiency. Users no longer need to rely solely on keyword searches or sifting through vast amounts of information to find relevant and concise content. There is a suite of new features to streamline the process of pre-investment decision-making, including personalised stock research which enables investors
to quickly filter stocks based on their own criteria, and show trending market topics. Another key feature is the ability to summarise highlights from earnings calls and releases, offering a comprehensive overview of a company’s performance. Leveraging Tiger Trade’s access to premium data and research, TigerGPT adds data including support and resistance indicators, stock trend analysis and economic calendars. The full version of TigerGPT is now accessible in NZ through the Tiger Trade app.
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ESSENTIALS
Spring is in the Air
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Let’s brighten things up and welcome the new season. 1
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1. Gorman Sour Straps cylinder vase – gormanshop.co.nz, 2. Merle table lamp – www.achomestore.co.nz, 3. Folded bookend – infinitedefinite.com, 4. Freedom Lune fabric daybed - www.freedomfurniture.co.nz, 5. Superette Sage and Clare Tula Nudie bathmat – superette.co.nz, 6. Freedom Palm Springs fabric occasional chair – www.freedomfurniture.co.nz, 7. Slow Torus vase small – www.slowstore.co.nz, 8. A&C Moro Easy – www.achomestore.co.nz S P R I N G 2 0 2 3 | I N F O R M E D I NVESTO R 1 2
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Make it Pop
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Resene Skydiver
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Resene Pursuit
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Resene Supernova
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Resene Wonderland
Bright accents and cooling whites for hip home highlights.
9. Father Rabbit Bonnie and Neil oven mitts – fatherrabbit.com, 10. Frank Green 34oz reusable bottle – superette.co.nz, 11. Ellis Brooklyn Bee eau de parfum – www.meccabeauty.co.nz, 12. Adairs Daisy Mustard Rust rug – www.adairs.co.nz, 13. Crisp Pen Pen Desk Tidy red – crisphomeandwear.co.nz, 14. Adairs Archie Violet Marle towel range – adairs.co.nz, 15. Coffee Supreme x Maruhiro Hasami block mug tall – coffeesupreme.com, 16. Kit: Universal face lotion – www.meccabeauty.co.nz
resene.co.nz/colorshops
WOMEN & MONEY
Can you Afford a 20-year Holiday? Having a financial plan can lead to retirement success – and maybe the odd piña colada beachside too, writes Victoria Harris of The Curve. Personally, I couldn’t afford a 20-year holiday right now. But I could if I had the right financial plan in place, and enough time. And so could you. They say the average length of time we’re in retirement is 20 years. This is a period of time where we are not earning and so are essentially on – a 20-year holiday. Pension, retirement, superannuation – whatever you want to call it – they all sound pretty boring to be honest. I don’t know about you, but whenever I hear these words, I don’t get that excited. I get flashes of old people, grey hair and community living. However, with the population now leading fitter and healthier lives, the word “retirement” should bring flashes of drinking wine in magical vineyards, cruising on a boat in the Caribbean or relaxing on a beach in the Med. Exciting phase We are trying to change the view of retirement as an exciting phase of life. A time where you get to relax, have fun and enjoy the part of your life you have worked so hard for. However, in order to enjoy your “20-year holiday”, you need a financial plan. Nobody will be paying you a salary, so you need to ensure you have enough to pay yourself. So, how much does a 20-year holiday cost? A rough rule of thumb suggests you will need 80 per cent of your current salary for every year of your holiday. This will allow you to live your current lifestyle, while on holiday. If you’re
currently earning $100,000 per year, you will need $80,000 each year, for 20 years. This is $1.6 million. It sounds like a lot but if you’re 30 years old, and haven’t saved anything for your 20-year holiday yet, you only need to invest $700 a month to achieve this by the time you’re 65 years old*. This is only really 8 per cent of your salary and totally doable if you set your mind to it and be disciplined. Getting started I mentioned you need a plan, but you also need time. The sooner you start contributing to your 20-year holiday fund, the less you will have to save due to the magical thing called compound interest. Taking the $1.6m figure, if you waited another 10 years and didn’t start putting money aside to your holiday fund until you were 40 years old, you would need to contribute more than DOUBLE. You would need to put aside $1,500, instead of $700 per month in order to enjoy your holiday. Having a financial plan for any goal is key. Retirement should be exciting, not scary or overwhelming. You don’t want to wake up in a panic the day before your holiday, stressing about how you’ll afford it. Be prepared. Have a plan. And stick to it. Because the only thing you should be stressing about on holiday, is whether to order a piña colada or aperol spritz.
The sooner you start contributing to your 20-year holiday fund, the less you will have to save due to the magical thing called compound interest.
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