Generation X reboot; How the election affects KiwiSaver; Credit card cash-back traps; How not to lose your job; Count your blessings

Generation X reboot; How the election affects KiwiSaver; Credit card cash-back traps; How not to lose your job; Count your blessings

By Amanda Morrall (email)

1) Turn a negative into a positive 

I linked a few columns back to the Forbes 2012 investment guide  which has some constructive financial advice for the various generations. This posting profiling how one Generation X couple turned  a misfortune into a blessing is quite interesting.

In a nutshell, they wracked up US$10K of wedding expenses on a credit card and then everything that could go wrong did. One party lost their job, the other got a pay cut. They turned it all around for the better by using, (a money tracking software) and permanently adopting a "we are broke mentality.'' 

Read the piece all the way through. The clincher is the last line.

It's about the importance of finding a career or line of work that you love and can imagine doing until you're 70.

2) What the election outcomes means for your retirement savings

Call me paranoid, or perhaps I've been working with Bernard too long, but I think public pensions will be a thing of the past when it comes time for me to retire. As such, planning and provisioning for one's own retirement is hugely important.

According to a recent study, many now regard KiwiSaver as their primary retirement savings vehicle and yet for the average New Zealander that nestegg will only go one-third of the way to covering their financial needs in old age. That at least was the opinion of some financial advisers I spoke with recently.

With the election behind us now, this is prime time to review where you're at with KiwiSaver. Here's a check-list to get you started:

  • What's your balance? 

(Check your annual statement, or sign up to the IRD's KiwiSaver website to find out how much you, your employer and government have paid into it).

  • What's your performance been over the past four years, and how does that compare to others? Find your fund here.
  • What's your contribution rate? (Minimum employee rates are now 2% but that's changing to 3% in 2013)
  • What's your employer's rate? (Employers are currently obliged to pay 2% (some pay more - make it part of your next salary negotiation -- on top of pay) that will change to 3% in 2013.
  • What's changing this year?(Member Tax Credits will be half what they were last year)

For a summation of the changes ahead for KiwiSaver under National click here.

3) Cash back traps

I have an aversion to debt. I avoid it at all costs. That said there is a smart way to use credit cards to capture air miles, "gifts" or cash back. 

Is that free stuff really worth it or is it just a trick to get you to spend more?

Here's 10 cash back credit card traps from A few references to 401ks but general lessons for Kiwis as well.

4) How not to lose your job

I've had a lot of jobs over the years. I just counted 15 (since I was 15) but I expect I left a few out. Happily, I was only canned from one job.

I was "let go" after I failed to turn up for a hostessing shift at a restaurant. I thought I had a good excuse as I was working on a dance production at the time. It didn't fly with the manager. I didn't care so much as I'd also seen this manager get into a row with an elderly customer who complained about an overcooked steak.

The manager's response to the complaint was this: "Perhaps it's your dentures dear?" Apparently, this manager missed the crucial "the customer is always right" lecture.

Anyhow, there are far worse ways to lose one's job.  This has got to be the worst. 

5) Count your financial blessings and otherwise

There are two things I associate with my late grandfather: 1) his passionate belief about the power of vitamin B  which he religiously dispensed with a glass of OJ and a bowl of Weetabix on my summer visits to his country home on Vancouver Island and 2) his daily pep-talk which included a sermon about "always counting your blessings." 

I didn't know what he was on about as a kid but the message has come home to roost in my adult years.

The lessons in life are never ending, but one that will always serve you well, in personal finance, or otherwise is to appreciate what you have.

It won't magically make your problems go away however by taking stock of and appreciating all that you do have, it will help to curb some of those cravings that lead to unnecessary consumer binges.

I couldn't find a financial link to go with this message but here's how gratitude is cultivated on the yoga mat.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Last week one of my employees decided he wanted to join Kiwisaver, I'm giving him a $1500 kick in the arse start, and he is saving for himself with total controll.  No fund manager taking fees, he can access the money any time he likes to invest in his own business or buy a house.

I'm encouraging him to save in precious metals, and invest in a home for himself, or start his own business.  I was quite pleased how receptive he was to the idea of total control of his own destiny.  I'll match his savings quartely, I'm better off because I have happy confident staff, and he is better off because he has the control of his own destiny.

Many ways to skin the savings cat. V generous of you. Hopefully said employee will have the discipline not to raid the nestegg along the way.

Yeh it's even odds if he will or not.  I had a helping hand up, from my old boss, and a similar talk, and now I can repeat a similar scenario.  His retirement plan was, work hard for your business, so that one day your business can work hard for you.

Great advice. It's true what goes around comes around. We need more employers like you.

Be nice to think that for those in kiwisaver, their fund managers won't raid their accounts or destroy value of their fund, or the government continue to tinker before the nominal retirement age and ability to access your own hard worked for savings....

Yes, let's hope so Hamish.Choose your fund manager carefully, follow what's going on with your fund, lobby our newly elected MP to push Government for a pledge to end any further mucking around in KiwiSaver. Maybe then confidence will grow.

The problem is the Govn is going to be up against a CAPEX shortfall of considerable magntude going forward.  So a nice easy way for them to get CAPEX is to insist the Cullen fund invests a higher and higher % in Govn bonds and govn projects.  The next thing I expect is for kiwsaver providers to come under similar pressure......Pollies can never resists tinkering or getting their hands on any sum of money that isnt diversely spread away from them....

Consider and plan for the worst, hope for the best.


skudiv - 

Honestly, you are getting yourself into a whole world of bother.  Why?

1.  What would happen if your employee now joined KiwiSaver?  What will you do then?    You have absolutely no way of stopping him - and if you adjust his pay to compensate your extra costs is open to legal challenge (to put it mildly).      

2.  What about your other employees?   Are you going to give them the same deal? 

3.  You can't force him to use that money for investments. 

But the worst part of this is that you are giving personal financial advice.  The employee decided to join KiwiSaver and you have convinced him not to.   Unless you are an Authorised Financial Adviser, you are breaking the law.   

Honestly, do yourself a big favour and just concentrate making your business a success.   KiwiSaver membership is something that happens through payroll.   Your employees can join or not join - but the choice is theirs, not yours. 




You are right, I didn't think about all the leagle and beauracratic BS that directly opposes free thought, and conversation.  The only thing stopping him trying to screw me over is his integrity.  You are only as good as your word, and if you can't trust someone to keep their word then you can't trust at all.  Giving someone the benefit of the doubt is a risk I don't mind taking, thats just me.  I believe in giving people a bit of rope, they can either climb up it, or hang themselves.  There is no way I would own my own business if noone gave me some rope, I've had pleanty of help, all my debts were private capital.  I'm happy and doing well, it remains to be seen if I can help others.  This is a bit idealistic I realise that, but having a good name, and loyal ambitious workers is great for me. 

Crikey.  Is there a book called "The Employer Delusion"?   If not, it needs writing and you need to read it!

Your employee wanted to join KiwiSaver (by the way, he doesn't have to *ask*).   Instead, he is being pressurised by you, his employer,  to invest the same amounts of money he could have had through KiwiSaver in precious metals instead.   Why?  Because your opinion is  that this will be better for him.  Worse than that, you are making out you're doing him a big favour ! 

He now feels he can't join KiwiSaver now (or in the future) because you, his employer,  will see that as a personal snub, a sign of disloyalty, showing a lack of integrity.    Is that  the kind of  "free thought and conversation" you mean?    How about letting him make his own mind up and not present him with silly dilemmas over where to invest his money?  

Thats exactly what I did, no pressure at all. He can join anytime, thats a given, once joining though he can never leave.  I have increased his options, now he actually has a real choice to make.  Obviously you can't see that, and would rather the only choice people had was to accept the government sponsered one. Sure accuse people who talk about finance of breaking the law, and anyone that doesn't join kiwisaver after getting a second opinion must have been pressured out of it.  Wake up, take control of your own future.

He was put under pressure by you after he decided to join KiwiSaver (past tense).  I didn't make it up.   Forgive me for being less-than-relaxed about the law when it comes to people's savings.   I must work on that flaw in my character. 

Effect of OBR on Kiwisaver Conservative funds
Some funds are invested in cash or near cash within the banks. Under OBR presumably they will be in the same position as other creditors. Nought for your comfort if the resolution outcome is a skinhead haircut. Maybe all investments need to be re-examined through the OBR lens