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Butting out; E-erotica; Solo savings; 2/4/6/8 contribution rates; get a job, a second job!

Butting out; E-erotica; Solo savings; 2/4/6/8 contribution rates; get a job, a second job!

By Amanda Morrall

1) Smoke and mirrors

On a recent trip abroad, I had occasion to undertake an undercover assignment: my neighbour asked me to buy some duty-free smokes. Don't shoot me but I obliged her. It's her only vice.

As I haven't purchased cigarettes in 20 years, I didn't realise what a mission it was today. It damn near took me 10 minutes to find them until I realised they were staring me in the face. More accurately, I was the one who was being started at by two beefy guards stationed in front of highly secured no-go zone where the cigarettes were kept in locked white closets with signs and posters plastered with warnings about death, dying and smoking. My heart was pounding as I did the walk of shame into the secret smoking chamber where I meekly placed my order half expecting to be interrogated.

When I think back to high school where there was an allocated outdoor smoking area (on site), the whole experience seems bizarre. And yet with the NZ Government determined to make the country smoke-free by 2025, it's little wonder buying tobacco has become so taboo.

Will all these restrictions and the ever growing tax grab on tobacco have the effect of stamping the filthy habit out or merely foster a black market for it? This post-budget report from BusinessDesk suggests the latter.

2) E-books

On the subject of naughty stuff, here's a sideline budding writers with a Mills and Boons bent might want to contemplate: a trade in E-erotic books which are pulsating with profits. According to this Wall Street Journal story, one in three romance books were sold in the e-book format last year underscoring the public's growing appetite for racy little numbers that can be discretely read on the bus with a tablet.

I might have to contemplate a change in themes for my second book.

3)Solo savings

National's 2012 "zero budget" has been described as under whelming (BusinessDay's Jazial Crossley reports on the tax changes here). On the whole I would agree the budget was a bit of bore. However, reading between the lines I think there was a strong message for New Zealanders who are being pulled in all directions as the Government scrambles to return to surplus in 2014-15. 

To me the Government's removal of tax breaks, even thin one's for working students, reveals a not so quiet desperation that signals the beginning of the end of safety nets, supports and rebates. While KiwiSaver subsidies are safe for now, it's hard to believe (in the absence of an economic miracle for NZ Ltd) that they are long-term sustainable. The writing is on the wall and it's everyone for themselves in the savings department. Don't expect anyone to save for you and don't expect that 3% of salary is going to cut it either. Triple that and you'll be closer to the recommended norm internationally.

4) How much do you need?

The Government and the savings industry are working on a plan to help New Zealanders determine how much they'll need in retirement and to figure out how to bridge any potential shortfalls.  We can expect some interesting material on this front in August.

With some thoughtful consideration and planning, most individuals will be able to figure this out on their own, taking stock of their assets, liabilities, current savings levels and giving some thought to what kind of lifestyle they want in retirement.

Here's a calculator that may be of benefit. It shows you how much KiwiSaver will cost you and how much you can expect to save given different contribution savings levels.

According to the latest KiwiSaver Sentiment Index, released by Mercer, the majority of New Zealanders are contributing either 2% of salary (41%) or 4% of salary (44%), while only 6% are putting away 8% of their salary.

5) Grow your business

Post GFC, second jobs and sidelines businesses have grown in popularity as both a means of getting rid of debt and increasing savings.

This article from yahoofinance looks at some considerations around making the most of your business.

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

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Lest e-books get a bad name they do have a two other advantages I like; like being able to browse and buy a new book whilst reading in bed - and - most of them are a lot cheaper (in NZ anyway) than the local book store.  What is $29.95 at the end of a car trip is $9.95 sitting at home.

Whats wrong with a boring budget.  This is not a stadium spectacle.  Indeed, 'exciting' budgets are the most likely to be bad.  But it can go either way.

Yep.  Government subsidies soon won't be there around Kiwisaver.  And there is no real reason they should be there.
Kiwisaver should be around 15% of income.  That's more than your 9% Amanda.  But there is a lot of catch up to do for almost everybody.

V true.

Free books are available on epukapuka for your e-reader. Download Overture on your Android or Kobo vox. Epukapuka is run by your public library - get a pin number for your library card. New books - free.

Self managed super should be available to whoever wants that option. Bypasses the fund manager who has his hand in your pocket.

..... be fair , KS was set up by NZ Labour .... and those guys are happy to have another fellow's hands in their pockets ......
But if you want some good advice , follow the lead of the world's richest man , Slim Carlos .... the Mexican mega-billionaire is buying up stocks in ............ Greece !
...... this guy made his killing buying Mexican stocks way back in the 1980's when the economy was absolutely munted ...... and the local gloomsterisers would've been wailing about how it'll never recover , this is the end , yadda yadda ......
Crappy situations do end .......... eventually ...... buy Greece !

Let me know when you've finished your second book Amanda, and be still, my beating heart.  

On the question of how much do you need I found this series of posts (via Mr Money Mustache's blogroll), by Sean Owen at RenewableWealth instructive:
His 5 part series is rather depressing w.r.t. critiquing the commonly recommended savings rate for retirement.