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Honey, don't sell the kids; Flip a coin; "It won't go to zero"; "Dear boss, I quit"; Mind that colossal pay gap

Personal Finance
Honey, don't sell the kids; Flip a coin; "It won't go to zero"; "Dear boss, I quit"; Mind that colossal pay gap

By Amanda Morrall

1) Don't sell the kids

Unless you've been living in a cave, most of you will know this week marked the official launch of the much touted Mighty River Power initial public offering. Wouldn't you love to know how many of the 444,000 plus pre-registrants actually put their money on the table. Top secret, says John Key. When push comes to shove, most people are reluctant to open their wallets. That's particularly the case when it comes to investing in the stock market. It's not for me to say whether this is a good or bad deal. I'm not an authorised financial advisor (AFA). I would however agree with AFA and best selling investment writer Martin Hawes that if you are carrying debt you might want to hit the pause button and think this one through very carefully.

I'm always interested to hear Martin's views and invite you to do so as well here by checking out his latest newsletter. 

2) Flip a coin

Because most of us do something other than scrutinising stocks for a living, we rely on expert opinions as to whether a particular company is a good one to invest in or not. The trouble is knowing who to believe. Should you believe your broker, your outwardly looking rich neighbour who professes to know a thing or two about the markets, or your financial advisor. 

Number crunchers at Nerdwallet in the US decided to measure the performance of certain stocks recommended by experts in the US to see how they measured up against their hardy endorsements. It's not exactly a ringing endorsements for the experts and thus Josh Brown's (aka. The Reform Broker) 'Flip a Coin' headline on his pie chart showing the results. Check out it.

3) "It won't go to zero"

Whoever said financial advisors are boring. I'm not endorsing his opinion, style, singing voice or anything else but I applaud American Certified Financial Planner Ken Robinson's courage and creative delivery for waxing poetic in rap on market resilience and the importance of having a diversified portfolio. Robinson croons enthusiastically about mutual funds, which is basically what KiwiSaver is (except it's a long-term, no getting out before 65 variety). I didn't hear Robinson dissing fund mangers for fat or undeserved fees but I might have missed it. Make sure you don't. Find out what you are paying in fees and how that compares to similar funds and factor in the performance.

4) Dear boss, I quit

More fun and games for you today in personal finance land; Check out this clever resignation letter designed by a new dad who finally threw in the towel as a employee to pursue his passion as a baker. As someone who advocates passion pursuits for a living, I found it rather inspirational. Equally as interesting however, is the banter between the talk show hosts discussing his brazen move. One of them suggests the guy deserved to be fired for honing his craft while on the job. Hard to imagine how you can bake cakes at work without the boss noticing. Googling recipes for Marzipan icing on the other hand....Hmmm, maybe he's got a point? 

5) Overpaid CEOs

One more tasty personal finance treat to conclude.  Chief executive officers employed by America's biggest firms took home on average of US$12.3 million in total pay in 2012. That compares to an average of US$34,645 p.a. for their employees, or 354 times less.

You may, or may not be comforted to know that's a dilution from the year 2000 when the gap measured out at 525 times. Yikes.

Can't imagine New Zealand, given our scarcity of big corporations, comes anywhere close to that but I'd be keen to know. Anyone?

Are you keen on Amanda? 

The best things in life are free, including her blog, but you can show your support by buying a copy of her book Money Matters. Here's how. The book is also available in ebook format as well thru Amazon and is replete with hyper links to help you get your finances in order. 

You can also follow Amanda on Twitter @amandamorrall; check out her previous Take Fives here; Find out what she's up on on her own blog here. Or if you're into yoga, come to her Sunday class at Lululemon this Sunday at 8.30 a.m. in Ponsonby. We had about 70 yogis turn up last Sunday so come early.

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#4 the icing on the cake reads:

Today is my 31st birthday and having recently become a father I now realize how precious life is and how important it is to spend time doing something that makes me, and other people, happy.

For that reasons, I hearby give notice of my resignation, in order that I may devote my time and energy to my family, and to my cake business, which has grown steadily over the past few years.

I wish the organisation and my colleagues the best for the future and I remind you that, if you enjoy this cake, you can order more at

The article then goes on to say; With his resignation, Holmes continues a long tradition of quitting in outrageous fashion.

Really? Outrageous? a polite letter written in icing on a cake? by a guy who is leaving to start a ... cake baking business?

I can't help wonder how sheltered your life has been if that is what you class as outrageous.


#3 a quick search in Google for "monkeys outperform fund managers" produces a slew of websites dedicated to the outcome of a Wall Street contest between monkeys* and fund managers.

It was spurred on by economist Burton Malkiel saying that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”

*the monkeys were actually just blindfolded people throwing darts at a stock chart.

You can read about it here if you like

but the gist of it is that you are better to just pick a passive index tracker and run with that. No fees either.

Monkeys 1 Fund Managers 0


#5 Have the booking. Reading it. Enjoying it.


Here comes the next lunatic NZ education policy from the UK....

"The Education Secretary warned that the current school timetable is out of date and only fit for the agricultural economy of the 19th century – where children had to have long summer holidays to help in the fields."

This Pommy fathead knows how to gild his CV...must have gone to the same school as Wheeler....

How long before some fool like Banks jumps on this wagon?