Well advised
When it comes to money matters, expert guidance is more important than ever in today's tough economy.
When it comes to money matters, expert guidance is more important than ever in today's tough economy.
photo Jahl Marshall
As a lender for more than 20 years, Brooke Reynolds has certainly worked her way up through the finance world. She started as a full-time casual teller and worked in almost every bank position imaginable. She then went on to work as a mobile mortgage lender and later studied conveyancing. Today, she has extensive, well-rounded knowledge of the whole banking process, not just lending, and owns half of Rapson Loans and Finance in Tauranga. Brooke loves using her valuable and vast wisdom to help others. Here, she tells us why a financial advisor is an important asset to have, and what to expect from them in terms of advice, knowledge and assistance.
Financial advisors are the go-between with individuals and the banks/lenders. They get to know you and understand your needs and then relay that information to the lenders. The relationship you form is important as the more they know their clients, the easier it is to achieve exactly what you want. Everyone has different needs − no two people are the same − and your adviser needs to be able to manage that and not take a ‘one fits all’ approach.
But can’t I just do that myself, you ask? Yes, absolutely you can. If you don’t mind making the appointments with lenders, taking time off work and then following up with further information and research. It all costs you time and effort, and then if they say no, what do you do? Advisers are able to go to multiple lenders and will be able to tell from the conversations you have had which banks have the policies and products that would best suit your situation. Banks have different policies and products. They are not all the same. Advisers know this and can navigate it all for you.
The majority of the time, it costs you nothing to consult a financial adviser; however, in the situation where you are using a second-tier lender/commercial lending/equity lending, there may be a fee. Most of the time this can be capitalised onto the loan. The banks will also claw back any commission paid if the loans are repaid and closed prior to 27 months (this varies with lenders, some are less) but this is a conversation to be had at the time of engagement.
Financial advisers are highly regulated. Absolutely everything must be disclosed, from what we are paid, to complaints and clawbacks, and so on. Our files are reviewed and we could get a visit from the FMA at any time. This includes any email correspondence, text messages and phone calls.
All in all, financial advisors are a valuable resource and tool to lean on for knowledge, advice and help with applications. Look out for my column in the next issue if you’d like to learn about different types of loans and the importance of structure.
Helping kiwis supercharge their wealth
Ask Kristen Lunman when you should start investing, and she’ll tell you, today. Thanks to Hatch, the digital investing platform she co-founded, the world’s share markets are now more accessible to Kiwis than ever.
Ask Kristen Lunman when you should start investing, and she’ll tell you, today. Thanks to Hatch, the digital investing platform she co-founded, the world’s share markets are now more accessible to Kiwis than ever.
What does wealth mean to Kiwis? Lunman says that for her customers, it means having a full life that balances travel, work, family, friends, and health. Lunman saw limited options for ambitious Kiwis to grow their wealth and, as a woman balancing career, children and life, she felt the pain. It motivated her to start Hatch, which delivers a straightforward way for people like her to get their money working as hard as they do to earn it in the first place.
“We launched Hatch on a mission to help Kiwis supercharge their wealth and build good money habits,” says Lunman. “Term deposits and savings are no longer attractive options to grow wealth thanks to low interest rates and inflation.” With Hatch, Kiwis can now own shares in over 3500 US-listed companies and funds on the intuitive and straightforward platform.
“Property’s great, but you need a large amount of capital to get involved, and then you’re locked in. Building a business is another way to grow wealth but making a success of it is hard work and high risk, and again, once you’re in, you’re in.”
Owning shares in world-class companies and funds has always been an opportunity reserved for the financial elite, something that never sat right with Lunman. She saw a way to offer a fresh new approach to self-directed investing that’s designed for newbies to experts.
“We’ve built a simple, straightforward experience to help you take control, wherever you’re at. With Hatch, it’s not hard to back the pioneers that are shaping our future and benefiting from their success. From Netflix to Zoom, Tesla and Vanguard, when you approach investing like you’re backing a business or industry, it breaks down the mental barriers to getting started.”
It takes about three minutes to open a Hatch account. After transferring money into your account, the next morning, you’re ready to buy shares in companies and funds in the world’s largest and most liquid share market. It’s that simple.
“We want people to be shareholders in businesses because it’s a tried and tested way to meet financial goals over the long term. We’re not about trading stocks on a whim and trying to predict fluctuations in the markets. We want to help Kiwis build sustainable wealth over time, through great financial habits.”
For Lunman, the best investors are mindful investors. This means considering why you’re investing in the first place. This level of self-awareness helps you stay calm and make smarter choices. “Being mindful means you don’t panic when your shares fall in value. There are always going to be ups and downs in share prices, but over time, the highs in the markets should outweigh the lows.”
As part of Kiwi Group Holdings alongside Kiwibank and Kiwi Wealth, Hatch has grown and benefited from the backing and wisdom of one of New Zealand’s most trusted financial names whilst staying completely autonomous. And the Kiwi family has benefitted from a fresh, innovative new brand. Win-win.
Buying a slice of a company or a pioneering industry like fake meat or cannabis and watching it grow and shape our future is exciting. Shareholders in the likes of Apple, Tesla, Beyond Meat and clean energy companies are looking ahead and hoping to benefit from megatrends that are changing the way we live. Why not join 65,000 other Kiwis and to do the same?
Alisha Brady: EnableMe
A financial personal trainer at EnableMe, our guest columnist says that when it comes to paying off your mortgage, 10 is the new 30.
A financial personal trainer at EnableMe, our guest columnist says that when it comes to paying off your mortgage, 10 is the new 30.
PHOTO SALINA GALVAN
When you go to a bank to get a mortgage, many people default to the bank’s offer of a 30-year term. It’s in the bank’s interest for you to take your time, as they’ll make more money. But did you know that over 30 years, you’ll pay back almost three times what you borrowed?
EnableMe founder Hannah McQueen was a young accountant when she applied to get her first mortgage 11 years ago. Reluctant to pay three times the amount she wanted to borrow back to the bank, she approached the University of Auckland’s mathematics department. Together they devised a calculus formula to determine how to pay off your mortgage in the fastest time, with the lowest interest cost and the most flexibility. That’s now the basis of EnableMe’s programme, which in the past decade has helped thousands of Kiwis get in control and get ahead.
We work on these ratios: you can pay off your debt in eight years if it’s four times the size of your household income, or in 10-12 years if it’s five times the size. If it’s more like eight times, you’ve probably stretched yourself too far and we’d suggest selling your house.
That’s why we say 10 is the new 30! Most people can achieve more than they realise when they’re armed with an ambitious plan and expert advice, and when they’re accountable to someone other than their spouse.
Kiwis fritter away 15 percent of their income on things that don’t make them any happier or that they don’t notice they’re spending money on. Finding and eliminating the fritter in your spending provides a huge opportunity to make progress. You’d also be surprised at the savings you can make from efficient mortgage set-ups, tax structures and insurances.
We use behavioural science to work out what your spending personality is, then help you incorporate positive behaviours into your life. Most of us are shoppers rather than savers, but having a plan in place that includes things that make you happy and also gives you something to strive for can help you make progress and build wealth, while taking into account your spending habits.
You can go for the traditional approach of printing out your bank statements and working out where all your money has gone, but that only tells you what you’ve done, not what you’re capable of. We’re not in the business of putting people on financial deprivation diets – we want to help them get ahead while enjoying life.