Saving Grace: Investing for the Future: Ten Years from Now, Will You Be Set Up for Life? Vikki Bland Takes a Look at the New Zealand Investment Scene in 2007. Is There Investment Potential beyond Property?

By Bland, Vikki | New Zealand Management, June 2007 | Go to article overview

Saving Grace: Investing for the Future: Ten Years from Now, Will You Be Set Up for Life? Vikki Bland Takes a Look at the New Zealand Investment Scene in 2007. Is There Investment Potential beyond Property?


Bland, Vikki, New Zealand Management


Even the most comfortably paid manager could feel a little unnerved after a visit to the Retirement Commission website. While most people want a retirement income that finances fun and opportunity as well as the essentials, fewer take the time to sit down and work out exactly how much money they need to deliver it.

According to the Commission's online calculators, a person wanting to retire in 15 years on 70 percent of $120,000 will need to have capital of around $600,000. From a zero savings position, that translates to savings and/or return on investments totalling around $2700 per month or $32,400 per year for the next 15 years.

For some senior managers and executives, such savings goals are within reach and may even be underway. But how many of us have saving and investment firmly within our sights? Are we instead the big spenders and rotten savers some economic commentators say we are?

At first glance, our financial prowess as a nation does appear weak. An April 2007 OECD economic survey of New Zealand describes the country as having a "large external deficit, very low household savings and a still-strong inflation pattern".

The survey also reports that while Australia has a household saving rate of 0.1 percent, the United States 1.7 percent, and Japan 6.8 percent, New Zealand's is a dismal minus 6.9 percent with household debt accounting for, gulp, 160 percent of disposable income. However, while statistically New Zealanders spend $1.15 for every dollar they earn, this doesn't necessarily mean the entire $1.15 has been spent in areas that don't deliver a return, says retirement commissioner Diana Crossan.

"Household debt has definitely gone up, but so has the value of assets so people think they can borrow more. We don't talk about saving any more, we talk about financial preparation for retirement," says Crossan.

She says young people may be better off spending savings on furthering their education to ensure they slot into a higher income bracket in the middle years. Similarly, it may be wiser for 'middle-lifers' to pay off the mortgage before beginning to save. Other people find it important to financially help their children to buy a house or start a business by providing 'early inheritances', family loans, or even 'passing on' a family home or farm.

"People with farms may not be savers, but they may be extremely financially well prepared for retirement. Others want to live their lifestyle now and are not saving when they should be; some are saving too much so that the life they are living now is not [enjoyable]," says Crossan.

What constitutes savings or investment is therefore not always obvious. Nor are the long-term effects of such 'hidden investments' on the economy.

FINANCIAL SAVVY Mark Weldon, CEO for NZX, is also hesitant to brand New Zealanders 'poor savers'. He says wealth and investment is measured in different ways and New Zealanders can generally be relied upon to think for themselves and obtain good advice.

"There seems to be a whole lot of debate around whether New Zealand has a savings problem. But that question, if it ever was a question, has been hijacked by people like [author and consultant] Michael Little-wood who rave on and on about our poor savings record," says Weldon.

Weldon says more New Zealanders are selling small businesses for significant gain and are not missing share market opportunities either.

"The first quarter of 2007 showed $90 million net fund inflow into the managed fund industry--that's the most for a very long period of time," he says.

Tim Jenkins, head of Mercer New Zealand, says business executives tend to think more widely about retirement savings than people at other levels of employment, are more likely to have an investment property and share portfolio, and to have achieved financial literacy.

That, by the way, is something the Government would like every New Zealander to have--from 2009, it plans to introduce financial literacy learning to schools. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Saving Grace: Investing for the Future: Ten Years from Now, Will You Be Set Up for Life? Vikki Bland Takes a Look at the New Zealand Investment Scene in 2007. Is There Investment Potential beyond Property?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.