WEBVTT - Martin Hawes: Are reverse mortgages ever viable? 0:00:05.761 --> 0:00:09.441 You're listening to the Weekend Collective podcast from News Talks, 0:00:09.441 --> 0:00:09.721 it'd be. 0:00:13.761 --> 0:00:14.601 Got news. 0:00:15.441 --> 0:00:18.361 I gotta pay so long, I'm gonna work. 0:00:18.601 --> 0:00:23.801 Arn't work every day. I got mouth, I got fee, 0:00:24.881 --> 0:00:29.721 so I'm gonna make sean everybody is. I got big 0:00:29.921 --> 0:00:30.841 Polly's built. 0:00:30.641 --> 0:00:33.881 Find my test day looking like a mouth. All the 0:00:33.961 --> 0:00:36.401 little kids run around. I can hear this comach's crowd. 0:00:37.441 --> 0:00:41.481 There's a full moon out to my card house. Says 0:00:41.521 --> 0:00:44.121 it gonna leave me and Pa'll come home at fifty thousand. 0:00:46.321 --> 0:00:51.081 All then then well then on then oh man a man, 0:00:51.161 --> 0:00:51.721 old man. 0:00:51.641 --> 0:00:52.041 A man. 0:00:53.441 --> 0:00:55.401 I had a very good afternoon. If you've just joined us, 0:00:55.681 --> 0:00:58.321 this is the Weekend Collective, you're like, it's five o'clock, 0:00:58.481 --> 0:01:00.561 just gone five o'clock. Anyway, I'd say that because of 0:01:00.601 --> 0:01:02.601 course the show starts at three. We had Politics Central 0:01:03.081 --> 0:01:05.641 Chris Pink talking about the reform in the whole building 0:01:05.681 --> 0:01:09.281 consent process, followed by Shane Jones, who, among other things, 0:01:09.321 --> 0:01:11.761 we're talking about the loss of the jobs at the 0:01:13.081 --> 0:01:16.721 in Timaru and just the reasons behind that, as well 0:01:16.761 --> 0:01:18.721 as just be a bit of quick catch up on 0:01:18.841 --> 0:01:22.201 the change to the fishing limits as well. The previous 0:01:22.321 --> 0:01:26.201 hour with Kent John's from Kent John's Health for the 0:01:26.241 --> 0:01:29.721 Health Hub about Mental Health Week and now you can 0:01:29.761 --> 0:01:31.521 catch those by the way, just go and look for 0:01:31.561 --> 0:01:33.601 the podcast, look for the Weekend Collective on our Heart 0:01:33.721 --> 0:01:36.121 radio or the news talk Cippy website. But right now 0:01:36.481 --> 0:01:38.601 it is time for smart Money and my guest is 0:01:39.481 --> 0:01:43.201 financial author of a truckload of books. Actually I think 0:01:43.241 --> 0:01:46.161 it's nineteen. I kept forgetting I filed at Underway of Lots. 0:01:46.201 --> 0:01:48.241 It's like Nevaretti Marner when we ever on the panel. 0:01:48.361 --> 0:01:50.761 How many wards is it? Neva thirteen fourteen? How many 0:01:50.801 --> 0:01:51.241 books is it? 0:01:51.361 --> 0:01:53.321 Martin Hawes It's twenty three? 0:01:53.601 --> 0:01:54.681 Oh, twenty three? 0:01:54.921 --> 0:01:58.201 Sorry, yeah, and the twenty fourth has gone into the publisher, 0:01:58.401 --> 0:02:00.521 so when that's published it will be twenty four. 0:02:00.641 --> 0:02:03.321 Now I suggested a title for the last last time. 0:02:03.361 --> 0:02:04.921 I think I have no idea what it was. But 0:02:05.081 --> 0:02:06.881 have you got a working title for it yet? 0:02:07.121 --> 0:02:07.321 Well? 0:02:07.761 --> 0:02:11.481 Yeah, I think the final title is something like retirement. Ready. 0:02:11.601 --> 0:02:16.121 You know, the book is about disruption of my life, 0:02:16.161 --> 0:02:21.201 my own personal life, left Queenstown, moved to christ Church. 0:02:21.641 --> 0:02:25.201 And when you have a disruption like that, you should 0:02:25.201 --> 0:02:26.961 have a look at all the aspects of your finance, 0:02:27.081 --> 0:02:29.001 and at the same time, I wanted to make sure 0:02:29.041 --> 0:02:32.401 that I was ready for retirement. I don't necessarily think 0:02:32.441 --> 0:02:36.601 I'm going to retire anytime soon, but you're only as 0:02:36.641 --> 0:02:39.041 good as your last doctor's visit when you get to 0:02:39.121 --> 0:02:43.921 a certain age. So I sort of thought I needed 0:02:43.921 --> 0:02:46.001 to be retirement ready. So it's the steps I took 0:02:46.081 --> 0:02:48.361 to be retirement ready and to get my finances in 0:02:48.481 --> 0:02:48.961 good order. 0:02:49.601 --> 0:02:51.401 Has your perspective changed when you go and have it, 0:02:51.561 --> 0:02:53.481 I don't know if you do this sort of yearly 0:02:53.681 --> 0:02:56.081 or whatever check up with the doctors, Has your perspective 0:02:56.161 --> 0:02:59.361 changed on those visits, like here we go, yes, give 0:02:59.361 --> 0:03:00.121 me the bad news. 0:03:01.041 --> 0:03:06.001 Yeah, it really has really over the last fifteen years. 0:03:06.441 --> 0:03:09.641 I used to get a blood test and sort of 0:03:09.721 --> 0:03:12.961 basically forget that I'd had to think and never never 0:03:13.081 --> 0:03:15.761 think about it again. Now I get a blood test 0:03:15.801 --> 0:03:18.481 and I'm waiting for the GP to ring and tell 0:03:18.561 --> 0:03:22.601 me the results of it. So I do. I do 0:03:22.841 --> 0:03:28.601 think quite differently about my health then I did, say 0:03:28.921 --> 0:03:29.881 a decade or so ago. 0:03:30.881 --> 0:03:33.081 Yeah, that is interesting. I mentioned the change here. Is 0:03:33.121 --> 0:03:35.041 there anything particular that triggers it? Or is it just 0:03:35.201 --> 0:03:37.441 say you have one little incident you think, oh, my goodness, me, 0:03:37.561 --> 0:03:37.801 that's it. 0:03:39.121 --> 0:03:44.041 No, I think it's it really comes from friends and 0:03:44.361 --> 0:03:48.321 family who I have seen get bad results. So I 0:03:48.441 --> 0:03:51.161 always thought my results wan didn't They always come back 0:03:51.281 --> 0:03:55.561 and as usual they say you're perfect. But there's no 0:03:55.721 --> 0:03:59.681 reason that my blood tests would come back perfect. You know, 0:03:59.921 --> 0:04:05.201 I'm of an age now where imperfections are arising, and 0:04:06.881 --> 0:04:11.521 I guess I've just seen so much of of bad 0:04:11.681 --> 0:04:16.601 test result, bad medical test results, and yeah, you know, 0:04:16.761 --> 0:04:17.641 one day that'll be me. 0:04:17.961 --> 0:04:20.881 It's funny. It's a I mean the philosophical point of view. 0:04:20.921 --> 0:04:25.761 I was chatting to a friend, you know, about the 0:04:26.041 --> 0:04:30.721 bereavement and things like that, and it's like like there's 0:04:30.721 --> 0:04:32.841 a big, long queue and when you're young and healthy, 0:04:32.921 --> 0:04:35.441 you know, the queue for the you know, for the 0:04:35.841 --> 0:04:38.561 wrapping things up, it's a long one. And it feels 0:04:38.841 --> 0:04:41.041 there is a slight change when your parents die, and 0:04:41.161 --> 0:04:43.721 so when my parents start, it's almost like, oh, right, 0:04:43.841 --> 0:04:45.921 I've just moved to the front of the Q sort 0:04:45.961 --> 0:04:49.441 of thing. I don't know what that means anyway. Look, 0:04:49.441 --> 0:04:51.121 we're not going to focus much more on this, but 0:04:51.561 --> 0:04:54.521 it's interesting because I mean, actually you're because your books, 0:04:54.881 --> 0:04:57.281 you sort of you help people out with the titles 0:04:57.321 --> 0:04:59.521 of your books, because they're generally fairly literal, aren't they. 0:05:00.361 --> 0:05:02.081 You focus on what's the messages, and here we go, 0:05:02.121 --> 0:05:03.001 it's retirement ready. 0:05:03.241 --> 0:05:07.081 Yes, yes, that's right, yeah, yep. And it needs to 0:05:07.161 --> 0:05:09.321 be that. It needs to say what the book is about. 0:05:10.161 --> 0:05:12.881 You know, that's probably marketing one on one, I should think. 0:05:13.361 --> 0:05:16.441 I guess, so, yeah, well, actually, because what we want 0:05:17.121 --> 0:05:20.841 I wanted to talk about the for this hour to 0:05:21.001 --> 0:05:26.321 kick it off, is reverse mortgages. I well, there's a 0:05:26.401 --> 0:05:32.481 story about it where the Retirement Commissioner commission should I say, 0:05:32.561 --> 0:05:35.001 has said some pensioners. It's talked about how much you 0:05:35.041 --> 0:05:38.801 can boost your income by up to fifty percent. I'm 0:05:38.841 --> 0:05:40.801 thinking that's probably looking at the lower end of the 0:05:40.881 --> 0:05:45.361 scale in terms of boosting a low level of income. 0:05:46.441 --> 0:05:49.881 And every time I see the notion of reverse mortgages, 0:05:50.601 --> 0:05:54.641 I've always loathed the idea because it seems like one 0:05:54.641 --> 0:05:56.281 of those things where you get to borrow a little 0:05:56.281 --> 0:05:59.321 bit against the equity of your home, and over the 0:05:59.401 --> 0:06:02.521 course of time while you're living on that, the bank 0:06:02.681 --> 0:06:05.161 just gradually eats into the rest of it. And I 0:06:05.281 --> 0:06:07.361 sort of think there's got to be a better way 0:06:08.641 --> 0:06:11.201 of funding your retirement. Of course there are better ways, 0:06:11.521 --> 0:06:14.241 but I mean they've got a better, be better late 0:06:14.401 --> 0:06:17.641 resort because it seems like that is that is an 0:06:17.641 --> 0:06:20.201 option of late late or last resort, isn't it? 0:06:21.041 --> 0:06:24.961 Yes, yes, it is in the this is it's really 0:06:25.161 --> 0:06:27.841 it's really a thing for people who are asset rich 0:06:27.961 --> 0:06:30.721 and cash poor. And people wins about that, but it's 0:06:30.721 --> 0:06:33.401 actually a choice because if you are, if you own 0:06:34.721 --> 0:06:36.561 a house and not a lot else, you can do 0:06:36.721 --> 0:06:39.281 something about that. You can downsize the house, or you 0:06:39.361 --> 0:06:42.161 can go into some form of home equity release of 0:06:42.481 --> 0:06:47.041 wiser and now you'll be pleased to hear two forms. 0:06:47.121 --> 0:06:49.961 There are other reverse mortgages, which is what you were 0:06:50.041 --> 0:06:53.721 talking about, But there is now a new one called 0:06:54.281 --> 0:06:58.601 wait trot home reversions not not a terribly sexy sort 0:06:58.641 --> 0:07:01.361 of name. Now a full disclosure. 0:07:01.161 --> 0:07:02.761 Home what home? 0:07:02.841 --> 0:07:05.921 What home? Home home reversion? 0:07:06.401 --> 0:07:07.361 A home reversion. 0:07:08.361 --> 0:07:12.201 Yeah. Now, I'm a director and a small shareholder of 0:07:12.321 --> 0:07:17.681 the company that has launched this new form of home 0:07:17.761 --> 0:07:23.481 equity release. Okay, and it's not borrowing, but instead it's selling. 0:07:23.881 --> 0:07:28.641 Over a ten year period, it's selling a small amount 0:07:28.681 --> 0:07:33.401 of the house each year to make up over ten years? 0:07:34.441 --> 0:07:37.641 Are you selling thirty five percent of your house? So 0:07:38.761 --> 0:07:41.641 if you started at an age seventy, each year you 0:07:41.681 --> 0:07:45.321 would sell three point five percent of your house and 0:07:45.481 --> 0:07:48.241 you would get an amount of money for that, and 0:07:48.361 --> 0:07:53.201 that would effectively provide an income for you for a decade. 0:07:54.201 --> 0:07:57.081 So from perhaps age if you entered into this at 0:07:57.081 --> 0:08:01.001 age seventy two, that would run till age eighty two 0:08:01.321 --> 0:08:05.961 and then the income would stop and lifetime the company 0:08:05.961 --> 0:08:08.081 of which I'm a director and the shareholder would own 0:08:08.161 --> 0:08:09.601 thirty five percent of your house. 0:08:10.681 --> 0:08:16.561 Actually that who thought of that idea? Because common I'm 0:08:16.561 --> 0:08:18.121 happy to dig into it as well. I know you've 0:08:18.161 --> 0:08:22.881 and you've declared your interest in it. Is it it's 0:08:22.921 --> 0:08:24.121 something you borrow from overseas? 0:08:24.161 --> 0:08:24.321 Is it? 0:08:24.721 --> 0:08:24.761 Or? 0:08:24.921 --> 0:08:28.441 Yeah? Yeah, very common in France and other parts of 0:08:28.481 --> 0:08:30.481 Europe and a few other places. 0:08:31.841 --> 0:08:32.441 And the. 0:08:33.921 --> 0:08:36.761 The good thing about this is that there's a little 0:08:36.761 --> 0:08:41.321 bit more certainty because the problem with a reverse mortgage 0:08:41.481 --> 0:08:45.001 is that the interest rate a is quite high. I 0:08:45.081 --> 0:08:50.241 think the current one for Heartland's reverse mortgage is ten 0:08:50.281 --> 0:08:54.601 point ten point five. But also it varies over time, 0:08:54.801 --> 0:08:57.521 so you can't calculate exactly what the cost of this 0:08:57.721 --> 0:09:00.761 is going to be over let's say the next twenty years. 0:09:01.841 --> 0:09:06.401 The one the home reversion one that lifetime income has 0:09:06.521 --> 0:09:11.721 done only last for ten years. But it's working on 0:09:11.881 --> 0:09:14.881 the assumption, and the assumption is supported by a lot 0:09:14.961 --> 0:09:19.881 of studies and so forth, the assumption that as you 0:09:20.041 --> 0:09:25.241 move into your eighties, your expenditure and retirement will naturally fall. 0:09:25.961 --> 0:09:29.721 You will do less shopping, you'll do less or maybe 0:09:29.761 --> 0:09:33.961 even no travel, and so forth, And all the studies 0:09:34.001 --> 0:09:38.961 show that there is a retirement spending is a V 0:09:39.201 --> 0:09:43.041 shape that it gradually drops off as you move through retirement. 0:09:43.441 --> 0:09:46.641 It might go up a little bit, but again right 0:09:46.721 --> 0:09:49.441 at the end of retirement, as you move into care 0:09:49.641 --> 0:09:55.041 or something like that, but generally there's a fall and 0:09:55.201 --> 0:09:57.001 expenditure in retirement. 0:09:57.201 --> 0:10:00.681 How so that's because I actually was about to the 0:10:00.841 --> 0:10:03.841 other and I guess the broad heading. So I keep 0:10:03.881 --> 0:10:06.001 on chopping myself off because my as moving too quickly. 0:10:06.801 --> 0:10:10.961 But it's about late late retirement planning or last minute 0:10:11.001 --> 0:10:15.921 retirement sort of strategies. Because what's it called again, the 0:10:15.961 --> 0:10:20.161 reverse mortgage. I must say I don't like it, And 0:10:20.521 --> 0:10:22.801 it wasn't because I didn't like it when my parents alive, 0:10:22.841 --> 0:10:24.521 because I didn't think that would work, not that they 0:10:24.601 --> 0:10:27.601 ended up doing that, but I don't like it either 0:10:27.641 --> 0:10:30.241 from the sake of the fact that would eat into 0:10:30.281 --> 0:10:32.921 my equity is for what I could pass onto my kids. 0:10:33.441 --> 0:10:35.801 But the other thing is I just I've always thought 0:10:35.841 --> 0:10:38.481 that just putting your one to the side, just for 0:10:38.521 --> 0:10:41.281 a second, that one of the key if you are 0:10:41.521 --> 0:10:43.721 I guess it depends on where you're living and what 0:10:43.961 --> 0:10:46.081 the market is you're living in and what your options are. 0:10:46.561 --> 0:10:48.681 But if you have, over the course of your life 0:10:48.801 --> 0:10:50.841 ended up in a reasonably pleasant home, that's got quite 0:10:50.841 --> 0:10:52.921 a value to it. I would have thought that the 0:10:53.041 --> 0:10:55.801 first thing you'd do is, well, okay, my house is 0:10:55.881 --> 0:10:58.561 worth a million and a half, maybe I can find 0:10:58.601 --> 0:11:01.761 something for half a million bingo downsize. 0:11:02.361 --> 0:11:06.521 Yeah. The problem with that is it it's to take 0:11:06.921 --> 0:11:12.361 get any capital out of downsizing unless you move locality, 0:11:12.921 --> 0:11:15.641 and generally that's from a city. So a Queenstown person 0:11:15.801 --> 0:11:19.321 moving to christ Church is probably going to free up 0:11:19.361 --> 0:11:22.761 a capital. They'll buy much cheaper house than christ Us 0:11:22.761 --> 0:11:24.921 than they ever would in Queenstown. Or if you were 0:11:24.961 --> 0:11:28.761 living in Auckland and you move to I don't know, 0:11:28.881 --> 0:11:31.081 somewhere in the central North Island or somewhere or maybe 0:11:31.161 --> 0:11:34.241 up in Northland again, you probably free up capital. Now 0:11:34.281 --> 0:11:37.081 that means you're moving away from family, and you're moving 0:11:37.121 --> 0:11:39.681 away from friends, and you're moving away from your connections 0:11:39.721 --> 0:11:42.121 and all those kinds of things. If you simply say, 0:11:42.121 --> 0:11:44.681 am going to literally downsize the house and have a 0:11:44.721 --> 0:11:47.801 smaller house, that is, go from say three bedrooms to 0:11:47.881 --> 0:11:51.041 two bedrooms, or a house to stay in, yes, or 0:11:51.121 --> 0:11:53.401 something like that, you might free up a bit a 0:11:53.521 --> 0:11:56.561 house to an apartment. But if you're just going, you know, 0:11:56.721 --> 0:12:00.841 standalone house of three bedrooms to a standalone house of 0:12:00.961 --> 0:12:05.641 two bedrooms and the same locality, you're probably, after costs, 0:12:06.161 --> 0:12:08.001 not going to free up an awful lot of capital. 0:12:08.681 --> 0:12:13.321 So a lot of downsizing does involve people moving. I 0:12:13.401 --> 0:12:17.121 think three or four years ago when my daughter was 0:12:17.161 --> 0:12:19.441 looking at at properties and I was doing a bit 0:12:19.481 --> 0:12:22.601 of looking at properties with her, there was something like 0:12:22.681 --> 0:12:25.881 a third of people who were buying properties in christ 0:12:26.001 --> 0:12:29.401 Church were from out of town. Some would be speculators 0:12:29.441 --> 0:12:32.201 and investors, but quite a lot of them were people 0:12:32.241 --> 0:12:37.521 who were downsizing to christ Church. And that means they're 0:12:37.601 --> 0:12:43.201 leaving behind a network and friends and family and so forth. 0:12:43.481 --> 0:12:47.001 So downsizing is not all that it's cracked up to be. 0:12:47.521 --> 0:12:48.761 I used to think it was a sort of a 0:12:48.801 --> 0:12:51.961 silver ballot, but you know, when I look at it 0:12:52.121 --> 0:12:54.041 in reality and I look at the way people go 0:12:54.161 --> 0:12:57.361 about it, I don't think it's a silver ballet at all. 0:12:57.761 --> 0:13:02.241 I guess if you're living in Victoria, Aven and you 0:13:02.401 --> 0:13:04.841 decide to move maybe just to three or four streets, 0:13:05.441 --> 0:13:09.441 the probably downsize quite successfully given the projects in that market. 0:13:09.521 --> 0:13:12.161 But I'm sure, I'm sure you're right. 0:13:13.241 --> 0:13:16.561 You clarify that when you moved from Queenstown to christ Church. 0:13:18.281 --> 0:13:22.201 Probably wasn't really with the idea of releasing equity, I'm 0:13:22.241 --> 0:13:25.441 guessing as a former as financial advisor and currently financial author. 0:13:26.761 --> 0:13:29.921 No, no, it wasn't. It wasn't about freeing up a 0:13:30.121 --> 0:13:33.921 capital at all. It was about family and moving back 0:13:34.001 --> 0:13:37.921 to being by the sea, which I know. I was 0:13:37.961 --> 0:13:40.561 in the mountains and Queens and I love the mountains, 0:13:40.801 --> 0:13:43.521 but I love the sea as well. So there were 0:13:43.561 --> 0:13:45.681 quite a lot of polls to christ Church and I 0:13:45.921 --> 0:13:48.121 never wanted to leave it in the first place. So 0:13:48.561 --> 0:13:49.001 here I am. 0:13:49.281 --> 0:13:53.841 But what a good solid cantabrin you are, Martin. We 0:13:53.961 --> 0:13:55.961 want to take your cause on this a late retirement 0:13:56.001 --> 0:13:59.761 and look, I think, well, look I've been I'm not 0:13:59.841 --> 0:14:02.041 as on money, but I've been hosting a money are 0:14:02.201 --> 0:14:04.161 enough to get the sense there are a lot of 0:14:04.241 --> 0:14:08.161 people who are heading towards the retirement who feel that 0:14:08.241 --> 0:14:11.481 they are not prepared for it. So what is on 0:14:11.601 --> 0:14:13.761 your mind when it comes to getting ready for retirement? 0:14:13.801 --> 0:14:17.961 Would you consider a reverse mortgage or home reversion which 0:14:18.041 --> 0:14:20.121 is something that Martin has just shared with us, which 0:14:20.161 --> 0:14:21.721 we're going to dig into a little bit more after 0:14:21.801 --> 0:14:24.241 this R E one hundred and eighty ten eighty text 0:14:24.641 --> 0:14:28.281 nine two. It's coming up to twenty one past five 0:14:28.361 --> 0:14:47.321 News Talk s B and welcome back. This is the 0:14:47.361 --> 0:14:50.121 weekend collective. I'mton Beverage. This is smart Money. My guest 0:14:50.241 --> 0:14:53.201 is Martin Haw's financial author twenty three books, soon to 0:14:53.241 --> 0:14:57.041 be twenty four, and we're talking about late retirement options, 0:14:57.121 --> 0:15:02.041 in particular the reverse mortgage. But as Martin has mentioned, 0:15:02.961 --> 0:15:06.281 the idea of what's called home reversion, and he's declared 0:15:06.321 --> 0:15:08.401 he's actually a director and a small shareholder and a 0:15:08.441 --> 0:15:10.521 company that is starting this new idea, and it basically, 0:15:10.801 --> 0:15:15.241 instead of borrowing money where the bank gradually eats into 0:15:15.441 --> 0:15:18.481 your equity, but you borrow a chunk of money here, 0:15:18.681 --> 0:15:22.121 you actually sell a part of your house over a 0:15:22.201 --> 0:15:24.961 ten year period. I've got to be nice and circumspect 0:15:25.001 --> 0:15:26.841 about this, because when I hear a new idea, I 0:15:26.961 --> 0:15:29.121 was get excited about it. But Martin it, I must say, 0:15:30.001 --> 0:15:32.921 I'm on the face of it, it sounds like a 0:15:33.001 --> 0:15:33.801 bloody good idea. 0:15:34.841 --> 0:15:37.761 Yeah you are. Of course, they're still giving up equity, 0:15:38.401 --> 0:15:40.641 so yeah, yes, but you're getting. 0:15:40.441 --> 0:15:43.321 Paid for it's not getting eaten into. And if you 0:15:43.401 --> 0:15:46.041 still own seventy percent of the house, if your house 0:15:46.121 --> 0:15:48.321 goes up in value, it's still worth seventy percent of 0:15:48.361 --> 0:15:52.281 your house, I mean, and I guess so will your 0:15:52.841 --> 0:15:54.921 home be with the reverse mortgages. 0:15:56.761 --> 0:15:58.681 You can't. You can't have your cake and eat it too. 0:15:58.801 --> 0:16:02.561 What you trading. What you're doing is trading thirty five 0:16:02.641 --> 0:16:05.801 percent of your house or lifestyle. 0:16:06.161 --> 0:16:07.721 Yeah, which I'd. 0:16:07.681 --> 0:16:12.241 Argue isn't valuable. And you know, a lot of a 0:16:12.281 --> 0:16:14.241 lot of people they're getting their ends super and that 0:16:14.401 --> 0:16:17.601 might be thirty five forty thousand dollars a year, depending 0:16:17.641 --> 0:16:22.841 on texts and so forth, and they are almost that, 0:16:22.961 --> 0:16:24.921 you know, it depends on the size of the house 0:16:24.961 --> 0:16:26.681 and so forth. The value of the house, but they 0:16:26.721 --> 0:16:31.921 can almost double that and that gives a significantly better lifestyle. 0:16:32.561 --> 0:16:34.241 Actually, just before we go, we actually I'm going to 0:16:34.321 --> 0:16:35.881 let some of our callers ask questions because there's a 0:16:35.921 --> 0:16:37.881 lot of texts and we're going to have callers who 0:16:37.881 --> 0:16:39.801 want to find out a bit more about this. But 0:16:40.201 --> 0:16:41.681 I just wanted to touch on one little thing to 0:16:41.721 --> 0:16:43.561 get your thoughts about it. It's more just a decision 0:16:43.601 --> 0:16:46.281 around retirement that you were talking about. How as you 0:16:46.321 --> 0:16:48.161 get older, there becomes an age where you do just 0:16:48.241 --> 0:16:50.521 spend less because you're doing less and you're less active, 0:16:50.521 --> 0:16:53.281 et cetera. And I my rule of thumb would be 0:16:53.441 --> 0:16:55.881 that if I am still living the sort of life 0:16:56.081 --> 0:16:58.321 where I'm going to be requiring the same sort of 0:16:58.361 --> 0:17:02.881 spending as pre sixty five, I would imagine if I 0:17:02.961 --> 0:17:04.281 still felt that I was going to be that busy 0:17:04.321 --> 0:17:06.121 and spending that much, I probably still want to be 0:17:06.201 --> 0:17:06.601 kept working. 0:17:07.081 --> 0:17:11.041 To be honest, Yeah, yeah, that's right. What is it? 0:17:11.121 --> 0:17:14.481 Forty eight percent of people aged sixty five to seventy 0:17:14.841 --> 0:17:17.401 are still working. And I think you're right. I think 0:17:17.441 --> 0:17:21.881 if you're active and able to work, then you could 0:17:22.121 --> 0:17:26.161 very well choose to there's a small ish number of 0:17:26.601 --> 0:17:30.481 wealthy people who can afford to fund a very good lifestyle, 0:17:31.121 --> 0:17:32.281 A lot of them. You know, I had a lot 0:17:32.321 --> 0:17:34.601 of those kind of kinds of people as clients when 0:17:34.641 --> 0:17:39.921 they used to be an advisor. But yeah, you know 0:17:39.961 --> 0:17:41.801 I have I think if this new book has a 0:17:42.281 --> 0:17:44.721 I think the chap brom work is called something like 0:17:44.881 --> 0:17:47.481 in praise of work, because work does have a fair 0:17:47.521 --> 0:17:49.761 bit going for it, not not just the money, but 0:17:50.241 --> 0:17:51.961 social engagement and so forth. 0:17:51.761 --> 0:17:53.921 Social engagement and just keeping active and all that sort 0:17:53.921 --> 0:17:56.121 of thing, so long as the work itself isn't destroying 0:17:56.161 --> 0:17:58.081 you if you're doing obviously, you don't want to be 0:17:58.641 --> 0:17:59.881 working in a coal mine. 0:18:01.881 --> 0:18:04.921 Or up on the roof banging on. That's the one, yeah, 0:18:05.401 --> 0:18:07.961 n Or something like something like you need to be 0:18:08.161 --> 0:18:12.841 in a job like you and me, we're sitting on our. 0:18:12.801 --> 0:18:17.281 Butts talking good on it. Well I am you? Hey, thanks? Right, 0:18:17.361 --> 0:18:20.681 let's take some calls. Paul, Hello, how's it going. 0:18:20.761 --> 0:18:24.481 I just want to ask him a a question. Is 0:18:24.521 --> 0:18:28.481 it like reverse morgage? You know, like someone bars the 0:18:28.601 --> 0:18:31.521 money over ten years and five years they have to 0:18:31.601 --> 0:18:34.921 sell their house to go into a rest home. You know, 0:18:35.401 --> 0:18:38.201 does have money? It does whatever's owe on the house 0:18:38.281 --> 0:18:40.761 they take, do they take it out or can they 0:18:40.921 --> 0:18:46.921 transfer transferred onto the other property day buy because the 0:18:46.961 --> 0:18:49.481 only thing I don't like about reverse mortgage is is 0:18:49.561 --> 0:18:52.641 so many people that do it and they go into 0:18:52.721 --> 0:18:55.761 wrist home. They can't afford to buy a house because 0:18:56.561 --> 0:18:57.321 the money's gone. 0:18:58.161 --> 0:19:02.561 Yes, probably there'd be certainly no guarantee of that, and 0:19:03.321 --> 0:19:06.961 it would be unlikely because you know, going into a 0:19:07.041 --> 0:19:10.921 rest home we being lifetime and come. And I don't 0:19:10.961 --> 0:19:14.401 think the reverse mortgage people either, would you know, are 0:19:14.601 --> 0:19:18.001 able to lend or buy a little bit of a 0:19:18.441 --> 0:19:21.561 of a rest time So you'd have to use the 0:19:21.681 --> 0:19:24.281 sixteen in our case, you'd have to use whatever was 0:19:24.401 --> 0:19:28.881 left of your equity to buy the rest time? You 0:19:29.041 --> 0:19:32.241 not And you might do that, but you might not either. 0:19:33.481 --> 0:19:37.521 Yeah, can you ever do a thing like finances would beat? 0:19:37.561 --> 0:19:41.641 You know, we'd invest money be beat because iron about 0:19:42.121 --> 0:19:46.041 iron te teen ten thousand dollars before to six weeks 0:19:46.281 --> 0:19:51.881 my rentals and just finding somewhere to env invest rest 0:19:51.921 --> 0:19:52.321 of money. 0:19:53.601 --> 0:19:56.881 I don't do that personally, and I didn't even do 0:19:57.001 --> 0:19:59.361 that when I was a financial advisor. All I did 0:19:59.561 --> 0:20:03.161 was give advice to people and help them find somebody 0:20:03.241 --> 0:20:07.121 who would be the money for them, of which all, 0:20:07.241 --> 0:20:09.761 there are plenty of people around who will do that 0:20:10.041 --> 0:20:12.161 for you, and do it quite compotantly. 0:20:12.321 --> 0:20:14.241 It doesn't sound like I've put he's earning that money 0:20:14.281 --> 0:20:15.601 in that period of time, and he needs to worry 0:20:15.641 --> 0:20:19.001 about the reverse mortgage, that's for sure. But I'm curious questions. Yeah, thanks, 0:20:19.081 --> 0:20:23.281 thanks Paul. Let's take another question or call Bruce solo 0:20:25.361 --> 0:20:26.321 game all right? 0:20:27.201 --> 0:20:27.801 All right, hi. 0:20:29.481 --> 0:20:29.721 Martin. 0:20:29.841 --> 0:20:34.081 Hey, our situation is that we have a freehold house 0:20:34.241 --> 0:20:37.721 and also a freehold commercial building. Now, we took early 0:20:37.801 --> 0:20:40.241 retirement a few years ago and we're sort of starting 0:20:40.321 --> 0:20:42.201 run out of a bit of bread. Now, what do 0:20:42.321 --> 0:20:44.521 one knows if we would have put a reverse mortgage 0:20:44.601 --> 0:20:48.001 or a home equity release mortgage on our house and 0:20:48.161 --> 0:20:50.481 we sold their commercial property sat in five years time? 0:20:50.601 --> 0:20:54.681 Are we able to pay that mortgage off without any penalties? 0:20:55.241 --> 0:20:55.441 Oh? 0:20:55.721 --> 0:21:00.721 What a good question. I'm not sure. I'm not sure 0:21:00.881 --> 0:21:03.761 the reverse mortgage would you whether you would have that right, 0:21:04.481 --> 0:21:09.041 but you could probably negotiate that. I don't think you'd 0:21:09.081 --> 0:21:13.081 be able to do it with lifetime with the with 0:21:13.201 --> 0:21:16.561 the home reversion one because you've actually sold say thirty 0:21:16.601 --> 0:21:20.521 five percent of the house. You could argue, can we 0:21:20.681 --> 0:21:22.841 just buy it back? Well, maybe on a one off 0:21:23.161 --> 0:21:25.801 kind of deal, but you'd be an outlier. I'd have 0:21:25.841 --> 0:21:28.401 to say brucently. You know, there wouldn't be many people 0:21:28.721 --> 0:21:29.801 in that sort of situation. 0:21:30.961 --> 0:21:33.521 Yeah, because the problem we have is that no bank 0:21:33.561 --> 0:21:35.761 will need ue any money because we don't really have 0:21:35.841 --> 0:21:36.281 an income. 0:21:36.921 --> 0:21:39.961 Yes, yeah, and what about the commercial property that should 0:21:40.001 --> 0:21:41.121 be generating an income. 0:21:41.921 --> 0:21:44.761 Yeah, but that gives us enough to live on, I see, 0:21:45.001 --> 0:21:47.081 don't money to travel or anything. 0:21:47.441 --> 0:21:48.561