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Speaker 5: And welcome back to the service of the Weekend Collective
Speaker 5: on Tion Beverage. And this is smart Money. By the way,
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Speaker 5: the podcast for the Weekend Collective. As I mentioned right now,
Speaker 5: it is time for smart Money. Want your calls on
Speaker 5: eight hundred and eighty ten eighty in text on nine
Speaker 5: to nine to two. We're going to have a chat
Speaker 5: about I guess, broadly speaking, managing your indebtedness, but how
Speaker 5: much debt you should take on? For instance, how much
Speaker 5: should you spend on a house versus how much the
Speaker 5: bank is willing to lend you. Because new data from
Speaker 5: Centris has revealed that the number of homeowners who are
Speaker 5: behind on their mortgaged and mortgage sorry increased by eleven
Speaker 5: hundred people in December alone. So with interest rates dropping significantly,
Speaker 5: many would have thought things would be a little bit
Speaker 5: easier financially. So what has happened and how are people
Speaker 5: coping with that? And what is the best way to
Speaker 5: manage that debt? And I mean, how desperately should you
Speaker 5: also just make sure that you don't get into debt?
Speaker 5: And how do you see about managing your debt so
Speaker 5: you don't get into trouble with things like your mortgage,
Speaker 5: which is the last thing you would want anyone to
Speaker 5: be stressed about, because the stress around being behind on
Speaker 5: your mortgage payments just be absolutely horrendous. Anyway, joining us
Speaker 5: to talk about that is the financial author of how
Speaker 5: many books I think we've lost count But there's another one?
Speaker 5: Is it coming out soon? It's Martin Hall is goody
Speaker 5: Martin how are you?
Speaker 6: Yeah, yeah, hi, hi there, Yes it is. It's coming
Speaker 6: out in March.
Speaker 5: This is number seventeen or eighteen.
Speaker 6: No, it's twenty four.
Speaker 5: Oh, twenty four books.
Speaker 6: Yeah, I'm so embarrassed to say the number. But it's
Speaker 6: over a long period of time. You know. I wrote
Speaker 6: my first one in nineteen eighty seven, so you know,
Speaker 6: it's not like I've just rustled them up in the
Speaker 6: last couple of weeks or some point.
Speaker 5: I guess, because there must be themes that do recur
Speaker 5: in the books. But are there or do you manage
Speaker 5: to write completely about something that you've never written about before.
Speaker 6: I'd call it crossover? Yeah, you know, so if I
Speaker 6: write about investment, I have to write a little bit
Speaker 6: about property investment. And I've already wrested on a wholebok
Speaker 6: on property investment. Very outdated.
Speaker 2: Now.
Speaker 6: I had a look at the other day and I
Speaker 6: was talking about houses, you know, good houses that you
Speaker 6: could buy for two hundred thousand, that sort of stuff,
Speaker 6: because it was done well, it was done back in
Speaker 6: ninety war, I think of ninety five or something. So
Speaker 6: it's you know, it whatard embarrass me to see it
Speaker 6: in a bookshop now. But you know, there's always a
Speaker 6: bit of crossover, but it's certainly themed quite separately, and
Speaker 6: they're about the big picture, if you like. Is quite
Speaker 6: a different topic from anything else I've done. Yeah. Has
Speaker 6: it got a title, Yeah, A Retirement Ready. So it's
Speaker 6: a book about it's quite biographical. I think I've probably
Speaker 6: said this to you before, but I had a couple
Speaker 6: of bad years in my life, ended up moving from
Speaker 6: Queenstownd to christ Church. And when you have a big
Speaker 6: change in your life, and I certainly have a big change,
Speaker 6: I sat down and figured out what part of my
Speaker 6: finances need to change, and there are probably six or
Speaker 6: seven major areas. So I wound up the family trust,
Speaker 6: I did a new will, I handed my investments over
Speaker 6: to somebody to manage for me after forty five years
Speaker 6: of doing it. So a bunch of stuff like that.
Speaker 6: So the book basically relates those things, because although I
Speaker 6: don't intend to retire, I know very well that I
Speaker 6: could be retired. I could find myself retired for some
Speaker 6: reason or other.
Speaker 5: Well, of course, for many people, the thought of retiring
Speaker 5: is a long way away. When you've got these figures
Speaker 5: about the number of people who are behind on their mortgages. Yes,
Speaker 5: it does feel pretty grim, doesn't when you see those
Speaker 5: sorts of headlines, isn't it?
Speaker 6: Yes? It does. And look, I don't think the recession
Speaker 6: is over. It's hard to know. In New Zeallympics. We
Speaker 6: are so behind and getting data. We don't get data monthly,
Speaker 6: we get generally quarterly, and I think that's a real
Speaker 6: fault New Zenald, So we we don't know how bad
Speaker 6: things are they are. But I have a bunch of
Speaker 6: small business owners who I talk to pretty regularly and
Speaker 6: have done for years, in some cases forty odd years,
Speaker 6: and some of them have always been extremely good bell
Speaker 6: weathers for telling me what's going on in the in
Speaker 6: the in the economy. And you know, if I say
Speaker 6: it one of them, you know, how are sales at
Speaker 6: the moment, and they say absolutely dreadful, then I know
Speaker 6: that that's a pretty good sign that people are hurting
Speaker 6: out there, and I think they are. And you know
Speaker 6: that that figure showing mortgage differulties rising in December. December
Speaker 6: is a high expense month, so you're trying to do
Speaker 6: something for the kids, You're trying to have a reasoning
Speaker 6: sort of Christmas, and the mortgage shouldn't go on the
Speaker 6: back burner, but it very often does. And I suspect
Speaker 6: January is going to be pretty tough for people, and
Speaker 6: probably for another three months or so at least.
Speaker 5: Yes, because the number of people who are behind on
Speaker 5: their mortgages is over twenty two thousand now, so that
Speaker 5: number increased by eleven ye yeah, yeah, yeah, I can't
Speaker 5: think of any Oh. Look, look, there's all sorts of
Speaker 5: stresses that we can have in life, but in terms
Speaker 5: of financial stress, I've got to think that being behind
Speaker 5: on your mortgage must be the the up there in
Speaker 5: terms of the number one that you don't want to be,
Speaker 5: And isn't it.
Speaker 6: No, yeah, that'll be right. But tim of you ever
Speaker 6: lost your job, you know, don't come back, don't hume
Speaker 6: back Monday. So an awful lot of public servants have
Speaker 6: lost their jobs and there's a fair unemployment as rising.
Speaker 6: Infrastrates are not really falling terribly quickly. So they are,
Speaker 6: you know, the four point two five, but you know
Speaker 6: we've got floating which is a seven percent and fixed
Speaker 6: the fixed rate ones that six six and a half.
Speaker 6: That that kind of thing. They're not they're still pretty
Speaker 6: jolly expense of given the fact that inflation's gone down
Speaker 6: to two point two last cause, which really takes me.
Speaker 6: Sorry to interrupt and rave.
Speaker 5: Varner, but no, this is what you stay silent.
Speaker 6: Me stay silent. Never the we measure inflation quarterly in
Speaker 6: this country, so our inflation came out, I mean it
Speaker 6: was the twenty second of January, and that was for
Speaker 6: the last quarter, so that was October, November, December, so
Speaker 6: we knew at the end of January what inflation had
Speaker 6: been in October, because you know, like the US and
Speaker 6: the UK and most big economies measuring this monthly, so
Speaker 6: they've got their finger right on the pole. So Deserve
Speaker 6: Bank is getting those those numbers and being i think
Speaker 6: very reactive and and and dropping intst rates and quite
Speaker 6: big chunks as they see. We don't know what inflation
Speaker 6: was in January, and we won't know until April, yeh
Speaker 6: of April.
Speaker 5: And of course, I mean just generally in terms of
Speaker 5: the economy and the global outlook, there's still a wack
Speaker 5: of uncertainty there out there at the moment, isn't there
Speaker 5: Just it's just colossal there is.
Speaker 6: Yes, investors are doing well. Investors are doing quite well.
Speaker 5: What sort of investors you mean people are, yeah, you.
Speaker 6: Keep you saving investors and Shermark and investors and the likes.
Speaker 6: But I think where there's probably a lot of hurts
Speaker 6: in the small medium sized business area in New Zealand.
Speaker 5: Because one of the things I think I was as
Speaker 5: I was looking at the questions that we've sort of
Speaker 5: lined up to talk out with her to do with
Speaker 5: the debt and how much should you spend on a
Speaker 5: house versus how much the bank is willing to lend you,
Speaker 5: I was thinking that if I was sitting back and
Speaker 5: listening to conversations around debt, and I guess through the
Speaker 5: course of smart Money, I've we hear people talking about
Speaker 5: how to use debt and how debt can be used
Speaker 5: to build your wealth and things like that. And yet
Speaker 5: when you are in the situation where debt's getting on
Speaker 5: top of you, and now we're looking at the number
Speaker 5: of people who are not managing their mortgages, I just
Speaker 5: I think there's some of the question about there about
Speaker 5: what is what attitude should we have towards debt and
Speaker 5: to how approach it to approach it, because of course,
Speaker 5: when you are borrowed in a property market which is
Speaker 5: going gangbusters, then you've leveraged up the ying yang and
Speaker 5: you might be terrified, but then you're laughing a few
Speaker 5: years later because things are gone nutty. But if it
Speaker 5: goes the other way as well, and you get bitten
Speaker 5: by too much debt, it can really ruin your life,
Speaker 5: can't it.
Speaker 6: Absolutely. You know, it's a double short sort. You know,
Speaker 6: it cuts back to ways. It cuts on the upside.
Speaker 6: It's great on the upside, as you say, but it's
Speaker 6: really really bad on the downside. You know, we've been
Speaker 6: talking about mortgages, and you know, I think everybody would
Speaker 6: say it's fair enough, it's probably absolutely necessary, and the
Speaker 6: vast vast majority of people the cases that they would
Speaker 6: have to borrow to buy a house. But it's when
Speaker 6: people are borrowing to buy consumer items like appliances and
Speaker 6: so forth, and these things are always going to depreciation
Speaker 6: value that you're starting to get in trouble. And the
Speaker 6: trouble becomes much worse when you start to borrow for consumption,
Speaker 6: and that you really are on the skids there. So
Speaker 6: I always think of debt as you know, there's good debt,
Speaker 6: and that's for things that go up in value will
Speaker 6: tend to go up in value being houses, and.
Speaker 5: It's as that supports your ability, supports your ability to
Speaker 5: generate income which covers more than the debt pays for them.
Speaker 6: You know. Yep. But when you go out and you
Speaker 6: put the car or the new dishrusher on HV, I
Speaker 6: think that's a hold.
Speaker 5: Of the border because for some people, that is borrowing
Speaker 5: to buy basic things that I would call them housing
Speaker 5: infrastructure in a way you just talked about buying a
Speaker 5: dryer or a bed or things like that. People borrow
Speaker 5: a lot for that. It's quite consistent. I don't know why,
Speaker 5: because I never really got particularly financial advice from my
Speaker 5: family or anything, but I always thought instinctively that putting
Speaker 5: something on lay by or paying something off gradually didn't
Speaker 5: make sense, just because I thought, well, why would you
Speaker 5: do that? Why wouldn't you just wait until you've got
Speaker 5: the money and then buy. But not everyone has that
Speaker 5: convenience of just going, well, I'll wait a little bit
Speaker 5: longer till I've saved for that particular item, and that
Speaker 5: becomes part of their way of life, doesn't it.
Speaker 6: Yeah, yep. And Lita, it's a lower income country, you know,
Speaker 6: there are a lot of people, even in relatively good
Speaker 6: time who are struggling. We don't pay high wages here.
Speaker 6: We don't have industries that are able to afford to buy,
Speaker 6: sorry to pay high wages. You know, it's fairly hard
Speaker 6: scrabble being in Mirrle New Zealand, even at the very
Speaker 6: best of times, let alone at times like now when
Speaker 6: there are layoffs happening, when infistrates are sticky. On the upside,
Speaker 6: it's pretty jully hard for people.
Speaker 5: What advice do you give to people who are in
Speaker 5: a position of paying off debt how quickly they should
Speaker 5: do it, because if it would love to hear your
Speaker 5: approach on this as well, how hard do you strive
Speaker 5: to pay off debt versus going Well, Okay, I could
Speaker 5: pay my mortgage off a few years earlier, but I
Speaker 5: also do want to actually enjoy life before I need
Speaker 5: to retire, because it is it is an interesting balance
Speaker 5: to strike, isn't it Like I could probably I'm we're
Speaker 5: in the fortunate position that we've paid a lot of
Speaker 5: our mortgage off, but if I really wanted to, I
Speaker 5: could probably pay it off several years earlier. But the
Speaker 5: hedonistic part of Tim Beveridge wants to have that wants
Speaker 5: to go hiking in the in the Alps.
Speaker 6: Yeah, there's a there's a balance on that, isn't it.
Speaker 6: But my general principle, if the debt is non tax deductible,
Speaker 6: you know, so it's for the house you're going to
Speaker 6: live in or for its an appliance, and it's not
Speaker 6: for a business or to invest in property or something
Speaker 6: like that, then I would be saying, pay off that
Speaker 6: non deductible debt as fast as you possibly can get
Speaker 6: that off your back, and then I think you can
Speaker 6: start to relax. Now the bit of rolling of eyes
Speaker 6: and so forth when I say this, but I always
Speaker 6: think as an aim, people should try to have their
Speaker 6: mortgage paid off by the time they're in their early
Speaker 6: early to mid fifties, something like something like that. And
Speaker 6: I think when that happens, you'd have with bloody good
Speaker 6: celebration and maybe even spend you know, make the last
Speaker 6: mortgage payment and then make the next fun that you've
Speaker 6: got for a really good trip or something. I've really
Speaker 6: looked forward forward.
Speaker 5: And the reason I raised that is because I recently
Speaker 5: just for an exercise. It ties into a couple of
Speaker 5: things You've talked about how the cost of borrowing is
Speaker 5: still quite high, so we've got. I think that there's
Speaker 5: this there's this idea that in New Zealand that oh,
Speaker 5: look this house is only eight or nine hundred thousand
Speaker 5: dollars or something, and people think, oh, that's that doesn't
Speaker 5: sound that expensive. But then you work out what the
Speaker 5: mortgage is on that and you go, hell, that's a
Speaker 5: lot of money. But what it ties into is that
Speaker 5: if you do decide to let that mortgage go for
Speaker 5: another five years, that is actually worth a truckload of money,
Speaker 5: isn't it? And the interest Whereas if you so, the
Speaker 5: moral of the story I'm yes, I'm leaning to is
Speaker 5: I should be lecturing myself to biting the bullet and
Speaker 5: paying that mortgage off as fast as possible because it's
Speaker 5: worth tens, if not hundreds of thousands of dollars, isn't it.
Speaker 6: If I well a financial advisor, and I'm not from
Speaker 6: I was your financial advisor, I'd be banning with table.
Speaker 6: I'm saying, yes, get rid of the thing. Life can
Speaker 6: be a whole lot different if you don't have that
Speaker 6: monkey on your back.
Speaker 5: So we want to know your attitude to debt. This
Speaker 5: is basically a simple question. We've got lots of questions
Speaker 5: around this about how much you should spend on your
Speaker 5: house versus how much the bank is willing to lend you.
Speaker 5: But how if you are listening right now, how cautious
Speaker 5: are you or careless if you like. And I don't
Speaker 5: mean that in a judgmental way either, because we can
Speaker 5: all form our own judgments on our attitude towards money.
Speaker 5: But how cautious are you when it comes to debt?
Speaker 5: Because while you might be borrowing for something which you
Speaker 5: think is going to make you a fortune, if it
Speaker 5: turns the other way, it can be a really nasty
Speaker 5: You can find yourself in a bit of a pickle.
Speaker 5: So do you try and pay off your mortgage as
Speaker 5: fast as possible or do you sort of think, well,
Speaker 5: you know what, I also want to be able to
Speaker 5: enjoy life. But that ten thousand dollars holiday you might
Speaker 5: or maybe even more if you're going overseas, how much
Speaker 5: is that worth in the mortgage ultimately that you're going
Speaker 5: to pay for that holiday because you didn't stick it
Speaker 5: off your mortgage in the first place. I just want
Speaker 5: to know that your attitude towards how urgently you address
Speaker 5: paying off your debt eight hundred and eighty ten and
Speaker 5: eighty text nine two nine two. You can email Tim
Speaker 5: be it Newstalks said, be But you know what, this
Speaker 5: is a talk back show, so let's get on the blower.
Speaker 5: Twenty three past five. Welcome back to Smart Money. My
Speaker 5: guest is financial author. He used to be a financial advisor,
Speaker 5: but now he's a financial author. He dishes out of
Speaker 5: his advice.
Speaker 6: Did I?
Speaker 5: I didn't. I hope I didn't describe his financial advisor earlier, Martin.
Speaker 5: But anyway, we've moved on. It's Martin Hahawes and he's
Speaker 5: got a new book coming out soon, by the way,
Speaker 5: Retirement Ready, So keep an eye out for that when
Speaker 5: it does actually hit the shops. I realized, actually the
Speaker 5: way I framed my question, by the way, was around
Speaker 5: our attitude to debt. But I think that the more
Speaker 5: digestible question for people is we, in most of us
Speaker 5: who've got a house or rent, we've got some sort
Speaker 5: of debt, haven't we. What are the luxuries that you
Speaker 5: often see taking priority? What are the luxuries in your
Speaker 5: life that you give priority to because you still want
Speaker 5: to live when in fact, if we listened to the
Speaker 5: advice that Martin might give, if you're still a financial adviser,
Speaker 5: there would be banging the table saying, just pay off
Speaker 5: the mortgage. Martin. In your own life, you would have
Speaker 5: had moments where you possibly could have paid more off
Speaker 5: something I'm guessing, but you would have made a trade off.
Speaker 5: What were your trade offs?
Speaker 1: For?
Speaker 6: My trade offs were generally lifestyle rather than buying stuff.
Speaker 6: I mean I could have made a lot more money.
Speaker 6: Have I been or christ Church rather than Queenstown, then
Speaker 6: I would have had a much bigger career. I knew
Speaker 6: it at the time, but I thought, well, I'm I'm
Speaker 6: prepared to give up, to give up some income, to
Speaker 6: give up building a business or anything like that, and
Speaker 6: have a lifestyle full of mountaineering and skiing and well
Speaker 6: generally messing around.
Speaker 5: That's exactly the issue I think many of us have.
Speaker 5: And look, we live in a gorgeous country. We want
Speaker 5: to make the use of it. But also New Zealanders
Speaker 5: love overseas travel. I mean, you're the sentiments you've just
Speaker 5: talked about the mountains and skiing and lifestyle and mountaineering.
Speaker 5: I think you've been. Haven't you been mountaineering in France recently?
Speaker 6: Yes? I have? Yeah, yeah, well a year ago, oh,
Speaker 6: a year ago.
Speaker 5: Well, let's call it recently, because that's the same time
Speaker 5: I heard our trip. But those are the questions, and
Speaker 5: that is that the cynical way I would put it,
Speaker 5: cynical way whatever, Just the way I would say, which
Speaker 5: maybe set me up for people to immediately swap me
Speaker 5: down as having a bad attitude, was I don't want
Speaker 5: to be saving so hard for retirement that I can
Speaker 5: look back and luxury and a life that I haven't lived.
Speaker 6: Yes, I think it does. It's really really well some time.
Speaker 6: You know, it's a trade off, it's a balance, it's
Speaker 6: what we're comfortable with. I don't think there's any rule
Speaker 6: of thumb or anything like that. It's a trade off
Speaker 6: between the present and the future. The present getting yourself
Speaker 6: into a strong financial position, maybe having no death or
Speaker 6: at least very little dere the future in terms of
Speaker 6: savings and such like. So, I mean, you can you know,
Speaker 6: I know people who have spent their berty paying off
Speaker 6: their mortgage and getting themselves into a very strong position.
Speaker 6: They can live the rest of their life mortgage free.
Speaker 6: They've probably got a bit of income from other sources,
Speaker 6: they can work part time. That kind of thing. They
Speaker 6: pay a big price for that, and the price they
Speaker 6: pay is lifestyle. Now I'm having a pretty good lifestyle
Speaker 6: at the moment because although I work, you know, I'm
Speaker 6: not working full time or anything like that. And so
Speaker 6: I'm going to the likes of France or Italy this
Speaker 6: year probably to go climb and to go rock climbing,
Speaker 6: or to go mountain mountain, mountaineeric. But you know, I mean,
Speaker 6: excuse me. I made it through to them. Some people
Speaker 6: don't make it through through, you know, to their health,
Speaker 6: and then they can no longer. I can still carry
Speaker 6: on during mountaineering rock climbing on my seventies. A lot
Speaker 6: of people wouldn't be able to.
Speaker 5: Yeah, I think because I think that that's ultimately when
Speaker 5: it comes to questions we can all relate to, whether
Speaker 5: it comes to money and finances, is what trade off
Speaker 5: are you prepared to make? And I mean, look, I've
Speaker 5: been a musician for I was a freelance musician for
Speaker 5: quite a few years, and that is a tough way, yes,
Speaker 5: financially that there is a major sacrifice that comes. Until
Speaker 5: I could have stayed practicing law, and who knows, but
Speaker 5: I would have looked back and there's a certain element
Speaker 5: that in my poverty. I do feel pretty good about
Speaker 5: the choices I've made, because ultimately life is for living.
Speaker 5: But it is it's a constant I don't know how
Speaker 5: many people wrestle with this, and I would imagine everyone does,
Speaker 5: doesn't it, Because you see people who seem to seamlessly
Speaker 5: make a decision to, you know, really aggressively attack their
Speaker 5: finances and get on top of it and things, and
Speaker 5: it always feels like it's effortless for them. But when
Speaker 5: you talk to them and go, oh, well, you know,
Speaker 5: I wish I'd done X, Y and Z, and instead
Speaker 5: we focused on paying off our debt. And it is.
Speaker 5: It's a constant wrestling match with everyone, unless you win
Speaker 5: the lotto. And even then people still blow the money.
Speaker 6: Don't they. They are very high proportional of them. It's
Speaker 6: I think it's a very difficult thing. I don't think
Speaker 6: that most people make a conscious decision. Although when they
Speaker 6: realize they've made a decision, say to have the overseas trip,
Speaker 6: instead of waking ten dollars of them more which were
Speaker 6: twenty when they or twenty when they've made that decision,
Speaker 6: they're very good at at justifying it, having already made it.
Speaker 6: They've made the decision because that's what they want to do,
Speaker 6: but then they come up with the reasons they do it,
Speaker 6: and often around lifestyle is the thing. You know, I
Speaker 6: said before, I think people should be aimble to pay
Speaker 6: off their mortgage in the early to make fifties and
Speaker 6: people will have all their lives and how do you
Speaker 6: do that these days? And I'm well aware that young
Speaker 6: people now have a lot more temptation put in their
Speaker 6: way than we to. You know, overseas travel is as
Speaker 6: easier for.
Speaker 5: The Instagram lifestyle.
Speaker 6: Yeah, exactly, yep. If you've got to create your lifestyle
Speaker 6: on Facebook, just just so you've got to be doing
Speaker 6: this these kinds of things. You've got to have these
Speaker 6: kinds of things, whether it's electronics or what have you.
Speaker 6: I'm not can't remember who it was who was talking
Speaker 6: about the smashed avocado on toast. Yeah, yeah, and sort
Speaker 6: of scoffing about it. I know people have the temptation,
Speaker 6: but I think I think we've always got to try
Speaker 6: and say, to what thing do I will I feel
Speaker 6: the most value? Yeah, And for some people come up
Speaker 6: with the idea of having no debt, it's so valuable
Speaker 6: to them that they're prepared to go, prepared to foregos
Speaker 6: things for other people. You know, they value the overseas truck,
Speaker 6: they value the ski holiday or what have you.
Speaker 5: It's an interesting one because it almost lends us in
Speaker 5: a money out. It's a philosophical question around, I think,
Speaker 5: because yeah, they're not easy. They're not easy decisions to answer,
Speaker 5: and I sometimes wonder whether each generation is influenced to
Speaker 5: go the opposite way of the previous one. And you
Speaker 5: will have spoken to plenty of people. In fact, often
Speaker 5: you talk to a successful business person man or woman
Speaker 5: about things and you'll say, how did you end up
Speaker 5: deciding to do X, Y and Z? And they I've
Speaker 5: heard it quite a few times, and they said, I
Speaker 5: saw how my parentstruggled from payday to payday, and I
Speaker 5: resolved I would never be like that. So their priority
Speaker 5: was easily set at it's all about wealth accumulation, full stop.
Speaker 6: Yes. My parents used to tell us about the depression.
Speaker 6: I was going to say, AGNs No, it just left
Speaker 6: such a huge scar on them that my father particularly
Speaker 6: kept saying, there will be another depression, there will be
Speaker 6: another depression. You've got to make sure that you've got
Speaker 6: yourself in a position that you can withstand that.
Speaker 5: Do you think there will be another depression? Martain?
Speaker 6: Oh, I think undoubtedly at some point in the future.
Speaker 6: Who knows.
Speaker 5: The reason I asked that, sorry to interrupt, is because
Speaker 5: I wonder if monetary policy and economics has evolved a
Speaker 5: bit more where sensible governments can sort of manage things
Speaker 5: a little bit, so we live within a narrower band
Speaker 5: without those extremes, although we have some medicine extremes in
Speaker 5: terms of wealth, haven't we? But now you know, because
Speaker 5: for instance, I'm probably a little bit a little bit
Speaker 5: pessimistic and concerned how long it's going to take us
Speaker 5: to boost our GDP and to get out of the
Speaker 5: doldrums a bit, because it does feel despite whatever headlines
Speaker 5: you might read, it does feel pretty blur at the moment,
Speaker 5: doesn't it.
Speaker 6: Yes, yes, it does. I do think economics is better.
Speaker 6: It's way better than you know when I was saying
Speaker 6: my twenties or thirties. I think governments can manage the
Speaker 6: economy much better. They've got far better data. But still
Speaker 6: there's going to be something come out of left field
Speaker 6: and that will cause a depression at some point. No,
Speaker 6: no idea. When I think this recession. We've got a
Speaker 6: sort of it was first we've had for a good
Speaker 6: while other than during the during cover. But I think
Speaker 6: it's a bit of a shot across our bowels because
Speaker 6: for a lot of people it's kind of a wake
Speaker 6: up call. And you know, the I can't see New
Speaker 6: Zealand wriggling out of this quickly either, you know, that's
Speaker 6: sort of what you were saying. I can't see. I
Speaker 6: can't see we've got any fantastic industries to do that with,
Speaker 6: and we don't have an oval strategy like the like
Speaker 6: Singapore or or even Hong Kong you used to have.
Speaker 6: And we've got a couple of the two main industries
Speaker 6: are in trouble. One is agriculture. Yes, I know dairy
Speaker 6: prices are up a little bit a little bit now,
Speaker 6: but in lots of ways if you stand back and
Speaker 6: look at the big betause you say that agriculture is
Speaker 6: losing its social license. And then the other big industry've
Speaker 6: got is tourism, which is still not back to pre
Speaker 6: COVID COVID levels, but even so it's a scungy sort
Speaker 6: of industry. It's an industry base based on people making
Speaker 6: cups of coffee, for tourists basically making their beds and
Speaker 6: that sort of thing. You can't get productivity growth out
Speaker 6: of tourism. Tourism somebody can only make one bed every
Speaker 6: ten minutes, mons or whatever it is. It's you know,
Speaker 6: it's real price. Take us up and we try to
Speaker 6: get to the top end of tourism, you know, by
Speaker 6: getting the wealthiest people to come. But yeah, and do
Speaker 6: we make some progress on that, but it's still pretty
Speaker 6: just jolly difficult in Udustrand and I say that having
Speaker 6: lived twenty years in Queens Fne.
Speaker 5: Yeah, which is obviously we know where Queenstone gets its money. Well,
Speaker 5: they get their money from selling real estate as well
Speaker 5: and developing things. But I like your thoughts on this
Speaker 5: about what's firstly getting back to that question I asked
Speaker 5: of Martin about what are the trade offs you make
Speaker 5: when it comes to managing your own debt, indebtedness and
Speaker 5: way of life. And look, I know, if there are
Speaker 5: people are living from paycheck to pray check, there's not
Speaker 5: a lot of trading off that goes on. Although even
Speaker 5: within smaller budgets there are still those things where you think, okay,
Speaker 5: well I'm just not going to fall go having that
Speaker 5: coffee on a Tuesday morning and a scone or something.
Speaker 5: That's my little bit of luxury. What are the luxuries
Speaker 5: that you you give priority to when if you will
Speaker 5: simply all about the money, you would do everything to
Speaker 5: pay off your debt and to save as much as possible.
Speaker 5: We love your calls on that as well. You'll also
Speaker 5: give you all feelings on the outlook that Martin and
Speaker 5: I have sort of been sharing about the future in
Speaker 5: New Zealand, which does make you sort of understand why
Speaker 5: politicians like for instance, Shane Jones comes to mind pushes
Speaker 5: we're going to dig, dig, dig, baby. We got to
Speaker 5: get the minerals. We've got to do whatever it takes
Speaker 5: to develop more wealth, which sounds politically from that point
Speaker 5: of view, quite appealing. Oh eight hundred and eighty ten
Speaker 5: addicts twenty one to two six News Talks. He'd be yes,
Speaker 5: welcome back to the show. Now I'm thinking through the
Speaker 5: smart money lens, why is Billy Joel interested in an
Speaker 5: uptown girl because he wants to have a bit of lifestyle.
Speaker 5: Of course, he's an uptown boy these days. Billy Joel.
Speaker 5: I hate to think what he's made over his career,
Speaker 5: but just selling out Madison Square Garden once a month.
Speaker 5: Is your sort of monthly pub gig. That'll be a
Speaker 5: gig to go to, wouldn't it. Martin Dawes.
Speaker 6: Yes, you shouldn't have given up the well, you haven't
Speaker 6: given up music.
Speaker 4: Me.
Speaker 5: No, I'm not quite updown. It wasn't Christy Brinkley, I think,
Speaker 5: wasn't it Billy Joel? Anyway, looks good to bound through
Speaker 5: out these things. Hey, look, it's a few texts before there.
Speaker 5: I do want to touch on Key we Saver because
Speaker 5: there's been some stuff out about some of the funds
Speaker 5: that haven't been performing as well as others. Somebody's one
Speaker 5: person just says, the choices that we make are a
Speaker 5: lot about the spoon that you're given. And I guess
Speaker 5: that's I'm not sure. Is there another analogy for silver spoon?
Speaker 5: Is there stainless steel?
Speaker 6: YEA, A rough pewter or something. I suppose No, I
Speaker 6: supposed pewter is quite quite valuable. Look, there's a lot
Speaker 6: of truth in that, you know, I mean, I you know,
Speaker 6: I don't think I'm particularly clever or anything. I've done
Speaker 6: reasonably well. But I was brought up by two loving
Speaker 6: parents who really valued education, demanded that I continue to
Speaker 6: have an education. They were both very good with words.
Speaker 6: They loved language. That that came down to me. I
Speaker 6: went to a very good school. It was a public school,
Speaker 6: but a very good school with some absolutely wonderful teachers.
Speaker 5: I drop the name well.
Speaker 6: Iwan Marshall was one of them, and Derek Bolt was
Speaker 6: the other white Tachi boys High school. There was the school.
Speaker 5: Yeah that's right, man, Yeah, yeah, those names schools or
Speaker 5: something of course.
Speaker 6: Yeah, yeah, but a whole bunch of really good teachers
Speaker 6: who again demanded that you learn stuff. So I've had
Speaker 6: every advantage and no silver spone, that's for sure.
Speaker 5: Yeah.
Speaker 6: A wealthy family, but wealth wealth is and lots more
Speaker 6: ways and money.
Speaker 5: Look, I don't want to get distracted by this particular
Speaker 5: threat of conversation, but I agree one hundred percent. I
Speaker 5: think that the worst thing that you can probably do
Speaker 5: for your kids is to simply hand them wealth without
Speaker 5: the education that supported your building that in the first place.
Speaker 5: I've got a question here, Martin. Martin, we have almost
Speaker 5: half a half a million invested trying to set up
Speaker 5: for retirement, which is a few years away. My questions
Speaker 5: relate to poorly performing stocks, namely New Zealand. Conversely, US
Speaker 5: stocks are doing well, why would we even consider investing
Speaker 5: in New Zealand. I'm sure mister Luxeon would like to
Speaker 5: see New Zealand investing. What are your observations on that?
Speaker 5: As an author of financial author.
Speaker 6: I don't manage my portfolio, portfolio or any more. But
Speaker 6: one of the one things that I did say to
Speaker 6: the people who are managing it now is that I
Speaker 6: didn't want to be heavily invested in New Zealand. Yes,
Speaker 6: I'd have a token amount and that it's less than
Speaker 6: ten percent and invested in New Zealand. The balance of
Speaker 6: it is in US and particularly US equities, a little
Speaker 6: bit in Europe as well. So I don't think you know.
Speaker 6: I mean, I love New Zealand. I choose to live here.
Speaker 6: I could go on the elsewhere, but I'm not going
Speaker 6: to have the bulk of my money here because well,
Speaker 6: I just can't see anything decent to put my money into.
Speaker 5: Gosh, that's a sobering comment because I appreciate your honesty
Speaker 5: on that, because in a way, hearing you say that
Speaker 5: sort of it doesn't shock me, but it's a ring
Speaker 5: because it highlights the things that we're all worried about.
Speaker 5: And because it's what's the expression, money talks and in
Speaker 5: terms of backing where you want to put your money,
Speaker 5: that says, yeah, I mean, I don't invest in the
Speaker 5: shere market, but if I was, I'd probably be saying
Speaker 5: I'd probably be going to some fun saying you know,
Speaker 5: you know the ones that are focused on the US stocks.
Speaker 5: And that feels almost a bit it feels a bit
Speaker 5: very non whiteingy day of me.
Speaker 6: Yes, well, I mean I'm a very proud New Zealer
Speaker 6: and I couldn't live anywhere else. But look, the big
Speaker 6: things that are happening in the world, they're not happening
Speaker 6: in Dunedin. They're not happening in Wellington or even Auckland.
Speaker 6: They're happening in the Silicon Valley or Seattle or places
Speaker 6: like that. Because the big things are happening in the
Speaker 6: world are about AI and they're about medical devices, they're
Speaker 6: about biotechnology, they're about clean technology and so forth. They're
Speaker 6: not happening here. They're happening internationally, and that's where you
Speaker 6: need to have your money invested. I'm really sorry for
Speaker 6: that because if there were you know, I certainly you
Speaker 6: know Mainfrase is a very very good company, and you know,
Speaker 6: my managers have to have me in some things like that.
Speaker 6: I'm not saying there's nothing here, but there's no major
Speaker 6: industry that I would think of as a theme and
Speaker 6: say in New Zealander, I'm going to invest in that.
Speaker 5: That shows I think you've just summed up for me
Speaker 5: in a few sentences that the challenges that we've got
Speaker 5: and that our politicians have got, isn't it. Let's take
Speaker 5: some calls David, Hello.
Speaker 2: Yeah, Hi, Yeah, I just wanted to contribute to conversation.
Speaker 2: I took all our funds out a few years ago
Speaker 2: and it took it all out of the New Zealand
Speaker 2: market and put it into an a senate of boards.
Speaker 2: Five hundred has been in these funds, and boy, I
Speaker 2: have not regretted that. Man. We've got so much money
Speaker 2: back from just the increase in you know, the business,
Speaker 2: you know, increasing the profits of the businesses in America.
Speaker 2: But not only that, the New Zealand has. The inflation
Speaker 2: of the New Zealm dollar versus UIs dollar is really contributed.
Speaker 2: And so in the last year, I think it's it's
Speaker 2: gone up to like forty I don't want to exaggerate,
Speaker 2: but I think it's from like forty percent. Yeah, and
Speaker 2: the last five years, I think it's been about a
Speaker 2: twenty percent return, which is phenomenal. I mean, if I
Speaker 2: said to someone, I'll only give you a twenty cent
Speaker 2: return year on year, they would accuse me of being
Speaker 2: a bondie scheme. You know, that's how good it seems.
Speaker 5: Yeah, yes, and I guess past theerformance is no indicator
Speaker 5: of future performance, and we are We've got a little
Speaker 5: bit more uncertainty out there, but those are pretty amazing
Speaker 5: just for a standard and Poors five hundred.
Speaker 6: Isn't it. We've got a lot of them uncertainly out there.
Speaker 6: But you know, the S and P five hundred is
Speaker 6: five hundred biggest companies in the US, and that's not
Speaker 6: a special you know, the main companies in that, the
Speaker 6: biggest nine I think, are all tech companies. But you know,
Speaker 6: you could be much more targeted in tech if you
Speaker 6: want it to be. And you know, I mean that
Speaker 6: has done fabulously well. You know, Amazon listed twenty seven
Speaker 6: years ago, it's given a thirty three percent per annum
Speaker 6: return ever since, as listed for twenty seven years. Apple
Speaker 6: a similar kind of thing in video that makes makes
Speaker 6: chips for twenty years. It's given on average or return
Speaker 6: of I think it's something.
Speaker 5: As it were covered from that deep set sort of
Speaker 5: shock that in video got it and had a bit
Speaker 5: of effect.
Speaker 6: It's partly covered. I personally think that was a bit overdone.
Speaker 6: That doesn't quite smell right to me the thing. Yeah,
Speaker 6: and yeah, I think that we might find it's easy
Speaker 6: to copy somebody, but hard to do the original research.
Speaker 5: And be the least you've taken it. You've taken the
Speaker 5: words right out of my mouth on that one, because
Speaker 5: in fact I downloaded deep Sect to check it out,
Speaker 5: and I tell you it's blim and slow mind you.
Speaker 5: I think probably because everyone was downloading it at the time.
Speaker 5: But yeah, actually, I'll come back. We got to just
Speaker 5: touch on the key we saver stuff in just a
Speaker 5: moment just before we wrap up, Martin. But we'll be
Speaker 5: back in just to take it's nine minutes to six.
Speaker 5: Let's welcome back to Smart Money. My guest is Martin
Speaker 5: Haawes and financial author. Actually we've done have much time, Martin,
Speaker 5: but I just wanted to touch on that story which
Speaker 5: showed that A and Z hadn't performed too flash on
Speaker 5: the key we save steaks and just checking with you
Speaker 5: on how often you reckon. People should actually review their
Speaker 5: key we saber because past performance no guarantee of future.
Speaker 5: How do you work out whether you've got the right
Speaker 5: fund because you know, no, my life, God change just
Speaker 5: as that fund went bananas.
Speaker 6: It's it's one of the big problems with Keep you
Speaker 6: sav How do you choose the right fund? And the
Speaker 6: most important thing is that you're in the fund with
Speaker 6: the right amount of risk, you know, conservative, balanced, or
Speaker 6: or growth. So that's that's the first thing. But then
Speaker 6: which provided you go to is just for it's really
Speaker 6: really difficult. ANZ Bank used to be an absolutely top
Speaker 6: notch investor.
Speaker 5: They had a bad year this year, didn't they.
Speaker 6: Yep, yep, yep. And and it happens all the time.
Speaker 6: Somebody's top of the pops and then they do it bad.
Speaker 6: Why Oh, it'll be something probably to do with their strategy.
Speaker 6: Somebody's had some idea of investing in some particular area
Speaker 6: or not investing in a particular area. They would have
Speaker 6: been on the wrong side of something. It probably comes
Speaker 6: down to, I mean, investments mostly about people processes.
Speaker 5: They could turn it around though, couldn't they. That's I
Speaker 5: think people might go stuffeans in, I'll go with someone
Speaker 5: else and then next minute, oh, Gans, it's top of
Speaker 5: the pops again.
Speaker 6: Yeah, but a bit of luck. You know, they they've
Speaker 6: still got the same people. They change strategy back to
Speaker 6: what they used to have, and you know they could
Speaker 6: be doing really well. I would not swap from provider
Speaker 6: to provider. There's no cost to do it. But you're
Speaker 6: just trying to chase your tail.
Speaker 5: Can you actually we've only got about thirty seconds left,
Speaker 5: but can you actually target particular markets? Are they funds
Speaker 5: that actually, like we're focused on the US and things.
Speaker 6: Yes, there are funds that will let you do that,
Speaker 6: that will give you a lot of a lot of
Speaker 6: personal choice as to what you want to be invested in.
Speaker 5: Well, we'll dig into that to another time. Meanwhile, Martin,
Speaker 5: great to chat to you again, mate, I really appreciate it,
Speaker 5: and enjoy the rest of what's left you view weekend.
Speaker 5: That's Martin Haawes. Thanks Martin, and we'll be back same
Speaker 5: time next weekend Sunday at six as next thanks to
Speaker 5: Tyra Roberts. Enjoy the the rest of your Sunday evening,
Speaker 5: and we'll look forward to you again sometime soon.
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