WEBVTT - Ben Brinkerhoff: When to take a look at your KiwiSaver 0:00:05.761 --> 0:00:09.321 You're listening to the Weekend Collective podcast from News Talk 0:00:09.401 --> 0:00:10.401 sedb it. 0:00:11.441 --> 0:00:14.001 But it don't too far because you know it don't 0:00:14.041 --> 0:00:19.241 matter anyway, So money money won't get your no barget 0:00:19.441 --> 0:00:20.081 too far. 0:00:34.721 --> 0:00:35.121 To take. 0:00:35.241 --> 0:00:35.641 What is. 0:00:38.161 --> 0:00:38.601 This is on? 0:00:40.961 --> 0:00:43.761 I started talking before I was really ready. There, Welcome 0:00:43.761 --> 0:00:45.641 back to the Weekend Collective. This is smart Money. I'm 0:00:45.641 --> 0:00:48.601 Tim Beverage. And if you've missed any of the previous hours, 0:00:48.601 --> 0:00:50.681 we had Jude Walter in just now for the Health 0:00:50.761 --> 0:00:52.961 Up talking about keeping your brain active and fit and 0:00:53.001 --> 0:00:57.281 healthy and avoiding stress and just basically keeping your cognitive 0:00:57.281 --> 0:00:58.761 health on top. So if you want to listen to 0:00:58.801 --> 0:01:02.321 you that, go and check out the podcast. iHeartRadio, look 0:01:02.361 --> 0:01:06.121 for the Weekend Collective and for politics, we had an 0:01:06.121 --> 0:01:09.401 interview with well Shane Rettie was chatting about nitrous oxide 0:01:09.641 --> 0:01:11.241 and how they're clamping down on it. Every time I 0:01:11.241 --> 0:01:13.641 think not nutro soxide, I we think of Steve Martin 0:01:13.681 --> 0:01:15.921 and as the dentist in the Little Shop of Horrors. 0:01:17.961 --> 0:01:21.561 But anyway, the clamping down on nitrosoxide recreationally speaking. But 0:01:21.561 --> 0:01:23.161 also we had a chat with Simon Carter as the 0:01:23.801 --> 0:01:29.281 Poletry Undersecretary to the Ministry for rom Reform about basically 0:01:29.401 --> 0:01:31.041 they're throwing it out and they're going to start again. 0:01:31.081 --> 0:01:34.601 Well they have started, and yeah, rom Reform. If you 0:01:34.601 --> 0:01:37.841 want to check that out, listen to our podcast. So 0:01:38.041 --> 0:01:41.561 but right now it's time for smart money. And my 0:01:41.641 --> 0:01:45.001 guest is he's head of advice at Concilium. You can 0:01:45.001 --> 0:01:48.561 go and check out their their worker anytime Concilium dot 0:01:48.601 --> 0:01:51.801 co dot nz or the Kiwi save a funders Kiwi 0:01:51.881 --> 0:01:54.601 rap as in wrapping a present dot co dot nz. 0:01:54.841 --> 0:01:56.881 And he is Ben Brinkerhoff. 0:01:56.921 --> 0:01:57.361 Gid a Ben. 0:01:57.401 --> 0:01:58.601 How are you going good? 0:01:58.641 --> 0:01:58.841 Dan? 0:01:58.881 --> 0:02:00.761 How are you not too bad? Nice to thank you 0:02:00.801 --> 0:02:01.801 for coming into the studio. 0:02:01.841 --> 0:02:03.441 Good to see you. It's good to be here. 0:02:03.521 --> 0:02:05.161 What's been keeping you out of mischief. 0:02:05.561 --> 0:02:07.081 And the money scene? 0:02:07.961 --> 0:02:09.881 I mean, but it's a strange way to put a question. 0:02:10.241 --> 0:02:10.921 It sort of is. 0:02:11.281 --> 0:02:12.961 I think the best way to stay out of trouble 0:02:13.001 --> 0:02:17.001 is to read the newspaper as little as possible, right, Yeah. 0:02:16.281 --> 0:02:18.281 I might just get you to just pull your microphone 0:02:18.321 --> 0:02:20.081 just a little closer there, So there we go, there 0:02:20.081 --> 0:02:22.161 we go. We want to talk about key we saver 0:02:22.241 --> 0:02:25.441 a bit because for many people when it comes to 0:02:25.481 --> 0:02:29.561 the financial investment it's sort of a default thing where 0:02:29.561 --> 0:02:32.921 people they're investing in all sorts of things without knowing 0:02:32.921 --> 0:02:37.081 it and people, I mean, yeah, so if you've got look, 0:02:37.081 --> 0:02:39.041 we're going to talk about key we saver from a 0:02:39.041 --> 0:02:41.561 whole bunch of angles as to how often you should 0:02:41.601 --> 0:02:43.521 monitor the performance of your key we save it you 0:02:43.561 --> 0:02:46.561 just put it away and forget it does past performance? 0:02:46.601 --> 0:02:48.281 For instance, you look at someone and go, man, they 0:02:48.281 --> 0:02:50.561 have an amazing key we save a fund. Should I 0:02:50.561 --> 0:02:53.161 stick my money with them? All those sorts of things 0:02:53.281 --> 0:02:57.161 Key we saver it actually, ben how often do you 0:02:57.161 --> 0:03:00.121 think people actually look at the performance of their key 0:03:00.121 --> 0:03:02.361 we save or is it best? Is it best just 0:03:02.401 --> 0:03:03.841 to sort of put it in the bottom drawer and 0:03:03.881 --> 0:03:06.041 maybe look at it every so six months. 0:03:06.041 --> 0:03:09.201 We'll side that. That's a question with a couple of layers. 0:03:09.201 --> 0:03:10.481 But let me just peel back a couple. 0:03:10.921 --> 0:03:11.121 Yeah. 0:03:11.961 --> 0:03:16.281 There's an awesome paper written in the past called myopic 0:03:16.361 --> 0:03:19.121 lossid version, and my opic just means short. 0:03:19.521 --> 0:03:23.241 I'm going to write that down myopic myopic that's short 0:03:23.481 --> 0:03:26.361 loss a version, right, okay. 0:03:26.241 --> 0:03:31.881 And the premise of this paper was that basically people's 0:03:32.241 --> 0:03:35.241 point of view is very short sighted. That's what myopic 0:03:35.321 --> 0:03:38.201 means is short sighted. And the more short sighted your 0:03:38.281 --> 0:03:40.881 view of your performance is, the more likely you are 0:03:41.201 --> 0:03:44.401 to make bad decisions. And so I wrote a paper 0:03:44.481 --> 0:03:47.201 once called It's Okay to look Away, Yeah, and I 0:03:47.201 --> 0:03:53.681 wrote it during the COVID time period, where was pretty challenging. 0:03:54.561 --> 0:03:58.041 And the other waying premise was don't look at your 0:03:58.121 --> 0:04:01.641 account balance. You want to set things up to be 0:04:01.721 --> 0:04:05.001 done correctly. You should maybe review it once a year, 0:04:05.641 --> 0:04:07.561 and I think you should view with an advisor and 0:04:07.601 --> 0:04:09.761 determine if you're on track to achieve your goals or 0:04:09.761 --> 0:04:11.961 if your goals have changed, if your strategy needs to change. 0:04:11.961 --> 0:04:15.561 All that's good stuff, right, But looking at your key 0:04:15.681 --> 0:04:19.321 saver balance regularly is more likely to lead you to 0:04:19.321 --> 0:04:20.041 make a mistake. 0:04:20.281 --> 0:04:22.641 Well, it's like it's like, if you're buying and selling 0:04:22.681 --> 0:04:24.521 shares and it was your hobby to do your own 0:04:24.561 --> 0:04:27.801 make your own choices, probably following them every day wouldn't 0:04:27.841 --> 0:04:30.761 necessarily lead you to the right decisions. Of course, then again, 0:04:31.041 --> 0:04:33.401 if they suddenly went up in value a lot, it 0:04:33.401 --> 0:04:35.161 would have been useful to follow them. But that's not 0:04:35.201 --> 0:04:35.441 the game. 0:04:35.481 --> 0:04:37.761 Machan, the number one person that looks at car ads 0:04:38.921 --> 0:04:43.401 car sellers, people that just bought a car or really, yeah, 0:04:43.881 --> 0:04:46.361 so you just buy a car and you're looking at ads, 0:04:46.361 --> 0:04:47.921 why just to make sure you've got a good deal. 0:04:48.561 --> 0:04:51.961 I think when people make when they change their investments around, 0:04:52.001 --> 0:04:53.521 they're going to look at them a lot, decide to 0:04:53.761 --> 0:04:55.641 make a good choice and make a bad choice. I 0:04:55.681 --> 0:04:59.281 think it leads to a lot of people being unsettled overall. 0:04:59.481 --> 0:05:01.441 I don't think looking at your key saver balance that 0:05:01.601 --> 0:05:04.201 often no idea. 0:05:03.801 --> 0:05:07.201 Are there actually investments it does if you are taking 0:05:07.281 --> 0:05:09.321 hands on approach, are there investments where it does pay 0:05:09.361 --> 0:05:12.641 to keep a regular eye on them? Because of course, 0:05:12.681 --> 0:05:15.881 key that's the thing with key we Saver people aren't 0:05:15.921 --> 0:05:18.281 key we Saber managers because they're idiots. They are on 0:05:18.401 --> 0:05:21.441 the job for you all the time. But whereas I guess, 0:05:21.441 --> 0:05:26.801 if you are managing your own personal, individualized investments, then 0:05:27.001 --> 0:05:29.441 obviously you're you're going to keep an eye on that. 0:05:29.521 --> 0:05:32.161 For instance, if you're you're choosing your own stocks in 0:05:32.201 --> 0:05:35.361 the share market, you've got ten companies that you've invested in, 0:05:35.561 --> 0:05:38.481 you probably will monitor their performance more regularly. But that's 0:05:38.481 --> 0:05:39.841 a completely different game, isn't It's a. 0:05:39.761 --> 0:05:43.321 Completely different game. And by the way, don't don't don't 0:05:43.321 --> 0:05:45.961 do that. Don't don't that you're Key we saver balance 0:05:46.001 --> 0:05:46.881 on ten stocks. 0:05:47.081 --> 0:05:49.201 I No, I wasn't saying that. I'm just talking about 0:05:49.321 --> 0:05:51.521 different the reasons you might keep an eye on your 0:05:51.561 --> 0:05:52.281 investor totally. 0:05:52.321 --> 0:05:53.881 If you're in and yet and they're in that kind 0:05:53.881 --> 0:05:56.641 of situation and you are basically the manager of your 0:05:56.681 --> 0:06:01.641 own investments, yeah, then maybe maybe it makes sense, you know, 0:06:01.761 --> 0:06:06.001 But I just suggest that that the key Saver is 0:06:06.001 --> 0:06:10.201 one area where we're diversification and maybe taking a different approach. 0:06:10.281 --> 0:06:13.841 Piece are You've raised a couple of things there which 0:06:13.881 --> 0:06:16.441 I might I wouldn't mind digging into, because how many 0:06:16.481 --> 0:06:21.961 people do you think actually have a goal with the 0:06:22.041 --> 0:06:23.921 key we save it? And and the reason I asked 0:06:23.961 --> 0:06:28.561 that is because we generally have If you are an employee, 0:06:29.001 --> 0:06:31.841 your employer may put in I'm not sure what the 0:06:31.881 --> 0:06:33.881 rules are because I'm self employed, which is, let's not 0:06:33.921 --> 0:06:37.241 dig into that, but say three percent or something or 0:06:37.281 --> 0:06:39.841 two or three percent. And I wonder if people just 0:06:39.881 --> 0:06:41.441 sort of go, well, this is what Key we Saver 0:06:41.481 --> 0:06:43.961 it does, and I've got this amount, but they don't 0:06:44.001 --> 0:06:46.081 actually ever stop to think what the goal is. They 0:06:46.201 --> 0:06:48.081 just know that there's money going in that. 0:06:48.281 --> 0:06:51.241 Oh you've hit I don't know if you if you 0:06:51.601 --> 0:06:53.441 thought about that too much ahead of time, but you've 0:06:53.481 --> 0:06:58.841 actually completely hit on the issue is that with keysaver, 0:06:59.721 --> 0:07:01.601 you want to have, you want to be intentional, what 0:07:01.721 --> 0:07:04.681 do you actually want to achieve? And you think about 0:07:05.961 --> 0:07:08.561 you don't have a huge number of choices to make 0:07:08.561 --> 0:07:12.081 in kiv saver, but boy that it can be dramatic 0:07:12.561 --> 0:07:15.561 the impact of the choices that you make over maybe 0:07:15.601 --> 0:07:18.241 a twenty thirty, maybe a forty year time arise. And 0:07:18.241 --> 0:07:20.001 if you start when you're twenty five, you cash out 0:07:20.001 --> 0:07:22.681 when you're sixty five, that is a long time for 0:07:22.721 --> 0:07:28.681 those choices to compound. And I'm American, right, so, for 0:07:28.681 --> 0:07:32.161 for better or for worse, I tend to be overly 0:07:32.201 --> 0:07:34.801 friendly with people. And I'm on I'm on the airplane 0:07:35.081 --> 0:07:37.001 and I'm asking I ask people what they're doing in 0:07:37.041 --> 0:07:40.361 their kiwisaver, and they are you California? 0:07:40.521 --> 0:07:42.641 I am California because you can check out, but you 0:07:42.641 --> 0:07:43.641 can never leave. 0:07:45.001 --> 0:07:46.201 Exactly. 0:07:46.321 --> 0:07:48.361 Let's not get into the deep spiritual sense. 0:07:48.401 --> 0:07:49.961 That's on California. 0:07:50.041 --> 0:07:52.601 Yeah, yeah, yeah, okay, anyway. 0:07:52.361 --> 0:07:57.121 Carry on well, and you talk to people about kivsaver 0:07:57.241 --> 0:08:00.521 and you say, well, based on what you want to 0:08:00.561 --> 0:08:04.561 spend in your future, what amount of what you need 0:08:04.641 --> 0:08:07.041 is ever we're going to cover? You know, is it 0:08:07.081 --> 0:08:08.721 going to cover forty percent of what you need? Is 0:08:08.721 --> 0:08:10.481 it going to cover sixty percent of what you need? 0:08:10.641 --> 0:08:12.841 Is it going to cover everything that you need? And 0:08:13.481 --> 0:08:15.801 what's your plan to fund the difference? 0:08:17.801 --> 0:08:20.561 I reckon people find that, and I'm probably speaking personally 0:08:20.601 --> 0:08:23.321 as well, there's a part of I think there's a 0:08:23.401 --> 0:08:25.521 huge amount of I'm not sure if the word is 0:08:25.561 --> 0:08:31.161 procrastination or avoidance, because people don't want to know what 0:08:31.201 --> 0:08:32.961 that means when they set their goal this is what 0:08:33.001 --> 0:08:35.041 I want, It's like, well, this is how far away 0:08:35.121 --> 0:08:37.521 from that you are? How often do people avoid it 0:08:37.561 --> 0:08:41.961 because they just you know, we're living in high we've 0:08:41.961 --> 0:08:44.841 been living in under high inflation. The costs of buying 0:08:44.841 --> 0:08:47.321 a house is people who are pessimistic about a bunch 0:08:47.321 --> 0:08:49.281 of things. I reckon, a lot of people put that 0:08:49.281 --> 0:08:51.041 stuff in the bottom drawn. That's why they just leave 0:08:51.081 --> 0:08:53.601 it to the employer contribution and whatever they have to 0:08:53.601 --> 0:08:56.081 stick in and go to sleep. 0:08:56.321 --> 0:08:57.841 You know that's right, that's right. 0:08:58.161 --> 0:09:00.281 Well, listen, you know, if you don't have a plan, 0:09:00.361 --> 0:09:02.961 You'll get somewhere. It just may not be where you intended. 0:09:03.201 --> 0:09:06.761 Right, So sounds like that, it sounds like a lyric 0:09:06.801 --> 0:09:08.241 from that song again, But it's probably not. 0:09:08.601 --> 0:09:11.641 As long as that's an acceptable outcome, that you you 0:09:11.761 --> 0:09:15.361 end up where you ended up, and perhaps that's okay 0:09:15.401 --> 0:09:18.801 because you wouldn't have known the difference. But when you 0:09:18.841 --> 0:09:20.961 actually know where you want, or you have an idea 0:09:20.961 --> 0:09:23.641 of what you want. I talk to some people sometimes 0:09:23.641 --> 0:09:27.481 and they're just desperate because they think I'm not going 0:09:27.561 --> 0:09:30.521 to be successful. I've I've waited too long. It's it's 0:09:30.561 --> 0:09:33.241 it's passed me by. But but you can actually sit 0:09:33.281 --> 0:09:36.201 down and still form a strategy and people can go 0:09:36.361 --> 0:09:38.881 from maybe hopeless to go like, you know, this might 0:09:38.881 --> 0:09:39.681 actually work out. 0:09:40.721 --> 0:09:42.721 And I says something to be said for even if 0:09:42.841 --> 0:09:44.961 you know maybe it's not the answer you want, the 0:09:45.081 --> 0:09:47.681 fact of taking control of your finances, it's actually in 0:09:47.721 --> 0:09:50.401 its own right, no matter how good or bad the 0:09:50.441 --> 0:09:53.121 outcome is, there's something about it that is actually liberating 0:09:53.121 --> 0:09:56.001 because you're finally in control and you know what you're 0:09:56.001 --> 0:09:57.121 doing absolutely. 0:09:57.241 --> 0:09:59.601 You feel you feel like, well, this is where I'm 0:09:59.601 --> 0:10:01.961 at and I'm not in denial anymore, and I actually 0:10:01.961 --> 0:10:05.081 have a strategy to make the best out of the 0:10:05.161 --> 0:10:06.281 choices I have left. 0:10:07.321 --> 0:10:08.721 We Actually, i'd like to hear from you on this. 0:10:08.961 --> 0:10:11.921 I eight one hundred eighty t and eighty. Have you 0:10:12.001 --> 0:10:17.241 stopped to think of a particular financial goal or do 0:10:17.361 --> 0:10:19.521 you sort of just do different things, Like I'll stick 0:10:19.521 --> 0:10:21.281 a bit of extra money into ki we sab because 0:10:21.321 --> 0:10:22.761 I think I need to save some more, But you 0:10:22.801 --> 0:10:24.641 have no idea what that's going to amount to in 0:10:24.681 --> 0:10:27.161 the end. You just sort of think this is what 0:10:27.201 --> 0:10:29.881 I'm going to do because I think I should. It's 0:10:29.921 --> 0:10:33.281 but like people want to buy get into the residential 0:10:33.281 --> 0:10:36.201 property market, they may not have the actual financial goal 0:10:36.241 --> 0:10:39.081 in mind, but they'll go, well, apparently this is the 0:10:39.121 --> 0:10:41.201 place to be. So I'm going to stick some money 0:10:41.241 --> 0:10:44.761 in because I should. I'm actually quite curee I'll be 0:10:44.841 --> 0:10:46.441 cursed to know how many people actually have a goal. 0:10:46.721 --> 0:10:49.561 I ran the numbers recently, and well, if you took 0:10:49.601 --> 0:10:51.601 like a thirty year old and I know that this 0:10:51.681 --> 0:10:54.121 sounds like like a big salary, but I want to 0:10:54.161 --> 0:10:56.161 think about it from the sink of a professional, because 0:10:56.161 --> 0:10:58.041 that was the audience I was thinking about. A thirty 0:10:58.081 --> 0:10:59.761 year old who was on one hundred thousand dollars a 0:10:59.841 --> 0:11:02.441 year and just put in three percent. Poor, you're putting 0:11:02.521 --> 0:11:05.921 three percent and you know, saved age sixty five. That 0:11:05.961 --> 0:11:08.241 person ended up some way. If you look at the math, 0:11:08.321 --> 0:11:11.241 like at three hundred ffty thousand dollars balance, but at that. 0:11:11.321 --> 0:11:13.281 Same person's going to be bitter them that you just said, 0:11:13.321 --> 0:11:15.121 Actually I thought that was going to be I was 0:11:15.161 --> 0:11:17.201 surprised at what it was that much. 0:11:17.161 --> 0:11:19.681 Three and fifty thousand dollars balance. It isn't as much 0:11:19.681 --> 0:11:21.841 as it should be because you know that's that's three 0:11:21.881 --> 0:11:23.801 and fifty thousand and thirty five years from now. What's 0:11:23.841 --> 0:11:26.441 the purchasing power of that. It's not as great as 0:11:26.481 --> 0:11:28.921 it sounds. It's maybe half of what it is now. 0:11:29.561 --> 0:11:34.361 If that same person allocated into an aggressive portfolio and 0:11:35.081 --> 0:11:38.041 put in six percent, they'd end up with three or 0:11:38.321 --> 0:11:42.561 four times the balance. You know, that's that's a life 0:11:42.641 --> 0:11:46.441 altering difference to end up with three hundred thousand, to 0:11:46.521 --> 0:11:50.401 end up with one point two million, And those two 0:11:50.401 --> 0:11:53.681 outcomes are both possible for the thirty year old who's 0:11:53.801 --> 0:11:57.401 who's a high earner based on just increasing their personal 0:11:57.441 --> 0:12:02.201 contributions and allocating more aggressively, course, more aggressively. You allocied, 0:12:02.201 --> 0:12:04.481 there's gonna be ups and downs. We can talk about 0:12:04.481 --> 0:12:07.161 that later if you well, I'd love to talk about that. Actually, 0:12:07.161 --> 0:12:09.161 I would love to know what you wanted. Of course, Ben, 0:12:09.401 --> 0:12:11.881 he's got a few clues about investing. In fact, the 0:12:11.921 --> 0:12:13.161 last time I on the show, there are a couple 0:12:13.201 --> 0:12:15.361 of things that you said that really did stick with me. 0:12:15.521 --> 0:12:16.961 So you did well there. 0:12:16.961 --> 0:12:19.881 But Brent Ben Brenkerhoff is my guest. He's head of 0:12:19.961 --> 0:12:23.441 advice at Concilium. You can check out Concilium dot code 0:12:23.441 --> 0:12:25.761 on ZID. They also have their own Keiwi Saber Fund, 0:12:25.761 --> 0:12:28.081 which is key we rap as in wrapping a present 0:12:28.361 --> 0:12:31.241 dot code dot nz. We'd like to take your calls 0:12:31.361 --> 0:12:34.041 any questions you've got about Kiwi Saber and Ben and 0:12:34.081 --> 0:12:36.801 I have lots to talk about. So we'll be back 0:12:36.801 --> 0:12:39.681 in just a moment. It's so eighteen minutes past five 0:12:39.881 --> 0:12:40.361 news talks. 0:12:40.361 --> 0:12:42.241 He'd be and welcome back. 0:12:42.321 --> 0:12:45.521 My guest is Ben Bronkohoff, head of advice at Concilium. 0:12:45.561 --> 0:12:49.001 Actually I say Concilium, Ben, just quickly, what does Concilium do? 0:12:49.081 --> 0:12:49.641 What's your bag? 0:12:49.681 --> 0:12:50.041 Baby? 0:12:51.401 --> 0:12:55.241 So Concilium's job is basically to help independent advisors stay independent. 0:12:55.761 --> 0:12:58.401 So we provide a lot of the services, consulting, a 0:12:58.441 --> 0:13:03.721 lot of the research and software required for an independent advisor, 0:13:03.841 --> 0:13:05.161 not out to sell someone's stuff. 0:13:05.521 --> 0:13:06.561 So excellent. 0:13:07.001 --> 0:13:08.961 So, look, we've got a lot of questions about can 0:13:09.001 --> 0:13:11.441 we say we went to the break just with the 0:13:11.521 --> 0:13:14.441 questions around aggressive funds? And I mean there are generally 0:13:14.441 --> 0:13:16.441 three types of fund are there is three or four? 0:13:16.841 --> 0:13:21.561 There's conservative, balanced and aggressive and maybe there's somewhere but. 0:13:21.481 --> 0:13:24.281 There's there's some nuancewers there ten but you you can 0:13:24.321 --> 0:13:25.361 stick with those if you want. 0:13:25.561 --> 0:13:29.281 Okay, So aggressive, you were talking about over a you know, 0:13:29.401 --> 0:13:31.401 say a thirty year old decides they're going to stick 0:13:31.441 --> 0:13:34.601 a certain percentagen and the difference between being in a 0:13:34.841 --> 0:13:37.361 more conservative fund to aggressive and the potential money that 0:13:37.401 --> 0:13:40.121 they could end up having. I guess the first question 0:13:40.601 --> 0:13:45.241 would be over what time period? So aggressive? Obviously you 0:13:45.281 --> 0:13:47.361 are more susceptible to the rises and the falls in 0:13:47.401 --> 0:13:51.001 the market. So is there a time period where the 0:13:51.161 --> 0:13:54.721 risks of being in an aggressive fund are at at 0:13:54.761 --> 0:13:56.681 a point where you know what, you're okay, if you're 0:13:56.721 --> 0:13:59.321 in this for ten years, don't worry, or five years 0:13:59.441 --> 0:14:03.081 or what's the sort of minimum time to be in 0:14:03.121 --> 0:14:05.881 an aggressive fund. Yeah, so not spific. 0:14:06.401 --> 0:14:08.841 I think people that invest in keV saver mess this up, 0:14:08.841 --> 0:14:10.161 and I'll tell you how they mess it up because 0:14:10.161 --> 0:14:12.961 they think I'm going to reach sixty five and then oh, 0:14:13.001 --> 0:14:15.921 I got ten years until sixty five. Therefore my time 0:14:15.961 --> 0:14:19.961 arison is ten years. I'm fifty five. Well, no, when 0:14:20.001 --> 0:14:21.921 do you want to spend the money? Your time horizon 0:14:22.001 --> 0:14:23.921 is not based on when you reach the age of 0:14:24.721 --> 0:14:27.121 the that you can pull the money out. Your time 0:14:27.161 --> 0:14:31.241 horizon should be the time until you spend down the money, 0:14:31.641 --> 0:14:35.481 and if you have fifteen years, then you can then aggressive. 0:14:35.521 --> 0:14:38.521 An aggressive allocation is perfectly fine, but it's actually more 0:14:38.601 --> 0:14:41.641 nuanced of that. And let me explain this. When you 0:14:41.721 --> 0:14:45.841 are saving regularly right that means money's going in every 0:14:45.961 --> 0:14:49.241 couple of weeks right from your paycheck, then being in 0:14:49.281 --> 0:14:52.481 an aggressive allocation makes a lot of sense typically because 0:14:52.521 --> 0:14:57.241 if prices are down and you're a buyer, that's good. Yeah, 0:14:57.521 --> 0:14:59.921 so I want you. I want to give everyone in 0:14:59.921 --> 0:15:01.841 the mind if they're in KIV saver right now, they're 0:15:01.881 --> 0:15:03.401 regularly contributing. 0:15:03.041 --> 0:15:03.761 They're a buyer. 0:15:04.361 --> 0:15:06.921 If there was a recession and prices went down, they're 0:15:06.921 --> 0:15:09.681 not harmed because they're buying at low prices. Now who 0:15:09.721 --> 0:15:13.001 are they buying from. They're buying from people that are selling. Yeah, well, 0:15:13.041 --> 0:15:15.361 if if there's a recession of prices are down, you're 0:15:15.361 --> 0:15:18.921 a seller, that's a lot more harmful. So when you're 0:15:19.041 --> 0:15:22.321 become when you transition from becoming a buyer and you 0:15:22.361 --> 0:15:25.561 become a seller, you want to have some securities in 0:15:25.601 --> 0:15:29.201 your portfolio that you can sell that aren't very price sensitive, 0:15:29.441 --> 0:15:33.761 cash term deposits, fixed interest, things like this, so that 0:15:33.881 --> 0:15:36.081 when prices are down, you're not forced to sell at 0:15:36.121 --> 0:15:38.641 low prices. But if you're buying them, you're buying every 0:15:38.641 --> 0:15:41.681 couple of weeks and prices are low because of recession, 0:15:41.721 --> 0:15:44.561 the stock markets are down, and that doesn't harm you 0:15:44.641 --> 0:15:46.521 very much because you're buying at low prices. 0:15:46.761 --> 0:15:50.601 So what I'm hearing there is if I was what 0:15:50.721 --> 0:15:52.521 even my fund is, Let's let's pretend I'm in a 0:15:52.561 --> 0:15:56.881 conservative fund and we should aggressive, we should talk. I'm 0:15:56.881 --> 0:15:59.361 not in a concert fund, don't worry. I'm in balance. 0:15:59.401 --> 0:16:01.361 But I'm a bit passive on this because you know, 0:16:01.521 --> 0:16:03.601 mortgages and all sorts of cost of expence. So I 0:16:03.641 --> 0:16:08.641 haven't been a great contributor. I'm hearing that right now. 0:16:09.081 --> 0:16:13.241 The GDP data and all that sort of data data 0:16:13.481 --> 0:16:17.401 is we're not rocking and rolling as an economy at 0:16:17.401 --> 0:16:20.241 the moment. So intuitally, what I just heard you say 0:16:20.321 --> 0:16:22.001 is probably now is a good time to switch to 0:16:22.001 --> 0:16:25.961 an aggressive fund. Yeah, I believe I've got enough time. 0:16:26.801 --> 0:16:27.801 What is it fifteen years? 0:16:27.801 --> 0:16:28.121 You say? 0:16:28.801 --> 0:16:31.201 Yeah, I kind of think about fifteen years if you're 0:16:31.201 --> 0:16:33.881 an aggressive portfolio, that would be ninety percent or more 0:16:33.921 --> 0:16:36.841 in shares as opposed to cash and bonds and things. 0:16:37.601 --> 0:16:40.841 So if you have that kind of time horizon. Now, 0:16:40.921 --> 0:16:43.281 I think the idea of when you should be in 0:16:43.321 --> 0:16:46.281 and we should get out is really tricky because the 0:16:46.361 --> 0:16:49.961 share market is a prediction. It's a prediction of future prices, 0:16:50.001 --> 0:16:52.321 so it's really hard to know when to get in 0:16:52.521 --> 0:16:53.441 and when to get out. 0:16:53.841 --> 0:16:56.681 And you are reminding me of our earlier conversation as well, 0:16:56.721 --> 0:16:59.121 because it was about people watching the shear market and 0:16:59.161 --> 0:17:00.761 thinking when's a good time to buy, and you are like, 0:17:00.881 --> 0:17:02.601 the market is always going to be ahead of you. 0:17:02.561 --> 0:17:04.321 Buddy, That's exactly right. 0:17:04.401 --> 0:17:06.601 So I don't think that that's a good idea, but 0:17:06.721 --> 0:17:09.201 I do think that when people are regularly buying, they 0:17:09.281 --> 0:17:13.161 they're partially insulated from the effects of down markets because 0:17:13.201 --> 0:17:16.361 if the markets are down, then they can purchase at 0:17:16.401 --> 0:17:20.241 low prices and that helps to blunt the effect of 0:17:20.281 --> 0:17:21.321 those low prices. 0:17:21.561 --> 0:17:23.561 But if you're constantly buying, you're also buying when the 0:17:23.601 --> 0:17:24.841 market is inflated as well. 0:17:24.921 --> 0:17:27.081 That's right, but no one cares. When the market's in flavor, 0:17:27.081 --> 0:17:28.761 they're super happy because they look at their balance and 0:17:28.761 --> 0:17:31.561 there they're an aggressive allocation and it's it's done really well, 0:17:31.841 --> 0:17:34.041 So psychologically. 0:17:33.801 --> 0:17:35.401 They are they're happy. 0:17:35.481 --> 0:17:35.721 Now. 0:17:36.161 --> 0:17:38.561 The problem with us that with the idea of when 0:17:38.601 --> 0:17:42.201 the market's high is the market, over any length of 0:17:42.241 --> 0:17:45.361 time generally trends one direction, so it's always going to 0:17:45.401 --> 0:17:48.241 go get higher. So the idea when it's high, if 0:17:48.281 --> 0:17:49.921 it's at an all time high, does that mean it's 0:17:49.921 --> 0:17:51.681 going to fall? No, that doesn't mean that at all. 0:17:51.681 --> 0:17:54.001 It's very hard to know these things. 0:17:53.881 --> 0:17:55.401 Because the issue that you've. 0:17:56.881 --> 0:18:00.841 Maybe touched on is it's one thing to decide when 0:18:00.881 --> 0:18:02.681 you're going to get into an aggressive fund. And I 0:18:02.681 --> 0:18:05.121 guess the answer is as early as possible. 0:18:05.121 --> 0:18:05.761 That's the answer. 0:18:05.841 --> 0:18:09.641 Okay, as possible that that is the answer. 0:18:09.801 --> 0:18:11.881 You know, but of course I listen. 0:18:11.961 --> 0:18:14.961 This isn't advice and not if someone someone, if someone 0:18:15.041 --> 0:18:18.281 is has a has a frame of mind that when 0:18:18.361 --> 0:18:21.801 markets are volatile they really lose sleep and it's highly 0:18:21.881 --> 0:18:25.841 uncomfortable for them, then they should understand that that they 0:18:25.841 --> 0:18:28.841 can go more conservative to balance or a conservative but 0:18:28.961 --> 0:18:32.761 the implication of is that they will likely, over a 0:18:32.801 --> 0:18:34.641 long period of time end up with less money. So 0:18:34.681 --> 0:18:35.441 here's the tension. 0:18:36.481 --> 0:18:37.161 What is risk? 0:18:37.561 --> 0:18:42.601 Is risk the fear or the risk of prices going 0:18:42.681 --> 0:18:44.921 up and down a little bit or even a lot 0:18:44.961 --> 0:18:46.841 over a short term time period. Or is risk that 0:18:46.921 --> 0:18:48.761