1 00:00:01,840 --> 00:00:02,320 Speaker 1: Hilda. 2 00:00:02,360 --> 00:00:05,600 Speaker 2: I'm Chelsea Daniels, host of the front Page, The Ends 3 00:00:05,640 --> 00:00:09,600 Speaker 2: at Herald's daily news podcast. The podcast is taking the 4 00:00:09,680 --> 00:00:13,000 Speaker 2: day off as the country marks and Zach Day. Instead, 5 00:00:13,039 --> 00:00:17,240 Speaker 2: we're presenting an episode of The Prosperity Project, The Herald's 6 00:00:17,320 --> 00:00:24,680 Speaker 2: Personal finance podcast. Listen as host Nadine Higgins talks with 7 00:00:24,840 --> 00:00:28,520 Speaker 2: personal finance columnist Mary Holm about what you need to 8 00:00:28,560 --> 00:00:32,560 Speaker 2: know about Kiwi Saver, including what the most important thing 9 00:00:32,640 --> 00:00:36,360 Speaker 2: to consider is when picking a provider. If you enjoyed 10 00:00:36,360 --> 00:00:40,360 Speaker 2: the episode, follow The Prosperity Project wherever you get your podcasts, 11 00:00:40,560 --> 00:00:43,360 Speaker 2: and we'll catch you back on Monday for another look 12 00:00:43,479 --> 00:00:44,839 Speaker 2: behind the headlines. 13 00:00:53,320 --> 00:00:57,000 Speaker 3: Yilder, I'm Nadine Higgins, and welcome to your personal finance podcast, 14 00:00:57,120 --> 00:01:03,520 Speaker 3: The Prosperity Project. On this podcast, I'm on a mission 15 00:01:03,560 --> 00:01:07,920 Speaker 3: to empower you financially. I am a columnist and a journalist, 16 00:01:08,040 --> 00:01:11,360 Speaker 3: an investor, a financial advisor, and the mum of a toddler. 17 00:01:11,920 --> 00:01:13,800 Speaker 1: But I do not claim to be the font of 18 00:01:13,840 --> 00:01:14,440 Speaker 1: all knowledge. 19 00:01:14,520 --> 00:01:17,120 Speaker 3: I'm still figuring it out too, and that's why I'll 20 00:01:17,160 --> 00:01:20,319 Speaker 3: be bringing you the experts and mining their big brains 21 00:01:20,319 --> 00:01:22,640 Speaker 3: for all the things you and I need to know. 22 00:01:23,000 --> 00:01:23,600 Speaker 1: Every week. 23 00:01:27,040 --> 00:01:29,560 Speaker 3: More than three point three million New Zealanders are in 24 00:01:29,640 --> 00:01:31,800 Speaker 3: Kiwi Saver and we now have more than one hundred 25 00:01:31,800 --> 00:01:36,000 Speaker 3: and ten billion dollars invested. But too many of us 26 00:01:36,040 --> 00:01:38,520 Speaker 3: are not making the most of the scheme. So today 27 00:01:38,880 --> 00:01:41,600 Speaker 3: we're going to get some guidance to ensure that you 28 00:01:41,800 --> 00:01:45,640 Speaker 3: are and joining us as finance expert columnist and author 29 00:01:45,720 --> 00:01:49,520 Speaker 3: Mary Holm, who has just revised and updated her eighth book, 30 00:01:50,040 --> 00:01:54,840 Speaker 3: Rich Enough. Hi, Mary Hei Nadine, It's so lovely to 31 00:01:54,880 --> 00:01:57,680 Speaker 3: be talking to you. I've been a longtime reader, first 32 00:01:57,720 --> 00:01:58,440 Speaker 3: time interviewer. 33 00:01:59,280 --> 00:01:59,560 Speaker 1: Same. 34 00:02:02,040 --> 00:02:05,240 Speaker 3: What are some of the ways that we Kiwis who 35 00:02:05,320 --> 00:02:07,920 Speaker 3: have signed up to Kiwi Saber are getting it wrong? 36 00:02:08,240 --> 00:02:13,440 Speaker 1: Yeah? Well, firstly, just not contributing. I mean, obviously people 37 00:02:13,520 --> 00:02:16,160 Speaker 1: sometimes have to take a break if they lose their job, 38 00:02:16,440 --> 00:02:20,400 Speaker 1: although even then perhaps they could still put twenty dollars 39 00:02:20,440 --> 00:02:22,840 Speaker 1: a week, and it depends on the situation. Twenty dollars 40 00:02:22,880 --> 00:02:26,519 Speaker 1: a week will get you the maximum government contribution, and 41 00:02:27,000 --> 00:02:29,280 Speaker 1: so it's really good if people can keep doing that 42 00:02:29,760 --> 00:02:32,080 Speaker 1: or even five dollars a week, just to keep the 43 00:02:32,160 --> 00:02:38,160 Speaker 1: habit rolling apart from anything else. But beyond those sort 44 00:02:38,240 --> 00:02:41,360 Speaker 1: of situations, people I think take what used to be 45 00:02:41,440 --> 00:02:45,440 Speaker 1: called contributions holiday and is now called a saving suspension 46 00:02:45,480 --> 00:02:49,840 Speaker 1: to make it sound a bit less appealing, like a holiday. Yes, yes, yeah, 47 00:02:50,040 --> 00:02:53,320 Speaker 1: and then not getting back into the contributing later. 48 00:02:53,400 --> 00:02:55,480 Speaker 3: And it's one of those things that maybe goes into 49 00:02:55,520 --> 00:02:58,520 Speaker 3: the too hard basket they have life edmund basket, and 50 00:02:58,560 --> 00:03:00,120 Speaker 3: once they're out, they just don't get. 51 00:03:00,360 --> 00:03:02,520 Speaker 1: And think it, you know, possibly think it's quite a 52 00:03:02,560 --> 00:03:04,320 Speaker 1: hateful to get back in, but it shouldn't be. It 53 00:03:04,320 --> 00:03:08,880 Speaker 1: should be really easy to get back in. And peaking 54 00:03:09,080 --> 00:03:12,800 Speaker 1: speaking from the perspective of someone who's been around a 55 00:03:12,840 --> 00:03:17,240 Speaker 1: while and did some retirement savings back in the seventies 56 00:03:17,280 --> 00:03:19,760 Speaker 1: in America when I worked in journalism over there, that 57 00:03:19,919 --> 00:03:24,040 Speaker 1: money that I then left in America has grown hugely. 58 00:03:24,360 --> 00:03:27,800 Speaker 1: It's really wonderful for young people to get in and 59 00:03:27,919 --> 00:03:32,000 Speaker 1: keep contributing, and by the time they get to retirement 60 00:03:32,080 --> 00:03:36,520 Speaker 1: sort of age, it's huge. You know, the growth is huge. 61 00:03:36,720 --> 00:03:39,960 Speaker 3: And that's what they mean by time is your greatest 62 00:03:39,960 --> 00:03:42,440 Speaker 3: ass that you start young and you've just got decades 63 00:03:42,520 --> 00:03:45,560 Speaker 3: for that money to compound and grow exactly. 64 00:03:46,080 --> 00:03:48,120 Speaker 1: I mean, these the young ones, a lot of them 65 00:03:48,120 --> 00:03:50,800 Speaker 1: are going to retire with a million and kiwi saving, 66 00:03:51,160 --> 00:03:54,080 Speaker 1: especially if they go into the higher risk funds that 67 00:03:54,160 --> 00:03:56,840 Speaker 1: tend to have higher returns. And we should know that 68 00:03:56,880 --> 00:03:59,400 Speaker 1: a million dollars then probably won't buy as much as 69 00:03:59,400 --> 00:04:01,680 Speaker 1: it does now, but it's still going to buy a 70 00:04:01,680 --> 00:04:06,040 Speaker 1: pretty nice retirement. So we want people to just be 71 00:04:07,320 --> 00:04:09,040 Speaker 1: if you have to take a little break, take it, 72 00:04:09,120 --> 00:04:13,240 Speaker 1: but be really religious about getting right back into contributing. 73 00:04:13,800 --> 00:04:14,040 Speaker 3: Yeah. 74 00:04:14,160 --> 00:04:18,120 Speaker 1: Absolutely, you mentioned the higher risk funds. Yes, is that 75 00:04:18,160 --> 00:04:20,480 Speaker 1: one of the other mistakes that we're making that we're 76 00:04:20,480 --> 00:04:25,800 Speaker 1: all a bit too nervy about taking on risk. We're 77 00:04:25,800 --> 00:04:28,400 Speaker 1: not all that way. I mean, some people take on 78 00:04:28,520 --> 00:04:30,839 Speaker 1: going to a high risk fund and then panic when 79 00:04:30,880 --> 00:04:35,400 Speaker 1: the markets go down, and so if they really really 80 00:04:35,440 --> 00:04:38,720 Speaker 1: can't cope with that volatility, they shouldn't have been in 81 00:04:38,240 --> 00:04:41,360 Speaker 1: that fund in the first place. But there are a 82 00:04:41,360 --> 00:04:44,520 Speaker 1: lot of people who are the opposite, in particular women. 83 00:04:44,560 --> 00:04:47,000 Speaker 1: There's quite a lot of research to suggest that women 84 00:04:47,080 --> 00:04:51,640 Speaker 1: tend to go into the lower risk investments and end 85 00:04:51,720 --> 00:04:54,679 Speaker 1: up retiring with a lot less money, because it makes 86 00:04:54,839 --> 00:04:56,479 Speaker 1: a big, big difference over the years. 87 00:04:56,600 --> 00:05:00,680 Speaker 3: The reason I laughed then is I think maybe you 88 00:05:00,839 --> 00:05:04,679 Speaker 3: only know what your risk profile is when things are volatile, 89 00:05:04,720 --> 00:05:06,840 Speaker 3: because when it's all going up, you can say, great, 90 00:05:07,200 --> 00:05:10,280 Speaker 3: take on lots of risk, because it doesn't feel risky 91 00:05:10,160 --> 00:05:11,680 Speaker 3: the fair assumption. 92 00:05:11,880 --> 00:05:15,280 Speaker 1: Yes, I think so. I mean in early twenty twenty, 93 00:05:15,320 --> 00:05:19,719 Speaker 1: when the market's really plunged, when COVID broke out, that 94 00:05:19,920 --> 00:05:22,520 Speaker 1: was the first time for a lot of people that 95 00:05:22,560 --> 00:05:25,000 Speaker 1: their Kii Saber had gone down much. People who got 96 00:05:25,080 --> 00:05:27,400 Speaker 1: in at the very beginning in two thousand and seven 97 00:05:27,520 --> 00:05:31,479 Speaker 1: or eight, they saw a big downtem because the global 98 00:05:31,480 --> 00:05:35,400 Speaker 1: financial crisis happened around then. But first of all, quite 99 00:05:35,400 --> 00:05:38,080 Speaker 1: a lot of people went in yet, and secondly, it 100 00:05:38,160 --> 00:05:42,240 Speaker 1: was on a pretty small balance. People went all lad interested. 101 00:05:42,279 --> 00:05:44,120 Speaker 1: At that stage. They might have a couple of thousand 102 00:05:44,160 --> 00:05:46,839 Speaker 1: dollars in key saber and it went down five hundred 103 00:05:46,839 --> 00:05:49,599 Speaker 1: dollars and they, oh, you know, it's only five hundred bucks. 104 00:05:49,720 --> 00:05:52,359 Speaker 1: But by the time we got to twenty twenty, for 105 00:05:52,400 --> 00:05:56,240 Speaker 1: a lot of people they saw the value dropping by 106 00:05:56,320 --> 00:06:00,599 Speaker 1: thousands of dollars and panicking. And of course, as we 107 00:06:00,640 --> 00:06:05,040 Speaker 1: all know now, the market's recovered remarkably quickly that time. 108 00:06:05,440 --> 00:06:09,240 Speaker 1: They don't always so fast. But I mean, I was 109 00:06:09,360 --> 00:06:12,240 Speaker 1: in my HAIRLD column. I was continually saying to people, no, 110 00:06:12,400 --> 00:06:15,800 Speaker 1: just stay poor, just stay put, and even even if 111 00:06:15,839 --> 00:06:18,359 Speaker 1: there is a downturn, and you learn from that that 112 00:06:18,400 --> 00:06:21,719 Speaker 1: you can't cope with volatility as much as you thought 113 00:06:21,760 --> 00:06:24,680 Speaker 1: you could, if you can just hang in there for 114 00:06:24,680 --> 00:06:29,799 Speaker 1: a while, because markets that go down suddenly quite often 115 00:06:29,920 --> 00:06:35,000 Speaker 1: recover quite fast. And then once things have sort of 116 00:06:35,040 --> 00:06:37,560 Speaker 1: turned around again, if you really want at that point 117 00:06:37,600 --> 00:06:42,280 Speaker 1: to move to lower risk because you can't cope with volatility, 118 00:06:42,839 --> 00:06:46,000 Speaker 1: that's fine, but you're not allowed to. Then when the 119 00:06:46,040 --> 00:06:48,520 Speaker 1: markets start going back up again, Oh, I'm going to 120 00:06:48,600 --> 00:06:51,360 Speaker 1: flick back into the high risk again. People that do that, 121 00:06:51,680 --> 00:06:53,919 Speaker 1: really do. There's a lot of data that shows that 122 00:06:53,960 --> 00:06:57,080 Speaker 1: people that shift around like that end up with sometimes 123 00:06:57,080 --> 00:06:59,640 Speaker 1: only about half as much money as Wow, people who 124 00:06:59,720 --> 00:07:01,159 Speaker 1: just we just misstime it. 125 00:07:01,279 --> 00:07:04,120 Speaker 3: We jump in after the markets have risen, and we 126 00:07:04,240 --> 00:07:08,159 Speaker 3: jump out when they're falling after they've fallen. 127 00:07:08,360 --> 00:07:12,880 Speaker 1: It's it's absolutely awful what happens where people they're buying 128 00:07:12,880 --> 00:07:15,040 Speaker 1: at a high price and selling at a low price. And 129 00:07:15,520 --> 00:07:18,000 Speaker 1: if you you know, think about cars, If you buy 130 00:07:18,000 --> 00:07:19,880 Speaker 1: a car at a high price and then sell it 131 00:07:19,920 --> 00:07:23,520 Speaker 1: when the prices are low for that model, that's not good. 132 00:07:23,760 --> 00:07:25,400 Speaker 1: It's just the same and key we saving. 133 00:07:25,680 --> 00:07:29,080 Speaker 3: Do you think that the term high risk needs some 134 00:07:29,960 --> 00:07:33,720 Speaker 3: workshopping by the marketing department to be something that doesn't 135 00:07:33,760 --> 00:07:35,160 Speaker 3: sound so scary. 136 00:07:35,280 --> 00:07:39,120 Speaker 1: Yeah, yeah, that's you know a lot of people say, well, 137 00:07:39,160 --> 00:07:43,840 Speaker 1: it's really volatility, it's not risk, and that's absolutely true 138 00:07:44,160 --> 00:07:47,880 Speaker 1: in a key we sab fund because they're all quite 139 00:07:47,920 --> 00:07:50,640 Speaker 1: widely diversified. They own a lot of different shares or 140 00:07:50,680 --> 00:07:56,640 Speaker 1: bonds or whatever, and so they're not the value is 141 00:07:56,720 --> 00:07:59,640 Speaker 1: not going to fall to zero just and when it 142 00:07:59,680 --> 00:08:02,640 Speaker 1: goes down it's almost certainly going to go back up 143 00:08:02,680 --> 00:08:05,600 Speaker 1: again in time. It might it might take a few years, 144 00:08:06,560 --> 00:08:08,760 Speaker 1: or it might take just a few months, but it 145 00:08:08,800 --> 00:08:13,080 Speaker 1: will come back up. So it's not really risky. It's volatile. 146 00:08:13,360 --> 00:08:18,160 Speaker 1: The trouble is high volatility is the kind of it 147 00:08:18,240 --> 00:08:20,560 Speaker 1: doesn't flow off the tongue is easy. Yeah, and I 148 00:08:20,560 --> 00:08:24,119 Speaker 1: think quite a lot of people might not even fully understand. Well, 149 00:08:24,200 --> 00:08:26,000 Speaker 1: you know, it's a little bit of a hard word. 150 00:08:26,120 --> 00:08:28,760 Speaker 1: Maybe do you think, yeah, we preaps need to find 151 00:08:28,800 --> 00:08:30,600 Speaker 1: some other one. I'm not sure what you Yeah. 152 00:08:30,600 --> 00:08:33,199 Speaker 3: No, I wonder whether it is one of the other 153 00:08:33,280 --> 00:08:35,840 Speaker 3: mistakes that some of us are making, is we're looking 154 00:08:35,920 --> 00:08:38,800 Speaker 3: at our balance too often. I know people who have 155 00:08:38,880 --> 00:08:41,680 Speaker 3: it on their mobile banking app and so on any 156 00:08:41,760 --> 00:08:44,000 Speaker 3: given day they can tell you whether it's up, down, 157 00:08:44,120 --> 00:08:46,800 Speaker 3: or otherwise. But if we're looking at a twenty or 158 00:08:46,800 --> 00:08:49,920 Speaker 3: thirty year investment on the daily, we're more likely to 159 00:08:49,920 --> 00:08:50,400 Speaker 3: be worried. 160 00:08:50,520 --> 00:08:54,040 Speaker 1: Yeah, absolutely, And I mean I think that's one one 161 00:08:54,120 --> 00:08:56,280 Speaker 1: reason why I'm not a huge fan of the bank 162 00:08:56,520 --> 00:08:59,200 Speaker 1: kV saver schemes. I mean, they're not bad, but they're 163 00:08:59,240 --> 00:09:03,200 Speaker 1: not not amongst the bettest schemes for the most part. 164 00:09:03,280 --> 00:09:06,120 Speaker 1: But that problem too, of people seeing their balance. It 165 00:09:06,160 --> 00:09:08,840 Speaker 1: was fine while the markets kept growing, and you know, 166 00:09:08,960 --> 00:09:13,000 Speaker 1: in the ten or so years from about twenty ten 167 00:09:13,040 --> 00:09:18,120 Speaker 1: to twenty twenty before that COVID crash, there weren't many 168 00:09:18,160 --> 00:09:21,960 Speaker 1: downturns at all, and I think people thought that's just 169 00:09:21,960 --> 00:09:23,280 Speaker 1: the way it was always going to work, and so 170 00:09:23,320 --> 00:09:25,600 Speaker 1: they look at their bank balance and it was often 171 00:09:25,600 --> 00:09:28,079 Speaker 1: it was a bit higher, and it made them feel good. 172 00:09:28,120 --> 00:09:31,640 Speaker 1: But then when it went down, that was especially if 173 00:09:31,679 --> 00:09:35,040 Speaker 1: it's on your bank app or something and you're seeing 174 00:09:35,080 --> 00:09:39,760 Speaker 1: it every time you buy something or whatever, not a 175 00:09:39,800 --> 00:09:42,320 Speaker 1: good idea. I think you can ask the banks, do 176 00:09:42,400 --> 00:09:44,080 Speaker 1: you know. I think you can ask them not to 177 00:09:44,679 --> 00:09:48,320 Speaker 1: have your balance come up like that. I think they'd 178 00:09:48,400 --> 00:09:50,600 Speaker 1: be a good idea for people to if they want 179 00:09:50,640 --> 00:09:51,920 Speaker 1: to stick with their bank too. 180 00:09:52,360 --> 00:09:56,200 Speaker 3: If that helps them manage their personal feelings about risk 181 00:09:56,280 --> 00:10:00,240 Speaker 3: or volatility, then perhaps that's a really good idea. If 182 00:10:00,240 --> 00:10:03,440 Speaker 3: you feel like you don't have the stomach for volatility, 183 00:10:03,600 --> 00:10:06,000 Speaker 3: is there a way of just at least dipping your 184 00:10:06,040 --> 00:10:10,439 Speaker 3: toe in and partially exposing your fund to more risk. 185 00:10:10,840 --> 00:10:14,679 Speaker 1: Absolutely, And that's one of the reasons why I think, 186 00:10:15,240 --> 00:10:17,680 Speaker 1: well nearly all the key we saber providers let you 187 00:10:17,720 --> 00:10:20,959 Speaker 1: be in more than one of their funds. And there 188 00:10:21,000 --> 00:10:23,680 Speaker 1: are sort of two situations where people might want to 189 00:10:23,720 --> 00:10:26,960 Speaker 1: do that. One is, as you're approaching the time of 190 00:10:27,000 --> 00:10:31,400 Speaker 1: spending the money, maybe on a home or maybe in retirement, 191 00:10:31,960 --> 00:10:34,920 Speaker 1: then quite often you want to put some of the money, 192 00:10:35,880 --> 00:10:38,440 Speaker 1: the money you're planning to spend soon in low risk 193 00:10:38,480 --> 00:10:41,000 Speaker 1: and then the longer term money in a higher risk. 194 00:10:42,360 --> 00:10:45,600 Speaker 1: But the other time is when you're thinking, i'd quite 195 00:10:45,720 --> 00:10:49,640 Speaker 1: like to be brave and go into something that's a 196 00:10:49,679 --> 00:10:54,920 Speaker 1: little bit more high risk, high volatile, that you can 197 00:10:55,080 --> 00:10:58,160 Speaker 1: if you're I'm not sure I can cope because I 198 00:10:58,240 --> 00:11:03,760 Speaker 1: reckon you should actually picture your balance to be radical harving. 199 00:11:04,080 --> 00:11:07,200 Speaker 1: I mean, there have been market crashes where where the 200 00:11:07,280 --> 00:11:10,240 Speaker 1: value of something like a Key Sab fund would have halved, 201 00:11:10,720 --> 00:11:14,160 Speaker 1: and that's very rare, but I think in the eighty 202 00:11:14,240 --> 00:11:17,440 Speaker 1: seven crash it probably happened. I mean it's possible. And 203 00:11:17,520 --> 00:11:20,240 Speaker 1: so if you had a Key Saber balance of one 204 00:11:20,320 --> 00:11:25,560 Speaker 1: hundred thousand and you're moving into a higher risk fund, 205 00:11:25,600 --> 00:11:30,520 Speaker 1: picture it going to fifty and you know, it's great 206 00:11:30,559 --> 00:11:33,080 Speaker 1: if you can cope with that, because to hang about 207 00:11:33,120 --> 00:11:35,600 Speaker 1: it and it'll come back up again. But if you 208 00:11:35,720 --> 00:11:39,959 Speaker 1: really can't, you know that just sounds too grim. Then 209 00:11:40,000 --> 00:11:42,560 Speaker 1: perhaps put a quarter of your money into high risk 210 00:11:43,120 --> 00:11:44,880 Speaker 1: and then see how that goes for a couple of 211 00:11:45,000 --> 00:11:49,679 Speaker 1: years and get more transferred over. Now, last I took 212 00:11:49,720 --> 00:11:54,720 Speaker 1: to Simplicity. They were the one major provider that wasn't 213 00:11:54,760 --> 00:11:57,800 Speaker 1: letting you be in more than one fund. But Sam 214 00:11:57,840 --> 00:11:59,760 Speaker 1: Stubbs will say, no, no, no, we're going to change that. 215 00:12:00,040 --> 00:12:03,960 Speaker 1: I'm not sure whether they have yet, but those of 216 00:12:03,960 --> 00:12:05,560 Speaker 1: you who are in simplicity and want to be in 217 00:12:05,559 --> 00:12:07,719 Speaker 1: more than one fund, hassle them because. 218 00:12:09,080 --> 00:12:12,520 Speaker 3: It so once you've figured out, you know you need 219 00:12:12,559 --> 00:12:15,600 Speaker 3: to be in growth, aggressive, balanced, whatever it is. 220 00:12:16,160 --> 00:12:16,480 Speaker 1: I guess. 221 00:12:16,520 --> 00:12:19,199 Speaker 3: The next step is to figure out, well, whose growth 222 00:12:19,520 --> 00:12:24,040 Speaker 3: aggressive balanced fund should you be in? How will we 223 00:12:24,120 --> 00:12:28,240 Speaker 3: best to determine because there's many providers and it can 224 00:12:28,280 --> 00:12:30,040 Speaker 3: be a bit overwhelming. 225 00:12:30,000 --> 00:12:35,560 Speaker 1: Some it can. I think the major basis on which 226 00:12:35,600 --> 00:12:39,880 Speaker 1: I would suggest you choose a provider is fees, which 227 00:12:39,920 --> 00:12:43,440 Speaker 1: is controversial because people say, well, if you pay more 228 00:12:43,480 --> 00:12:47,640 Speaker 1: for something, you tend to get something better. Not always, 229 00:12:47,679 --> 00:12:52,000 Speaker 1: but you tend to when you're buying clothes or or 230 00:12:52,679 --> 00:12:57,280 Speaker 1: houses or whatever, pay more and get something better. But really, 231 00:12:57,520 --> 00:13:01,800 Speaker 1: in managed funds and including key we that doesn't necessarily 232 00:13:01,880 --> 00:13:05,160 Speaker 1: happen that there's a lot of research to show that 233 00:13:05,200 --> 00:13:08,920 Speaker 1: the low fee ones can perform as well, if not better, 234 00:13:09,600 --> 00:13:13,800 Speaker 1: after fees than the high fee ones, and so I 235 00:13:13,880 --> 00:13:16,240 Speaker 1: reckon it's good to just go with low fees. And 236 00:13:16,320 --> 00:13:20,200 Speaker 1: the easy way to work out which funds charged low 237 00:13:20,240 --> 00:13:23,439 Speaker 1: fees is to just go on the sorted website on 238 00:13:23,480 --> 00:13:28,160 Speaker 1: the smart and Vesta tool and it's pretty neat tool 239 00:13:28,360 --> 00:13:31,160 Speaker 1: for those who haven't explored it. You just click on 240 00:13:31,240 --> 00:13:35,360 Speaker 1: kipsaber and then you can choose what risk level you 241 00:13:35,400 --> 00:13:37,520 Speaker 1: want to look at, or you can look at all 242 00:13:37,600 --> 00:13:40,080 Speaker 1: KP saber funds. But It's easier really if you say, look, 243 00:13:40,120 --> 00:13:43,160 Speaker 1: I'm in a balanced fund. Click on balance funds and 244 00:13:43,280 --> 00:13:46,800 Speaker 1: rank them by fees. You can rank them by returns. 245 00:13:46,800 --> 00:13:49,520 Speaker 1: You can rank them by quite a few different different things, 246 00:13:49,840 --> 00:13:52,840 Speaker 1: but rank them by fees lowest first. You can get 247 00:13:52,880 --> 00:13:56,080 Speaker 1: fees the highest first, fees lowest first, and then have 248 00:13:56,160 --> 00:13:59,920 Speaker 1: a look at say half a dozen of the one 249 00:14:00,160 --> 00:14:03,360 Speaker 1: that charge the lowest fees, and read about them that 250 00:14:04,200 --> 00:14:08,240 Speaker 1: website has got. If you click on the name of 251 00:14:08,280 --> 00:14:13,280 Speaker 1: the particular fund, you get a good summary of information. 252 00:14:13,400 --> 00:14:16,079 Speaker 1: It's not you know, screeds and screeds of it. It's 253 00:14:16,280 --> 00:14:19,880 Speaker 1: what major investments they're in and how their returns are 254 00:14:19,880 --> 00:14:23,560 Speaker 1: compared with other returns are warning on that people look 255 00:14:23,600 --> 00:14:27,000 Speaker 1: and see that it hasn't had such good returns. Now, 256 00:14:27,040 --> 00:14:30,400 Speaker 1: if it's had really bad returns relative to other funds 257 00:14:30,720 --> 00:14:34,040 Speaker 1: in that risk level, I would perhaps give it a miss, 258 00:14:34,120 --> 00:14:39,560 Speaker 1: but don't necessarily dismiss it because it's had only mediocre returns, 259 00:14:39,680 --> 00:14:43,240 Speaker 1: because there's once again heaps of research to show the 260 00:14:43,240 --> 00:14:45,840 Speaker 1: ones that did well in one period won't necessarily do 261 00:14:45,960 --> 00:14:49,040 Speaker 1: well in the next period. So I think it's better 262 00:14:49,080 --> 00:14:53,960 Speaker 1: to go with low fees and then one that's had 263 00:14:54,160 --> 00:14:57,560 Speaker 1: reasonable sort of returns. The other thing you can look 264 00:14:57,600 --> 00:15:01,280 Speaker 1: at is the services that the that the different keyv 265 00:15:01,360 --> 00:15:08,600 Speaker 1: Saber providers offer, and the Retirement Commission does surveys annual 266 00:15:08,640 --> 00:15:12,040 Speaker 1: surveys on and asks all the providers do you offer this, 267 00:15:12,120 --> 00:15:14,040 Speaker 1: do you offer that? And they come up with a 268 00:15:14,120 --> 00:15:17,440 Speaker 1: score for each provider on on how good their services are, 269 00:15:17,800 --> 00:15:20,280 Speaker 1: and you can find that on the keypsaber fund finder 270 00:15:20,680 --> 00:15:24,240 Speaker 1: tool on Sorted you can find it which one's got 271 00:15:24,280 --> 00:15:25,040 Speaker 1: good services. 272 00:15:25,360 --> 00:15:28,920 Speaker 3: Yeah, and I would agree that that tool is phenomenal. 273 00:15:29,160 --> 00:15:32,160 Speaker 3: And we should point out to people that Sorted is 274 00:15:32,600 --> 00:15:35,520 Speaker 3: created by the Retirement Commission, so it's government funded. They're 275 00:15:35,520 --> 00:15:39,280 Speaker 3: not trying to sell you anything. It's just good independent information. 276 00:15:39,560 --> 00:15:42,360 Speaker 3: So head there. We'll put the link in the show notes. 277 00:15:42,400 --> 00:15:44,040 Speaker 3: I want to talk to you some more about the 278 00:15:44,080 --> 00:15:46,800 Speaker 3: mistakes we're making and the importance of fees, but we 279 00:15:46,840 --> 00:15:49,400 Speaker 3: do have to take a quick break back after this 280 00:15:59,080 --> 00:16:01,360 Speaker 3: Welcome back to the Prospers charity project. We're talking to 281 00:16:01,400 --> 00:16:04,920 Speaker 3: money expert Mary Holme about ensuring you're getting the best 282 00:16:05,000 --> 00:16:09,000 Speaker 3: out of your kiwisaver, and we started talking about fees, Mary, 283 00:16:09,840 --> 00:16:12,520 Speaker 3: and I know that on the Sorted website that you 284 00:16:12,560 --> 00:16:15,480 Speaker 3: can rank them from lowest to highest. But is it 285 00:16:15,560 --> 00:16:18,520 Speaker 3: most important to look at the fees or is it 286 00:16:18,520 --> 00:16:22,280 Speaker 3: most important to look at the return after fees? 287 00:16:22,920 --> 00:16:27,760 Speaker 1: Yeah, I think look at the fees. Yeah, you know, 288 00:16:27,840 --> 00:16:31,160 Speaker 1: that does seem counterintuitive because you want to look at 289 00:16:31,160 --> 00:16:35,480 Speaker 1: which everyone's doing well. The trouble is it's all past information, 290 00:16:35,640 --> 00:16:37,720 Speaker 1: And as I was saying a minute ago, there's lots 291 00:16:37,760 --> 00:16:40,720 Speaker 1: of research to show that funds that have done well 292 00:16:40,760 --> 00:16:44,560 Speaker 1: in the past in fact are sort of less than 293 00:16:44,600 --> 00:16:46,800 Speaker 1: average likely to do well in the future. There's a 294 00:16:46,880 --> 00:16:51,840 Speaker 1: real tendency. You know, the active fund managers which charge 295 00:16:51,960 --> 00:16:55,560 Speaker 1: the higher fees, tend to have a certain way of 296 00:16:55,920 --> 00:16:59,000 Speaker 1: selecting investments which quite often does well in one environment 297 00:16:59,040 --> 00:17:03,040 Speaker 1: and not well in an environment. So really, honestly, and 298 00:17:03,080 --> 00:17:06,720 Speaker 1: people find it quite hard to believe it's a very 299 00:17:06,720 --> 00:17:10,960 Speaker 1: good idea to ignore returns unless they're particularly bad. 300 00:17:11,440 --> 00:17:13,600 Speaker 3: Yeah, I think people would struggle to get their heads 301 00:17:13,600 --> 00:17:16,719 Speaker 3: around the idea of ignoring returns when they're all ranked 302 00:17:16,760 --> 00:17:19,679 Speaker 3: on this fund or that fund has achieved the best return, 303 00:17:19,720 --> 00:17:22,600 Speaker 3: and we've got the morning Star report that'll tell you 304 00:17:22,680 --> 00:17:25,359 Speaker 3: who's done what over the past five years, ten years, 305 00:17:26,440 --> 00:17:30,000 Speaker 3: So what is the research that tells us that it 306 00:17:30,080 --> 00:17:33,200 Speaker 3: really doesn't matter if they've done well in the past, 307 00:17:33,240 --> 00:17:34,960 Speaker 3: it doesn't mean they're going to do well in the future. 308 00:17:35,040 --> 00:17:37,320 Speaker 1: By the way, on morning start have a look and 309 00:17:37,359 --> 00:17:40,600 Speaker 1: it says that you know, it says there don't take 310 00:17:40,720 --> 00:17:43,840 Speaker 1: much notice of the returns. It does say on their reports. 311 00:17:44,080 --> 00:17:49,040 Speaker 1: But the research is mostly American, I have to admit, 312 00:17:49,960 --> 00:17:51,760 Speaker 1: done by S and P, which runs the S and 313 00:17:51,800 --> 00:17:56,840 Speaker 1: P five hundred and huge big American research firm, but 314 00:17:57,520 --> 00:17:59,560 Speaker 1: there has been some done in New Zealand that shows 315 00:17:59,560 --> 00:18:01,920 Speaker 1: the same. So things happening here where they look at, 316 00:18:02,200 --> 00:18:06,800 Speaker 1: for example, the funds that have done best let's say 317 00:18:06,800 --> 00:18:09,080 Speaker 1: a five year period, how did they do in the 318 00:18:09,119 --> 00:18:11,960 Speaker 1: following five year period or over ten years, and how 319 00:18:11,960 --> 00:18:15,199 Speaker 1: do they do in the following ten or whatever the 320 00:18:15,200 --> 00:18:18,640 Speaker 1: period is. And very often the ones that did well 321 00:18:18,680 --> 00:18:22,760 Speaker 1: in one period then they tend to be less likely 322 00:18:22,840 --> 00:18:28,320 Speaker 1: than by chance, to do badly next time around. And 323 00:18:28,359 --> 00:18:30,520 Speaker 1: the ones that did badly are quite likely to do 324 00:18:30,600 --> 00:18:34,040 Speaker 1: well the next time around. It's really it is hard 325 00:18:34,040 --> 00:18:37,080 Speaker 1: to get head around it. If you're doing you know, 326 00:18:37,119 --> 00:18:40,760 Speaker 1: if you study finance, which I've done, I could explain it. 327 00:18:40,800 --> 00:18:44,480 Speaker 1: But it's not a quick crab. Really yeah, fair enough? 328 00:18:45,040 --> 00:18:47,800 Speaker 3: And when I know that there's plenty of debate over 329 00:18:48,000 --> 00:18:52,240 Speaker 3: active funds versus passive funds, and I guess the lower 330 00:18:52,280 --> 00:18:56,240 Speaker 3: fee ones tend to be the more passive funds. 331 00:18:56,760 --> 00:18:58,000 Speaker 1: Is that to say that there's. 332 00:18:57,880 --> 00:19:02,480 Speaker 3: Just really no benefit to some highly powered financial analyst 333 00:19:03,720 --> 00:19:06,480 Speaker 3: who's paid lots and so therefore charges you lots going 334 00:19:06,560 --> 00:19:08,880 Speaker 3: through and picking the investments. 335 00:19:09,080 --> 00:19:12,840 Speaker 1: Yeah, I think there is no benefit. I mean that's 336 00:19:13,080 --> 00:19:16,440 Speaker 1: perhaps a bit sweeping. And people always bring up Warren 337 00:19:16,480 --> 00:19:19,359 Speaker 1: Buffett to me, you know, when I'm saying you can't 338 00:19:19,400 --> 00:19:23,760 Speaker 1: really pick shares. He and Charlie Munger have been exceptional. 339 00:19:24,119 --> 00:19:26,280 Speaker 1: They are the exception that proves the rule. In fact, 340 00:19:26,520 --> 00:19:29,200 Speaker 1: he himself Warren Buffett has said you should go into 341 00:19:29,200 --> 00:19:34,560 Speaker 1: index sons. But generally speaking, when you look at the research, 342 00:19:34,920 --> 00:19:37,040 Speaker 1: I've been following this for more decodes than are clear 343 00:19:37,119 --> 00:19:39,200 Speaker 1: to men. But when you look at people who are 344 00:19:39,400 --> 00:19:43,680 Speaker 1: praised for being very good at selecting shares, and then 345 00:19:43,760 --> 00:19:47,400 Speaker 1: suddenly next time around they don't do very well, it's 346 00:19:47,560 --> 00:19:49,640 Speaker 1: just a common thing. 347 00:19:49,960 --> 00:19:53,240 Speaker 3: I actually underlined in your book a quote from Warren 348 00:19:53,280 --> 00:19:56,760 Speaker 3: Buffett in his twenty seventeen Annual Report, where he says 349 00:19:56,800 --> 00:20:01,320 Speaker 3: performance comes, performance goes, fees never fault, yes, which I 350 00:20:01,359 --> 00:20:04,720 Speaker 3: thought was quite poignant because maybe what people don't understand 351 00:20:05,000 --> 00:20:08,440 Speaker 3: is you're not just charged fees if your fund grows, right. 352 00:20:08,600 --> 00:20:12,119 Speaker 1: No, that's right. Then people can get upset by that. 353 00:20:12,240 --> 00:20:15,119 Speaker 1: Sometimes if their balance goes down quite a lot in 354 00:20:15,160 --> 00:20:18,240 Speaker 1: the fees just keep on coming along. But if you're 355 00:20:18,280 --> 00:20:22,280 Speaker 1: realistic about it, you can't really expect the people who 356 00:20:22,320 --> 00:20:25,520 Speaker 1: are running KYP Saber funds to just get no or 357 00:20:25,600 --> 00:20:29,040 Speaker 1: low income when the markets are down. That's not going 358 00:20:29,119 --> 00:20:32,920 Speaker 1: to work for people. They're still doing the work, they're 359 00:20:32,920 --> 00:20:35,840 Speaker 1: still running the funds, and many times it's not their 360 00:20:35,960 --> 00:20:38,480 Speaker 1: fault that the markets have gone down, you know, it's 361 00:20:38,600 --> 00:20:41,480 Speaker 1: market condition. Yeah, COVID or something like that comes along, 362 00:20:41,520 --> 00:20:43,960 Speaker 1: and you can't blame them for that. There's nowhere to. 363 00:20:43,920 --> 00:20:46,520 Speaker 3: Run and hide in a situation like that. What about 364 00:20:46,560 --> 00:20:49,720 Speaker 3: performance fees? Not all funds charge them, but some do 365 00:20:50,440 --> 00:20:55,200 Speaker 3: where if you achieve a certain amount above the benchmark. 366 00:20:54,640 --> 00:20:58,080 Speaker 1: That they'll charge you extra. Is that a waste of money? 367 00:20:58,320 --> 00:21:04,920 Speaker 1: It's yes, there's not that many do charge those anymore, 368 00:21:04,960 --> 00:21:09,399 Speaker 1: I think, and they're not really They can give the 369 00:21:09,440 --> 00:21:14,440 Speaker 1: wrong incentives for the managers to go for short term 370 00:21:14,480 --> 00:21:18,040 Speaker 1: performance as against longer term because they can take the 371 00:21:18,080 --> 00:21:22,639 Speaker 1: money and run to South America. Yeah, you're stuck in 372 00:21:22,720 --> 00:21:26,000 Speaker 1: Kip Saber over the decades. I mean, I know the 373 00:21:26,119 --> 00:21:29,200 Speaker 1: FMAS looked into performance fees and I don't think they're 374 00:21:29,240 --> 00:21:32,879 Speaker 1: particularly impressed by by the way it works. It's not 375 00:21:33,280 --> 00:21:40,280 Speaker 1: I wouldn't wouldn't applaud a fund that charges performance fees. 376 00:21:39,320 --> 00:21:42,399 Speaker 3: At the last FMA report and it said that the 377 00:21:42,960 --> 00:21:45,800 Speaker 3: I think this is for the twenty twenty four year 378 00:21:46,400 --> 00:21:49,879 Speaker 3: that we paid seven hundred and eighty nine point six 379 00:21:50,080 --> 00:21:53,719 Speaker 3: million in fees. Gosh, do you think that we're just 380 00:21:54,600 --> 00:21:57,600 Speaker 3: paying too much? Should there be a cap on what 381 00:21:57,680 --> 00:21:58,119 Speaker 3: you canch? 382 00:21:58,160 --> 00:22:03,520 Speaker 1: Sure? I prefer in these sort of situations to let 383 00:22:03,560 --> 00:22:06,639 Speaker 1: the market do it, and we should vote that with 384 00:22:06,680 --> 00:22:10,240 Speaker 1: our feet, then yes, and move to the low fee ones, 385 00:22:10,280 --> 00:22:12,560 Speaker 1: which is not only helping the market work better, but 386 00:22:12,600 --> 00:22:18,000 Speaker 1: also helping you. And it's absolutely true that fees have 387 00:22:18,119 --> 00:22:20,600 Speaker 1: gone down, and you know, the f he may has 388 00:22:20,640 --> 00:22:23,080 Speaker 1: been monitoring that, and especially at the low end. It 389 00:22:23,200 --> 00:22:26,160 Speaker 1: used to be that a zero point five percent fee 390 00:22:26,320 --> 00:22:28,800 Speaker 1: was low and now there are quite a few providers 391 00:22:28,800 --> 00:22:31,760 Speaker 1: offering you know, a fair bit and sometimes quite a 392 00:22:31,840 --> 00:22:35,679 Speaker 1: lot less than that. Yeah, So I think we just 393 00:22:35,800 --> 00:22:38,000 Speaker 1: let the market work that one out. Yeah. 394 00:22:38,119 --> 00:22:41,840 Speaker 3: I think you've been quite definitive though. We're looking for 395 00:22:41,880 --> 00:22:45,840 Speaker 3: the lowest fee and not performance, and so I think 396 00:22:45,840 --> 00:22:48,200 Speaker 3: if everyone thinks that way, I think we'll all drift 397 00:22:48,200 --> 00:22:50,920 Speaker 3: in a certain direction and surely the other fund managers 398 00:22:50,920 --> 00:22:51,439 Speaker 3: will catch ale. 399 00:22:51,720 --> 00:22:54,960 Speaker 1: Yeah, and there has been was it being one of 400 00:22:55,000 --> 00:22:59,320 Speaker 1: the big providers not long ago lower their fees, tended 401 00:22:59,359 --> 00:23:04,160 Speaker 1: to lower them across all all their funds. Yeah, it's. 402 00:23:05,520 --> 00:23:08,600 Speaker 3: Yes, we've talked about the fees. We've talked about not 403 00:23:08,640 --> 00:23:11,399 Speaker 3: necessarily getting hung up on the returns. Is there anything 404 00:23:11,400 --> 00:23:14,720 Speaker 3: else you should consider when you're picking a provider, Well. 405 00:23:14,680 --> 00:23:18,080 Speaker 1: There's you know, the whole issue of ethical investing, which 406 00:23:18,080 --> 00:23:20,920 Speaker 1: has become more and more popular and a lot more 407 00:23:20,920 --> 00:23:24,680 Speaker 1: new Zealanders are taking an interest when Mindful Money, which 408 00:23:24,720 --> 00:23:27,080 Speaker 1: is the website I recommend on it. They got some 409 00:23:27,160 --> 00:23:30,560 Speaker 1: great information on which kei we saber providers and which 410 00:23:30,600 --> 00:23:35,760 Speaker 1: funds invest nicely as far as the environment goes or 411 00:23:35,760 --> 00:23:38,280 Speaker 1: social issues or that in fact that you can look at, 412 00:23:38,320 --> 00:23:41,440 Speaker 1: whether they're animal testing, all sorts of factors you can 413 00:23:41,480 --> 00:23:44,840 Speaker 1: look at, and so have a look at the Mind 414 00:23:44,880 --> 00:23:48,000 Speaker 1: for Money website, but they when they do surveys, they 415 00:23:48,040 --> 00:23:50,880 Speaker 1: find that, you know, the majority of New Zealanders really 416 00:23:50,960 --> 00:23:54,480 Speaker 1: care about the ethics of their investments, but a lot 417 00:23:54,640 --> 00:23:57,760 Speaker 1: fewer people are actually translating that into choosing a key 418 00:23:57,760 --> 00:24:02,840 Speaker 1: we Saver fund that is an ethically strong fund. But 419 00:24:02,960 --> 00:24:06,520 Speaker 1: I think that's probably gradually changing, and it's certainly something 420 00:24:07,000 --> 00:24:09,320 Speaker 1: so on the Mind for Money website, have a look 421 00:24:09,320 --> 00:24:12,520 Speaker 1: at a fund you're thinking of moving into, and you 422 00:24:12,600 --> 00:24:17,399 Speaker 1: can specify which issues matter to you and then see 423 00:24:17,440 --> 00:24:20,040 Speaker 1: how that fund scores, and that that might make you 424 00:24:20,119 --> 00:24:20,760 Speaker 1: change your mind. 425 00:24:21,200 --> 00:24:24,320 Speaker 3: I'm keen to know whether there are other changes more 426 00:24:24,359 --> 00:24:26,920 Speaker 3: broadly that you would like to see to how key 427 00:24:26,920 --> 00:24:28,880 Speaker 3: we Saver it works, because obviously there's only so much 428 00:24:28,880 --> 00:24:31,359 Speaker 3: that we as investors can do within the scheme to 429 00:24:31,440 --> 00:24:36,920 Speaker 3: maximize its value for us. For example, some people are 430 00:24:37,040 --> 00:24:41,760 Speaker 3: on contracts that are total remuneration contracts, so your key 431 00:24:41,760 --> 00:24:46,000 Speaker 3: we Save a contribution and the employer contribution comes out 432 00:24:46,040 --> 00:24:49,320 Speaker 3: of your salary, and that's always struck me as not 433 00:24:49,359 --> 00:24:53,800 Speaker 3: really being within the spirit of the legislation. Cricket, It's 434 00:24:53,840 --> 00:24:54,440 Speaker 3: not cricket. 435 00:24:55,200 --> 00:24:59,359 Speaker 1: No, I really don't like people doing it tends to 436 00:24:59,400 --> 00:25:03,040 Speaker 1: be big and play lawyers who do it, and they 437 00:25:04,680 --> 00:25:06,879 Speaker 1: they say it's because they want to treat the people 438 00:25:06,920 --> 00:25:09,520 Speaker 1: that are in key We Saver equally with the employees 439 00:25:09,520 --> 00:25:11,880 Speaker 1: who are not in ki We Savior. And I say, 440 00:25:11,920 --> 00:25:15,280 Speaker 1: that's that's pretty weak. We want there to be an 441 00:25:15,320 --> 00:25:17,240 Speaker 1: incentive for people to be in Kee We Save, but 442 00:25:17,280 --> 00:25:19,360 Speaker 1: we want the employees to want to be in it. 443 00:25:19,840 --> 00:25:23,600 Speaker 1: And I know that, you know, the Retirement Commission has 444 00:25:23,640 --> 00:25:25,320 Speaker 1: for a long time said we should get rid of 445 00:25:25,840 --> 00:25:29,160 Speaker 1: total remuneration it's called and I'd really like to see 446 00:25:29,440 --> 00:25:29,960 Speaker 1: that gone. 447 00:25:30,640 --> 00:25:32,560 Speaker 3: And this is maybe a tricky one for those who 448 00:25:32,600 --> 00:25:35,959 Speaker 3: find it difficult to find the three percent, But should 449 00:25:35,960 --> 00:25:38,399 Speaker 3: we have higher minimum contributions. 450 00:25:39,880 --> 00:25:42,680 Speaker 1: I'm not particularly a fan of that. The people who 451 00:25:43,600 --> 00:25:47,000 Speaker 1: are are often in the industry, and you sort of 452 00:25:47,000 --> 00:25:49,040 Speaker 1: think they've got a bit of an incentive. 453 00:25:48,880 --> 00:25:51,000 Speaker 3: Because because they can charge a fee based on how 454 00:25:51,080 --> 00:25:52,520 Speaker 3: much has invested more. 455 00:25:53,520 --> 00:25:56,520 Speaker 1: Yeah, And they say, no, no, no, Mary, that's not 456 00:25:56,560 --> 00:25:58,320 Speaker 1: what I mean at all. I just think people aren't 457 00:25:58,359 --> 00:26:01,440 Speaker 1: retiring with enough money. But actually, funnily enough, I mean 458 00:26:01,480 --> 00:26:04,960 Speaker 1: in my Weekend Herald column, every now and then there's 459 00:26:05,000 --> 00:26:07,200 Speaker 1: a letter from someone who lives on New Zealand super 460 00:26:07,320 --> 00:26:10,879 Speaker 1: alone and is quite happy on it. I'm not saying 461 00:26:11,240 --> 00:26:13,399 Speaker 1: everybody is, and I'm not saying that's good. But I 462 00:26:13,440 --> 00:26:16,560 Speaker 1: don't think we don't need to retire with half a 463 00:26:16,560 --> 00:26:19,480 Speaker 1: million dollars in key we saber. Most people don't. It's 464 00:26:19,640 --> 00:26:22,400 Speaker 1: you know, if you can, well that's nice, but it's 465 00:26:22,440 --> 00:26:30,240 Speaker 1: not essential. I would rather see contributions made, but by 466 00:26:30,359 --> 00:26:34,600 Speaker 1: the government to unemployed people. That's the change I would 467 00:26:34,600 --> 00:26:37,680 Speaker 1: really like to see. Get them into the system. Don't 468 00:26:37,680 --> 00:26:41,080 Speaker 1: take it out of their benefit because they are on 469 00:26:41,160 --> 00:26:45,320 Speaker 1: pretty low money already. Just puts three percent of their 470 00:26:45,320 --> 00:26:49,000 Speaker 1: benefit in addition into a Kiwi Saber fund for them, 471 00:26:49,440 --> 00:26:52,720 Speaker 1: because then they are part of the system, and when 472 00:26:52,720 --> 00:26:56,680 Speaker 1: they get off off the benefit, they're already enrolled and 473 00:26:56,760 --> 00:26:58,919 Speaker 1: things are rolling. They've got a stake in their future. 474 00:26:58,920 --> 00:27:01,359 Speaker 1: And I just think cycle logically, it could make a 475 00:27:01,359 --> 00:27:04,159 Speaker 1: big difference. And it doesn't cost that much. I know 476 00:27:04,200 --> 00:27:08,000 Speaker 1: the Retirement Commissioned did the number crunching on it a 477 00:27:08,000 --> 00:27:12,480 Speaker 1: while back, and it wasn't very expensive because the benefits 478 00:27:12,520 --> 00:27:14,800 Speaker 1: so low that three percent of the benefit is not 479 00:27:15,160 --> 00:27:18,840 Speaker 1: that much money. It's a really interesting concept. There's a 480 00:27:18,880 --> 00:27:21,760 Speaker 1: million more things I would love to ask you, and 481 00:27:21,760 --> 00:27:23,600 Speaker 1: perhaps we have to get you on another time, but 482 00:27:23,680 --> 00:27:26,920 Speaker 1: we really appreciate your time, Mary Halks, Nadine, I've enjoyed it. 483 00:27:27,320 --> 00:27:27,679 Speaker 1: Thank you. 484 00:27:30,840 --> 00:27:33,879 Speaker 3: Thanks for listening to The Prosperity Project. You can follow 485 00:27:33,920 --> 00:27:37,240 Speaker 3: this podcast on iHeartRadio or wherever you get your podcasts, 486 00:27:37,359 --> 00:27:39,919 Speaker 3: and please do chuck us a rating or a review 487 00:27:40,000 --> 00:27:43,200 Speaker 3: while you're there. For more personal finance and business content, 488 00:27:43,280 --> 00:27:46,480 Speaker 3: head to inzid Herald dot co dot zed and please 489 00:27:46,520 --> 00:27:48,760 Speaker 3: do feel free to get in touch with your questions 490 00:27:48,760 --> 00:27:53,000 Speaker 3: and your stories Nadine dot Higgins at zme dot co 491 00:27:53,200 --> 00:27:57,000 Speaker 3: dot zed. A reminder though, that this podcast is informational 492 00:27:57,080 --> 00:27:59,800 Speaker 3: only and nothing we say here should be considered personal 493 00:28:00,359 --> 00:28:03,879 Speaker 3: financial advice. But also remember that while listening to this 494 00:28:03,960 --> 00:28:07,000 Speaker 3: podcast is hopefully going to be additive to your financial 495 00:28:07,040 --> 00:28:11,399 Speaker 3: knowledge and that is fantastic. Knowing stuff doesn't create change. 496 00:28:11,760 --> 00:28:15,080 Speaker 3: Doing stuff does. So what action are you going to 497 00:28:15,119 --> 00:28:18,880 Speaker 3: take today to make your life more prosperous. My producer 498 00:28:18,880 --> 00:28:22,639 Speaker 3: for this episode is Ethansels, sound engineer is Richard Martin. 499 00:28:22,720 --> 00:28:25,840 Speaker 3: I'm Nadine Higgins. Thanks for listening to the Prosperity Project.