Should you pay off your property investment mortgage? This is a common question that property investors ask but it’s not a simple question to answer as it depends on your personal situation; however there are some guidelines that can help you make your decision. Guideline One If you have a mortgage on your personal home ideally you want to pay this off first. The reason for this is that you pay your personal mortgage with after tax money. So
A financial review is a must to ensure you are on track to achieve your goals and dreams. Just like we take our car into the garage once or twice a year to have a check-up and get a new warrant or go to the doctor, we also need to do a check up on our finances. For many of us our idea of a financial review is seeing if we have enough money in our bank account to
Negative gearing is often a dirty term in the world of property investing. Negative gearing is when the ongoing costs of owning a property are more than the revenue you receive from it. Sometimes, people refer to negative gearing or negative cashflow before tax or sometimes after tax. A property can be negative before tax, but when you add the tax rebate you receive, it can become positively geared or have positive cashflow. From the 2020 tax year the
There are two ways you make money from property investment. One is from cashflow and the other is from equity. In a perfect world, you would try to maximise both, however you will generally have more of one than the other, depending on what you buy. How equity works There are three components to creating equity: Buying below value: If you can create some equity when you purchase the property, you are off to a good start. Being able
We have been fortunate in recent years that mortgage interest rates have been at historical lows. Whilst it does appear that they will continue to stay low there is no guarantee that this will be the case. Many people tend to go into remote control and just pay the minimum requirement. That may be all that you can afford. If you can find some spare money to increase your payments, it is one of the most effective ways
Brian Tracey, a US based author and speaker, has always been one of my favourites. In my opinion, he has written some of the best books on goal setting. His Law of Accumulation provides some great guidelines for improving your financial situation. 1. Develop Discipline The achievement of financial independence will require a tremendous number of small efforts on your part. To begin the process of accumulation, you must be disciplined and persistent. You must keep at it for
Finding money to save can often be a challenge. Start small and over time increase the amount of savings. Here are a number of different ways you can save $20 each week: Start using up food you have stored in your cupboards and freezer. Many of us are hoarders and we can be surprised what we have in our cupboards. If you try and build one of two meals a week around using up what we already have you
Often people ask the question: “How long will it take to double my investment?” For instance, if you had an amount invested today, what would the length of time be to double that amount? And therefore allow you to get a glimpse of what it would be worth in the future. It is impossible to give definite answers to these questions, however the Rule of 72 states that if we divide the number 72 by an investment's net
Tax is not something we are particular fond of however it is necessary to help fund our economy. The IRD is working hard on making sure everyone pays their fair share. With international agreements and the use of technology its pretty hard to hide from your obligations. Here are some interesting stats. Make sure you read all the way to the bottom where you can see the amount of revenue ‘found’ from people who tried not to pay their
Last year over 377,628 company tax returns were filed, a significant percentage of those were for small businesses. Many people approach taxes as something to put off thinking about until absolutely necessary. Once they are finally done often the part of the brain that deals with taxes gets switched off until it needs to be engaged again next year. With a bit of thought and planning you can make next year’s taxes go much more smoothly. Get Organised There’s
One of the biggest mistakes business owners make is thinking that when you earn a dollar you get to keep most of it. The reality is you will be lucky to keep a third of it. By the time you take off expenses and allow for tax there is often little left, especially in the first few years of setting up a business. Below are a few key things that will help you manage your business finances: Understand the
Mortgage interest rates are historically low and have been for a while. Are you being smart and taking advantage of the opportunity? For most people your mortgage is the biggest financial commitment you have during your life and one you will usually have for a few decades. Low interest rates are fantastic for being able to borrow money cheaply and make it easier to buy the home you want. However the catch is that you have a massive mortgage
Outside England’s Bristol Zoo there is a parking lot for 150 cars and 8 buses. For 25 years, its parking fees were managed by a very pleasant attendant. The fees were £1.40 cars and £7 for buses. Then, one day, after 25 solid years of never missing a day off work, he just didn’t show up; so the Zoo Management called the City Council and asked it to send them another parking attendant. The Council did some research and
Many of us have the best intentions in the world but we often fall off the wagon, think it is all too hard and struggle to get back on it again. Below are some tips to help make it easier for you to achieve your goals. 1. Have one main goal Nobody reaches their potential by scattering themselves in lots of different directions. Reaching your potential requires focus. You must also decide what you are willing to sacrifice. 2.
Life can be challenging at the best of times, let alone when you are trying to juggle treatment for a serious illness, medical appointments, and looking after the family. But everyday New Zealanders are dealing with this on a regular basis. Swathe.me set up a Charitable Trust for you to be able to practically support an individual that is going through an unexpected life or health change. Many worthy charities request donations. They too do amazing work, but you
If Christmas is tough for you financially, cut down on gifts and consider less tangible ones, they are often the most valuable. In our busy lives we often don’t take the time to communicate how much we care about those close to us. The ideas below take no money, just a little bit of time and some imagination. 1THE GIFT OF LISTENING... But you must REALLY listen. No interrupting, no daydreaming, no planning your response. Just listening.
Questions from the Northern Advocate which is syndicated to the Bay of Plenty Times, Rotorua Daily Post, Hawkes Bay Today and Wanganui Chronicle What inspired you to write The New Zealand Money Guide? I’ve always been passionate about helping educate people to be smarter with their finances so they have more options in their lives. This book was a great way to do that. Do you think New Zealanders in general overspend and if so why? Yes they do and
When thinking about how people make financial decisions I believe common sense is surprisingly uncommon. May be its because we are so used to following rules that we forget the basics? May be its because we are so busy? I think the good old common sense is a critical component of making good decisions. Below is a parable that I came across that provides a good reminder of the value of common sense. London Times Obituary of the late
It is often said that going into a business partnership is just as complex and involved as a marriage. In my experience I would strongly agree with this. I’ve seen everything from incredibly successful partnerships through to ones that have been a complete nightmare. Let’s look at some areas you might like to consider before you enter a partnership with another party. A partnership could include investing, business or property investing partnerships. Formal partnership vs collaboration Does the arrangement
The short answer is start today, no matter how small the investment is it all adds up over time. If you go through your spending and check if you are spending wisely. Is there an area where you can cut back even just a little? Is there an alternative cheaper option for something you are buying? Have you checked that you really need everything you are spending your money on? Have you thought about taking on an extra job?
If yours is up for review, get in touch with your bank. If there seem to be better rates in the market, ask if they can match them. It is a competitive market and banks are under pressure to hold on to good business. There is more than half a percentage point in difference between the cheapest and most expensive two-year rates in the market. Banking expert Claire Matthews said winter tended to be a less frantic time
Any new graduate will tell you there is something quite disheartening about seeing 12 per cent of your new salary being siphoned off to student loan payments. While the scheme is currently interest free for borrowers who remain in New Zealand, the average student loan debt is more than $20,000 and graduates say that affects their ability to start saving for their retirements, or a first home. But if you start saving now you can make it easier
A: Many financial planners suggest having an emergency account, with enough money to cover at least three months’ worth of fixed expenses. This emergency account becomes your savings for a rainy day fund. If anything should happen to knock you off your feet, you do not want to be forced to sell your house, car or other assets. If something does happen, it is easy to stop your variable spending, such as not buying new clothes and no social spending.
The only challenge with life insurance is that you can’t buy it when you need it. You need to buy it ahead of time just in case you might need it. Generally speaking, the more debt and dependants you have the more insurance you need. In your early 20s you may not need a lot of insurance but as you go through life, have children and get a mortgage, you need the most amount of insurance. Then as your
I have three credit cards and a car loan. Is it a good financial decision to consolidate them and take out one big loan?
The answer to your question is that it depends. Consolidating all of your debts into one loan can either be a great idea saving you money and helping you get on top of your debts, or the opposite in that it costs you more money and stress. Debt consolidation is getting one loan, at a lower interest rate, and paying off all of your debts with this one loan. Often people will get a personal loan which will generally have