Investing your Money

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sonyxperiageek

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#222633 21-Aug-2017 19:18

What are your best ways of investing your money? (Someone will probably mention property.) Which account/s have the best interest rates at the moment? Just some food for thought here to see which banks, investment companies offer the best "bang for buck" interest. At the moment, my investments in Harmoney loans still seem to be generating the most interest out of all the banks here.

Sony

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#1849969 21-Aug-2017 19:23

Isn't the problem with that loan system, that the money is potentially locked in for quite a long period of time?

It seems many are investing a lot in shares, although prices are very high at the moment, so it could be a bubble. Banks are reducing interest rates all the time, so the rates are pretty low at the moment. They also seem to want to get people to lock their money in for longer period of time these days, when it wasn't that long ago when the better rates were with the online call accounts. These days those rates are very poor. Potentially with inflation, the money is getting inflated away with some types of accounts.

sonyxperiageek

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#1849973 21-Aug-2017 19:30

Yes, Harmoney locks the money in for either 36 or 60 months depending on which loans you choose to invest in, hence why I only have a little bit of it in there.

Yes, banks have very low interest rates at the moment... i.e ASB's FastSaver only generates 0.10%!

Sony

surfisup1000

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#1849975 21-Aug-2017 19:34

What is your risk tolerance?

alasta

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#1849977 21-Aug-2017 19:42

Assuming you are saving for retirement I think you should put the minimum contribution into Kiwisaver so that you get the government and employer subsidies, then put the rest of your savings into some other managed fund. Make sure that you select the investment direction that is appropriate to your age or life stage.

Bank savings accounts will pay you bugger all, so they're not a good long term investment.

Residential property requires capital gain to be profitable, and from all accounts the capital gains have dried up for now. The market might pick up again after the election, but who knows.

sonyxperiageek

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#1849994 21-Aug-2017 20:04

Sorry if I didn't make it clear before haha, I didn't mean for this thread to be about my savings in particular, just was wondering about ways others were investing money. But I guess it can be a very sensitive topic too.

And yeah, from the replies so far in this thread, currently there aren't many great investment schemes apart from maybe property and Kiwisaver.

Sony

AidanS

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#1849995 21-Aug-2017 20:12

Here's my approach to investing (I'm 20 so most of my investments are with a super long term mindset, any money I need in the next couple of years, new laptop/car/holiday, etc is saved in seperate cash based accounts - Rabo direct premium saver or their term deposits). I'm iffy on property in New Zealand at the moment, not only is it completely out of my affordability, but I just don't have any interest in bearing a massive mortgage on a tiny property when I can flat for cheap and funnel the rest of my money in profit-earning investments. If the cost of property to income ratio becomes more desirable then might look into this, but for now it's a joke for anyone my age.

Firstly, as a general rule of thumb with any investing, the higher the return the higher the risk. Don't be fooled my Harmoney's 10% being an equal level of risk as a 3% bank term deposit. It isn't, Harmoney investments do carry a higher risk, hence the higher return.

In saying that I think it's good to diversify as much as you can, diversify across different investment companies which invest in different products (shares, property, bonds, lines of credit, etc) across different countries. That way if one aspect of one economy goes down, you've got 10 other points of diversification to lead the charge.

For me, my current investments include a mix of:

Harmoney loans
- I enjoy the returns but I'm still fairly cautious about these p2p platforms until they've got a good solid few years of reputation behind them. I started investing small amounts back in 2015 to get a feel for the platform, now I have a regular deposit setup with auto-lend investing in A-B grade loans only. No more than $25 per loan, ever!
- Squirrel money's platform looks pretty good too, I might start putting a few % in there.
Simplicity Kiwisaver
- Simplicity are nice because they give me a good base for "passive" market investments as they use Vanguard's funds, 60% international, 10% Australasian.
- I always make sure I get the "member tax credit" annually at the very least, but otherwise not too big on having future money locked away in this scheme, especially now as Simplicity have released an identical non-kiwisaver product so you can withdraw your money whenever you need.
Rabo Direct hand picked managed funds
- I started this a while back as my first "proper" way of investing, I'm now leaning towards more passive based funds but I'll see how these go. An alternative to this would be Smartshares/Sharesies/Simplicity's non-kiwisaver fund.
- This money is probably divided across a dozen different funds across 4 or 5 investment companies (Fisher funds, Nikko, Devon, ANZ, etc), ranging from international shares, national shares, commercial property, bonds and other fixed interest.
- Investing this way can be quite fun if you enjoy having a hands on approach to your investing, as you get to choose exactly which investment company, investment product and country of investment gets your money. Not so much fun if you'd rather set and forget, but in saying that once you make your initial choice of funds, you can just setup regular monthly buy-ins through Rabo direct.
NZX and ASX funds (top 10, top 50, etc) through Smart Shares
- Since the release of Sharesies which uses the same underlying investment products, I'm going to start moving this money and any new money into Sharesies.
- I didn't realise when I signed up, but to sell your positions with Smartshares, you have to actually sell through a broker, which is costly for smaller investments, time consuming and just generally more difficult. So not too happy about that.
Crytopcurrencies
- I currently don't hold any positions in this area, but it's something I think I'll start to dribble 1-3% into. No money that I depend on, but small amounts to put in this super volatile high risk high reward market. Who knows where this industry will go.
Milford asset management
- I don't currently hold anything with these guys, but in terms of actively managed investments these guys seem to know what they're doing. I'm looking at starting to dribble money into their products over the next few months. I have a lot of friends who have been happy customers of them for many years.
Cash
- Any other money I keep in cash with Rabo direct, they are by the far the market leaders in savings accounts and interest rates. Super low returns, usually barely covers inflation after tax though as with any cash based investment. This is money I'm either still deciding where to put or is a "buffer". I think at any point in time it's good to have some % of your worth in cash that's accessible at a days notice (without nasty penalties) incase of emergency.

Anyone had any experience with Squirrel money's p2p platform, Sharesies or Milford asset management? I'd love to hear your experience.

Oblivian

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#1850003 21-Aug-2017 20:26

Been chewing on it myself with a tirade of savings. Same issue, it seems to be property or bust.

You can do term investments for all you like for similar pricing for 9-12months at present of around 3.7 (calculated PA however.. which if I'm not mistaken is 12months...)

Kiwisaver is a locked in investment portfolio its seems. And from what I can tell there are are actually different tiers of risk of fund you can request - but many take the base one dished out.

https://customer.anz.co.nz/kiwisaver/ANZFunds/Pages/ANZPerformance.aspx

As pointed out, theres higher risks for some at the expense of higher gains or even higher losses over a long period. But even the base KS portfolios have dropped off significantly. ~3yr opening was on par with but some have dropped. The base cash one is only an average of 3%. WHich, oh look.. same as a high interest saver of around 2.5%

And oh look, if you get a Conservative managed fund on withdrawl they take away a management fee. ~5% on a fund over 5 years.. minus fees (1.25-1.4%). Oh look, back at about 3-4%. Seen that number before?..

sonyxperiageek

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#1850030 21-Aug-2017 21:21

@AidanS Great detailed post! Yes, there is a slightly higher risk with Harmoney, but I've also not invested more than 1 note ($25) per loan, and only invested in A, B and C loans. Currently everybody has been repaying their loans on time and I have had no amount in arrears since I joined at the beginning of this year.

I was also thinking about investing a little bit in Bitcoin, as since the last time I said that I would invest in it, the value has increased again! This method probably has the highest risk of course. Anybody have a recommendation as to which store to buy/sell BTC on?

And yes, RaboDirect's PremiumSaver seems to have the best interest rate on a Savings account as well as good conditions! My current ASB SavingsPlus account only generates 2.25% if you don't make a withdrawal per calendar quarter. The only issue is whether it's a hassle or not to transfer from ASB to RaboDirect etc. and not have all my accounts with one bank.

Sony

solutionz

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#1850032 21-Aug-2017 21:26

sonyxperiageek:

I was also thinking about investing a little bit in Bitcoin, as since the last time I said that I would invest in it, the value has increased again! This method probably has the highest risk of course. Anybody have a recommendation as to which store to buy/sell BTC on?

https://www.geekzone.co.nz/forums.asp?forumid=182&topicid=221437

sonyxperiageek

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#1850035 21-Aug-2017 21:31

solutionz:

sonyxperiageek:

I was also thinking about investing a little bit in Bitcoin, as since the last time I said that I would invest in it, the value has increased again! This method probably has the highest risk of course. Anybody have a recommendation as to which store to buy/sell BTC on?

https://www.geekzone.co.nz/forums.asp?forumid=182&topicid=221437

Oh yes, lol, whoops, forgot about that already!

Sony

Jax

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#1850038 21-Aug-2017 21:39

AidanS:

Anyone had any experience with Squirrel money's p2p platform, Sharesies or Milford asset management? I'd love to hear your experience.

Yes I've got some money invested with Squirrel - main point of difference is a kitty fund to cover loan defaults. Works fine for me and they just emailed me saying they hit some milestone ($1million?) in loans.

I think the rates are lower on Squirrel Vs Harmony but arguably lower risk.

You are on the right track to invest in (low fee) passive funds.

Listen to this podcast: http://freakonomics.com/podcast/stupidest-money/

Then read the posts from this blog and check out the investment options from the last link. I also dabble in Cryptocurrency.

https://thesmartandlazy.com/2017/06/13/smartshares-superlife-simplicity-investnow-etf-index-fund-investing-in-new-zealand/

https://investnow.co.nz/

ANglEAUT

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#1850042 21-Aug-2017 22:12

AidanS: ...

Simplicity Kiwisaver

I always make sure I get the "member tax credit" annually at the very least, - with the employer contribution, this is basically money for nothing. The best return currently, IMO.
NZX and ASX funds (top 10, top 50, etc) through Smart Shares

Since the release of Sharesies which uses the same underlying investment products, I'm going to start moving this money and any new money into Sharesies. - They do suggest a buy & hold strategy. They lock your purchases to the 12:30 price when buying. Haven't sold any shares yet to cash out.
Crytopcurrencies

... but small amounts to put in this super volatile high risk high reward market. Who knows where this industry will go. - To true
Precious metals

Buy physical gold / silver and keep the metal yourself somewhere safe. Be wary of those that say they'll hold the gold on your behalf.
Anyone had any experience with Squirrel money's p2p platform, - Very similar to Harmoney IMO, but in $500 blocks instead of $25. Kinda painful not being able to have $300 work for you.

Sharesies - See comments above. Very responsive to customer feedback currently, they are brand new & growing currently. I do wonder what their long term reports will look like. If you are already in shares, it would be good to compare their values against the market. They spcialise in buying 10s of shares instead of 1000s by the sound of it. Currently, only six indexes you can chose.

or Milford asset management? - Heard good things, nothing more.

See comments in italics above. Comment edited to remove unnecessary quotes

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

Kiwifruta

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#1850045 21-Aug-2017 22:19

1) The Richest Man in Babylon. -- Money management

2) The Inteliigent Investor -- value stock investment

3) The Star Principle -- growth stock investment

Made over 50% per annum by investing in the sharemarkets and following the principles in these books.

Also recommend Selecting Shares that Perform. This helps you find an investing style that suits your personal strengths.

BlinkyBill

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#1850046 21-Aug-2017 22:20

Best personal investments for best returns, ranked in terms of risk (i.e. best return, highest risk), assuming long-term best position is the target outcome (i.e. not a gamble):
1. Own business
2. Picking stocks
3. Paying off personal debt especially mortgage
4. Aggressive funds via fund manager
5. Passive funds or etf's

It is silly to write off property, consider the tax advantages from capital gains.

Don't take financial advice from me or any other person, get reputable professional advice. If you do #1 or #2 get accountancy advice.

BlinkyBill

Kiwifruta

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#1850049 21-Aug-2017 22:26

BlinkyBill: Best personal investments for best returns, ranked in terms of risk (i.e. best return, highest risk), assuming long-term best position is the target outcome (i.e. not a gamble):
1. Own business
2. Picking stocks
3. Paying off personal debt especially mortgage
4. Aggressive funds via fund manager
5. Passive funds or etf's

It is silly to write off property, consider the tax advantages from capital gains.

Don't take financial advice from me or any other person, get reputable professional advice. If you do #1 or #2 get accountancy advice.

How would an accountant help with #2?

They are trained in tax and some financial management, not investing. Investment is in the realm of finance, not accounting.

The biggest risk is in yourself, so education is paramount.

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