KiwiSaver and Investments

KiwiSaver and Investments

Upsizing your savings

Too many Kiwis are missing out on the full potential of their retirement savings. Joining Kiwisaver and making regular contributions is only the first step – if you're not actively managing your fund, you could be missing out on hundreds of thousands of dollars.

Change your KiwiSaver scheme at any time

By leaving your KiwiSaver in your employer-chosen or default scheme, you could be missing out on a big chunk of retirement savings. The difference of a percent or two may not seem like much, but added up over a lifetime you can see that a fund check-up is more than worth your while.

Your KiwiSaver balance has two ways of growing:

1.By the amount of money you, your employer and the Government put in, and

2.The returns you earn on your investments. The higher the return you earn on your investments, the bigger your savings at retirement.

These simulated results show the effects of different rates of compounding returns - one a 4% per annum return and the other a 6% per annum return over time.

Don't just set and forget

Like any investment, your KiwiSaver needs will change depending on your age and life stage. It's worth looking at the balance of your funds regularly to make sure you have the right investment mix. One of our qualified financial advisors can help you get the most from the scheme, so you can just watch your savings stack up.

Contact us by email here or phone 09 302 7310 to arrange your KiwiSaver check up.

Reference: http://www.generatekiwisaver.co.nz/kiwisaver/even-...

Investment FAQ's

Looking to invest money and don't know where to begin? Consider yourself a savvy investor but have burning questions you feel you should be expected to know the answers to?

Investing money can start to feel like an overwhelming array of jargon and intimidating terms that just end up deterring you from making a commitment to invest. Here we aim to demystify some of those investment idioms that you might come up against and answer those questions you have been too embarrassed to ask!

What is Compound Interest?

Compound interest means you will earn a return not only on your initial investment, but also on any interest that you accrue over time. It is essentially ''earning interest on interest''. The amount in your fund is ''compounded'' at certain intervals throughout the term, and that balance is effectively 'banked' and carried over ready for the next compound period to start, an example of which:

Whilst the initial interest earnt can be quite low, over longer-term investments this continues to grow and can sometimes form the largest part of our investment balance. Compound interest is applicable to savings accounts and other investments such as KiwiSaver or shares with dividend reinvestment plans.

What is a Managed Fund?

A managed fund is when money from various investors is 'pooled' together and spread across a range of investments, each investor owning a portion of the total fund. Where this money is invested is chosen by the fund manager, who usually charges a fee.

Managed funds can focus on a specific type of fund, such as growth or aggressive, or focus on a particular market or investment such as shares or commodities.

What is an Index Fund?

Index funds allow you to invest in various investments at the same time. Typically, you can choose from a range of index funds such as overseas shares or a range of assets. As a rule, index funds have lower fees associated with them than managed funds.

What is the Share Market?

Some companies are listed on the Stock Exchange. Companies need to adhere to certain criteria in order to be listed and remain on the Stock Exchange as a way of ensuring the market is a level playing field for all investors. When a company is listed on the Stock Exchange, this allows investors to buy and sell shares in a company which then essentially means they ''own'' a proportion of that company. The price of shares fluctuates daily depending on the performance of the market – this is affected by supply and demand and a range of economic factors.

What does it mean to have shares in a company?

When you buy shares in a company, this represents how much of that company you 'own'. This is then recorded in a Share Register. How much you own determines what level of control you have over the decisions that are made regarding the company – as you would expect, the more shares you have, the greater your say.

You make money from shares by benefiting from dividends that are paid out by the company when they have performed well, and also by selling your shares to other investors.

How does having shares in a private company differ from having shares in a public company?

The principle of owning shares that you can buy and sell is the same across the two variations, however it is not as easy to sell shares in a private company as these are not listed on the Stock Exchange, and different rules apply. Having shares in private companies is generally considered as a longer-term investment as it can take 5-10 years for a company to start making a significant profit and start paying dividends.