June 21, 2026 • 40 mins
Generate Kiwisaver's Nathan Stanners joins Tim Beveridge to chat National's compulsory Kiwisaver policy - and whether it's a good policy for the our retirement savings pool.
They also talk how your risk profile should change the closer your get to retirement.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks edb.
Speaker 2 (00:10):
Yes, and welcome back to the Weekending Collective. I'm Tim
Beverage and welcome back or welcome in, and the number
is eight hundred eighty ten eighty because we'd love your participation.
Just join the conversation. You don't have to have the
answer to the meaning of life. You've just got to
have a question or a thought about something and think
I might share that with the country eight hundred eighty
ten eighty and you can text on nine to two,
(00:30):
nine to two. And of course right now it's smart
money and we got to look, we're going to have
a chat about kei. We save from a bunch of
different angles, and you know, we are told that it's
the future and contributions are important and that we're not
contributing enough. So Australia employer contributions up to twelve percent
minimum and look, and you just can't rely I guess
(00:53):
there's a generation of people who are just assuming I'm
not going to have SUPER when I'm retiring, so and
you certainly can't rely on your SUPER payments being enough
and maybe they won't even be there when you turn
six five, depending on I mean, I think there are
a bunch a whole generation of gen wires. Would the millennials,
I don't know where they're at with their expectations on
super anyway, But today National also announced mandatory key we
(01:17):
saver for all work workers. They've also announced a fifteen
hundred dollars newborn key we saber policy, where more basically,
we have a baby, fifteen hundred bucks goes into the
key we saber. I mentioned I'm not a huge fan
of just splashing the cash from a point of view
of a winning an election, because politicians love to throw
money around. But I guess if you're happy for them
(01:39):
to throw money around, is this a good direction for
them to throw the money into fifteen hundred dollars for
every child, which I think I applied an average return
rate of five percent and by the time that baby retires,
depending on how you do calculations, compounding and all that
(01:59):
sort of thing. Actually I didn't do the calculations. I
said to chat GPT, what do you reckon it's worth
when they retire, and it's said about between thirty two
and forty thousand bucks assuming five percent something like that. Anyway,
you can have your reckons on that. Do you like
the policy? But also the other things, like they're going
to make it compulsory for employers to contribute beyond sixty five,
(02:22):
which is a policy I one hundred percent like because
the fact that you have continued working, the fact that
you've hit sixty five shouldn't be letting your employer off
the hook. If they want you, then why would you
be treated any differently? That seems to me to make sense.
There's a few other things we can dig into, but
your reckons on O eight one hundred and eighty ten
eighty and joining me. He's a key we Saber advisor
at Generate and that's second time on the show, so
(02:44):
we it's still something we need to introduce. It's a
Nathan who does need an introduction. Nathan Sander's good day, Nathan.
How you going today? Tim?
Speaker 3 (02:52):
I'm good? Thanks? Send me back, how are you good?
Speaker 2 (02:54):
Good? Just pull that microphone a little bit closer to
you and I think we'll be good. Hey, okay, well
you've you've heard the announcement today from National. What do
you make of the policy?
Speaker 4 (03:04):
Yeah?
Speaker 3 (03:04):
I was actually for them around the golf when that
I got a notification on my phone, thought I'd better
go home and sweared up before for the radio. Yep,
we got most of it in before one o'clock when
it started belting down. But you're like a lot of
common sense since stuff there, which is as fantastic, especially
when you look at what you mentioned before with over
sixty fives, I think it makes no sense to have
people working past sixty five not get employer contributions, right,
(03:26):
So it's a really good start.
Speaker 2 (03:28):
Actually, do I wonder why it wasn't there in the
first place. Was it seen as being a bit too bossy?
Speaker 3 (03:34):
Yeah, look, I'm not sure. But one thing I would
note from the people that I speak to is, as
most employers will, I haven't met someone yet over sixty
five that has actually been contrabying to themselves and the
employer has stopped. Generally, if you've been with that company
since before you were sixty five, they are probably not
going to stop it. But it's case by case. Can't
be said for everyone. But now that they're making it,
you know in law, but essentially that's fantastic.
Speaker 2 (03:54):
So, yeah, what were the other Okay, the fifteen hundred
dollars to every newborn, I mean as a guess, is
a key we save a guy, You'd be like, this
is fantastic. It's just more money going towards people's retirement,
it is.
Speaker 3 (04:07):
And you know, the overarching the reason why these changes
are being looked at is because retiring is not getting
any cheaper and people just don't have enough to retire
on currently. If you look at the average key Wes
have about someone who turns sixty five, it's about seventy
thousand dollars now. And if you look at all the
suberannuation pays you for an individual, which is about five
hundred dollars per week after tax, That with seventy thousand
(04:27):
dollars for the next twenty thirty years of your life
just probably isn't going to be enough, right, so we
do have to find ways.
Speaker 2 (04:32):
It's not going to be enough for You're very kind
you that's probably it's not going to be enough. Literally
you're going to be scraping by.
Speaker 3 (04:37):
One hundred percent. And this, you know, studies to actually
back up the startup, I in massive university do a
study every year and what you need by sixty five
to live a good life into retirement. And because a
few different variations they look at. But if you look
at a metro.
Speaker 2 (04:50):
Lifestyle and a million bucks, isn't it?
Speaker 3 (04:51):
It is between a couple, a two person household. It's
a million bucks deliver choices life style they call it.
So you're able to spoil your grandkids and go on
some vacations here and the air in between a couple. Yeah,
between a couple it is so yeah, so a little
a little more doable then, But again, how do we
get there? And the first place to start would be
key we save it because most people can save themselves,
and I definitely love when they do, but often we don't.
(05:13):
And if we do it through something that's compulsory and
we have high contributions with you will just see bigger
balances by a time, do you look.
Speaker 2 (05:21):
I The only reason I winged about it is I
just you know, we've had Nichola Wallis having a crack
at labor and other people saying, oh, you know, times
are tight, and all of a sudden in election time
you're splashing the cash. But putting that aside. I guess
if you're going to spend money somewhere as your election campaign,
this is not really a bad place to spend. It
(05:42):
is it because well does it lead is the fact
that there's money in there? Is that going to encourage
people to sort of get on board with it as well.
Speaker 3 (05:51):
And if you look at where they're spending obviously that
the spend with the what they called the baby boost,
the fifteen hundred per baby, that's fantastic and that is
direct government expenditure. But the employer contributions going up make
it compulsory. That isn't costing them anything. And also with
that of atually it will cost them less because people
are actually relying on the Key we Saver more than
the pension all subrenuation by the time to get a
sixty five. So I'm definitely a big fan of it. Obviously,
(06:13):
depending on a situation with your self employed or employee
that changes things too, But I think as a general
in New Zealand that you should be quite excited about
this change.
Speaker 2 (06:20):
Actually, how because I guess when it comes to key
we Save it means that parents will also have to
make a call as to who their key we Save
it provider is going to be. Look, there are default
How does it work? Remind me how it works? Because
I went with A and Z because I'm with A
and Z yeah, and I haven't changed. I did shift
to a more aggressive fund because I thought this is ridiculous.
(06:41):
I should be you know, I've got a bit of
time left.
Speaker 3 (06:43):
So yes, a default provider status looks at a few
things and it's changed every now on the end, so
the FMA does come in and review this when they see
necessary to make changes. But I look at a few things.
The first one is going to be a balance fund mandate,
so you do have to have a balance fund for that.
It used to be conservative, so a lot of people
when they start a key WE saver up until about
the last five years, would have been in a more
conservative fund. Now that is balance you put in the
balance fund and they look at how that money's invested,
(07:06):
look at fees as well, and also how responsibly it's invested.
Most people these days want to exclude certain things like
nuclear weapons and tobacco manufacturing, so that is a criteria
as well with being a default fund. And the last
one is that the customer service aspect of member engagement.
If you have never got a call from a provider
with a default provider and it's been a number of years,
probably not going to be in the right fund that's
we would definitely want to avoid. So there's one of
(07:27):
those three or four criteria to being a default provider.
Speaker 2 (07:30):
Hey, by the way, you mentioned, Look, just I've got
my attention. You were talking about some people who don't
want tobacco manufacturing and nuclear or something. Are there any
key we save funds that go there.
Speaker 3 (07:40):
I think most would exclude them, but I can't speak
for everyone. I definitely haven't looked at everyone's exclusion policy.
But at Generative course, we are very keen on being
responsible investors, so we do exclude a lot of things,
including those.
Speaker 2 (07:50):
It's a funny one. Look, I think the tobacco is
a no brainer. It's an interesting one the one that
people and I know this is a bit of a digression,
but by the way, what are your thoughts on the governments, sorry,
national parties plan to give fifteen hundred dollars to each
newborn as well as extent. I don't know if anyone
can argue with the plus sixty five's not getting contributions
(08:13):
if they continue working. But actually, just you mentioned that
thing about the ethical investing side of things, which is
probably it's not something we'd flagged, but it is. It
is never as straightforward as you think, because, for instance,
arms manufacture, I might you might say, off the top
of your head, I don't really want to be financial
(08:34):
making money out of the manufacture of arms. But then
if someone is to say, well, it's the manufacture of
arms and maybe drones that are helping Ukraine defend itself,
I go, oh, maybe I'm okay with that it is.
I mean, if it's arms to end up in Vladimir
Putin's hands, then I'm probably not so.
Speaker 3 (08:55):
Yeah, It's definitely a nuanced conversation, Tim, I want to
speak to a lot of people. Everyone is very different.
Some people are one hundred percent returns focused and really
don't care where their money is going. Outside of others,
a lot these days are more concerned about how responsible
their money's invested, and I think most keys want it
to be done in a net positive way along the way,
But what does that mean and what do you exclude
to do that right? And the key thing there is
(09:16):
everyone's different, but we definitely should be thinking about it
as providers.
Speaker 2 (09:19):
It's an interesting one, isn't it that people like I
don't care how much. I don't care where the money's
being made. I just want to make the money.
Speaker 3 (09:25):
Yeah, if you're and far between these days. But I
think most people, as a said, if you can get
your returns, want to do it with a positive along
the way in terms of how your money is invested.
Speaker 2 (09:33):
Okay, so what are the standout things? What popped out
to you out of them? Announcement from Keil.
Speaker 3 (09:40):
So, yes, start from the top, especially with the changing
contribution rates. So we'll lift to six percent by twenty
thirty two.
Speaker 2 (09:46):
That's six percent from both sides.
Speaker 3 (09:48):
So you and your employer on both sides, and I
mean imagine that will be staggered. So if you're someone
who was at home, is a businessman who owns a business,
and you're looking at, hey, look how much does it
cost me, it's going to be staggered over a number
of years. I expect it's not going to be all
at once. We'll see there in the final printers that
comes through. But if you look at someone who's say thirty,
with a salary of seventy thousand, they're starting key wes
of it today and then investing out to sixty five
(10:08):
and a more aggressive fund if they are on four percent,
which is what it will be in twenty twenty eight.
It's currently three and a half four percent even get
you about six hundred thousand by retirement, and that is
inflation adjusted, So we're looking at today's dollar values right tomorrow.
But if you go up to six percent, that's almost
a million dollars. It's about nine hundred and forty thousand.
So that two percent change might not feel like a lot,
but it is going to be three hundred plus thousand
(10:29):
buy your retirement right, and that is starting from zero.
So it is a massive change, and it means people
are going to be set up a lot better for now.
Speaker 2 (10:35):
And that's based on so just tell me begain those NHS.
Speaker 3 (10:37):
Yes, you assumptions. So we've got someone who is thirty
are they're starting key us of today, They've got zero
dollars in their account, starting from scratch, they're earning seventy
thousand dollars a year. We're going to put them in.
Speaker 2 (10:46):
Actually, if you're talking about that for the whole life,
we're not talking at a high.
Speaker 3 (10:50):
Level, yees. So we'll build in a bunch of assumptions.
We look at wage growth, so we will add the
calculat I've used using wage growth at about three point
five percent per year and then heading off inflation around
two so a net game every year, which is nice.
Obviously every year works out differently depending on who you are,
but we are baking in some assumptions there. So from
thirty out to sixty five, thirty five year duration at
four percent, they grow to about six hundred and thirty thousand,
(11:11):
and that's an aggressive fund. So we get a rate
of return be roughly around eight percent over that time
frame and an aggressive fun which is the average from
the last ten years from morning start, but to a
bunch of reports, and then if you went up to
six percent in terms of the contribution rate, it will
get you to nine thirty, So about a three hundred
kight difference when you bake in, yes, a bunch of asumptions, and.
Speaker 2 (11:28):
What contributions are you making yourself.
Speaker 3 (11:31):
So if you started at four and four, you and
your employee, which is what it will be in twenty
twenty eight, so then it will be going up to
four and four. It's currently three and a half, but
it will be four and four by twenty twenty eight.
They eat about six hundred and thirty thousand by sixty five,
and again that is a lot of money. But you
then go to six percent on you and your important.
Speaker 2 (11:46):
To side six, so that's twelve.
Speaker 3 (11:47):
Yeah, you get to nine hundred and thirty, so a
big change about three hundred thousand worth.
Speaker 2 (11:52):
Gosh, actually that will kick and I mean it's difficult
to argue with that really.
Speaker 3 (11:57):
Yeah, imagine your parents retiring with the next of three
hundred thousand dollars. I mean, who wouldn't want their parents
to be retiring or their grandparents to be retiring and
an extra three hundred thousand dollars, right, So that is
the first part. And there's just catogotical data about the
fact that retiring is not getting any cheaper and we
need more money to retire on and so that is
going to do it having a high contribution rate.
Speaker 2 (12:16):
Okay, we'd love to know what your thoughts are on
the policy. I mean there'll be a lot of people
who are listening, who are you know, not thirty years old,
who are beyond it, who are thinking, know what help
hope is there for me? But you can still have
an opinion on the policy. Oh, eight hundred and eighty
ten eighty, And of course, if you are planning on
working past sixty five, I don't know if there's anyone
who could disagree with the working past sixty five thing,
(12:38):
although I do have one question for you and Nikola Willis.
I'm not sure what her answer was on this because
I interviewed her. I'm trying to remember what it was,
because you know, a lot of information in an interview
to digest. But they've gone for fifteen hundred bucks as
part of the gift. Well there's a gift. Yeah, let's
not get ourselves. And I think New Zealand first had
(13:02):
a policy where you give every newborn one thousand bars
just for mischievous, mischievous sake. I'm ninety five percent convinced
that there was a discussion about how much do we
make it? Well, New Zealand first at one thousand, we
better go another five hundred bucks. I reckon it was
that simple. What do you reckon? Yeah, I mean, look,
(13:23):
one thousand bucks, fifteen hundred or or does a thousand
sound a bit that's a bit stingy. Let's make it
fifteen hundred. What's your what's your ballpark reading on that?
Speaker 3 (13:33):
The more the better. I'm certainly not one to dive
into politics, especially around this sort of stuff. I don't
know whether National had done it for that reason alone,
but ultimately, the more the merry. You might think five
hundred dollars isn't a big difference, but it's fifty percent
more than the thousand, of course, and ultimately over time
it will compound to a lot more. The longer you
got it in near, the more difference it was.
Speaker 2 (13:50):
I did specifically ask Nikola that if I could have
access to their behind the scenes email, would it say
would there be an email there saying well, Winston's going
on thousand, we better go fifteen hundred. I can't remember
how she ounced at that now.
Speaker 3 (14:01):
I think it was speculated in the article that maybe
that was the reason, but.
Speaker 2 (14:03):
I did it's not a thought. I thought that was
original thought for me, which is a bit disappointing. Anyway.
We're with Nathan Stanners. He is a key we Saver
advisor at Generate and National's announcements today on mandatory key
we saver. Oh that's the other thing, mandatory key we
saver for all workers. We'll dig into that as well.
I mean, I don't know if you can raally argue
(14:25):
against this stuff. Should it be available to people to
not do key we saber where you wonder why, but
your thoughts on the changes as well, and the fifteen
hundred dollars start for newborns. And if you're working past
sixty five, I don't think there's anyone who could argue
against requiring employers to continue contributing to your super to
(14:47):
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for beverage. Anyway, we're talking about key We Saver and
what you make of the National parties because not National government,
(16:15):
because that's a coalition government. Of course, I was worth
remembering that the National Party's plan to give newborn's fifteen
hundred bucks a when they're born basically into the kei
We sab. But also what you make of the changes
on eight hundred and eighty ten eighty. Now there was
something we're going to dig into with Nathan stan As,
he's mcguest. He's the key We Saber advisor at Generate
ake We Saber adviser. Makes it sound like there's only
(16:37):
one when I say the the eke We Saber advisor
or that that sounds a little bit more high for Luton. Hey,
now that where was something else we're going to touch on?
Nathan and I have completely forgotten what we touched on.
Speaker 3 (16:46):
Now we're just going to look at the power of
compounding that number. So if you look at the fifteen
hundred dollars by the time you get to eighteen, if
that was at an aggressive fund and morning Star you
mentioned before in your advert, they do those quarterly reports
and the average was about eight percent per year and
an aggressive fund over the last ten years. So you
take that, you compound that out about eighteen years, five
grand by the time they get to eighteen, which is
(17:07):
a really strong number. That's a five grand hits up
they wouldn't have had without this policy, which was great.
But if the parents then decide, hey, look I'm going
to put in twenty dollars a week and to see
how that goes for eighteen years, that number wouldn't be
five anymore, be about thirty two thousand, and again that
is just like that a thousand.
Speaker 2 (17:22):
A year, So you can imagine it would become fairly hefty.
Speaker 3 (17:25):
Yeah, it is. And even if so you got ten
dollars a week, they'd be eighteen thousand by the time
they get there, so often doesn't take too much to
get that ball rolling, and then the power of compounding
takes care of the rest. And that's really what national
is thinking that the earlier we do this and the
more we put it, and that's when you're going to
see a bigger balance by the time they start working.
It's real, real, going to kick start for them along
the way.
Speaker 2 (17:45):
Do you think that putting the money in excuse me,
do you think they're putting that money in will? I
mean this is guesswork again, because there'll be people who
see the money go in and they just leave it
and they never do anything about it because parents pass
their good or bad habits onto their kids. But do
you think there will also be something that when the
children are old enough to work out for themselves what
(18:07):
key we save is about, they will look and see
in their own key we say, with the power of
what that money has done since they were born and go,
and it'll maybe motivate them to be more more actively
involved in investing for the retirement because you know young
people as well, it's like, oh, retirement, it's decades away.
How would i care about that.
Speaker 3 (18:27):
Yeah, and you did, right. I think the penny drops
when you see that was fifteen hundred dollars. Now it's
your X thousand when you do end up taking it
or looking at it when you've kind of first got
your app when you're eighteen and see what your balance is.
So that is fantastic, But don't forget you can use
it for a first time too, and that'd be the
bigger motivator for young people. If we're in Auckland, right,
buying a first house here or most of the country
is not getting easier, it's just getting harder for the
(18:47):
most part, So that motivates you as well. Hey, look,
I'd say most people I see that are in the
early twenties with a big balance. Their parents started it
a while ago and they put in a certain amount
of a week, or they got the kickstart which is
available for it for a long time as well, which
is one thousand dollars.
Speaker 2 (19:00):
Oh yeah, well, actually that's the other sort of talk,
you know, thing we could have an opinion on. You're
probably cautious about expressing your opinions, but what do you
think was the kickstart was of its time? I think
because it was when Kiwi's saber was I don't know
when the kickstart was brought in, but it was to
get adults who needed to get on board with the program,
(19:22):
the incentive to get and I actually thought that was
I can understand why that's that was then, but now
this is now. It's now about getting you know, everyone
who's had the opportunity to get that kickstart there in.
But now we've got to get a younger generation. I
can almost understand why this is a good policy, and
it's as opposed to the kickstart. They were right for
(19:44):
their times.
Speaker 3 (19:45):
Yeah, definitely. I think when Kiyis ever came in, obviously
the pickup rate wasn't huge to start with. It's we
a little old than expected, but that kickstart allow people
to say, look, it's a thousand dollars, you may as
well started and get it going. Right now, it's actually
let's start as early as possible, rather than just starting
at some point when you're working, Let's start it eighteen
years before you start working, or even longer than that. Right,
So a spot on. It's a really good balance where
(20:06):
the kickstart was needed to begin with people, and then
now it's actually let's messt money back into the bottom
end when people actually come to this world, which is
it's fantastic.
Speaker 2 (20:14):
By the way, when you heard about the policy, were
you sort of surprised? I mean, I mean it's election
time that they're going to be spending some money somewhere.
Speaker 3 (20:22):
I was not so much for National. I know Labor
has not been that open with what they want to
do with KI SAB, but I'm always going a lookout
for what parties will be doing with QWI Saver. And
they obviously took the initiative earlier last year or two
a year and a half ago to make those changes
to the current setup while they've been in government and then,
so I'm not surprised that they were looking ahead saying, look,
retirement's not going to get any cheaper. Let's make some changes.
(20:44):
And as I said, that fifteen hundreds of the money
they're spending, but the rest of it isn't them spending it, right,
So I think it is a sense of all to say,
look again, retirement's not getting cheaper. Let's make these changes
and make sure we have people retiring with a bigger balance.
Speaker 2 (20:57):
Okay, right, let's we've got a bunch of texts here.
By the way if you want to jump the queue
of because I'm going to get into some text correspondence
and questions for Nathan. But if you want to jump
the queue with a call, we'd love to hear from
you on our eight hundred and eighty ten eighty Hi's
z B. We put twenty five dollars in each of
our key. We save kids key we save every week. Okay,
what's that one thousand bucks a year basically, isn't it?
Speaker 1 (21:18):
Yeah?
Speaker 2 (21:18):
Just a bit more twelve hundred and fifty not twelve
hundred sixty five is no, No, I've got that wrong.
Twelve and seventy five. I think fifty two weeks. Anyway,
let's not big. Yeah, it does the new policy extend
the free two hundred and fifty if you put in
one thousand dollars and forty a year to under eighteen
year odds. What is? Where are we at with what
the government they used to top up your account by
(21:43):
either five hundred or a thousand if you put one
thousand bucks in a year, they would match it for
a while.
Speaker 3 (21:47):
Yeah, it's now two sixty so it's twenty five cents
of a dollar, and that is everyone's sixteen and over,
so it used to be eighteen and over now sixteen
and over, which is good. But to answer the question, look,
I don't know just yet. The article and the release
that came out. I don't think there was a specific
round whether they're going to give anything to those that
are already in key we save it but still young.
So I'm just not sure. It'd be nice if they did.
But I mean, that will be a lot more expensive
(22:08):
for them, Ryan governments. It is all about the bottom line,
so I'm not sure if they would do that.
Speaker 2 (22:11):
Okay, Hi there. I've been enjoying the discussion regarding retirement plans,
although I find it hard to understand the rationale for
political parties not removing Now I don't know what this
is company tec policies. It's all about forcing employees to pay,
not the companies.
Speaker 3 (22:28):
Yeah, I think probably referring to ECT tax, which is
the employer supreneuration tax. So if you do unpack that,
and this is assuming this is what they're talking about.
But your employer does pay tax on their contributions, you don't.
So if you're both on the minimum, what's going into
your account will be less because the government does tax
the employer contributions at a certain rate. So if they
could remove that as a starting point, I think that's
(22:49):
really what the person is saying, and that'll be a
sure fi way to increase your balance as well.
Speaker 2 (22:53):
Well. That will just have a cost to the government
of course, and that's why they're not going to do it.
They just keep it simple and say.
Speaker 3 (22:58):
Well, exactly so they've decided to put up the top
end rather than removing the tax along the way, and
that could be another way to do it, but again
it will probably come down numbers for them.
Speaker 2 (23:06):
Okay, I actually got one on the ethical side. In fact,
I'd be happy to have a chat about this. Firstly,
for people who are in key we Saber, do you
have any idea what the ethical stance of your key
We Saber fund is, because I would bet just about
everyone wouldn't have a clue about what decisions and what
(23:28):
industries their key We Saber fund invests in, unless, of
course you're going there is you know, there's a fund
that has a certain amount which goes into bitcoin or
other particular ones, which is to attract a certain type
of investor.
Speaker 3 (23:41):
Actually, how would yeah, really good point, I know exactly
what you're looking at there, and there's a few easy
places to start. There's a good company called Mindful Money.
They're independent. They you can find them online if you
go on mindful money and have a look at that.
They give a list of providers they see as mindful
for being responsible in how they invest in their eyes.
Got a bunch of criteria around that. But only about
ten percent of key wes have a funds are mindful
(24:04):
in their eyes. It's a good way to tell if
your provider is doing a decent job.
Speaker 2 (24:07):
Only ten percent of funds in their eyes. So's what's
the standard they've set for mindful Yeah.
Speaker 3 (24:12):
Really good point. And it's not as simple as excluding
just certain things. It's how they go about investing it.
So you may exclude heaps of stuff or you may
not be good in investing responsibly. There's also you makes
good a little less, but then you're very good at
investing responsibly. So again, as a nuanced approach, it'd be
great to actually have someone from there on here and
explain exactly how they do it. But if you go
online you can check if you provide it is mindful
in their eyes, which is just a good place to start.
(24:33):
It's not the be all and end all. But it's
one way to look at it cooled. Does my provider
actually look at this in an important way?
Speaker 2 (24:39):
What's what's sort of I mean generate Obviously youre going
to talk within your own within the Generate key, we
save a scheme, But what approach do you guys take
to ethical investing? Because the life is a lot of
gray areas, isn't it, yees?
Speaker 3 (24:53):
So I mean, we've got our exclusion framework to start,
So look at excluding tobacco, manufacturing, nuclear weapons, the manufacturing
of cluster ministions, whale meat, antipersonal minds. Those are outright exclusions,
and you might think that list is quite slim, but
then ultimately it gets very nuanced where your money is going,
as you're kind of explaining before. So what we do
is actually have an analyst. She will go and look
(25:13):
at all of these companies not just for their kind
of bottom line and how much they're worth, but actually
how well do they do this in terms of their
environmental factors? There are they have a good supply chain
or labor practices and things like that. So you provide
us look at something like generate, we are actually going
to hire an analyst that does this sort of stuff.
So the bottom lineers are not just always the number one.
We look at the other factors.
Speaker 2 (25:32):
So it's quite fascinating because you realize how the So
for instance, and I'm making this up as a go along,
but I could imagine that on the face of it,
you'd hear about a company that's doing very well launching
satellites into space, and I mean, I think Rocket Labs
probably involved in a bit of that as well. And
(25:54):
yet there could be companies who are putting satellites in
space because it helps with military targeting, and I mean
because the use of technology, it's on how it can
be deployed. I'm guessing with mindful money that that's probably
something they look at and go, oh, not all satellites
are friendly.
Speaker 3 (26:10):
Yeah, they'll take a deeper dive. But there is a
lot of nuance involvers are said, you could have a
company that has two percent of their revenue generated from
something like that, or they make it, manufacture a component
that goes into a switchboard that goes into something that
is used in a military application. Right, So there is
a lot of nuance involved. It's never that clear cut.
So you just want to know what your provider is
doing and if you do want to understand more about that,
(26:30):
Mindful money is a really good place give.
Speaker 2 (26:32):
Us your list for you guys. I quite like I
thought that was a pretty good list of yes. So
you couldn't really argue with cluster musician. Yes, cluster musicians.
Speaker 3 (26:40):
Not quite almost your past life coming into it of it.
Speaker 2 (26:43):
There sessions otherwise known as a band.
Speaker 3 (26:47):
Yeah, the startfod's up.
Speaker 2 (26:48):
So sorry, I don't know what.
Speaker 3 (26:51):
No, you're right. We've got nuclear weapons and tobacco manufacturing.
Speaker 2 (26:54):
So nuclear tobacco, and.
Speaker 3 (26:57):
Then you look at the manufacturing of cluster minitions as
you see before, whale meat as well. Oh yeah, with
you on that one, and then anti personnel minds in there.
So those are those five that outright, if there's any
company that has a one percent exposure and that we
will stay away from, so then it goes a lot deeper,
which is why we have an analyst, and she's good
to watch. She does outside of what I know.
Speaker 2 (27:17):
Look, I'm quite keen to throw that out to people
who are listening about your ethics and how well. Firstly,
I mean, I'm not sure if anyone will actually want
to call and say I have no idea about the
ethical profile of my key. Wes have a fund, I'll
be honest, I don't. It's mine's with A and Z,
and I just well, A and Z. You know I'm
happy with a bank with them. I assume nothing untoward
(27:38):
going on with their key. We say up wouldn't have a clue,
but which I don't think it tells you that I
don't care about the ethics of it. It just maybe
it just informs the fact that I haven't really thought
about it very much. But how important is the ethical
investing to you? And how do you draw the line?
If you'd like to join the show and have a
chat with us about that, we'd love to hear me.
(28:00):
On eight hundred and eighty ten to eighty, we're taking
have a little bit of a chat before we get out,
just about understanding how ki different profiles are. Because we
have conservative, we have balance, balanced, conservative, all sorts of things.
How do you understand the gist of how risky key
we saver is Because my understanding, I still think that
compared to some of the stuff I've done in my life,
(28:21):
they're all pretty balanced and conservative. So we might have
a chat about the language of risk as well, but
on the ethics, give us a call on that. Eight
hundred and eighty ten eighty time flies twenty two minutes
to sex News talks. He'd b news talks hed B.
There's a smart money by the way, I raised the
question around ethical investing and apparently, but we're with Nathan
(28:42):
Standards from he's a key we save advisor at Generate
and that's not that's not the term they use these days.
They use a different term.
Speaker 3 (28:49):
Yeah, I look from the fm A guidelines these days
are responsible ethics were seemed too different and subjective depending
on who you were, So that's kind of what we
use these days. But look, the two words are the
same thing, really just language.
Speaker 2 (29:00):
They are the same thing. So somebody's just.
Speaker 3 (29:01):
Language in my mind?
Speaker 2 (29:02):
Is it because ethics can tie in to religious beliefs
and all sorts of things, and then people just word
ethics they just I think it's a great word as
opposed to be responsible.
Speaker 3 (29:11):
Possibly it's just a language that we should use as
advisors from the ethics.
Speaker 2 (29:14):
Okay, so you'll say responsible and anyway, let's take some
calls Kent.
Speaker 4 (29:19):
Hello, Hey, yeah, I was interested with the physical investing.
I was wondering, like what happens if you're okay with, say,
funding the military, Like if I was living in the Ukraine,
I probably would be fine with like people investing the
military because the military is protecting me from the Russians
(29:43):
invading and taking over my country.
Speaker 2 (29:45):
Bengo.
Speaker 3 (29:46):
Yeah, yeah, ultimately, Kent, if you want to find out
what your provider does or doesn't do, you can have
a look. But there are a lot of providers that
aren't going to take a massive look at that, right,
And I'd always keep in mind as well that some
providers will be big on responsible investing, but still good
returns too. There's not always just a trade off there.
But if you're someone that's not too concerned, and you
can always find a provider that is going to have
(30:07):
a less look at it, but you'd also be surprised
some of the ones that do are still going to
do a good a job with the money.
Speaker 4 (30:14):
Yeah, because I think this should be a range. It
shouldn't be like you're excluding all these funds and even
something like. So there was one stage where people were
concerned about oil, but we need oil for the economy
to work, So does it make sense that I have
provided that excludes oil.
Speaker 2 (30:36):
Well, I mean that's and even that's a difficult one
to get you hit around because it's oil and coal
for heating and for power or whatever, and yet we
actually do rely on it. Yeah, I mean, what's your
take on one of the things you'd rule out for
investments you're making Kent?
Speaker 4 (30:54):
Probably tobacco, because tobacco kills a lot of people. But
I would feel hypocritical about like excluding a lot of
the providers because like, yes, say, if I was in
Ukraine that kind of situation, then I would be supporting
the military and I'd be happy that people had invested
(31:16):
in the military that was protecting me from the Russian scene.
Speaker 2 (31:21):
Yeah, I'm with you on that. That's why I think
ethics is always just an interesting conversation around and responsible investing,
just for Nathan's sake. On that one, it is a
fascinating the conversation because what might seem obvious. And I
discovered that even just when I was studying law, you'd
think something would come up and it would be a
(31:42):
slam dunk easy answer on a moral question, and all
of a sudden somebody will say, well what about and
they raised different hypotheticals and you suddenly think, oh, it's
a life's a lot grayer than I thought it was anyway. Actually,
I was looking at the A and z's Responsibility Responsible
Investing and it had something about coal and oil for
(32:05):
thermal energy general, and I sort of thought, well, then again,
if we use cold fire up Huntley POWERstation, we all
use that cold and I sort of think it's a
it's a It's tricky, isn't it.
Speaker 3 (32:18):
Yeah, And that's I said of people if we didn't
have Huntley, you know, half of north Oland have been
cold last year at certain times, and we're coming into
winter again this year. So there's just nuance involved. It
is really important to as is someone sitting at home
as a cus of a member. Just figure out whether
it is important to you, and then try to find
out what your provider does. And that's kind of more
where it is answering the questions with it. It's you know,
yes or no, shouldn't been investing. It's different for everyone.
(32:39):
So you just want to figure out what your provider does,
what they exclude, then if you're comfortable with that. And
as Kent said before though, and what I can reader
to him is just because you provide it as big
one responsible doesn't mean they don't do well performance wise too, right,
So they aren't mutually exclusive. You can do both at
the same time.
Speaker 2 (32:53):
Yeah, somebody mentioned in a texts I just saw Elon
Musk's name pop up and along the context of that, Gosh,
it's an amazing story, is not the Where are we
at with the launch of what's the name of his company? SpaceX?
That's the one which went bonkers, didn't it?
Speaker 3 (33:10):
Yeah? I think it's chief Rice Abot one hundred and
eighty dollars now close launch in fifty So yeah, it's
a better a chump, isn't it?
Speaker 2 (33:17):
So criky? That's nuts? Hey, Look, the question around risk.
The reason I'm interested in this is because there's risk
within the concept of kei we saver, and my understanding
about within the concept of key we save, what might
be the most risk investment is probably still nothing compared
to how risky you can go with your investment strategy.
(33:40):
How how do we how do we understand how risky
it is? Because in terms of safety of your money
being at least not being stolen or embezzeled, you know
that's pretty pretty safe. But how do you explain risk
to people from conservative extremely conservative to what's the most
(34:01):
risky fund that you guys have a generate.
Speaker 3 (34:03):
Cool So i'd split risk and two categories. There's kind
of volatility and then there's risk and volatility is just
the movement of your ke we Save if we stick
on it on the key we serve side here, these
more aggressive funds have got more growth assets in them,
which it shares property, infrastructure, and even if you've got
three hundred plus companies in there, they're still going to
be very volatile. Right, So the more aggressive funds are
going to be very volatile. On the more conservative side
(34:25):
of things, you've got more what'll be called fixed interest
in bonds and savings accounts and cash, So that's where
you're going to have less volatility with them. They're going
to move around far list.
Speaker 2 (34:33):
Okay, so it's really how long have you got to
wait for your stock ture exactly?
Speaker 3 (34:38):
And that's the second part of what I mentioned before.
What is risk in the contact with KEII Saver? So
when you look at KEI we Save it, risk is
you not meeting your goal. And if you've got a
first time goal coming up in a year and you've
got between you and your partner one hundred and fifty
K and KEII saver Sitting in aggressive fund is very
risky because they often don't perform well over a short
period of time. However, if they have the same couple,
have bought that house, they're now thirty with thirty five
(35:00):
years to retirement, the risk is very low. The data
is categorical, the long geu ha, especially ten plus years
before you're going to use that money, we can be
very confident you will see a better return in a
more aggressive fund. So risk there as you're not wining
your goal. If you have a long time so you're
going to meet it. Yes, it will still be volatile,
but the risk is actually quite low.
Speaker 2 (35:18):
So what so what's I don't know what what's the
highest or the risk? The most aggressive?
Speaker 3 (35:25):
Equal high growth or aggressive. We've got focus growth, which
is a nice buzzword, but call it Yeah.
Speaker 2 (35:29):
Focus, That sounds safe to me. It's focused, but you
know it's more.
Speaker 4 (35:34):
Yeah.
Speaker 2 (35:35):
The language is around just different funds is fascinating. Yeah,
So what's that one? What's the what's the vibe?
Speaker 3 (35:41):
Yeah, so if you look at someone, let's say someone
is ten thousand and KII saver. If they go into
our Focus Growth Fund, what you'd expect there is about
ninety five percent or nine and a half grand of
your money is invested in shares, So it's going to
be you know, Apple's, Google's, Microsoft's the World and the
New Zealand your Fisher and Pikele Main for Sparkle clean Airport.
So that's a distribution in terms of what you can
expect them a long term over the last ten years.
And of course past performance isn't guarantee future performance, but
(36:04):
Aggresive Fund's been a about nine point five percent parannum
after fees over that time frame and some years over
what time frame? Over ten years, so nine point five
percent parannum and some years importantly though that is twenty
five percent, some years it is minus ten.
Speaker 2 (36:17):
So I look, every company will be different. Every he
was saying with a provider will be different. But I
would imagine that. So if you think you're going to
continue working for ten years, there's a very good argument.
And I know you don't give specific financial advice to
anyone who's listening, so don't take this as advice to
you from Nathan, but just a response to a question
from me, if I've got more than ten years working
(36:38):
life left, I should just go on the most aggressive
fund I can finte, shouldn't I Yeah.
Speaker 3 (36:43):
The other fact that we want to take into account
it's sort of time, as the person's individualist profile, how
comfortable they are with the ups and downs. But generally speaking, yes,
if you do have time and ten plus years especially,
you probably will see a bigger balance. When I say probably,
it is more significantly likely that you will.
Speaker 2 (36:58):
So I think that's the best explanation I've heard of it.
So it's more around volatility, not as an oh, sorry,
you've done, you do it's all gone.
Speaker 3 (37:06):
Yeah, it just doesn't happen in key We saver.
Speaker 2 (37:09):
Because there must be. I mean, I guess even the
most aggressive funds, because they would they would would they
ever get into startups? Can you save a fund?
Speaker 3 (37:15):
Yeah? So, I mean, if you look at Generate, we
do have some money going into private equity. People at home,
especially in the rural sector, may have heard of Halter.
They make those egretech or the Egretech company make those
Calclas or Henry the accounting software. So we will do
some private equity.
Speaker 2 (37:29):
This is the underpinning philosophy and business practice and idea
and everything it has to You look at it and
you go, this has got to be a one or
rather than someone's Yeah, I got this great idea, let's
give it a.
Speaker 3 (37:41):
Whirl on exactly. There's still a lot of edding involved, right,
and this is going to be a far smaller proportion
of your key we saver like an envestment and someone
that whole will be zero point two percent less than
that of our aggressive fund. Right, so a very small amount.
And that's why diversification is important. If you provider as
doing private equity, it's likely to be far less than
five percent of your money.
Speaker 2 (37:58):
Hey, by the way, did you you go to Field Days?
Speaker 3 (38:02):
We were down there, Generate was. I wasn't personally, but
we had to stand there. We had a few speakers there.
So we go to every year. Fantastic Eventestionally, it is amazing.
Speaker 2 (38:10):
I made of mine run he's the CEO of Field,
He's one of my panelists, Richard Lindrews, and so I'm
probably got a bit more attuned to it through Nam Richard.
But I think you know that the how much he's
enjoying getting into it, and the transformation that the rural
sectors having, you know, with great ideas like Houlter and
things like that.
Speaker 3 (38:28):
Yeah, it seems to be a biving economy at the moment,
especially with the Fonterra payout of later and milk price
is being high and dollar being low. It's yeah, favorable
for dairy farmersyone buying a.
Speaker 2 (38:36):
Sauna at field Days apparently. Anyway, Hey, we look, we're
going to take a quick moment. We're back for a
few final words with Nathan and it is eight and
a half minutes to sex News Talk, said b Yes,
News Talk, z'd be with Tim Beveridge. My guest is
Nathan Stannards. He's a key we saber advisor at Generate.
By the way, if you want to check out Generate,
their website is generatewealth dot co dot nz. Just a
(39:00):
last little comment, we've only got about a minute and
a half left. I think the most can maybe the
most contentious part or potentially the most contentious part of
the National Party's announcement is making key we savor compulsory,
which from a national sort of collective point of view,
I can see as appealing, but for some people to
be like, excuse me, I'll make my own decisions. What
do you make of it?
Speaker 3 (39:19):
Yeah, particularly self employed people, i'd say, and people in
different circumstances. I do kind of sit on the fence
with this. I do like choice, but ultimately I think
the government is just trying to address the fact that
we aren't again having enough for retirement so that more
people in and starting early and contributing.
Speaker 2 (39:32):
That's what we will It applied to self employed people,
you'll be expected to put.
Speaker 3 (39:36):
I think there's actually going to be some sort of
not exemption, but difference with self employed does not. It
does imply I think that might have said in the
in the article maybe four percent rather than something like that.
So we have to wait till the final details come out.
But look, I've got my two best mates self employed,
so I definitely get that they've got businesses and they've
got employees they're paying. It's just the cost of them.
I do get it. But ultimately, yeah, we're just trying
(39:56):
to get more people.
Speaker 2 (39:57):
I'm self employed doing this actually because I'm a contractor
so and it's been something that i've done the Baarest
minimum mask on so probably you know, some times getting
a bit of a push doesn't hurt, doesn't anyway. I
wonder how much once if this ends up coming to fruition,
I imagine we'll see a bunch more ads about with you
guys all trying to get parents to go, hey, hey,
(40:17):
switch to generate or whoever. So keep you out of mischief.
Speaker 3 (40:21):
Yeah, one hundred percent. And if you guys want to
get advice, I think advice is the first place to
start with any of this. Got our website, you can
request to meet. We'll get advisors all across the country.
Speaker 2 (40:29):
Great stuff, and if you great explanation on the risk
and the volatility side of things, which is the first
time I really think I've got close to understanding that
concept within the context of the whole key we saver thing.
By the way, look check out our podcast if you
want to hear anything you've missed and news Talk SAIDB
dot Co and Zera iHeartRadio thanks to Nathan from Generate
Wealth and We'll catch you thanks my producer Sam. Great job, mate,
(40:51):
We'll catch you soon. Sund Out six is next.
Speaker 1 (40:54):
For more from the weekend collective, listen live to News
Talk Said B weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks edb.
Speaker 2 (00:10):
Yes, and welcome back to the Weekending Collective. I'm Tim
Beverage and welcome back or welcome in, and the number
is eight hundred eighty ten eighty because we'd love your participation.
Just join the conversation. You don't have to have the
answer to the meaning of life. You've just got to
have a question or a thought about something and think
I might share that with the country eight hundred eighty
ten eighty and you can text on nine to two,
(00:30):
nine to two. And of course right now it's smart
money and we got to look, we're going to have
a chat about kei. We save from a bunch of
different angles, and you know, we are told that it's
the future and contributions are important and that we're not
contributing enough. So Australia employer contributions up to twelve percent
minimum and look, and you just can't rely I guess
(00:53):
there's a generation of people who are just assuming I'm
not going to have SUPER when I'm retiring, so and
you certainly can't rely on your SUPER payments being enough
and maybe they won't even be there when you turn
six five, depending on I mean, I think there are
a bunch a whole generation of gen wires. Would the millennials,
I don't know where they're at with their expectations on
super anyway, But today National also announced mandatory key we
(01:17):
saver for all work workers. They've also announced a fifteen
hundred dollars newborn key we saber policy, where more basically,
we have a baby, fifteen hundred bucks goes into the
key we saber. I mentioned I'm not a huge fan
of just splashing the cash from a point of view
of a winning an election, because politicians love to throw
money around. But I guess if you're happy for them
(01:39):
to throw money around, is this a good direction for
them to throw the money into fifteen hundred dollars for
every child, which I think I applied an average return
rate of five percent and by the time that baby retires,
depending on how you do calculations, compounding and all that
(01:59):
sort of thing. Actually I didn't do the calculations. I
said to chat GPT, what do you reckon it's worth
when they retire, and it's said about between thirty two
and forty thousand bucks assuming five percent something like that. Anyway,
you can have your reckons on that. Do you like
the policy? But also the other things, like they're going
to make it compulsory for employers to contribute beyond sixty five,
(02:22):
which is a policy I one hundred percent like because
the fact that you have continued working, the fact that
you've hit sixty five shouldn't be letting your employer off
the hook. If they want you, then why would you
be treated any differently? That seems to me to make sense.
There's a few other things we can dig into, but
your reckons on O eight one hundred and eighty ten
eighty and joining me. He's a key we Saber advisor
at Generate and that's second time on the show, so
(02:44):
we it's still something we need to introduce. It's a
Nathan who does need an introduction. Nathan Sander's good day, Nathan.
How you going today? Tim?
Speaker 3 (02:52):
I'm good? Thanks? Send me back, how are you good?
Speaker 2 (02:54):
Good? Just pull that microphone a little bit closer to
you and I think we'll be good. Hey, okay, well
you've you've heard the announcement today from National. What do
you make of the policy?
Speaker 4 (03:04):
Yeah?
Speaker 3 (03:04):
I was actually for them around the golf when that
I got a notification on my phone, thought I'd better
go home and sweared up before for the radio. Yep,
we got most of it in before one o'clock when
it started belting down. But you're like a lot of
common sense since stuff there, which is as fantastic, especially
when you look at what you mentioned before with over
sixty fives, I think it makes no sense to have
people working past sixty five not get employer contributions, right,
(03:26):
So it's a really good start.
Speaker 2 (03:28):
Actually, do I wonder why it wasn't there in the
first place. Was it seen as being a bit too bossy?
Speaker 3 (03:34):
Yeah, look, I'm not sure. But one thing I would
note from the people that I speak to is, as
most employers will, I haven't met someone yet over sixty
five that has actually been contrabying to themselves and the
employer has stopped. Generally, if you've been with that company
since before you were sixty five, they are probably not
going to stop it. But it's case by case. Can't
be said for everyone. But now that they're making it,
you know in law, but essentially that's fantastic.
Speaker 2 (03:54):
So, yeah, what were the other Okay, the fifteen hundred
dollars to every newborn, I mean as a guess, is
a key we save a guy, You'd be like, this
is fantastic. It's just more money going towards people's retirement,
it is.
Speaker 3 (04:07):
And you know, the overarching the reason why these changes
are being looked at is because retiring is not getting
any cheaper and people just don't have enough to retire
on currently. If you look at the average key Wes
have about someone who turns sixty five, it's about seventy
thousand dollars now. And if you look at all the
suberannuation pays you for an individual, which is about five
hundred dollars per week after tax, That with seventy thousand
(04:27):
dollars for the next twenty thirty years of your life
just probably isn't going to be enough, right, so we
do have to find ways.
Speaker 2 (04:32):
It's not going to be enough for You're very kind
you that's probably it's not going to be enough. Literally
you're going to be scraping by.
Speaker 3 (04:37):
One hundred percent. And this, you know, studies to actually
back up the startup, I in massive university do a
study every year and what you need by sixty five
to live a good life into retirement. And because a
few different variations they look at. But if you look
at a metro.
Speaker 2 (04:50):
Lifestyle and a million bucks, isn't it?
Speaker 3 (04:51):
It is between a couple, a two person household. It's
a million bucks deliver choices life style they call it.
So you're able to spoil your grandkids and go on
some vacations here and the air in between a couple. Yeah,
between a couple it is so yeah, so a little
a little more doable then, But again, how do we
get there? And the first place to start would be
key we save it because most people can save themselves,
and I definitely love when they do, but often we don't.
(05:13):
And if we do it through something that's compulsory and
we have high contributions with you will just see bigger
balances by a time, do you look.
Speaker 2 (05:21):
I The only reason I winged about it is I
just you know, we've had Nichola Wallis having a crack
at labor and other people saying, oh, you know, times
are tight, and all of a sudden in election time
you're splashing the cash. But putting that aside. I guess
if you're going to spend money somewhere as your election campaign,
this is not really a bad place to spend. It
(05:42):
is it because well does it lead is the fact
that there's money in there? Is that going to encourage
people to sort of get on board with it as well.
Speaker 3 (05:51):
And if you look at where they're spending obviously that
the spend with the what they called the baby boost,
the fifteen hundred per baby, that's fantastic and that is
direct government expenditure. But the employer contributions going up make
it compulsory. That isn't costing them anything. And also with
that of atually it will cost them less because people
are actually relying on the Key we Saver more than
the pension all subrenuation by the time to get a
sixty five. So I'm definitely a big fan of it. Obviously,
(06:13):
depending on a situation with your self employed or employee
that changes things too, But I think as a general
in New Zealand that you should be quite excited about
this change.
Speaker 2 (06:20):
Actually, how because I guess when it comes to key
we Save it means that parents will also have to
make a call as to who their key we Save
it provider is going to be. Look, there are default
How does it work? Remind me how it works? Because
I went with A and Z because I'm with A
and Z yeah, and I haven't changed. I did shift
to a more aggressive fund because I thought this is ridiculous.
(06:41):
I should be you know, I've got a bit of
time left.
Speaker 3 (06:43):
So yes, a default provider status looks at a few
things and it's changed every now on the end, so
the FMA does come in and review this when they see
necessary to make changes. But I look at a few things.
The first one is going to be a balance fund mandate,
so you do have to have a balance fund for that.
It used to be conservative, so a lot of people
when they start a key WE saver up until about
the last five years, would have been in a more
conservative fund. Now that is balance you put in the
balance fund and they look at how that money's invested,
(07:06):
look at fees as well, and also how responsibly it's invested.
Most people these days want to exclude certain things like
nuclear weapons and tobacco manufacturing, so that is a criteria
as well with being a default fund. And the last
one is that the customer service aspect of member engagement.
If you have never got a call from a provider
with a default provider and it's been a number of years,
probably not going to be in the right fund that's
we would definitely want to avoid. So there's one of
(07:27):
those three or four criteria to being a default provider.
Speaker 2 (07:30):
Hey, by the way, you mentioned, Look, just I've got
my attention. You were talking about some people who don't
want tobacco manufacturing and nuclear or something. Are there any
key we save funds that go there.
Speaker 3 (07:40):
I think most would exclude them, but I can't speak
for everyone. I definitely haven't looked at everyone's exclusion policy.
But at Generative course, we are very keen on being
responsible investors, so we do exclude a lot of things,
including those.
Speaker 2 (07:50):
It's a funny one. Look, I think the tobacco is
a no brainer. It's an interesting one the one that
people and I know this is a bit of a digression,
but by the way, what are your thoughts on the governments, sorry,
national parties plan to give fifteen hundred dollars to each
newborn as well as extent. I don't know if anyone
can argue with the plus sixty five's not getting contributions
(08:13):
if they continue working. But actually, just you mentioned that
thing about the ethical investing side of things, which is
probably it's not something we'd flagged, but it is. It
is never as straightforward as you think, because, for instance,
arms manufacture, I might you might say, off the top
of your head, I don't really want to be financial
(08:34):
making money out of the manufacture of arms. But then
if someone is to say, well, it's the manufacture of
arms and maybe drones that are helping Ukraine defend itself,
I go, oh, maybe I'm okay with that it is.
I mean, if it's arms to end up in Vladimir
Putin's hands, then I'm probably not so.
Speaker 3 (08:55):
Yeah, It's definitely a nuanced conversation, Tim, I want to
speak to a lot of people. Everyone is very different.
Some people are one hundred percent returns focused and really
don't care where their money is going. Outside of others,
a lot these days are more concerned about how responsible
their money's invested, and I think most keys want it
to be done in a net positive way along the way,
But what does that mean and what do you exclude
to do that right? And the key thing there is
(09:16):
everyone's different, but we definitely should be thinking about it
as providers.
Speaker 2 (09:19):
It's an interesting one, isn't it that people like I
don't care how much. I don't care where the money's
being made. I just want to make the money.
Speaker 3 (09:25):
Yeah, if you're and far between these days. But I
think most people, as a said, if you can get
your returns, want to do it with a positive along
the way in terms of how your money is invested.
Speaker 2 (09:33):
Okay, so what are the standout things? What popped out
to you out of them? Announcement from Keil.
Speaker 3 (09:40):
So, yes, start from the top, especially with the changing
contribution rates. So we'll lift to six percent by twenty
thirty two.
Speaker 2 (09:46):
That's six percent from both sides.
Speaker 3 (09:48):
So you and your employer on both sides, and I
mean imagine that will be staggered. So if you're someone
who was at home, is a businessman who owns a business,
and you're looking at, hey, look how much does it
cost me, it's going to be staggered over a number
of years. I expect it's not going to be all
at once. We'll see there in the final printers that
comes through. But if you look at someone who's say thirty,
with a salary of seventy thousand, they're starting key wes
of it today and then investing out to sixty five
(10:08):
and a more aggressive fund if they are on four percent,
which is what it will be in twenty twenty eight.
It's currently three and a half four percent even get
you about six hundred thousand by retirement, and that is
inflation adjusted, So we're looking at today's dollar values right tomorrow.
But if you go up to six percent, that's almost
a million dollars. It's about nine hundred and forty thousand.
So that two percent change might not feel like a lot,
but it is going to be three hundred plus thousand
(10:29):
buy your retirement right, and that is starting from zero.
So it is a massive change, and it means people
are going to be set up a lot better for now.
Speaker 2 (10:35):
And that's based on so just tell me begain those NHS.
Speaker 3 (10:37):
Yes, you assumptions. So we've got someone who is thirty
are they're starting key us of today, They've got zero
dollars in their account, starting from scratch, they're earning seventy
thousand dollars a year. We're going to put them in.
Speaker 2 (10:46):
Actually, if you're talking about that for the whole life,
we're not talking at a high.
Speaker 3 (10:50):
Level, yees. So we'll build in a bunch of assumptions.
We look at wage growth, so we will add the
calculat I've used using wage growth at about three point
five percent per year and then heading off inflation around
two so a net game every year, which is nice.
Obviously every year works out differently depending on who you are,
but we are baking in some assumptions there. So from
thirty out to sixty five, thirty five year duration at
four percent, they grow to about six hundred and thirty thousand,
(11:11):
and that's an aggressive fund. So we get a rate
of return be roughly around eight percent over that time
frame and an aggressive fun which is the average from
the last ten years from morning start, but to a
bunch of reports, and then if you went up to
six percent in terms of the contribution rate, it will
get you to nine thirty, So about a three hundred
kight difference when you bake in, yes, a bunch of asumptions, and.
Speaker 2 (11:28):
What contributions are you making yourself.
Speaker 3 (11:31):
So if you started at four and four, you and
your employee, which is what it will be in twenty
twenty eight, so then it will be going up to
four and four. It's currently three and a half, but
it will be four and four by twenty twenty eight.
They eat about six hundred and thirty thousand by sixty five,
and again that is a lot of money. But you
then go to six percent on you and your important.
Speaker 2 (11:46):
To side six, so that's twelve.
Speaker 3 (11:47):
Yeah, you get to nine hundred and thirty, so a
big change about three hundred thousand worth.
Speaker 2 (11:52):
Gosh, actually that will kick and I mean it's difficult
to argue with that really.
Speaker 3 (11:57):
Yeah, imagine your parents retiring with the next of three
hundred thousand dollars. I mean, who wouldn't want their parents
to be retiring or their grandparents to be retiring and
an extra three hundred thousand dollars, right, So that is
the first part. And there's just catogotical data about the
fact that retiring is not getting any cheaper and we
need more money to retire on and so that is
going to do it having a high contribution rate.
Speaker 2 (12:16):
Okay, we'd love to know what your thoughts are on
the policy. I mean there'll be a lot of people
who are listening, who are you know, not thirty years old,
who are beyond it, who are thinking, know what help
hope is there for me? But you can still have
an opinion on the policy. Oh, eight hundred and eighty
ten eighty, And of course, if you are planning on
working past sixty five, I don't know if there's anyone
who could disagree with the working past sixty five thing,
(12:38):
although I do have one question for you and Nikola Willis.
I'm not sure what her answer was on this because
I interviewed her. I'm trying to remember what it was,
because you know, a lot of information in an interview
to digest. But they've gone for fifteen hundred bucks as
part of the gift. Well there's a gift. Yeah, let's
not get ourselves. And I think New Zealand first had
(13:02):
a policy where you give every newborn one thousand bars
just for mischievous, mischievous sake. I'm ninety five percent convinced
that there was a discussion about how much do we
make it? Well, New Zealand first at one thousand, we
better go another five hundred bucks. I reckon it was
that simple. What do you reckon? Yeah, I mean, look,
(13:23):
one thousand bucks, fifteen hundred or or does a thousand
sound a bit that's a bit stingy. Let's make it
fifteen hundred. What's your what's your ballpark reading on that?
Speaker 3 (13:33):
The more the better. I'm certainly not one to dive
into politics, especially around this sort of stuff. I don't
know whether National had done it for that reason alone,
but ultimately, the more the merry. You might think five
hundred dollars isn't a big difference, but it's fifty percent
more than the thousand, of course, and ultimately over time
it will compound to a lot more. The longer you
got it in near, the more difference it was.
Speaker 2 (13:50):
I did specifically ask Nikola that if I could have
access to their behind the scenes email, would it say
would there be an email there saying well, Winston's going
on thousand, we better go fifteen hundred. I can't remember
how she ounced at that now.
Speaker 3 (14:01):
I think it was speculated in the article that maybe
that was the reason, but.
Speaker 2 (14:03):
I did it's not a thought. I thought that was
original thought for me, which is a bit disappointing. Anyway.
We're with Nathan Stanners. He is a key we Saver
advisor at Generate and National's announcements today on mandatory key
we saver. Oh that's the other thing, mandatory key we
saver for all workers. We'll dig into that as well.
I mean, I don't know if you can raally argue
(14:25):
against this stuff. Should it be available to people to
not do key we saber where you wonder why, but
your thoughts on the changes as well, and the fifteen
hundred dollars start for newborns. And if you're working past
sixty five, I don't think there's anyone who could argue
against requiring employers to continue contributing to your super to
(14:47):
your keypisaber. So your thoughts on eight hundred and eighty
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(15:10):
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(15:53):
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So yes, the overa fund manager of the New Zealand
harbor Asset dot co dot NZ. I love those things
for beverage. Anyway, we're talking about key We Saver and
what you make of the National parties because not National government,
(16:15):
because that's a coalition government. Of course, I was worth
remembering that the National Party's plan to give newborn's fifteen
hundred bucks a when they're born basically into the kei
We sab. But also what you make of the changes
on eight hundred and eighty ten eighty. Now there was
something we're going to dig into with Nathan stan As,
he's mcguest. He's the key We Saber advisor at Generate
ake We Saber adviser. Makes it sound like there's only
(16:37):
one when I say the the eke We Saber advisor
or that that sounds a little bit more high for Luton. Hey,
now that where was something else we're going to touch on?
Nathan and I have completely forgotten what we touched on.
Speaker 3 (16:46):
Now we're just going to look at the power of
compounding that number. So if you look at the fifteen
hundred dollars by the time you get to eighteen, if
that was at an aggressive fund and morning Star you
mentioned before in your advert, they do those quarterly reports
and the average was about eight percent per year and
an aggressive fund over the last ten years. So you
take that, you compound that out about eighteen years, five
grand by the time they get to eighteen, which is
(17:07):
a really strong number. That's a five grand hits up
they wouldn't have had without this policy, which was great.
But if the parents then decide, hey, look I'm going
to put in twenty dollars a week and to see
how that goes for eighteen years, that number wouldn't be
five anymore, be about thirty two thousand, and again that
is just like that a thousand.
Speaker 2 (17:22):
A year, So you can imagine it would become fairly hefty.
Speaker 3 (17:25):
Yeah, it is. And even if so you got ten
dollars a week, they'd be eighteen thousand by the time
they get there, so often doesn't take too much to
get that ball rolling, and then the power of compounding
takes care of the rest. And that's really what national
is thinking that the earlier we do this and the
more we put it, and that's when you're going to
see a bigger balance by the time they start working.
It's real, real, going to kick start for them along
the way.
Speaker 2 (17:45):
Do you think that putting the money in excuse me,
do you think they're putting that money in will? I
mean this is guesswork again, because there'll be people who
see the money go in and they just leave it
and they never do anything about it because parents pass
their good or bad habits onto their kids. But do
you think there will also be something that when the
children are old enough to work out for themselves what
(18:07):
key we save is about, they will look and see
in their own key we say, with the power of
what that money has done since they were born and go,
and it'll maybe motivate them to be more more actively
involved in investing for the retirement because you know young
people as well, it's like, oh, retirement, it's decades away.
How would i care about that.
Speaker 3 (18:27):
Yeah, and you did, right. I think the penny drops
when you see that was fifteen hundred dollars. Now it's
your X thousand when you do end up taking it
or looking at it when you've kind of first got
your app when you're eighteen and see what your balance is.
So that is fantastic, But don't forget you can use
it for a first time too, and that'd be the
bigger motivator for young people. If we're in Auckland, right,
buying a first house here or most of the country
is not getting easier, it's just getting harder for the
(18:47):
most part, So that motivates you as well. Hey, look,
I'd say most people I see that are in the
early twenties with a big balance. Their parents started it
a while ago and they put in a certain amount
of a week, or they got the kickstart which is
available for it for a long time as well, which
is one thousand dollars.
Speaker 2 (19:00):
Oh yeah, well, actually that's the other sort of talk,
you know, thing we could have an opinion on. You're
probably cautious about expressing your opinions, but what do you
think was the kickstart was of its time? I think
because it was when Kiwi's saber was I don't know
when the kickstart was brought in, but it was to
get adults who needed to get on board with the program,
(19:22):
the incentive to get and I actually thought that was
I can understand why that's that was then, but now
this is now. It's now about getting you know, everyone
who's had the opportunity to get that kickstart there in.
But now we've got to get a younger generation. I
can almost understand why this is a good policy, and
it's as opposed to the kickstart. They were right for
(19:44):
their times.
Speaker 3 (19:45):
Yeah, definitely. I think when Kiyis ever came in, obviously
the pickup rate wasn't huge to start with. It's we
a little old than expected, but that kickstart allow people
to say, look, it's a thousand dollars, you may as
well started and get it going. Right now, it's actually
let's start as early as possible, rather than just starting
at some point when you're working, Let's start it eighteen
years before you start working, or even longer than that. Right,
So a spot on. It's a really good balance where
(20:06):
the kickstart was needed to begin with people, and then
now it's actually let's messt money back into the bottom
end when people actually come to this world, which is
it's fantastic.
Speaker 2 (20:14):
By the way, when you heard about the policy, were
you sort of surprised? I mean, I mean it's election
time that they're going to be spending some money somewhere.
Speaker 3 (20:22):
I was not so much for National. I know Labor
has not been that open with what they want to
do with KI SAB, but I'm always going a lookout
for what parties will be doing with QWI Saver. And
they obviously took the initiative earlier last year or two
a year and a half ago to make those changes
to the current setup while they've been in government and then,
so I'm not surprised that they were looking ahead saying, look,
retirement's not going to get any cheaper. Let's make some changes.
(20:44):
And as I said, that fifteen hundreds of the money
they're spending, but the rest of it isn't them spending it, right,
So I think it is a sense of all to say,
look again, retirement's not getting cheaper. Let's make these changes
and make sure we have people retiring with a bigger balance.
Speaker 2 (20:57):
Okay, right, let's we've got a bunch of texts here.
By the way if you want to jump the queue
of because I'm going to get into some text correspondence
and questions for Nathan. But if you want to jump
the queue with a call, we'd love to hear from
you on our eight hundred and eighty ten eighty Hi's
z B. We put twenty five dollars in each of
our key. We save kids key we save every week. Okay,
what's that one thousand bucks a year basically, isn't it?
Speaker 1 (21:18):
Yeah?
Speaker 2 (21:18):
Just a bit more twelve hundred and fifty not twelve
hundred sixty five is no, No, I've got that wrong.
Twelve and seventy five. I think fifty two weeks. Anyway,
let's not big. Yeah, it does the new policy extend
the free two hundred and fifty if you put in
one thousand dollars and forty a year to under eighteen
year odds. What is? Where are we at with what
the government they used to top up your account by
(21:43):
either five hundred or a thousand if you put one
thousand bucks in a year, they would match it for
a while.
Speaker 3 (21:47):
Yeah, it's now two sixty so it's twenty five cents
of a dollar, and that is everyone's sixteen and over,
so it used to be eighteen and over now sixteen
and over, which is good. But to answer the question, look,
I don't know just yet. The article and the release
that came out. I don't think there was a specific
round whether they're going to give anything to those that
are already in key we save it but still young.
So I'm just not sure. It'd be nice if they did.
But I mean, that will be a lot more expensive
(22:08):
for them, Ryan governments. It is all about the bottom line,
so I'm not sure if they would do that.
Speaker 2 (22:11):
Okay, Hi there. I've been enjoying the discussion regarding retirement plans,
although I find it hard to understand the rationale for
political parties not removing Now I don't know what this
is company tec policies. It's all about forcing employees to pay,
not the companies.
Speaker 3 (22:28):
Yeah, I think probably referring to ECT tax, which is
the employer supreneuration tax. So if you do unpack that,
and this is assuming this is what they're talking about.
But your employer does pay tax on their contributions, you don't.
So if you're both on the minimum, what's going into
your account will be less because the government does tax
the employer contributions at a certain rate. So if they
could remove that as a starting point, I think that's
(22:49):
really what the person is saying, and that'll be a
sure fi way to increase your balance as well.
Speaker 2 (22:53):
Well. That will just have a cost to the government
of course, and that's why they're not going to do it.
They just keep it simple and say.
Speaker 3 (22:58):
Well, exactly so they've decided to put up the top
end rather than removing the tax along the way, and
that could be another way to do it, but again
it will probably come down numbers for them.
Speaker 2 (23:06):
Okay, I actually got one on the ethical side. In fact,
I'd be happy to have a chat about this. Firstly,
for people who are in key we Saber, do you
have any idea what the ethical stance of your key
We Saber fund is, because I would bet just about
everyone wouldn't have a clue about what decisions and what
(23:28):
industries their key We Saber fund invests in, unless, of
course you're going there is you know, there's a fund
that has a certain amount which goes into bitcoin or
other particular ones, which is to attract a certain type
of investor.
Speaker 3 (23:41):
Actually, how would yeah, really good point, I know exactly
what you're looking at there, and there's a few easy
places to start. There's a good company called Mindful Money.
They're independent. They you can find them online if you
go on mindful money and have a look at that.
They give a list of providers they see as mindful
for being responsible in how they invest in their eyes.
Got a bunch of criteria around that. But only about
ten percent of key wes have a funds are mindful
(24:04):
in their eyes. It's a good way to tell if
your provider is doing a decent job.
Speaker 2 (24:07):
Only ten percent of funds in their eyes. So's what's
the standard they've set for mindful Yeah.
Speaker 3 (24:12):
Really good point. And it's not as simple as excluding
just certain things. It's how they go about investing it.
So you may exclude heaps of stuff or you may
not be good in investing responsibly. There's also you makes
good a little less, but then you're very good at
investing responsibly. So again, as a nuanced approach, it'd be
great to actually have someone from there on here and
explain exactly how they do it. But if you go
online you can check if you provide it is mindful
in their eyes, which is just a good place to start.
(24:33):
It's not the be all and end all. But it's
one way to look at it cooled. Does my provider
actually look at this in an important way?
Speaker 2 (24:39):
What's what's sort of I mean generate Obviously youre going
to talk within your own within the Generate key, we
save a scheme, But what approach do you guys take
to ethical investing? Because the life is a lot of
gray areas, isn't it, yees?
Speaker 3 (24:53):
So I mean, we've got our exclusion framework to start,
So look at excluding tobacco, manufacturing, nuclear weapons, the manufacturing
of cluster ministions, whale meat, antipersonal minds. Those are outright exclusions,
and you might think that list is quite slim, but
then ultimately it gets very nuanced where your money is going,
as you're kind of explaining before. So what we do
is actually have an analyst. She will go and look
(25:13):
at all of these companies not just for their kind
of bottom line and how much they're worth, but actually
how well do they do this in terms of their
environmental factors? There are they have a good supply chain
or labor practices and things like that. So you provide
us look at something like generate, we are actually going
to hire an analyst that does this sort of stuff.
So the bottom lineers are not just always the number one.
We look at the other factors.
Speaker 2 (25:32):
So it's quite fascinating because you realize how the So
for instance, and I'm making this up as a go along,
but I could imagine that on the face of it,
you'd hear about a company that's doing very well launching
satellites into space, and I mean, I think Rocket Labs
probably involved in a bit of that as well. And
(25:54):
yet there could be companies who are putting satellites in
space because it helps with military targeting, and I mean
because the use of technology, it's on how it can
be deployed. I'm guessing with mindful money that that's probably
something they look at and go, oh, not all satellites
are friendly.
Speaker 3 (26:10):
Yeah, they'll take a deeper dive. But there is a
lot of nuance involvers are said, you could have a
company that has two percent of their revenue generated from
something like that, or they make it, manufacture a component
that goes into a switchboard that goes into something that
is used in a military application. Right, So there is
a lot of nuance involved. It's never that clear cut.
So you just want to know what your provider is
doing and if you do want to understand more about that,
(26:30):
Mindful money is a really good place give.
Speaker 2 (26:32):
Us your list for you guys. I quite like I
thought that was a pretty good list of yes. So
you couldn't really argue with cluster musician. Yes, cluster musicians.
Speaker 3 (26:40):
Not quite almost your past life coming into it of it.
Speaker 2 (26:43):
There sessions otherwise known as a band.
Speaker 3 (26:47):
Yeah, the startfod's up.
Speaker 2 (26:48):
So sorry, I don't know what.
Speaker 3 (26:51):
No, you're right. We've got nuclear weapons and tobacco manufacturing.
Speaker 2 (26:54):
So nuclear tobacco, and.
Speaker 3 (26:57):
Then you look at the manufacturing of cluster minitions as
you see before, whale meat as well. Oh yeah, with
you on that one, and then anti personnel minds in there.
So those are those five that outright, if there's any
company that has a one percent exposure and that we
will stay away from, so then it goes a lot deeper,
which is why we have an analyst, and she's good
to watch. She does outside of what I know.
Speaker 2 (27:17):
Look, I'm quite keen to throw that out to people
who are listening about your ethics and how well. Firstly,
I mean, I'm not sure if anyone will actually want
to call and say I have no idea about the
ethical profile of my key. Wes have a fund, I'll
be honest, I don't. It's mine's with A and Z,
and I just well, A and Z. You know I'm
happy with a bank with them. I assume nothing untoward
(27:38):
going on with their key. We say up wouldn't have a clue,
but which I don't think it tells you that I
don't care about the ethics of it. It just maybe
it just informs the fact that I haven't really thought
about it very much. But how important is the ethical
investing to you? And how do you draw the line?
If you'd like to join the show and have a
chat with us about that, we'd love to hear me.
(28:00):
On eight hundred and eighty ten to eighty, we're taking
have a little bit of a chat before we get out,
just about understanding how ki different profiles are. Because we
have conservative, we have balance, balanced, conservative, all sorts of things.
How do you understand the gist of how risky key
we saver is Because my understanding, I still think that
compared to some of the stuff I've done in my life,
(28:21):
they're all pretty balanced and conservative. So we might have
a chat about the language of risk as well, but
on the ethics, give us a call on that. Eight
hundred and eighty ten eighty time flies twenty two minutes
to sex News talks. He'd b news talks hed B.
There's a smart money by the way, I raised the
question around ethical investing and apparently, but we're with Nathan
(28:42):
Standards from he's a key we save advisor at Generate
and that's not that's not the term they use these days.
They use a different term.
Speaker 3 (28:49):
Yeah, I look from the fm A guidelines these days
are responsible ethics were seemed too different and subjective depending
on who you were, So that's kind of what we
use these days. But look, the two words are the
same thing, really just language.
Speaker 2 (29:00):
They are the same thing. So somebody's just.
Speaker 3 (29:01):
Language in my mind?
Speaker 2 (29:02):
Is it because ethics can tie in to religious beliefs
and all sorts of things, and then people just word
ethics they just I think it's a great word as
opposed to be responsible.
Speaker 3 (29:11):
Possibly it's just a language that we should use as
advisors from the ethics.
Speaker 2 (29:14):
Okay, so you'll say responsible and anyway, let's take some
calls Kent.
Speaker 4 (29:19):
Hello, Hey, yeah, I was interested with the physical investing.
I was wondering, like what happens if you're okay with, say,
funding the military, Like if I was living in the Ukraine,
I probably would be fine with like people investing the
military because the military is protecting me from the Russians
(29:43):
invading and taking over my country.
Speaker 2 (29:45):
Bengo.
Speaker 3 (29:46):
Yeah, yeah, ultimately, Kent, if you want to find out
what your provider does or doesn't do, you can have
a look. But there are a lot of providers that
aren't going to take a massive look at that, right,
And I'd always keep in mind as well that some
providers will be big on responsible investing, but still good
returns too. There's not always just a trade off there.
But if you're someone that's not too concerned, and you
can always find a provider that is going to have
(30:07):
a less look at it, but you'd also be surprised
some of the ones that do are still going to
do a good a job with the money.
Speaker 4 (30:14):
Yeah, because I think this should be a range. It
shouldn't be like you're excluding all these funds and even
something like. So there was one stage where people were
concerned about oil, but we need oil for the economy
to work, So does it make sense that I have
provided that excludes oil.
Speaker 2 (30:36):
Well, I mean that's and even that's a difficult one
to get you hit around because it's oil and coal
for heating and for power or whatever, and yet we
actually do rely on it. Yeah, I mean, what's your
take on one of the things you'd rule out for
investments you're making Kent?
Speaker 4 (30:54):
Probably tobacco, because tobacco kills a lot of people. But
I would feel hypocritical about like excluding a lot of
the providers because like, yes, say, if I was in
Ukraine that kind of situation, then I would be supporting
the military and I'd be happy that people had invested
(31:16):
in the military that was protecting me from the Russian scene.
Speaker 2 (31:21):
Yeah, I'm with you on that. That's why I think
ethics is always just an interesting conversation around and responsible investing,
just for Nathan's sake. On that one, it is a
fascinating the conversation because what might seem obvious. And I
discovered that even just when I was studying law, you'd
think something would come up and it would be a
(31:42):
slam dunk easy answer on a moral question, and all
of a sudden somebody will say, well what about and
they raised different hypotheticals and you suddenly think, oh, it's
a life's a lot grayer than I thought it was anyway. Actually,
I was looking at the A and z's Responsibility Responsible
Investing and it had something about coal and oil for
(32:05):
thermal energy general, and I sort of thought, well, then again,
if we use cold fire up Huntley POWERstation, we all
use that cold and I sort of think it's a
it's a It's tricky, isn't it.
Speaker 3 (32:18):
Yeah, And that's I said of people if we didn't
have Huntley, you know, half of north Oland have been
cold last year at certain times, and we're coming into
winter again this year. So there's just nuance involved. It
is really important to as is someone sitting at home
as a cus of a member. Just figure out whether
it is important to you, and then try to find
out what your provider does. And that's kind of more
where it is answering the questions with it. It's you know,
yes or no, shouldn't been investing. It's different for everyone.
(32:39):
So you just want to figure out what your provider does,
what they exclude, then if you're comfortable with that. And
as Kent said before though, and what I can reader
to him is just because you provide it as big
one responsible doesn't mean they don't do well performance wise too, right,
So they aren't mutually exclusive. You can do both at
the same time.
Speaker 2 (32:53):
Yeah, somebody mentioned in a texts I just saw Elon
Musk's name pop up and along the context of that, Gosh,
it's an amazing story, is not the Where are we
at with the launch of what's the name of his company? SpaceX?
That's the one which went bonkers, didn't it?
Speaker 3 (33:10):
Yeah? I think it's chief Rice Abot one hundred and
eighty dollars now close launch in fifty So yeah, it's
a better a chump, isn't it?
Speaker 2 (33:17):
So criky? That's nuts? Hey, Look, the question around risk.
The reason I'm interested in this is because there's risk
within the concept of kei we saver, and my understanding
about within the concept of key we save, what might
be the most risk investment is probably still nothing compared
to how risky you can go with your investment strategy.
(33:40):
How how do we how do we understand how risky
it is? Because in terms of safety of your money
being at least not being stolen or embezzeled, you know
that's pretty pretty safe. But how do you explain risk
to people from conservative extremely conservative to what's the most
(34:01):
risky fund that you guys have a generate.
Speaker 3 (34:03):
Cool So i'd split risk and two categories. There's kind
of volatility and then there's risk and volatility is just
the movement of your ke we Save if we stick
on it on the key we serve side here, these
more aggressive funds have got more growth assets in them,
which it shares property, infrastructure, and even if you've got
three hundred plus companies in there, they're still going to
be very volatile. Right, So the more aggressive funds are
going to be very volatile. On the more conservative side
(34:25):
of things, you've got more what'll be called fixed interest
in bonds and savings accounts and cash, So that's where
you're going to have less volatility with them. They're going
to move around far list.
Speaker 2 (34:33):
Okay, so it's really how long have you got to
wait for your stock ture exactly?
Speaker 3 (34:38):
And that's the second part of what I mentioned before.
What is risk in the contact with KEII Saver? So
when you look at KEI we Save it, risk is
you not meeting your goal. And if you've got a
first time goal coming up in a year and you've
got between you and your partner one hundred and fifty
K and KEII saver Sitting in aggressive fund is very
risky because they often don't perform well over a short
period of time. However, if they have the same couple,
have bought that house, they're now thirty with thirty five
(35:00):
years to retirement, the risk is very low. The data
is categorical, the long geu ha, especially ten plus years
before you're going to use that money, we can be
very confident you will see a better return in a
more aggressive fund. So risk there as you're not wining
your goal. If you have a long time so you're
going to meet it. Yes, it will still be volatile,
but the risk is actually quite low.
Speaker 2 (35:18):
So what so what's I don't know what what's the
highest or the risk? The most aggressive?
Speaker 3 (35:25):
Equal high growth or aggressive. We've got focus growth, which
is a nice buzzword, but call it Yeah.
Speaker 2 (35:29):
Focus, That sounds safe to me. It's focused, but you
know it's more.
Speaker 4 (35:34):
Yeah.
Speaker 2 (35:35):
The language is around just different funds is fascinating. Yeah,
So what's that one? What's the what's the vibe?
Speaker 3 (35:41):
Yeah, so if you look at someone, let's say someone
is ten thousand and KII saver. If they go into
our Focus Growth Fund, what you'd expect there is about
ninety five percent or nine and a half grand of
your money is invested in shares, So it's going to
be you know, Apple's, Google's, Microsoft's the World and the
New Zealand your Fisher and Pikele Main for Sparkle clean Airport.
So that's a distribution in terms of what you can
expect them a long term over the last ten years.
And of course past performance isn't guarantee future performance, but
(36:04):
Aggresive Fund's been a about nine point five percent parannum
after fees over that time frame and some years over
what time frame? Over ten years, so nine point five
percent parannum and some years importantly though that is twenty
five percent, some years it is minus ten.
Speaker 2 (36:17):
So I look, every company will be different. Every he
was saying with a provider will be different. But I
would imagine that. So if you think you're going to
continue working for ten years, there's a very good argument.
And I know you don't give specific financial advice to
anyone who's listening, so don't take this as advice to
you from Nathan, but just a response to a question
from me, if I've got more than ten years working
(36:38):
life left, I should just go on the most aggressive
fund I can finte, shouldn't I Yeah.
Speaker 3 (36:43):
The other fact that we want to take into account
it's sort of time, as the person's individualist profile, how
comfortable they are with the ups and downs. But generally speaking, yes,
if you do have time and ten plus years especially,
you probably will see a bigger balance. When I say probably,
it is more significantly likely that you will.
Speaker 2 (36:58):
So I think that's the best explanation I've heard of it.
So it's more around volatility, not as an oh, sorry,
you've done, you do it's all gone.
Speaker 3 (37:06):
Yeah, it just doesn't happen in key We saver.
Speaker 2 (37:09):
Because there must be. I mean, I guess even the
most aggressive funds, because they would they would would they
ever get into startups? Can you save a fund?
Speaker 3 (37:15):
Yeah? So, I mean, if you look at Generate, we
do have some money going into private equity. People at home,
especially in the rural sector, may have heard of Halter.
They make those egretech or the Egretech company make those
Calclas or Henry the accounting software. So we will do
some private equity.
Speaker 2 (37:29):
This is the underpinning philosophy and business practice and idea
and everything it has to You look at it and
you go, this has got to be a one or
rather than someone's Yeah, I got this great idea, let's
give it a.
Speaker 3 (37:41):
Whirl on exactly. There's still a lot of edding involved, right,
and this is going to be a far smaller proportion
of your key we saver like an envestment and someone
that whole will be zero point two percent less than
that of our aggressive fund. Right, so a very small amount.
And that's why diversification is important. If you provider as
doing private equity, it's likely to be far less than
five percent of your money.
Speaker 2 (37:58):
Hey, by the way, did you you go to Field Days?
Speaker 3 (38:02):
We were down there, Generate was. I wasn't personally, but
we had to stand there. We had a few speakers there.
So we go to every year. Fantastic Eventestionally, it is amazing.
Speaker 2 (38:10):
I made of mine run he's the CEO of Field,
He's one of my panelists, Richard Lindrews, and so I'm
probably got a bit more attuned to it through Nam Richard.
But I think you know that the how much he's
enjoying getting into it, and the transformation that the rural
sectors having, you know, with great ideas like Houlter and
things like that.
Speaker 3 (38:28):
Yeah, it seems to be a biving economy at the moment,
especially with the Fonterra payout of later and milk price
is being high and dollar being low. It's yeah, favorable
for dairy farmersyone buying a.
Speaker 2 (38:36):
Sauna at field Days apparently. Anyway, Hey, we look, we're
going to take a quick moment. We're back for a
few final words with Nathan and it is eight and
a half minutes to sex News Talk, said b Yes,
News Talk, z'd be with Tim Beveridge. My guest is
Nathan Stannards. He's a key we saber advisor at Generate.
By the way, if you want to check out Generate,
their website is generatewealth dot co dot nz. Just a
(39:00):
last little comment, we've only got about a minute and
a half left. I think the most can maybe the
most contentious part or potentially the most contentious part of
the National Party's announcement is making key we savor compulsory,
which from a national sort of collective point of view,
I can see as appealing, but for some people to
be like, excuse me, I'll make my own decisions. What
do you make of it?
Speaker 3 (39:19):
Yeah, particularly self employed people, i'd say, and people in
different circumstances. I do kind of sit on the fence
with this. I do like choice, but ultimately I think
the government is just trying to address the fact that
we aren't again having enough for retirement so that more
people in and starting early and contributing.
Speaker 2 (39:32):
That's what we will It applied to self employed people,
you'll be expected to put.
Speaker 3 (39:36):
I think there's actually going to be some sort of
not exemption, but difference with self employed does not. It
does imply I think that might have said in the
in the article maybe four percent rather than something like that.
So we have to wait till the final details come out.
But look, I've got my two best mates self employed,
so I definitely get that they've got businesses and they've
got employees they're paying. It's just the cost of them.
I do get it. But ultimately, yeah, we're just trying
(39:56):
to get more people.
Speaker 2 (39:57):
I'm self employed doing this actually because I'm a contractor
so and it's been something that i've done the Baarest
minimum mask on so probably you know, some times getting
a bit of a push doesn't hurt, doesn't anyway. I
wonder how much once if this ends up coming to fruition,
I imagine we'll see a bunch more ads about with you
guys all trying to get parents to go, hey, hey,
(40:17):
switch to generate or whoever. So keep you out of mischief.
Speaker 3 (40:21):
Yeah, one hundred percent. And if you guys want to
get advice, I think advice is the first place to
start with any of this. Got our website, you can
request to meet. We'll get advisors all across the country.
Speaker 2 (40:29):
Great stuff, and if you great explanation on the risk
and the volatility side of things, which is the first
time I really think I've got close to understanding that
concept within the context of the whole key we saver thing.
By the way, look check out our podcast if you
want to hear anything you've missed and news Talk SAIDB
dot Co and Zera iHeartRadio thanks to Nathan from Generate
Wealth and We'll catch you thanks my producer Sam. Great job, mate,
(40:51):
We'll catch you soon. Sund Out six is next.
Speaker 1 (40:54):
For more from the weekend collective, listen live to News
Talk Said B weekends from three pm, or follow the
podcast on iHeartRadio.
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