October 6, 2024 • 41 mins
Financial author and advisor Lisa Dudson joins Tim Beveridge on The Weekend Collective to discuss the long term value of your savings depending on where you put it.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks,
i'd be.
Speaker 2 (00:49):
Hey, welcome to Welcome to the Weekend Collective. If you
have just joined us, you're late. We started a couple
of hours ago. Where have you been? But no, just kidding,
But if you have just joined us, then you can
catch up on the previous hours on our Weekend Collective podcast.
Go to iHeartRadio or wherever podcasts. We can go to
the News Talk CP website, and we also do post
our interviews as soon as we can after they've happened.
(01:11):
So I would actually recommend and particularly go and have
listened to our politics interviews, one with Judith Collins about
the sinking of the HGMS hmn z S Manawan Nui,
but also an illuminating interview with Matthew Horncastle from Williams Corporation.
I've got that right, yes, I have just around the
(01:32):
underwriting the government's planning to do with property developments, and
he spoke against that, even though it's kind of cynically
in his interest to be in favor of it, and
I thought it's quite an illuminating discussion with Matthew, so
go and check that out. But right, now it is,
and my guest is looking at me, going we're at this.
It's interesting because she has an interestant property as well.
There's money because this is smart money. And my guest
(01:54):
is Lisa Dodson. Dudson, she's a financial author, a bunch
of bunch of books and you know she's into she's
into financial advisor as well. Yes, yes, and hello, hello,
So I got there eventually, didn't we And how are you?
Speaker 3 (02:11):
I'm very good?
Speaker 2 (02:11):
Thank you excellent you picture, your ears did well? Your face,
tod per cup. When you heard that, I mentioned Matthew will.
Speaker 3 (02:18):
Yehow I'm definitely going to go and have a listen
to his interview because I think it'll be very interesting.
Speaker 2 (02:21):
Yeah, because he basically just started saying, look, I'm a
big fan of this government. I think the's a whole
lot of things I'm doing really well, but this isn't
one of them, and why, And he talked about just
enabling the free market to look after things. And he
made the case so well that we just said tex
stuff to text come in saying of surprised to hear
him say that, and I agree with him and he's
changed my mind. It was he made a good case.
Speaker 3 (02:40):
It was very intert I can imagine, you know, he's
a you know, he's a very very smart operator, you know,
very quite well respected in his in his field, which
is which is great. And let's face it, I think
generally speaking, the free market does a better job than
when the government tinkers too much.
Speaker 2 (02:56):
Just on a communications point of view, I think it's
an example of like, you know, if you communicate honestly
about something, it's like when Antonia Watson and for the
A and said said, what her honest thoughts we're on CGT.
I don't think being anything but good for your organization.
When CEOs and business leaders, well here's what I reckon,
regardless of what the business wants, and they just speak candidly,
unless you're proposing something horrendous. You know, just a bit
(03:20):
of candor and honesty. It's refreshing, isn't it.
Speaker 3 (03:22):
Well, that's right, and all of these issues are also
you know, they're incredibly complex, and there's so many stings
in the tails sometimes and there's so many flow on
effects from if pretty much any decision, and it's really
nice when someone can talk openly and talk you through
their logic and why they think what they think because
that helps you learn.
Speaker 2 (03:39):
Right, Yeah, exactly. Now we're going to talk about of course,
this is smart money, So we are going to talk
about money and a couple of things. Just well, to
kick off with something a little bit Well, it's a
question a lot of people would have that what do
you do when you've got a bit of extra cash?
Where should you put it? Because people will come into
(03:59):
money through you might inherit it, you might find you've
got a bit of a bonus at work, you might
find you don't have to tax to pay that you
thought you had to pay for yourself employed And where
where should you actually put that money that you've got
that you weren't expecting? Should you? I mean, of course
it's a personal decision because if it was me, and
I'm still probably a bit fiscally responsible, irresponsible because I
(04:21):
want to have another holiday overseas, I would battle with
that one. But then there's the mortgage, there's the key
we save it. There's whether to invest it, whether it
to shove it in some sort of very boring savings account.
Speaker 3 (04:32):
Extra cash well, I mean it all comes down to context. Right,
So firstly, we're talking ten thousand dollars and we're talking
ten million dollars because okay, well it's quite different, right,
So what does extra cash mean?
Speaker 2 (04:43):
I think it's something I obviously if it's ten million,
that's not a very common scenario, I guess. So let's
pretend I think it's more like the ten grand the
five grand. Yeah, because it's something that happens commonly when
people go I've got a bit of extra money at
the moment, and there'll be people whose instinct is to
save it, and there'd be people who's instinct to do
(05:04):
something else that I would have thought. Sticking at it
in key Wei Saver is well, if you want to
make sure you can't touch it, yeah, yeah, yeah. If
you don't trust yourself and you know you should stick
it somewhere, then shove it in key We Saver. But
if you want to invest it, I would say you
invest it in anything but key We save it, because
at least you've got some discretion as to what you
do with Yeah.
Speaker 3 (05:22):
So I guess again, everything's always about context, right, so,
and your personal circumstances. But if you had ten grand
for arguments sake, then you might say, okay, if you
weren't in a particularly good financial position. You might go
pay off debts or put it into an emergency account
for a future, you know, sort of rainy day issues.
But the first thing you might say, well, maybe i'll
make a lump some payment off your mortgage, so that
(05:43):
actually saves you quite a little bit of money over
the long term.
Speaker 2 (05:46):
Actually, that would be almost versus a savings account. That
would be the no brainer because it's a savings account
you pay tax on on your interest, whereas if you're
paying it off your mortgage, that is like a tax
free earning of interest in a way, because your mortgage
is higher than the interest you're going to get in savings.
Speaker 3 (06:03):
Absolutely, but also too if it's ten grand, and it's
ten grand that you're not paying interest on for let's
say the next fifteen, twenty twenty five years. Right, So
when you think about that, that's quite significant.
Speaker 2 (06:13):
You see what you've mounted. There is a really good
argument for always sticking on the mortgage because unless you
really need that holiday and Fiji or wherever, the if
you actually understood the future value of that money.
Speaker 3 (06:25):
Absolutely so any day of the week, lik, I'll.
Speaker 2 (06:27):
Say you got Oh, it doesn't matter what your mortgage is,
whether it's one hundred thousand or whether it's a million.
If you don't put that ten thousand dollars on your
mortgage and you've got another fifteen, twenty, twenty five thirty
years to go, I would hate to think what the
extra Yeah, it's going to be ware.
Speaker 3 (06:44):
So if you talk talk bang for your back. If
you had a mortgage, that's probably your best return, right
unless you're a high risk and be stuff. So that's
I think that's probably a bit of a no brainer.
If you were a little bit if you were frightened
you were going to spend that money and let's say
blow it on a holiday or some shopping, then key
we save is great from the perspective that it grows
in value over time and it's locked in.
Speaker 2 (07:05):
Still mortgage first, if you've got a mortgage.
Speaker 3 (07:07):
If your mortgage first, yeap, and then then the other
option would obviously be invested. So again it comes down
to your personal situation and actually the future.
Speaker 2 (07:14):
Value of an investment of ten thousand dollars over the
course of time, if you invest it really well, actually
could be a better better than the mortgage.
Speaker 3 (07:22):
It really depends on the type of investor. Let's call
you to the average balanced investor, your mortgage is probably
reasonably competitive. If you're quite an aggressive investor, you may
do better investing than on your mortgage.
Speaker 2 (07:34):
But over the course of if you have a long time,
if you've if you're comparing with a twenty mortgage, let's
say twenty years, an aggressive fund will do you quite well.
Speaker 3 (07:43):
Probably well because what you're comparing as you're saying, okay,
what's the average interest rate? So let's say it works
out five percent over twenty years, and then you're comparing
it with the after tax return of your investment. All right,
So if you're in an aggressive fund, you might get
eight percent, but less tax, it might be five and
a half. So you know, there's not a lot in it,
because with your investment, it's you know, some of its tax,
(08:03):
not all of it, depending on what you invest in
is text. So that's really what the comparison is.
Speaker 2 (08:09):
Okay, So there we go. So either stick it on
your mortgage or you invested aggressively for twenty years. It's
time time, all right? Should we wrap it up? That
play the theme music? We'll just do music. But actually
it's not that complex an answer in a way, is it?
Because I think the thing is to not make a
decisions the worst thing. And that's a little bit personal experience.
Because I've got a little bit of money left over
(08:30):
on my what's it called that money app that you use.
It's got a green logo. It's like carrying cash with
you around overseas. Why is it that's the one I've
got a little bit of money left and why is
it's been sitting there a few months?
Speaker 3 (08:43):
Would you like some financial advice to them?
Speaker 2 (08:45):
Yeah? Are you going to give?
Speaker 4 (08:46):
Actually?
Speaker 2 (08:46):
Funny thing is you know why I left it there
because it's a euro and I thought that actually our
value of the dollar would drop a bit and it
would be worth more just by leaving it in there
for a few months, which it has done. But now
I think it's time to literally indecision. It's just still
sitting here.
Speaker 3 (09:02):
But I've had clients in the past who have gone on,
I'm waiting to bet against the New Zealand dollar, you know,
to increase were increasing value before I put my money back,
and then five ten years down the track, they've still
got their money overseas, right, and then then their money's
been sitting in a bank overseas not earning any interest.
Speaker 2 (09:17):
So I should probably rip it out and at least
stick it on the rabo or something, yeah, or you know,
off them. They see, if I stick it off the mortgage,
you know, it's play money. It's sitting there. So maybe
it's not that straightforward. We want your cause, what do
you do when you get a bit of spare cash
and look at the decision to take a holiday is
a personal decision, and sometimes you know what, I think
I've said this to you before, Lisa, that there is
(09:39):
a school of thought for people who are pessimistic about savings.
They think, well, I'd rather I'd rather not have as
much money to retire, and so I can look back
on a life that I've lived rather than have a
truckload of money and looking back on a life where
it's too late.
Speaker 4 (09:51):
Now.
Speaker 3 (09:51):
Yeah, I mean, of course it's a trait.
Speaker 2 (09:53):
I mean that's personal.
Speaker 3 (09:54):
Yeah, And there's a trade off too, because you can
either do too much of one or too much of
the other. You don't want to get to your retirement
age either and have no retirement savings, So you know,
you've got to find a little bit of a balance
in there somewhere.
Speaker 2 (10:05):
Okay, I probably put it off the mortgage. Now the
other one is also do you have cash?
Speaker 3 (10:10):
Do I have cash?
Speaker 2 (10:11):
Do you have a bit of a you know, your
under your pillow or something. You've got a you know,
twenty bucks or something just in case? Do you have
a store of cash? Do you think people should keep
a store of you.
Speaker 3 (10:21):
Talking about a couple hundred dollars, I'm talking.
Speaker 2 (10:23):
About hard currency whatever whatever, where it's fifty bucks or
one thousand dollars.
Speaker 3 (10:28):
Well, I've actually got a little bit of cash floating
around on my wallet.
Speaker 2 (10:30):
Are in a drawer? I don't mean you have You
don't have to answer that. It sounded very nosy, didn't it.
Speaker 3 (10:35):
And I was just kind of get to understand what
you can really what your question was. But I mean
I've always got cash and bank accounts basically.
Speaker 2 (10:42):
Now what I mean is cash. Cash is no longer
king member. There will used to be a time where
people would carry around cash because mostly that's a lot
of big transactions, and wasn't the early days of e
F poss and all that. And no, generally, by accident
might have some money on me, but generally it's just
credit cards. But of course sometimes you can have I
don't know whether power cuts or whatever can affect accessibility
(11:05):
to do things. But do you think cash is actually
matters anymore? Does it matter to have cash? What's your
take on it?
Speaker 3 (11:11):
I mean, I couldn't even tell you the last time
I used cash in New Zealand really, to be honest,
I couldn't tell you an example. It's pretty much all
tap and interesting. I've just come out from Bali.
Speaker 2 (11:20):
And on tap or tap and go, because when.
Speaker 3 (11:23):
You're in Bali they call it tap, do they? Yeah,
So that's why I've got into you side. They say
would you like to tap? And I'm like, yeah, we'll tap.
So that's what the that's what they call it. And
pretty much and part apart from when if you're in
like you know, a little massage in a backstreets sort
of thing, pretty much everything is tap over there, you know,
like as opposed to the biggest spars, it's a lot
of it's tap. But when we're in Europe earlier in
the year, they were going, well, if you pay cash,
(11:45):
we'll give you a ten or twenty percent discount.
Speaker 2 (11:47):
I didn't even understand. What if you pay cash, we'll
give you a you mean actually hard currency that hard
current use. Sometimes when people say cash, then they don't
actually mean you know, how when our businesses pay cash.
What they mean is you pay for it all up
up front. Yeah, and we'll haggle. But cash to me
is cash. It's it's hard.
Speaker 3 (12:05):
But no, I don't know whether people do that that
much in New Zealand. Now, I really don't know, mind you. Interestingly,
I had a conversation with an accountant recently. He owns
a couple of accountantcing firms, and I said to him,
you know how much sort of money as cash floats
around in the black economy, you know, people doing deals
with cash and not paying tax. He said, unbelievable amount
of money. So maybe rather than worrying about increasing the
(12:26):
text right, maybe we need to be a bit more
energy putting and trying to hunt down the you know,
the black economy and the cash that's tax is not
being paid on. It was an interesting conversation.
Speaker 2 (12:35):
Actually, I've just realized that when we had a holiday
in Europe, I don't know what a euro looks like
because I never used cash at all, so I kind of,
you know, we went. I don't think maybe I'm lying,
but I'm pretty sure I don't think I know what
a euro looks like. Yeah, I don't think what it
sounds like quite. That seems like a guilty confession, it's like,
(12:57):
but that's the way.
Speaker 3 (12:58):
That it is really all around the world. Now, you
know that people aren't necessarily using cash, although I did
find and we're increasing turkey, that you did get quite
significant discounts paying cash. But that's because they're not declaring it.
Speaker 2 (13:08):
Oh okay, right, well they're not when you're a tourist.
If you're complicit in that stuff, who cares better? Deal?
Speaker 1 (13:14):
Well?
Speaker 3 (13:14):
Of course. And it's inflation too, right, because that's like
talking restinance. Is that crazy inflation? Currency inflation in recent times?
Speaker 2 (13:22):
Okay, well, we want to hear you from you. One
is on the where are you putting your spear cash?
We don't mean you spare a hard currency, We're just
using that as an expression, where are you putting your
extra mauler? If money comes in, you find you've got
some a bill you didn't have to pay, or you've
had a bit of a bonus, what do you do
with it? And how do you make the decision? Do
you stick it in an investment key we save it,
(13:43):
or do you stick it off the mortgage because you know,
the discussion around the holiday is one thing, but also
how much hard currency do you keep? Is it worth
having any of it? Are you always thinking, well, you
never know when you're going to need it for whatever.
When the world ends, I just might need some hard currency.
Probably not the biggest problem you're going to have, of course.
It's twenty past five, eight hundred and eighty ten eighty
(14:05):
and my guest is Lisa Dudson, financial author and advisor.
She's in with in the studio with me right now.
Give us a call, love to hear from your twenty
and a half past five. Are you worried about funding
a comfortable retirement, Well, you're not alone. The cost of
living crisis is hitting home for a lot of people,
so it's no surprise people are looking for ways to
make the most of their savings and get a little
(14:25):
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interesting solution is to invest in an income fund like
the Harbor Income Fund. It works by holding a mix
of interest paying securities and shares that have been designed
to generate a steady and sustainable income no matter in
the market. The Harbor Income Fund is actively managed and
currently it pays a distribution of five point twenty five
(14:48):
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monthly installments. To find out more about Harbor's income fund,
just head to their website or speak with your financial advisor.
This is not intended as personalized advice. The Product Disclosure
Statement for Harbor Investment Funds issued by Harbor Asset Management
is available at Harbor Asset dot co dot Nz.
Speaker 1 (15:12):
Tim Beverage on the weekend Connective calls.
Speaker 2 (15:18):
This news talks it b What do you do with
your extra cash? Do you stick it in your mortgage?
What do you invested somewhere? And how do you make
that decision? Or are you like me? You've got a
bit of extra money sitting on your wives card and
it's nine months later, it's still sitting there. Naughty, naughty me,
and it's more than one hundred bucks. Because let's face off,
what one hundred bucks? Who cares? There? We go, right,
here we go. Here's some texts, lots of text leasa
(15:40):
actually hi, Hi as a couple. When should we be
It's almost like a brag. When should we be selling
our mortgage free rental? We're fifty six we have no
other large savings to speak of, expecting to be mortgage
free home in three years, both still working, says Sean.
That's nonain not specific financial advice, by the way, Sean,
(16:03):
we're just going to discuss. This is theme for anyone
in your situation.
Speaker 3 (16:07):
Yeah, I mean in those sort of situations, I always
look at it and go, what is you know, what's
your current situation? Obviously there's a little bit and overview
that what are you actually trying and achieve when you're
looking at retiring? How much income do you think you
might need at retirement? Is selling your rental property enough
to give you the income that you want? What would
you do to create an income once you sold your
(16:27):
rental property. You know, there's all those questions that need
to be worked out. So you really need to go
and see someone and get some financial advice and just
work through because.
Speaker 2 (16:36):
There would be some I could imagine who would be saying, man,
you're going to be mortgage free in three years on
your own home and you've got a mortgage free rental.
I'm assuming that we're talking you know that those are
two different properties. We're talking about the ways to put
that text there would be many people to be like,
you've got so much equity, you should be doing something
with that equity. Yeah, without you know, making things too hard.
(16:58):
But he's got a lot of room to move, hasn't he.
Speaker 3 (17:01):
Well, that's right, And so that's the sort of thing.
You know, how much income do you want in retirement?
It might be that your rental property is in a
small town and it's worth four hundred thousand dollars, or
it might be worth two million dollars, right, so you
know what's the value of that rental property and then
looking at it and saying, well, what's the income that
you achieve from that rental property? Because that's someone of
the sometimes the challenge with property. I love property for
(17:23):
a wealth growing strategy and a wealth accumulation strategy, but
sometimes when you look at it when you're in retirement
and you look at the income ratio that you get
by the time you get your rent and you pay
all of your costs and then you pay your tax,
when you look at your actual after tax income, it's actually,
know quite low. Is that enough for what you're actually
wanting in your retirement?
Speaker 2 (17:42):
And I'm guessing if you're fifty six, unless you're wanting
to retire early, then that property, I mean property still
is going to go up in value at what rate?
Is a bit of a that's up for a bit
of conjecture at the moment, isn't it?
Speaker 3 (17:55):
Of course?
Speaker 2 (17:55):
But why would you get rid of if you just
want to have the cash in the bank. I wouldn't
have thought that would be the right idea to sell it.
You'd be better to have it in that investment, which
is possibly is a capital gain still going to you know, yeah,
that's right.
Speaker 3 (18:07):
And it's also looking at I mean, maybe it's a
property that needs a lot of maintenance. It's I mean,
you know what sort of property is it? You know,
what does the future look like for that property? Is
that property going to give you the best growth in
the next or you know, next five to ten years.
Would you be better off selling and putting into a
managed fund. Would you be better off leveraging against it
and buying an additional property? How many more years are
(18:28):
you planning on working between, you know, fifty six, planning
on working to sixty five? You know, so there's quite
a lot of information that you kind of need to
put in there to really understand what the way forward
is but you know, well done, that's you know, that's
a great position to be in.
Speaker 2 (18:41):
Yeah, good on you. Mortgage free, older investor, can you
please ask Lisa if you have if you have more
to invest, say one to two million, how she would
invest it? What percentage would she invest overseas?
Speaker 5 (18:56):
Well?
Speaker 2 (18:57):
This is again I guess this is where we're going
to come up with the same response in a way
that it depends on context. But on the face of it,
mortgage free and you've got one to two million, that's
bit of a range. What is it one or two anyway,
you've got some money.
Speaker 3 (19:12):
Yeah, And I think the way that if an investment
advisor would look at this is they'd say, okay, well,
what's your you know, how old are you? What's your
risk profile? Like are you a more conceivdive investor? Are
you a more aggressive investor? If you were a more
aggressive investor, you would have a higher percentage of that
portfolio invested overseas. And it might be something like, you know,
(19:34):
I don't know, seventy or eighty percent invested overseas, because
we've got to remember that New Zealand is only point
two percent of the world stock market. Like we're tiny here,
so you would have a significant amount invested overseas because again,
you know, a lot bigger place.
Speaker 2 (19:48):
For those who are listening here are thinking, you know
who's major investments simply just bung it in key we
savor and saying oh the balance or aggressive or whatever.
What How do you go out and investing overseas? As
you know that expression goes, do you do it through
a local broker or do you you actually while that,
would your suggestion be on researching that?
Speaker 4 (20:09):
Yeah?
Speaker 3 (20:09):
I think if you sort of probably under fifty thousand dollars,
you want to just go and to find a good
sort of balance fund or growth fund through one of
the managed fund providers. But if you're talking one to
two million dollars, I think you know you really need
to be going and finding a suitably qualified investment advisor
and sitting down and talking to them about it. You know,
(20:30):
there's a lot of research, you know, because I actually
own a company that does fundsunder advice, and you would
not believe the research and the time that goes into
figuring out how we invest our clients' money. So it's
not a five minute exercise. So I really think that
it's important to go and get some professional advice, certainly
at that level of money.
Speaker 2 (20:50):
Do you find that New Zealanders still have this idea
of that I'm going to look at investing overseas and
they think that the DIY sort of thing is still
the prevalent because that's our that's our mentality. Because we've
had a guest from Concilium, Ben Brinkerhoff, who who explained
to us. He said that the amount of research and
the number of people who are working in analyzing markets
(21:11):
constantly will always be ahead of you, unless you happen
to make a lucky gamblers. Basically. I don't want to
paraphrase them too much because I don't want to misquote them,
but his point was you'll never be ahead of the market.
You'll you'll just be dumb lucky.
Speaker 3 (21:25):
Yeah, And I would think for the vast majority of
cases that that is correct. I mean, you might, you know,
there are some people that that's what they do, right,
that's their hobby, and you know, you know they've got
a bent towards it and a strong interest in it.
They could do to it. But I think the average
investor will be hard pressed to beat a good quality
investment advisor. So you know, that's I'd always recommend that
(21:47):
you go and talk to someone.
Speaker 2 (21:48):
But that's why the problem with the water cooler talks
always a bit of you know, when somebody says, I, yes,
you know, when you see the highlights like in video,
had that you know fifteen hundred percent in some I
don't know what the period of time was, but it
wasn't very much. And look, if you had shoved everything
you had into a video, you might have you might
be dancing a jig. But if you had, there'll be
people who've stuck all their money in some other stock
(22:11):
that's and lost everything.
Speaker 3 (22:12):
Oh. Look, you know, if you're super lucky and get
your timing right, you might do okay. But I read
an article years ago, I remember when I was overseas,
and it was talking about that ninety percent of day
traders actually lose money. Right, So basically, these are people
are professionally in their trading on a day to day basis,
and they're not beating you know, a good fund manager,
(22:34):
investment advisor. So it's not as easy as one thinks.
So you know, if you're talking about a small amount
of money, you know, I think it's.
Speaker 2 (22:41):
Also doing your doing your research by headline. And another
one triggered me today. Actually I don't mind saying, but
there was an article in the in the heraldline Sunday
talking about how this person had made an elderly person
had made a lot of money. But it is the
property had sold at five hundred million dollars over the
reserve or something. And this was the headline, and the
(23:01):
headline was saying what this means that, well, well, the
property market's getting off the ground and rolling now. And
I must say, I feel like, shut up. That is
not what's happening. And there's headlines distort things so much
and yet you know.
Speaker 3 (23:15):
Well it's literally but that's what you know.
Speaker 2 (23:17):
But yeah, it's the new Yeah, here we are, Yes,
pot kettle black.
Speaker 3 (23:25):
Yeah, that's exactly what I was thinking.
Speaker 2 (23:27):
But no, but there was some sort of point around that,
there wasn't there That that the headlines. That's why I
think we sometimes surge from one extreme to the other.
We're all like, oh, the market's screwed, it's not doing anything,
and all of a sudden, all the market's are wave.
You don't get into your you know, you.
Speaker 3 (23:43):
Know, hey, look you know things are improving right there.
You know, the ocr coming down is certainly making a
difference of things. Markets have been pretty strong in the
last twelve months. We all know that term deposits are
you know, are heading south and will continue to to
head south. But yeah, you do have to be careful
of headlines and also remember that in an article that
you're reading in a couple of minutes, they have summarized
(24:04):
things significantly to put it into an article, so you
often lose a lot of detail and a lot of context.
Speaker 2 (24:11):
And they also probably haven't put a press release about
the property that didn't do so well. Yeah, guess what
that's exciting. Way we had to self under the reserve
put a press release out now not going to happen,
is it right? Sorry just to put my cynical shoes
on for a moment, But it's actually one of my
sort of kind of pet peeves that if you I'm
digressing now, but for instance, if a financial writer is
(24:35):
writing about particular shares and markets, they would have to
generally declare their interest in that market. And yet anyone
who writes about property nobody tell you never really know
if someone owns three or one or five properties, or
if they're looking to get into the market as the
first time buy, because everyone's got the little their little bias.
And I sometimes think I wonder whether if anyone who
writes on property should actually tell us what their stake is.
Speaker 3 (24:58):
Yeah, and I think and that brings up a point
about being key for what you read, right, and thinking
about where where this information that you're gettinghere? Does it
come from a lot of people over the water, call
in the kitchen, over getting coffee, Like a lot of
people have a lot of opinions about things, but their
opinions are often based on their own experience, not actually
a lot of research.
Speaker 2 (25:17):
Okay, let's read some more texts. Good afternoon. By the way,
you can give us a call. You'll jump the que
of the text if you're looking to get some you know,
have a bit of a banter with Lisa about and
get a steer on some thoughts you might not have
had about what to do with your money. Good afternoon.
I have been looking at a split mortgage. For example,
if I had a mortgage of three hundred K and
(25:38):
put two hundred and fifty on a thirty year term
and the remaining fifty on a twenty year term or less,
does this pay off the total loan faster than if
I had the hole on thirty three and count thirty years. Well,
of course it would pay it off faster. Also, debanks
provide these kind of mortgages. Can you split your mortgage
term wise?
Speaker 3 (25:59):
That's right, yeah, but I don't know whether it actually
I think unlikely that that's but I don't think they
would split the term of your mortgage, but I wouldn't
make any difference. So if you're talking about between what
would you say, twenty for twenty and thirty years.
Speaker 2 (26:18):
If you're paying part of it off on twenty years
and part of it off on.
Speaker 3 (26:21):
Thirty years, well if you paid the whole lot over
twenty five years, you might be in a similar place. Right,
So I think that I think a better way of
looking at would be is just looking at your personal
financial situation and going, how can I pay off my
mortgage as fast as I possibly can? That's I think
that's the best way of looking at it. And whether
that's fifteen years, twenty years, twenty years, or twenty five
(26:42):
years or thirty years, you still want to do your
best to pay it off as fast as possible, because
as soon as you pay it off, the lower the
interest that you pay.
Speaker 2 (26:49):
Yeah, actually the cumulative amount of money, say, if you
were to take another even just three years, you know,
if you save three years on your mortgage, huge, It's
quite colossal, isn't it.
Speaker 5 (27:00):
Yeah.
Speaker 3 (27:01):
It's a massing.
Speaker 2 (27:01):
Sobering too, actually, because you get people who are making
that judgment call or the day they think, oh, well,
I could put that on my mortgage, or I could
do something fun with it. And I don't think people
really realize I'm probably one of them. I've got a suspicion.
Speaker 3 (27:14):
Yeah, I mean, I don't have a calculator in front
of me to work it out. But you know, if
you knocked your thirty mortgage down to let's say twenty years,
and it was a five hundred thousand dollars mortgage, you
might be saving I don't know, maybe one hundred and
fifty thousand dollars.
Speaker 5 (27:27):
I don't know.
Speaker 3 (27:27):
That's a bit of a guest, but like it's significant.
It's not a few thousand.
Speaker 2 (27:31):
Yeah, we'll take some more calls than just one. By
the way, so where with Lisa Dudson, we actually kicked off.
We have digressed a little bit and that's on me.
My apologies, but what do you do with extra cash
when you find you've got a bit of extra money
that you weren't expecting. Okay, it's not millions, but it
might be ten, twenty, thirty thousand. Where do you put it?
(27:51):
And also how much hard currency do you do you
bother to keep any You can give us a call
on that if you like. Eight hundred and eighty ten
and eighty. We've got truckloads of texts to get to,
which we will do, but you can jump the que
with a call on the number I've just given you,
which I'm not going to say again because I'll run
out of bread. It's a twenty three minutes to six. Yes,
(28:22):
we're restricting my aberdt only one song a weekend, but
I do love a little bit of abber Welcome back.
It's a smart money. Lisa Dudson as my guest, taking
your cause, and let's go to Margaret. Hi.
Speaker 4 (28:35):
Hi there. I'm in the old age group and I
have been advised to keep I'm in my eighties and
keep cash on hand in case of sickness so that
somebody else can do my shopping and I don't have
to give them my f post card.
Speaker 3 (28:52):
Oh that's I mean that's a good idea. I mean
I can't really fault that. I mean, maybe you can
look at a higher interest on call account and so
you're maximizing, you know what the roturn you get out
of your cash. But that may not even initial for you.
It might just be about making life easy.
Speaker 4 (29:08):
I'm only talking about two or three hundred that I
keep on hand, all right, Well, that's at home and
an emergency. I both in case I'm sick and somebody
doesn't put a shopping for me.
Speaker 3 (29:22):
Oh that sounds like a great idea, well done.
Speaker 4 (29:24):
Yeah, yeah, there was some advice. That was some advice
that was given, So I thought that would sound a
pretty pretty good idea and perhaps how the people can
think about that as well.
Speaker 2 (29:34):
Yeah, I look, Margaret, ut with you. I think it
doesn't hurt to have two three hundred bucks in your
soft draw, you know, or wherever I have it in
my soft draw. I'm not going to ask you where
you put yours because that would be a bit personal.
Let's carry on with the calls. But thanks for your
called Margaret. Good on your Deborah High.
Speaker 5 (29:50):
Hi, how are you good?
Speaker 2 (29:52):
Thanks?
Speaker 5 (29:53):
Okay, it's good. Listen, I just slipped the car radio
on and heard the last one minute of your conversation
about paying off your mortgage quickly. And so I don't
know if it's of any benefit to anyone, but we
have a story that my husband and I managed, through
some good advice to pay off our mortgage in four
(30:15):
four and a half years.
Speaker 3 (30:17):
Wow, that's pretty impressive.
Speaker 2 (30:18):
You must have gone hard on that that.
Speaker 5 (30:21):
I listen all credit to the book that we picked up.
This was not our idea, but it was our genuine experience.
I worked in a bookshop. I just earned the basic
retail wage. My husband was a trader and had an
office wage bit more money than me, but we certainly
(30:41):
went rich. We bought our house for two hundred and
thirty six thousand in Sandringham and around ninety ninety five, so,
to be fair, houses were a different kind of price
than they are now. Working in the bookshop, I picked
up a book by an Australian woman. I can't for
(31:05):
life only remember your name.
Speaker 2 (31:06):
Don't worry about the book. What was the advice?
Speaker 5 (31:09):
Okay, so basically, in a nutshell, this is what she said.
She said, sit down and work ount your income. Basically,
go through all your bills for three months and get
a rough idea of what it costs you to live,
and then get an idea of what your disposable income.
(31:29):
On top of that is, take a small amount of
money that is going to be your spending money, and then.
Speaker 4 (31:38):
Put all of your disposable.
Speaker 5 (31:40):
Income into your mortgage. Now to do and that will
over and above your regular payments, you're making lump some
deposits into your mortgage every time you get paid. Now
to do that. To do that, you needed to structure
your mortgage in a particular way. And the way we
(32:02):
did it was that we looked at, Okay, this is
our rough disposable income for the year, so we're going
to put that amount onto a floating mortgage.
Speaker 3 (32:14):
Yes, that's right.
Speaker 5 (32:16):
So that meant that we could chunk that amount down
pay after every two weeks without any kind of penalty.
Speaker 2 (32:24):
So you just did it as aggressively as you could afford. Really,
so you didn't have a set amount you're aiming for.
You just thought, look, let's stick everything on the floating
mortgage and just try and try and live a.
Speaker 5 (32:33):
Strong not everything. Not everything, No, that's not correct. So
we looked at, say, for example, we thought, okay, at
our discretionary income after we've paid all our living expenses
is forty thousand dollars for the year. So we just
put that forty thousand dollars amount onto floating. Now, the
(32:57):
rest of it we broke into two We broke a
part of it another forty thousand into one books.
Speaker 3 (33:05):
Yeah, and I think the sixth.
Speaker 5 (33:07):
Light was less, and then the remainder we put into
two years fix because that was less again. So by
the time the end of the year came around, that
forty thousand had been chunked down. The one year six
came up for a new we put that onto floating. Yeah,
(33:28):
and that's how we did it. We just leaped frog
those amount.
Speaker 3 (33:33):
I was going to say, I think I pretty much
described the same philosophy and most of my books. But look,
I think now that's great because what you've done is
you've gone through a budgeting process and then you've said, okay, well,
what can we afford to pay off in our mortgage?
You know, all the surplus we have over and above
what our needs are, what we need to live is
that you're putting into your mortgage. And I think the
other key point there too is you've actually sat down
(33:55):
and worked out your numbers, and you've put a lot
of focus and discipline into paying off your mortgage. And
I've wor with a number of people over the years
who have had a similar result as well. By putting
that focus and discipline to your mortgage. It's quite remarkable
what you can achieve. So well done.
Speaker 2 (34:09):
Yeah, on, Actually there are mortgage I mean, there are
calculators out there, but there are actually websites, having googled it,
a mortgage repayment calculator, money saved or I can't mean
what I've stuck into it, and there are actually sites
where it says how much are you paying, what's your term?
How much extra do you want to pay? How quick
more quickly? But this is how much you'll save.
Speaker 3 (34:27):
Yeah, well that's right. But I often sit down with
people and co, Okay, well you know we need a
main bank account over here for a day to day,
we need a bit of an emergency account when then
maybe a little bit free extra for holiday and then
put that structure around how you do your budgeting and
then figure out what's left after that, and then that's
what you know, you focus on putting ont your mortgage.
But then you've also got to structure your mortgage in
(34:48):
such a way that you can make those additional payments.
Speaker 2 (34:51):
A quick question here, Hi, guys, my husband and I
mortgage free. Can we use as collateral to get another mortgage? Again,
it'll depend on I guess you're with you earning income
and things.
Speaker 3 (35:03):
So I'm assuming what you're asking is, can you usual
freehold home to borrow against to buy another property. So
the answer is yes, depending on the value of the
property that you're purchasing and the income.
Speaker 2 (35:13):
That you have. Yeah, and you so if you have
no income, if you're retired, it's probably a bit of
a tricky.
Speaker 3 (35:18):
Great if you've got no income, I mean, the banks,
particularly since the Responsible Leaning Code came in a few
years ago, there's a lot more focus on income. So yeah, again,
just really depends on your personal circumstances.
Speaker 2 (35:30):
Another one, Hi, guys, my husband, age sixty one, is
just retired. I'm sixty three. We live a fairly quiet life,
mortgage free home that is worth quite a lot. Quite
a lot. I love language because quite a lot for
one person could be seven hundred thousand, and for another
it might be five mil. Yeah, anyway, we thought of
downsizing to release money but we love our home and location.
(35:51):
We plan to live off our savings until my super
and then his kicks in, plus our key we save
as mine as tiny. My husband reckons we can live
on about fifty k a year, which seems very mean.
Do you think this amount is doable? Maybe? Thanks Helen.
Speaker 3 (36:06):
Oh, look, I mean I think anything's doable. But it
comes down to the you know, the life that you want.
Right If you're happy living on fifty thousand dollars a year,
then great, But.
Speaker 2 (36:16):
You know that's some that's luxury.
Speaker 3 (36:18):
Yeah, yeah, but that's you know, it's a pretty tight
amount of money. So it's just personal choices. You could
fast track spending some of your qv savor. You could
look at home equity release where you if you've got
quite a you know, quite an expensive home, you could
release a little bit of equity out of your home
on a regular basis. That means that down the track,
(36:41):
when you pass away and your estate is washed up,
then you have a loan that you have to pay back.
But that could be a way to release a little
bit of extra cash to top up. So you're fifty
thousand dollars because you don't want to be in a
situation where you feel like you're living on on the
smell of an order rag and not doing the things
that you've worked hard all your life to be able
to do, just because you're holding onto this massive, big home.
Speaker 2 (37:03):
Here we go at high So the Christich earthquake. I've
always kept a couple of hundred in small denominations and
small denominations because you've all the tenth persons front up
at a shop with one hundred dollar note, you're not
going to get any change. Yeah, okay, that's probably not
about well, I mean, it's all fairly extreme sort of examples,
I guess. But somebody thinks that it was money made
(37:26):
simple by Noel Whittaker, was what the lady was talking about.
But look, honestly, most financial books will have this.
Speaker 3 (37:32):
Notion on those lines.
Speaker 2 (37:33):
Yet, Yeah, how do you find a good investment advisor?
Given there will be people in the field with a
range of experience, abilities and dedication.
Speaker 3 (37:42):
What I would do? I mean, you could ask friends
and family. You could ask if you've got any professional advisors.
You could google and go and look and maybe meet
with three. Ask them how they get paid, how they
get renumerated. Most financial advisors work on.
Speaker 2 (37:58):
A well, they have relations with various funds. Sometimes that's right.
Speaker 3 (38:02):
I mean, certainly our company, all our advisors are based
on salary, which is not necessarily that common in the industry.
But I think it's also really important to have a
really good relationship with your financial advisor. So I would
definitely go and visit a couple and and ask lots
of questions about how they how they work, how they
get renumerated, and make sure that you can connect with them.
Speaker 2 (38:22):
Okay, we're going to come back with a couple. We'll
have a little bit of time. But by the way,
the obvious one is also how people How do people
contact Lisa Dudson.
Speaker 3 (38:31):
Oh, dub dub dub dot Acumen, dot co dot NZ.
Speaker 2 (38:33):
There you go, right, we'll be back in just to
tickets nine minutes to six. Yes, News Talks, Tim Beverage
is the Smart Money with Lisa Dudson. We're going to
take one more call on John. We've got two minutes,
so go yep.
Speaker 4 (38:49):
Okay, mortgage was Flow Team.
Speaker 2 (38:56):
Oh John, Unfortunately your phone line is terrible, so we'll
have to try you again another time. But we couldn't
hear and with time being short, I'm sorry we'd just
have to leave it there. But yeah, so can we
sign off with a little bit of a thought for
people I guess is that if you do have some
extra cash, if it ends up being a truckload of cash,
we need to get a bit of good advice. But yeah, I.
Speaker 3 (39:21):
Think it's just about sitting back and going, all right,
I've got some extra cash, what are my options and
think through the pros and cons of those options in
relation to how it actually works out for you, and
then make a decision.
Speaker 2 (39:33):
And probably, as you say, information is king, isn't it.
But if you're looking at paying something off your mortgage,
it is worth checking out what that extra ten thousand
is going to be costing you. If you don't pay
it off, you more BG and.
Speaker 3 (39:45):
I like to keep things simple. So even if you've
got a she to paper for paper and you write
down what you three four options are, write the pros
and cons down, you know, that's a really good loarning exercise.
It helps you really crystallize what your options are and
how they play out for you. But I think you know,
go through that exercise and make a decision.
Speaker 2 (40:02):
Okay, And if people want to catch up with the
your work at Acumen dot co dot in zen. That's correct,
and you've got a team of people this as well.
But yeah, so Acumen dot in zen. Thank you, Hey,
thanks yous fun. Thanks Lisa. What's your latest book? By
the way, what was the most recent one?
Speaker 3 (40:18):
The one was Good with Money? But that was I god, Curry,
it was last year? When was it most last year?
Speaker 2 (40:25):
If you got another one coming out? So last year,
I've got another one coming out. I mean, what is it?
Martin Ores he's ritten in book number twenty four.
Speaker 3 (40:34):
So I love Martin.
Speaker 2 (40:34):
He's great, lovely man. He's off climbing mountains.
Speaker 3 (40:38):
Yeah, and he's a big climber.
Speaker 2 (40:39):
Yeah, so you know, no such thing as a sort
of slow retirement.
Speaker 3 (40:42):
And he's early semities. Now you know, he's a He's
a great guy.
Speaker 2 (40:46):
I said, are you doing free solo? Who goes non
no ropes? Anyway, Hey, thanks Lisa. We I'll beat the
same time next weekend. I'm actually taking the week off,
so if you don't hear me for a few days,
then what a relief for you. Anyway, Thanks my producer
Tyra Roberts, stick around for for or I was gonna
(41:07):
give the wrong Sunday six I was gonna. I've got
help form for naming the show in the wrong way.
Sunday six is next Catch Your Son.
Speaker 1 (41:26):
For more from the weekend collective, listen live to news
Talks It'd be weekends from three pm, or follow the
podcast on iHeartRadio
You're listening to the Weekend Collective podcast from News Talks,
i'd be.
Speaker 2 (00:49):
Hey, welcome to Welcome to the Weekend Collective. If you
have just joined us, you're late. We started a couple
of hours ago. Where have you been? But no, just kidding,
But if you have just joined us, then you can
catch up on the previous hours on our Weekend Collective podcast.
Go to iHeartRadio or wherever podcasts. We can go to
the News Talk CP website, and we also do post
our interviews as soon as we can after they've happened.
(01:11):
So I would actually recommend and particularly go and have
listened to our politics interviews, one with Judith Collins about
the sinking of the HGMS hmn z S Manawan Nui,
but also an illuminating interview with Matthew Horncastle from Williams Corporation.
I've got that right, yes, I have just around the
(01:32):
underwriting the government's planning to do with property developments, and
he spoke against that, even though it's kind of cynically
in his interest to be in favor of it, and
I thought it's quite an illuminating discussion with Matthew, so
go and check that out. But right, now it is,
and my guest is looking at me, going we're at this.
It's interesting because she has an interestant property as well.
There's money because this is smart money. And my guest
(01:54):
is Lisa Dodson. Dudson, she's a financial author, a bunch
of bunch of books and you know she's into she's
into financial advisor as well. Yes, yes, and hello, hello,
So I got there eventually, didn't we And how are you?
Speaker 3 (02:11):
I'm very good?
Speaker 2 (02:11):
Thank you excellent you picture, your ears did well? Your face,
tod per cup. When you heard that, I mentioned Matthew will.
Speaker 3 (02:18):
Yehow I'm definitely going to go and have a listen
to his interview because I think it'll be very interesting.
Speaker 2 (02:21):
Yeah, because he basically just started saying, look, I'm a
big fan of this government. I think the's a whole
lot of things I'm doing really well, but this isn't
one of them, and why, And he talked about just
enabling the free market to look after things. And he
made the case so well that we just said tex
stuff to text come in saying of surprised to hear
him say that, and I agree with him and he's
changed my mind. It was he made a good case.
Speaker 3 (02:40):
It was very intert I can imagine, you know, he's
a you know, he's a very very smart operator, you know,
very quite well respected in his in his field, which
is which is great. And let's face it, I think
generally speaking, the free market does a better job than
when the government tinkers too much.
Speaker 2 (02:56):
Just on a communications point of view, I think it's
an example of like, you know, if you communicate honestly
about something, it's like when Antonia Watson and for the
A and said said, what her honest thoughts we're on CGT.
I don't think being anything but good for your organization.
When CEOs and business leaders, well here's what I reckon,
regardless of what the business wants, and they just speak candidly,
unless you're proposing something horrendous. You know, just a bit
(03:20):
of candor and honesty. It's refreshing, isn't it.
Speaker 3 (03:22):
Well, that's right, and all of these issues are also
you know, they're incredibly complex, and there's so many stings
in the tails sometimes and there's so many flow on
effects from if pretty much any decision, and it's really
nice when someone can talk openly and talk you through
their logic and why they think what they think because
that helps you learn.
Speaker 2 (03:39):
Right, Yeah, exactly. Now we're going to talk about of course,
this is smart money, So we are going to talk
about money and a couple of things. Just well, to
kick off with something a little bit Well, it's a
question a lot of people would have that what do
you do when you've got a bit of extra cash?
Where should you put it? Because people will come into
(03:59):
money through you might inherit it, you might find you've
got a bit of a bonus at work, you might
find you don't have to tax to pay that you
thought you had to pay for yourself employed And where
where should you actually put that money that you've got
that you weren't expecting? Should you? I mean, of course
it's a personal decision because if it was me, and
I'm still probably a bit fiscally responsible, irresponsible because I
(04:21):
want to have another holiday overseas, I would battle with
that one. But then there's the mortgage, there's the key
we save it. There's whether to invest it, whether it
to shove it in some sort of very boring savings account.
Speaker 3 (04:32):
Extra cash well, I mean it all comes down to context. Right,
So firstly, we're talking ten thousand dollars and we're talking
ten million dollars because okay, well it's quite different, right,
So what does extra cash mean?
Speaker 2 (04:43):
I think it's something I obviously if it's ten million,
that's not a very common scenario, I guess. So let's
pretend I think it's more like the ten grand the
five grand. Yeah, because it's something that happens commonly when
people go I've got a bit of extra money at
the moment, and there'll be people whose instinct is to
save it, and there'd be people who's instinct to do
(05:04):
something else that I would have thought. Sticking at it
in key Wei Saver is well, if you want to
make sure you can't touch it, yeah, yeah, yeah. If
you don't trust yourself and you know you should stick
it somewhere, then shove it in key We Saver. But
if you want to invest it, I would say you
invest it in anything but key We save it, because
at least you've got some discretion as to what you
do with Yeah.
Speaker 3 (05:22):
So I guess again, everything's always about context, right, so,
and your personal circumstances. But if you had ten grand
for arguments sake, then you might say, okay, if you
weren't in a particularly good financial position. You might go
pay off debts or put it into an emergency account
for a future, you know, sort of rainy day issues.
But the first thing you might say, well, maybe i'll
make a lump some payment off your mortgage, so that
(05:43):
actually saves you quite a little bit of money over
the long term.
Speaker 2 (05:46):
Actually, that would be almost versus a savings account. That
would be the no brainer because it's a savings account
you pay tax on on your interest, whereas if you're
paying it off your mortgage, that is like a tax
free earning of interest in a way, because your mortgage
is higher than the interest you're going to get in savings.
Speaker 3 (06:03):
Absolutely, but also too if it's ten grand, and it's
ten grand that you're not paying interest on for let's
say the next fifteen, twenty twenty five years. Right, So
when you think about that, that's quite significant.
Speaker 2 (06:13):
You see what you've mounted. There is a really good
argument for always sticking on the mortgage because unless you
really need that holiday and Fiji or wherever, the if
you actually understood the future value of that money.
Speaker 3 (06:25):
Absolutely so any day of the week, lik, I'll.
Speaker 2 (06:27):
Say you got Oh, it doesn't matter what your mortgage is,
whether it's one hundred thousand or whether it's a million.
If you don't put that ten thousand dollars on your
mortgage and you've got another fifteen, twenty, twenty five thirty
years to go, I would hate to think what the
extra Yeah, it's going to be ware.
Speaker 3 (06:44):
So if you talk talk bang for your back. If
you had a mortgage, that's probably your best return, right
unless you're a high risk and be stuff. So that's
I think that's probably a bit of a no brainer.
If you were a little bit if you were frightened
you were going to spend that money and let's say
blow it on a holiday or some shopping, then key
we save is great from the perspective that it grows
in value over time and it's locked in.
Speaker 2 (07:05):
Still mortgage first, if you've got a mortgage.
Speaker 3 (07:07):
If your mortgage first, yeap, and then then the other
option would obviously be invested. So again it comes down
to your personal situation and actually the future.
Speaker 2 (07:14):
Value of an investment of ten thousand dollars over the
course of time, if you invest it really well, actually
could be a better better than the mortgage.
Speaker 3 (07:22):
It really depends on the type of investor. Let's call
you to the average balanced investor, your mortgage is probably
reasonably competitive. If you're quite an aggressive investor, you may
do better investing than on your mortgage.
Speaker 2 (07:34):
But over the course of if you have a long time,
if you've if you're comparing with a twenty mortgage, let's
say twenty years, an aggressive fund will do you quite well.
Speaker 3 (07:43):
Probably well because what you're comparing as you're saying, okay,
what's the average interest rate? So let's say it works
out five percent over twenty years, and then you're comparing
it with the after tax return of your investment. All right,
So if you're in an aggressive fund, you might get
eight percent, but less tax, it might be five and
a half. So you know, there's not a lot in it,
because with your investment, it's you know, some of its tax,
(08:03):
not all of it, depending on what you invest in
is text. So that's really what the comparison is.
Speaker 2 (08:09):
Okay, So there we go. So either stick it on
your mortgage or you invested aggressively for twenty years. It's
time time, all right? Should we wrap it up? That
play the theme music? We'll just do music. But actually
it's not that complex an answer in a way, is it?
Because I think the thing is to not make a
decisions the worst thing. And that's a little bit personal experience.
Because I've got a little bit of money left over
(08:30):
on my what's it called that money app that you use.
It's got a green logo. It's like carrying cash with
you around overseas. Why is it that's the one I've
got a little bit of money left and why is
it's been sitting there a few months?
Speaker 3 (08:43):
Would you like some financial advice to them?
Speaker 2 (08:45):
Yeah? Are you going to give?
Speaker 4 (08:46):
Actually?
Speaker 2 (08:46):
Funny thing is you know why I left it there
because it's a euro and I thought that actually our
value of the dollar would drop a bit and it
would be worth more just by leaving it in there
for a few months, which it has done. But now
I think it's time to literally indecision. It's just still
sitting here.
Speaker 3 (09:02):
But I've had clients in the past who have gone on,
I'm waiting to bet against the New Zealand dollar, you know,
to increase were increasing value before I put my money back,
and then five ten years down the track, they've still
got their money overseas, right, and then then their money's
been sitting in a bank overseas not earning any interest.
Speaker 2 (09:17):
So I should probably rip it out and at least
stick it on the rabo or something, yeah, or you know,
off them. They see, if I stick it off the mortgage,
you know, it's play money. It's sitting there. So maybe
it's not that straightforward. We want your cause, what do
you do when you get a bit of spare cash
and look at the decision to take a holiday is
a personal decision, and sometimes you know what, I think
I've said this to you before, Lisa, that there is
(09:39):
a school of thought for people who are pessimistic about savings.
They think, well, I'd rather I'd rather not have as
much money to retire, and so I can look back
on a life that I've lived rather than have a
truckload of money and looking back on a life where
it's too late.
Speaker 4 (09:51):
Now.
Speaker 3 (09:51):
Yeah, I mean, of course it's a trait.
Speaker 2 (09:53):
I mean that's personal.
Speaker 3 (09:54):
Yeah, And there's a trade off too, because you can
either do too much of one or too much of
the other. You don't want to get to your retirement
age either and have no retirement savings, So you know,
you've got to find a little bit of a balance
in there somewhere.
Speaker 2 (10:05):
Okay, I probably put it off the mortgage. Now the
other one is also do you have cash?
Speaker 3 (10:10):
Do I have cash?
Speaker 2 (10:11):
Do you have a bit of a you know, your
under your pillow or something. You've got a you know,
twenty bucks or something just in case? Do you have
a store of cash? Do you think people should keep
a store of you.
Speaker 3 (10:21):
Talking about a couple hundred dollars, I'm talking.
Speaker 2 (10:23):
About hard currency whatever whatever, where it's fifty bucks or
one thousand dollars.
Speaker 3 (10:28):
Well, I've actually got a little bit of cash floating
around on my wallet.
Speaker 2 (10:30):
Are in a drawer? I don't mean you have You
don't have to answer that. It sounded very nosy, didn't it.
Speaker 3 (10:35):
And I was just kind of get to understand what
you can really what your question was. But I mean
I've always got cash and bank accounts basically.
Speaker 2 (10:42):
Now what I mean is cash. Cash is no longer
king member. There will used to be a time where
people would carry around cash because mostly that's a lot
of big transactions, and wasn't the early days of e
F poss and all that. And no, generally, by accident
might have some money on me, but generally it's just
credit cards. But of course sometimes you can have I
don't know whether power cuts or whatever can affect accessibility
(11:05):
to do things. But do you think cash is actually
matters anymore? Does it matter to have cash? What's your
take on it?
Speaker 3 (11:11):
I mean, I couldn't even tell you the last time
I used cash in New Zealand really, to be honest,
I couldn't tell you an example. It's pretty much all
tap and interesting. I've just come out from Bali.
Speaker 2 (11:20):
And on tap or tap and go, because when.
Speaker 3 (11:23):
You're in Bali they call it tap, do they? Yeah,
So that's why I've got into you side. They say
would you like to tap? And I'm like, yeah, we'll tap.
So that's what the that's what they call it. And
pretty much and part apart from when if you're in
like you know, a little massage in a backstreets sort
of thing, pretty much everything is tap over there, you know,
like as opposed to the biggest spars, it's a lot
of it's tap. But when we're in Europe earlier in
the year, they were going, well, if you pay cash,
(11:45):
we'll give you a ten or twenty percent discount.
Speaker 2 (11:47):
I didn't even understand. What if you pay cash, we'll
give you a you mean actually hard currency that hard
current use. Sometimes when people say cash, then they don't
actually mean you know, how when our businesses pay cash.
What they mean is you pay for it all up
up front. Yeah, and we'll haggle. But cash to me
is cash. It's it's hard.
Speaker 3 (12:05):
But no, I don't know whether people do that that
much in New Zealand. Now, I really don't know, mind you. Interestingly,
I had a conversation with an accountant recently. He owns
a couple of accountantcing firms, and I said to him,
you know how much sort of money as cash floats
around in the black economy, you know, people doing deals
with cash and not paying tax. He said, unbelievable amount
of money. So maybe rather than worrying about increasing the
(12:26):
text right, maybe we need to be a bit more
energy putting and trying to hunt down the you know,
the black economy and the cash that's tax is not
being paid on. It was an interesting conversation.
Speaker 2 (12:35):
Actually, I've just realized that when we had a holiday
in Europe, I don't know what a euro looks like
because I never used cash at all, so I kind of,
you know, we went. I don't think maybe I'm lying,
but I'm pretty sure I don't think I know what
a euro looks like. Yeah, I don't think what it
sounds like quite. That seems like a guilty confession, it's like,
(12:57):
but that's the way.
Speaker 3 (12:58):
That it is really all around the world. Now, you
know that people aren't necessarily using cash, although I did
find and we're increasing turkey, that you did get quite
significant discounts paying cash. But that's because they're not declaring it.
Speaker 2 (13:08):
Oh okay, right, well they're not when you're a tourist.
If you're complicit in that stuff, who cares better? Deal?
Speaker 1 (13:14):
Well?
Speaker 3 (13:14):
Of course. And it's inflation too, right, because that's like
talking restinance. Is that crazy inflation? Currency inflation in recent times?
Speaker 2 (13:22):
Okay, well, we want to hear you from you. One
is on the where are you putting your spear cash?
We don't mean you spare a hard currency, We're just
using that as an expression, where are you putting your
extra mauler? If money comes in, you find you've got
some a bill you didn't have to pay, or you've
had a bit of a bonus, what do you do
with it? And how do you make the decision? Do
you stick it in an investment key we save it,
(13:43):
or do you stick it off the mortgage because you know,
the discussion around the holiday is one thing, but also
how much hard currency do you keep? Is it worth
having any of it? Are you always thinking, well, you
never know when you're going to need it for whatever.
When the world ends, I just might need some hard currency.
Probably not the biggest problem you're going to have, of course.
It's twenty past five, eight hundred and eighty ten eighty
(14:05):
and my guest is Lisa Dudson, financial author and advisor.
She's in with in the studio with me right now.
Give us a call, love to hear from your twenty
and a half past five. Are you worried about funding
a comfortable retirement, Well, you're not alone. The cost of
living crisis is hitting home for a lot of people,
so it's no surprise people are looking for ways to
make the most of their savings and get a little
(14:25):
bit more income to supplement the New Zealand super One
interesting solution is to invest in an income fund like
the Harbor Income Fund. It works by holding a mix
of interest paying securities and shares that have been designed
to generate a steady and sustainable income no matter in
the market. The Harbor Income Fund is actively managed and
currently it pays a distribution of five point twenty five
(14:48):
percent per annum after fees and taxes paid out in
monthly installments. To find out more about Harbor's income fund,
just head to their website or speak with your financial advisor.
This is not intended as personalized advice. The Product Disclosure
Statement for Harbor Investment Funds issued by Harbor Asset Management
is available at Harbor Asset dot co dot Nz.
Speaker 1 (15:12):
Tim Beverage on the weekend Connective calls.
Speaker 2 (15:18):
This news talks it b What do you do with
your extra cash? Do you stick it in your mortgage?
What do you invested somewhere? And how do you make
that decision? Or are you like me? You've got a
bit of extra money sitting on your wives card and
it's nine months later, it's still sitting there. Naughty, naughty me,
and it's more than one hundred bucks. Because let's face off,
what one hundred bucks? Who cares? There? We go, right,
here we go. Here's some texts, lots of text leasa
(15:40):
actually hi, Hi as a couple. When should we be
It's almost like a brag. When should we be selling
our mortgage free rental? We're fifty six we have no
other large savings to speak of, expecting to be mortgage
free home in three years, both still working, says Sean.
That's nonain not specific financial advice, by the way, Sean,
(16:03):
we're just going to discuss. This is theme for anyone
in your situation.
Speaker 3 (16:07):
Yeah, I mean in those sort of situations, I always
look at it and go, what is you know, what's
your current situation? Obviously there's a little bit and overview
that what are you actually trying and achieve when you're
looking at retiring? How much income do you think you
might need at retirement? Is selling your rental property enough
to give you the income that you want? What would
you do to create an income once you sold your
(16:27):
rental property. You know, there's all those questions that need
to be worked out. So you really need to go
and see someone and get some financial advice and just
work through because.
Speaker 2 (16:36):
There would be some I could imagine who would be saying, man,
you're going to be mortgage free in three years on
your own home and you've got a mortgage free rental.
I'm assuming that we're talking you know that those are
two different properties. We're talking about the ways to put
that text there would be many people to be like,
you've got so much equity, you should be doing something
with that equity. Yeah, without you know, making things too hard.
(16:58):
But he's got a lot of room to move, hasn't he.
Speaker 3 (17:01):
Well, that's right, And so that's the sort of thing.
You know, how much income do you want in retirement?
It might be that your rental property is in a
small town and it's worth four hundred thousand dollars, or
it might be worth two million dollars, right, so you
know what's the value of that rental property and then
looking at it and saying, well, what's the income that
you achieve from that rental property? Because that's someone of
the sometimes the challenge with property. I love property for
(17:23):
a wealth growing strategy and a wealth accumulation strategy, but
sometimes when you look at it when you're in retirement
and you look at the income ratio that you get
by the time you get your rent and you pay
all of your costs and then you pay your tax,
when you look at your actual after tax income, it's actually,
know quite low. Is that enough for what you're actually
wanting in your retirement?
Speaker 2 (17:42):
And I'm guessing if you're fifty six, unless you're wanting
to retire early, then that property, I mean property still
is going to go up in value at what rate?
Is a bit of a that's up for a bit
of conjecture at the moment, isn't it?
Speaker 3 (17:55):
Of course?
Speaker 2 (17:55):
But why would you get rid of if you just
want to have the cash in the bank. I wouldn't
have thought that would be the right idea to sell it.
You'd be better to have it in that investment, which
is possibly is a capital gain still going to you know, yeah,
that's right.
Speaker 3 (18:07):
And it's also looking at I mean, maybe it's a
property that needs a lot of maintenance. It's I mean,
you know what sort of property is it? You know,
what does the future look like for that property? Is
that property going to give you the best growth in
the next or you know, next five to ten years.
Would you be better off selling and putting into a
managed fund. Would you be better off leveraging against it
and buying an additional property? How many more years are
(18:28):
you planning on working between, you know, fifty six, planning
on working to sixty five? You know, so there's quite
a lot of information that you kind of need to
put in there to really understand what the way forward
is but you know, well done, that's you know, that's
a great position to be in.
Speaker 2 (18:41):
Yeah, good on you. Mortgage free, older investor, can you
please ask Lisa if you have if you have more
to invest, say one to two million, how she would
invest it? What percentage would she invest overseas?
Speaker 5 (18:56):
Well?
Speaker 2 (18:57):
This is again I guess this is where we're going
to come up with the same response in a way
that it depends on context. But on the face of it,
mortgage free and you've got one to two million, that's
bit of a range. What is it one or two anyway,
you've got some money.
Speaker 3 (19:12):
Yeah, And I think the way that if an investment
advisor would look at this is they'd say, okay, well,
what's your you know, how old are you? What's your
risk profile? Like are you a more conceivdive investor? Are
you a more aggressive investor? If you were a more
aggressive investor, you would have a higher percentage of that
portfolio invested overseas. And it might be something like, you know,
(19:34):
I don't know, seventy or eighty percent invested overseas, because
we've got to remember that New Zealand is only point
two percent of the world stock market. Like we're tiny here,
so you would have a significant amount invested overseas because again,
you know, a lot bigger place.
Speaker 2 (19:48):
For those who are listening here are thinking, you know
who's major investments simply just bung it in key we
savor and saying oh the balance or aggressive or whatever.
What How do you go out and investing overseas? As
you know that expression goes, do you do it through
a local broker or do you you actually while that,
would your suggestion be on researching that?
Speaker 4 (20:09):
Yeah?
Speaker 3 (20:09):
I think if you sort of probably under fifty thousand dollars,
you want to just go and to find a good
sort of balance fund or growth fund through one of
the managed fund providers. But if you're talking one to
two million dollars, I think you know you really need
to be going and finding a suitably qualified investment advisor
and sitting down and talking to them about it. You know,
(20:30):
there's a lot of research, you know, because I actually
own a company that does fundsunder advice, and you would
not believe the research and the time that goes into
figuring out how we invest our clients' money. So it's
not a five minute exercise. So I really think that
it's important to go and get some professional advice, certainly
at that level of money.
Speaker 2 (20:50):
Do you find that New Zealanders still have this idea
of that I'm going to look at investing overseas and
they think that the DIY sort of thing is still
the prevalent because that's our that's our mentality. Because we've
had a guest from Concilium, Ben Brinkerhoff, who who explained
to us. He said that the amount of research and
the number of people who are working in analyzing markets
(21:11):
constantly will always be ahead of you, unless you happen
to make a lucky gamblers. Basically. I don't want to
paraphrase them too much because I don't want to misquote them,
but his point was you'll never be ahead of the market.
You'll you'll just be dumb lucky.
Speaker 3 (21:25):
Yeah, And I would think for the vast majority of
cases that that is correct. I mean, you might, you know,
there are some people that that's what they do, right,
that's their hobby, and you know, you know they've got
a bent towards it and a strong interest in it.
They could do to it. But I think the average
investor will be hard pressed to beat a good quality
investment advisor. So you know, that's I'd always recommend that
(21:47):
you go and talk to someone.
Speaker 2 (21:48):
But that's why the problem with the water cooler talks
always a bit of you know, when somebody says, I, yes,
you know, when you see the highlights like in video,
had that you know fifteen hundred percent in some I
don't know what the period of time was, but it
wasn't very much. And look, if you had shoved everything
you had into a video, you might have you might
be dancing a jig. But if you had, there'll be
people who've stuck all their money in some other stock
(22:11):
that's and lost everything.
Speaker 3 (22:12):
Oh. Look, you know, if you're super lucky and get
your timing right, you might do okay. But I read
an article years ago, I remember when I was overseas,
and it was talking about that ninety percent of day
traders actually lose money. Right, So basically, these are people
are professionally in their trading on a day to day basis,
and they're not beating you know, a good fund manager,
(22:34):
investment advisor. So it's not as easy as one thinks.
So you know, if you're talking about a small amount
of money, you know, I think it's.
Speaker 2 (22:41):
Also doing your doing your research by headline. And another
one triggered me today. Actually I don't mind saying, but
there was an article in the in the heraldline Sunday
talking about how this person had made an elderly person
had made a lot of money. But it is the
property had sold at five hundred million dollars over the
reserve or something. And this was the headline, and the
(23:01):
headline was saying what this means that, well, well, the
property market's getting off the ground and rolling now. And
I must say, I feel like, shut up. That is
not what's happening. And there's headlines distort things so much
and yet you know.
Speaker 3 (23:15):
Well it's literally but that's what you know.
Speaker 2 (23:17):
But yeah, it's the new Yeah, here we are, Yes,
pot kettle black.
Speaker 3 (23:25):
Yeah, that's exactly what I was thinking.
Speaker 2 (23:27):
But no, but there was some sort of point around that,
there wasn't there That that the headlines. That's why I
think we sometimes surge from one extreme to the other.
We're all like, oh, the market's screwed, it's not doing anything,
and all of a sudden, all the market's are wave.
You don't get into your you know, you.
Speaker 3 (23:43):
Know, hey, look you know things are improving right there.
You know, the ocr coming down is certainly making a
difference of things. Markets have been pretty strong in the
last twelve months. We all know that term deposits are
you know, are heading south and will continue to to
head south. But yeah, you do have to be careful
of headlines and also remember that in an article that
you're reading in a couple of minutes, they have summarized
(24:04):
things significantly to put it into an article, so you
often lose a lot of detail and a lot of context.
Speaker 2 (24:11):
And they also probably haven't put a press release about
the property that didn't do so well. Yeah, guess what
that's exciting. Way we had to self under the reserve
put a press release out now not going to happen,
is it right? Sorry just to put my cynical shoes
on for a moment, But it's actually one of my
sort of kind of pet peeves that if you I'm
digressing now, but for instance, if a financial writer is
(24:35):
writing about particular shares and markets, they would have to
generally declare their interest in that market. And yet anyone
who writes about property nobody tell you never really know
if someone owns three or one or five properties, or
if they're looking to get into the market as the
first time buy, because everyone's got the little their little bias.
And I sometimes think I wonder whether if anyone who
writes on property should actually tell us what their stake is.
Speaker 3 (24:58):
Yeah, and I think and that brings up a point
about being key for what you read, right, and thinking
about where where this information that you're gettinghere? Does it
come from a lot of people over the water, call
in the kitchen, over getting coffee, Like a lot of
people have a lot of opinions about things, but their
opinions are often based on their own experience, not actually
a lot of research.
Speaker 2 (25:17):
Okay, let's read some more texts. Good afternoon. By the way,
you can give us a call. You'll jump the que
of the text if you're looking to get some you know,
have a bit of a banter with Lisa about and
get a steer on some thoughts you might not have
had about what to do with your money. Good afternoon.
I have been looking at a split mortgage. For example,
if I had a mortgage of three hundred K and
(25:38):
put two hundred and fifty on a thirty year term
and the remaining fifty on a twenty year term or less,
does this pay off the total loan faster than if
I had the hole on thirty three and count thirty years. Well,
of course it would pay it off faster. Also, debanks
provide these kind of mortgages. Can you split your mortgage
term wise?
Speaker 3 (25:59):
That's right, yeah, but I don't know whether it actually
I think unlikely that that's but I don't think they
would split the term of your mortgage, but I wouldn't
make any difference. So if you're talking about between what
would you say, twenty for twenty and thirty years.
Speaker 2 (26:18):
If you're paying part of it off on twenty years
and part of it off on.
Speaker 3 (26:21):
Thirty years, well if you paid the whole lot over
twenty five years, you might be in a similar place. Right,
So I think that I think a better way of
looking at would be is just looking at your personal
financial situation and going, how can I pay off my
mortgage as fast as I possibly can? That's I think
that's the best way of looking at it. And whether
that's fifteen years, twenty years, twenty years, or twenty five
(26:42):
years or thirty years, you still want to do your
best to pay it off as fast as possible, because
as soon as you pay it off, the lower the
interest that you pay.
Speaker 2 (26:49):
Yeah, actually the cumulative amount of money, say, if you
were to take another even just three years, you know,
if you save three years on your mortgage, huge, It's
quite colossal, isn't it.
Speaker 5 (27:00):
Yeah.
Speaker 3 (27:01):
It's a massing.
Speaker 2 (27:01):
Sobering too, actually, because you get people who are making
that judgment call or the day they think, oh, well,
I could put that on my mortgage, or I could
do something fun with it. And I don't think people
really realize I'm probably one of them. I've got a suspicion.
Speaker 3 (27:14):
Yeah, I mean, I don't have a calculator in front
of me to work it out. But you know, if
you knocked your thirty mortgage down to let's say twenty years,
and it was a five hundred thousand dollars mortgage, you
might be saving I don't know, maybe one hundred and
fifty thousand dollars.
Speaker 5 (27:27):
I don't know.
Speaker 3 (27:27):
That's a bit of a guest, but like it's significant.
It's not a few thousand.
Speaker 2 (27:31):
Yeah, we'll take some more calls than just one. By
the way, so where with Lisa Dudson, we actually kicked off.
We have digressed a little bit and that's on me.
My apologies, but what do you do with extra cash
when you find you've got a bit of extra money
that you weren't expecting. Okay, it's not millions, but it
might be ten, twenty, thirty thousand. Where do you put it?
(27:51):
And also how much hard currency do you do you
bother to keep any You can give us a call
on that if you like. Eight hundred and eighty ten
and eighty. We've got truckloads of texts to get to,
which we will do, but you can jump the que
with a call on the number I've just given you,
which I'm not going to say again because I'll run
out of bread. It's a twenty three minutes to six. Yes,
(28:22):
we're restricting my aberdt only one song a weekend, but
I do love a little bit of abber Welcome back.
It's a smart money. Lisa Dudson as my guest, taking
your cause, and let's go to Margaret. Hi.
Speaker 4 (28:35):
Hi there. I'm in the old age group and I
have been advised to keep I'm in my eighties and
keep cash on hand in case of sickness so that
somebody else can do my shopping and I don't have
to give them my f post card.
Speaker 3 (28:52):
Oh that's I mean that's a good idea. I mean
I can't really fault that. I mean, maybe you can
look at a higher interest on call account and so
you're maximizing, you know what the roturn you get out
of your cash. But that may not even initial for you.
It might just be about making life easy.
Speaker 4 (29:08):
I'm only talking about two or three hundred that I
keep on hand, all right, Well, that's at home and
an emergency. I both in case I'm sick and somebody
doesn't put a shopping for me.
Speaker 3 (29:22):
Oh that sounds like a great idea, well done.
Speaker 4 (29:24):
Yeah, yeah, there was some advice. That was some advice
that was given, So I thought that would sound a
pretty pretty good idea and perhaps how the people can
think about that as well.
Speaker 2 (29:34):
Yeah, I look, Margaret, ut with you. I think it
doesn't hurt to have two three hundred bucks in your
soft draw, you know, or wherever I have it in
my soft draw. I'm not going to ask you where
you put yours because that would be a bit personal.
Let's carry on with the calls. But thanks for your
called Margaret. Good on your Deborah High.
Speaker 5 (29:50):
Hi, how are you good?
Speaker 2 (29:52):
Thanks?
Speaker 5 (29:53):
Okay, it's good. Listen, I just slipped the car radio
on and heard the last one minute of your conversation
about paying off your mortgage quickly. And so I don't
know if it's of any benefit to anyone, but we
have a story that my husband and I managed, through
some good advice to pay off our mortgage in four
(30:15):
four and a half years.
Speaker 3 (30:17):
Wow, that's pretty impressive.
Speaker 2 (30:18):
You must have gone hard on that that.
Speaker 5 (30:21):
I listen all credit to the book that we picked up.
This was not our idea, but it was our genuine experience.
I worked in a bookshop. I just earned the basic
retail wage. My husband was a trader and had an
office wage bit more money than me, but we certainly
(30:41):
went rich. We bought our house for two hundred and
thirty six thousand in Sandringham and around ninety ninety five, so,
to be fair, houses were a different kind of price
than they are now. Working in the bookshop, I picked
up a book by an Australian woman. I can't for
(31:05):
life only remember your name.
Speaker 2 (31:06):
Don't worry about the book. What was the advice?
Speaker 5 (31:09):
Okay, so basically, in a nutshell, this is what she said.
She said, sit down and work ount your income. Basically,
go through all your bills for three months and get
a rough idea of what it costs you to live,
and then get an idea of what your disposable income.
(31:29):
On top of that is, take a small amount of
money that is going to be your spending money, and then.
Speaker 4 (31:38):
Put all of your disposable.
Speaker 5 (31:40):
Income into your mortgage. Now to do and that will
over and above your regular payments, you're making lump some
deposits into your mortgage every time you get paid. Now
to do that. To do that, you needed to structure
your mortgage in a particular way. And the way we
(32:02):
did it was that we looked at, Okay, this is
our rough disposable income for the year, so we're going
to put that amount onto a floating mortgage.
Speaker 3 (32:14):
Yes, that's right.
Speaker 5 (32:16):
So that meant that we could chunk that amount down
pay after every two weeks without any kind of penalty.
Speaker 2 (32:24):
So you just did it as aggressively as you could afford. Really,
so you didn't have a set amount you're aiming for.
You just thought, look, let's stick everything on the floating
mortgage and just try and try and live a.
Speaker 5 (32:33):
Strong not everything. Not everything, No, that's not correct. So
we looked at, say, for example, we thought, okay, at
our discretionary income after we've paid all our living expenses
is forty thousand dollars for the year. So we just
put that forty thousand dollars amount onto floating. Now, the
(32:57):
rest of it we broke into two We broke a
part of it another forty thousand into one books.
Speaker 3 (33:05):
Yeah, and I think the sixth.
Speaker 5 (33:07):
Light was less, and then the remainder we put into
two years fix because that was less again. So by
the time the end of the year came around, that
forty thousand had been chunked down. The one year six
came up for a new we put that onto floating. Yeah,
(33:28):
and that's how we did it. We just leaped frog
those amount.
Speaker 3 (33:33):
I was going to say, I think I pretty much
described the same philosophy and most of my books. But look,
I think now that's great because what you've done is
you've gone through a budgeting process and then you've said, okay, well,
what can we afford to pay off in our mortgage?
You know, all the surplus we have over and above
what our needs are, what we need to live is
that you're putting into your mortgage. And I think the
other key point there too is you've actually sat down
(33:55):
and worked out your numbers, and you've put a lot
of focus and discipline into paying off your mortgage. And
I've wor with a number of people over the years
who have had a similar result as well. By putting
that focus and discipline to your mortgage. It's quite remarkable
what you can achieve. So well done.
Speaker 2 (34:09):
Yeah, on, Actually there are mortgage I mean, there are
calculators out there, but there are actually websites, having googled it,
a mortgage repayment calculator, money saved or I can't mean
what I've stuck into it, and there are actually sites
where it says how much are you paying, what's your term?
How much extra do you want to pay? How quick
more quickly? But this is how much you'll save.
Speaker 3 (34:27):
Yeah, well that's right. But I often sit down with
people and co, Okay, well you know we need a
main bank account over here for a day to day,
we need a bit of an emergency account when then
maybe a little bit free extra for holiday and then
put that structure around how you do your budgeting and
then figure out what's left after that, and then that's
what you know, you focus on putting ont your mortgage.
But then you've also got to structure your mortgage in
(34:48):
such a way that you can make those additional payments.
Speaker 2 (34:51):
A quick question here, Hi, guys, my husband and I
mortgage free. Can we use as collateral to get another mortgage? Again,
it'll depend on I guess you're with you earning income
and things.
Speaker 3 (35:03):
So I'm assuming what you're asking is, can you usual
freehold home to borrow against to buy another property. So
the answer is yes, depending on the value of the
property that you're purchasing and the income.
Speaker 2 (35:13):
That you have. Yeah, and you so if you have
no income, if you're retired, it's probably a bit of
a tricky.
Speaker 3 (35:18):
Great if you've got no income, I mean, the banks,
particularly since the Responsible Leaning Code came in a few
years ago, there's a lot more focus on income. So yeah, again,
just really depends on your personal circumstances.
Speaker 2 (35:30):
Another one, Hi, guys, my husband, age sixty one, is
just retired. I'm sixty three. We live a fairly quiet life,
mortgage free home that is worth quite a lot. Quite
a lot. I love language because quite a lot for
one person could be seven hundred thousand, and for another
it might be five mil. Yeah, anyway, we thought of
downsizing to release money but we love our home and location.
(35:51):
We plan to live off our savings until my super
and then his kicks in, plus our key we save
as mine as tiny. My husband reckons we can live
on about fifty k a year, which seems very mean.
Do you think this amount is doable? Maybe? Thanks Helen.
Speaker 3 (36:06):
Oh, look, I mean I think anything's doable. But it
comes down to the you know, the life that you want.
Right If you're happy living on fifty thousand dollars a year,
then great, But.
Speaker 2 (36:16):
You know that's some that's luxury.
Speaker 3 (36:18):
Yeah, yeah, but that's you know, it's a pretty tight
amount of money. So it's just personal choices. You could
fast track spending some of your qv savor. You could
look at home equity release where you if you've got
quite a you know, quite an expensive home, you could
release a little bit of equity out of your home
on a regular basis. That means that down the track,
(36:41):
when you pass away and your estate is washed up,
then you have a loan that you have to pay back.
But that could be a way to release a little
bit of extra cash to top up. So you're fifty
thousand dollars because you don't want to be in a
situation where you feel like you're living on on the
smell of an order rag and not doing the things
that you've worked hard all your life to be able
to do, just because you're holding onto this massive, big home.
Speaker 2 (37:03):
Here we go at high So the Christich earthquake. I've
always kept a couple of hundred in small denominations and
small denominations because you've all the tenth persons front up
at a shop with one hundred dollar note, you're not
going to get any change. Yeah, okay, that's probably not
about well, I mean, it's all fairly extreme sort of examples,
I guess. But somebody thinks that it was money made
(37:26):
simple by Noel Whittaker, was what the lady was talking about.
But look, honestly, most financial books will have this.
Speaker 3 (37:32):
Notion on those lines.
Speaker 2 (37:33):
Yet, Yeah, how do you find a good investment advisor?
Given there will be people in the field with a
range of experience, abilities and dedication.
Speaker 3 (37:42):
What I would do? I mean, you could ask friends
and family. You could ask if you've got any professional advisors.
You could google and go and look and maybe meet
with three. Ask them how they get paid, how they
get renumerated. Most financial advisors work on.
Speaker 2 (37:58):
A well, they have relations with various funds. Sometimes that's right.
Speaker 3 (38:02):
I mean, certainly our company, all our advisors are based
on salary, which is not necessarily that common in the industry.
But I think it's also really important to have a
really good relationship with your financial advisor. So I would
definitely go and visit a couple and and ask lots
of questions about how they how they work, how they
get renumerated, and make sure that you can connect with them.
Speaker 2 (38:22):
Okay, we're going to come back with a couple. We'll
have a little bit of time. But by the way,
the obvious one is also how people How do people
contact Lisa Dudson.
Speaker 3 (38:31):
Oh, dub dub dub dot Acumen, dot co dot NZ.
Speaker 2 (38:33):
There you go, right, we'll be back in just to
tickets nine minutes to six. Yes, News Talks, Tim Beverage
is the Smart Money with Lisa Dudson. We're going to
take one more call on John. We've got two minutes,
so go yep.
Speaker 4 (38:49):
Okay, mortgage was Flow Team.
Speaker 2 (38:56):
Oh John, Unfortunately your phone line is terrible, so we'll
have to try you again another time. But we couldn't
hear and with time being short, I'm sorry we'd just
have to leave it there. But yeah, so can we
sign off with a little bit of a thought for
people I guess is that if you do have some
extra cash, if it ends up being a truckload of cash,
we need to get a bit of good advice. But yeah, I.
Speaker 3 (39:21):
Think it's just about sitting back and going, all right,
I've got some extra cash, what are my options and
think through the pros and cons of those options in
relation to how it actually works out for you, and
then make a decision.
Speaker 2 (39:33):
And probably, as you say, information is king, isn't it.
But if you're looking at paying something off your mortgage,
it is worth checking out what that extra ten thousand
is going to be costing you. If you don't pay
it off, you more BG and.
Speaker 3 (39:45):
I like to keep things simple. So even if you've
got a she to paper for paper and you write
down what you three four options are, write the pros
and cons down, you know, that's a really good loarning exercise.
It helps you really crystallize what your options are and
how they play out for you. But I think you know,
go through that exercise and make a decision.
Speaker 2 (40:02):
Okay, And if people want to catch up with the
your work at Acumen dot co dot in zen. That's correct,
and you've got a team of people this as well.
But yeah, so Acumen dot in zen. Thank you, Hey,
thanks yous fun. Thanks Lisa. What's your latest book? By
the way, what was the most recent one?
Speaker 3 (40:18):
The one was Good with Money? But that was I god, Curry,
it was last year? When was it most last year?
Speaker 2 (40:25):
If you got another one coming out? So last year,
I've got another one coming out. I mean, what is it?
Martin Ores he's ritten in book number twenty four.
Speaker 3 (40:34):
So I love Martin.
Speaker 2 (40:34):
He's great, lovely man. He's off climbing mountains.
Speaker 3 (40:38):
Yeah, and he's a big climber.
Speaker 2 (40:39):
Yeah, so you know, no such thing as a sort
of slow retirement.
Speaker 3 (40:42):
And he's early semities. Now you know, he's a He's
a great guy.
Speaker 2 (40:46):
I said, are you doing free solo? Who goes non
no ropes? Anyway, Hey, thanks Lisa. We I'll beat the
same time next weekend. I'm actually taking the week off,
so if you don't hear me for a few days,
then what a relief for you. Anyway, Thanks my producer
Tyra Roberts, stick around for for or I was gonna
(41:07):
give the wrong Sunday six I was gonna. I've got
help form for naming the show in the wrong way.
Sunday six is next Catch Your Son.
Speaker 1 (41:26):
For more from the weekend collective, listen live to news
Talks It'd be weekends from three pm, or follow the
podcast on iHeartRadio
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