Re: Kiwisaver; Is Your Money Growing?

Postby tylersdad on Thu 11/Jun/09 8:43pm

I'm with Tugboat on this one - primarily because we are in the same game and understand the big picture (which he has tried to explain but you guys won't/can't understand). sorry, i'm not at liberty to divulge my job. - nor is anyone on here who knows (and i ain't a financial adviser).

most of the negativism around Kiwisaver has been in the fees. these are minimal. The amount of Govt subsidies alone cast these into neverland. forget the fees issue - gareth morgan et al is using scare tactics.

you show me an investment where you put in say $1042pa (say this is 2% of your pay), and on top of any investment return your account increases by $1042 pa from the govt, as well as the $1042 from your employer. thats over $2k a year free money.

now lets say your investment decreases in yr 1 by 20% - your bal is $800 , your employers contribution also falls to $800, (total $1600) but on 30 june the govt gives you $1042 (bal now $2600) all from an outlay from your pocket of $1042. you have only personally lost $200.

the naysayer will pay in $1042 to a nice safe bank @ 5%, at the end of 1 year your bal is $1100

Now lets compare your $1100 to my $2600 despite my 20% loss. whos laughing now.

lets do the same against a 20% increase - your investment of $1042, with the 2 subsidies becomes $3400 -against the banks return of $1100.

the money is yours to invest where you want in whatever scheme you choose. you don't want risk/growth, so you go conservative. the govt will not take this money back off you. it cannot.

none of this is investment advice. it is to describe the benefits of kiwisaver against a bank account.

before you make uninformed comment, please read into this further. Mary Holms book is good, and impartial.
tylersdad
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Re: Kiwisaver; Is Your Money Growing?

Postby phunk on Thu 11/Jun/09 10:44pm

tylersdad wrote:you show me an investment where you put in say $1042pa (say this is 2% of your pay), and on top of any investment return your account increases by $1042 pa from the govt, as well as the $1042 from your employer. thats over $2k a year free money.


Well not free money, the govt contribution is a wealth transfer, and the employer contribution is in lieu of a payrise.

Kiwisaver looks good for the individual, not so great for the economy...
phunk
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Re: Kiwisaver; Is Your Money Growing?

Postby znomit on Thu 11/Jun/09 10:53pm

Yeah, not so good for those of us who aren't eligible for kiwisaver.

phunk wrote:Well not free money, the govt contribution is a wealth transfer, and the employer contribution is in lieu of a payrise.
znomit
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