SPEAKER_00 0:00

So in a previous episode, we talked about at what point should you look at your KiwiSaver. Now, in this episode, we're going to talk about which KiwiSaver fund should you actually be in.

Which KiwiSaver Fund Fits You

SPEAKER_00 0:10

We're going to bust the myth of the safe conservative funds. So Dave, people often switch to conservative before buying. And then, as we discussed earlier, they forget to switch back. Correct. Yeah. So what's the real cost of staying? Saying

The Hidden Cost Of Conservative

SPEAKER_00 0:27

that one. Yeah. I hope he cuts this. What's the real cost of staying conservative long term?

SPEAKER_01 0:35

So the cost of staying conservative long term is that you will miss the upsides in the market. And over a long period of time, so once you've built your first home, for example, that period of time that you've got before you retire and need your money again or can access Kiwi Saver is quite significant. So you're going to miss out on the market movements, which over the last hundred years has shown, even in markets that drop a little bit because of events, they'll come back. And because you've got a long time period to take that risk, if you like, then it's going to outperform those conservative funds every time. So the real cost is hundreds of thousands of dollars over 30 years. And also, I will add to that that the value in having an advisor such as yourself or a business that helps you through that is quite significantly going to add value to your um money at the end of the day.

SPEAKER_00 1:23

Yeah, no, thank you. I've got a really curved question coming your way. I don't think you expect this one. So you know how there's been a massive hype around SpaceX?

SPEAKER_01 1:32

Yeah.

SPEAKER_00 1:34

Does Kivisaver,

SpaceX Hype And Retirement Money

SPEAKER_00 1:36

or the funds and you know, KiwiSaver that you work with? Yeah, do they invest into that sort of industry?

SPEAKER_01 1:42

Yeah, so they will look at speculative funds as a small part of their investment. They should do. Some go really risky, but then my view is don't mess around with your retirement money. If you've got a little bit of something to play with, go and invest a portion of that into SpaceX and let it do its job. I'm a bit long on the tooth, and I've seen lots of different things like SpaceX come through, and people go, Man, you've got to jump on this, you've got to do that. The tech bubble was a classic example of that. I had clients saying to me, get on this, it's great. Uh you're not going to lose any money, it's going to go through the roof. And then the bubble burst, and everybody lost a lot of money. Uh, that client in particular lost a lot of money. But you don't mess with your retirement savings. Be sensible, be diversified, have a little bit of that if you want it, but make sure that you've diversified through different sectors as well. Because that is your money in retirement that you're going to live off, and that will, I guess that's going to dictate how you live your retirement.

SPEAKER_00 2:42

Yeah, because another curvy one really is there's again, it's an election year, there's a lot of talk about retirement age being either pushed out or

NZ Super And Asset Testing

SPEAKER_00 2:52

no pension by the time we get there.

SPEAKER_01 2:54

Yeah. Yeah. The pension, I don't think there'll be no pension, but it will, I think there'll be asset testing. That's what they've been talking about. And when asset testing comes in, what does it look like? Who knows? Our view, and it should be a lot of people's view, should be that you when you're saving for retirement and doing your sums and doing how you want to live in retirement, don't take that into account. If you get the pension when you do retire, then it's a bonus. But make sure you've got enough money to retire off your own back.

SPEAKER_00 3:24

You know, I always like the saying of we are in control of our own future.

SPEAKER_01 3:28

Correct. Yeah, that's a good one.

SPEAKER_00 3:29

Yeah. So just to dig again into you a little bit deeper, so Kiwi Saver Funds, as part of the investment portfolio, do they invest into high

Growth Risk And Bitcoin Exposure

SPEAKER_00 3:40

risk?

SPEAKER_01 3:40

Yeah, they do, and they sh and you can get obviously the higher growth you go, the higher risk you'll get. But there's different ways to take risk. So you could take risk by investing in a lot of different companies at a higher level, but you still take risk with some speculative investment in there as well. And some providers have Bitcoin as part of theirs, some providers have a lot of Bitcoin, which is not necessarily going to help you in retirement. But again, like I said, have a little play to the side somewhere and put $5,000 into something and have a play. But yes, there is risk. So you just need to look at what who your provider is and what they're investing in to give you that return. Sometimes you might not want to take the risk that they're giving you to get the top returns because one year they could get you 25%, and the next year it could be minus 10%.

SPEAKER_00 4:25

Can can people ask their KV7 providers to see a list of where Absolutely.

SPEAKER_01 4:29

Yeah, absolutely. It's it's all available for most providers. Some providers will do top 10, and they provide what we

Fund Factsheets And Provider Transparency

SPEAKER_01 4:35

call a fund fact sheet. So ourselves, we provide a fund fact sheet, has all the holdings on, and we've got hundreds, and it will show you where that's invested, how they're invested, and as we're yeah, most providers are are pretty honest with what they are showing you what they're invested in and pretty uh transparent.

SPEAKER_00 4:52

Well, they should be, right?

SPEAKER_01 4:53

100%.

SPEAKER_00 4:54

Love it, love it. So so my tip for the people really has always been if you're looking to buy a lot of ticket, yeah, and if it's going to cost you $20 for like, you know, for the triple dip, just take that money and put it

Lotto Spending Versus Investing

SPEAKER_00 5:06

into an investment fund.

SPEAKER_01 5:07

Yep. It is it's an interesting argument, isn't it? Because I'm I'm pretty sure that the people who have won Lotto might argue that point. But uh, but I don't know too many of them, do you?

SPEAKER_00 5:17

Not at all.

SPEAKER_01 5:18

I wish I knew a few more, to be honest.

SPEAKER_00 5:20

Exactly. Awesome. Thank you, Dave. I look forward to seeing you again.

SPEAKER_01 5:23

Okay.