What type of risk-taker are you with your investments?

Decisions we make today, impact our tomorrow.

There is ALWAYS risk when investing (including term deposits), it is a matter of finding out what the risks are, and deciding if that level of risk is acceptable to you.

Knowing our risk-tolerance profile with regards our finances is very different to risk taking elsewhere.  I know for myself I am perfectly happy to jump out of a plane to go tandem skydiving, but I am also personally a more conservative investor when compared to the masses.

  • Do I know what investment risk is?
  • Do I understand the level of risk I am taking currently?
  • Am I better helping others take risk rather than taking it myself?

If you want to find out your financial/money RISK TOLERANCE you can find out here.

Once you habusiness-people-smiling-smallve answered the 25 questions, you will receive a report that shows you how much risk you could take with your money and compares it to answers from everyone else who has sat the test.


Finding out your risk tolerance will help you to know how to invest for your character, not your emotions on a given day.  The test is pyschometric, meaning that it tests your traits (permanent) versus your disposition (emotions on the day).  This is very important.

On the other hand the risk-tolerance is very different to your risk CAPACITY.  Sometimes the most aggressive investors have the least capacity to invest due to their willingness to take a risk, but this is not always the case as sometimes the risk paid off.

The first step to investing is to SAVE. If you are not saving, why not?  If you currently save nothing, have you ever tried setting up a bank account and having an automatic payment going in to it for $5 per week?  This experiment I know will have you saving more, as you see your success it will spur you on to save more.  In these days of internet banking it is easy to set up a new bank account and start saving.

Don’t put-off today those things that can change your tomorrow for the better.

Life insurance – boring!

Life insurance.

Two words that are guaranteed to put you to sleep. It is a product that no-one wants, but most people need. I have a different view. If you are educated about what you are paying for and given clear, professional, unbiased advice, then surely life insurance just becomes another part of your financial plan, albeit one that you never want to use. We insure our houses, but I guarantee you that no-one wants their house to burn down.Read More

Make the most of what you’ve got – Make it, save it, spend it!

Financial awareness is about truly understanding your financial affairs and what choices you have to improve these.

Financial advice is the process of developing strategies to help you manage your financial affairs so you can build wealth, enjoy life and achieve financial security. Good advice can change your life.

The old adage of ‘you don’t know what you don’t know’ is never more obvious than when overhauling your financial dealings.  When it comes to designing your financial future, there is no one right answer.

The role of a qualified financial adviser is to look at all aspects of your lifestyle, goals and requirements and develop a financial strategy suitable for you.  The recommended strategy should help you reach your financial goals effectively and efficiently.

When developing a financial plan for you, a planner will follow a structured six-step process to help understand your needs and recommend an appropriate strategy.

Good advice from an experienced, well-informed financial adviser can help people save money, protect against risk, manage debts, grow assets, reduce tax liabilities, plan for retirement, identify entitlements for government benefits, and plan what is to be left to the next generation.

The money you can save by seeing a financial adviser can far outweigh the losses made from uninformed choices.  Regular interaction with your planner can ensure that your financial strategy is always consistent with your goals and changing lifestyle needs.

The advice may or may not involve the recommendation of a financial product.  The role of a financial adviser is not to sell financial products, but to help you meet your goals.

Choose your financial adviser very carefully, as ideally, you could be working with this person for a long time, and they will be guiding you through some very important decisions.  Ensure your adviser is qualified, belongs to a professional body and most importantly, is someone with whom you feel comfortable.

Judi Galpin of DecisionMakers (Manawatu) Limited is a member of the Institute of Financial Advisers and is an authorized financial adviser.  A disclosure document is available on request and free of charge.

Be aware of the risks of property investment

Few could deny the fact that New Zealanders have a love affair with direct residential property investment. Whether or not direct property investment is the right move for you is a complicated question. Some of the factors you need to weigh up include:

  • Your current level of debt and financial assets
  • Whether you have the time and money to put into managing a rental property
  • Your goals and objectives
  • How you would deal with a worst-case scenario
  • The current state of the market, interest rates, etc.

If, after you have been through that process and you decide you would like to enter the market, here are some helpful tips to help you carefully manage the risks associated with direct property investment:

  1. Always buy quality (look at location, tenant and lease as the three key factors)
  2. Buy for income, not capital gain (favour security over speculation)
  3. Diversify your property investment with the inclusion of other asset classes
  4. Beware of lemons, e.g. specific-use properties or offices which are not functional
  5. Be patient – do your homework (good property decisions are rarely based on emotion)
  6. Work hard to secure the best lease terms possible
  7. Be aware of what point in the property cycle you are buying or selling in (don’t follow the herd!)
  8. Increase value by making improvements and increasing rent
  9. Don’t forget about transaction costs – for example, if you intend to sell within two to three years, it may not be worthwhile when you take transaction costs into account
  10. Remember that ‘location’ and properties change over time.

Preparing your financial survival kit

Natural disasters are unpredictable and in many cases can be life changing for those caught up in them. The recent disasters around the world, including Christchurch, Japan and as of this morning Sumatra, have got many Kiwis talking about and actively putting their survival plans in place.

Whilst the main emphasis should be placed on preparing for the immediate survival of your family from a natural disaster, for example meeting points, food and water, we shouldn’t overlook the financial needs and possible financial issues that will arise as soon as you’ve established your loved ones are ok.

Consider that banks could be disrupted, limiting access to cash. Government assistance, insurance, and other financial relief (which may or may not cover your total loss) may not return you to the financial position you have previously enjoyed.

Ultimately, you’ll remain responsible for most if not all of your debts and other financial obligations, and as soon as disaster hits, you’ll start to feel the pressure. However, it won’t hurt as much if you are prepared.

Consider the following tips to help manage your financial situation:

  • Make copies of important records and documents, and keep them in a secure place, preferably away from your home and out of your immediate area. Items should include credit card numbers, insurance policies, financial records, tax records, loan and mortgage documents, deeds and titles, wills and trusts, prescriptions and medical records, emergency contact lists.
  •  Some experts suggest using technology, such as digital images to record your financial profile. Combine these images with the documents above, scan them, and store them online e.g. using ‘Cloud Space’ (online data backup accessible anywhere in the world) or a USB Flash Drive which you could use to store your data and then give to family or friends out of town for safe keeping.
  •  Compile and maintain a one-page financial contacts list. This list should include the phone numbers of companies you may need to contact, as well as your account numbers. Include numbers for your bank, insurer, mortgage lender, consumer credit lender, investment companies, lawyer, accountant and anything else you can think of.
  •  Maintain a fireproof and waterproof lockable box or container with important recent financial documents you can quickly grab should you have to flee. Include recent bank credit card and investment account statements; your key financial contacts list; tax returns; mortgage and insurance information; and a supply of cash.
  •  Ensure you have access to cash. Carry your EFTPOS and credit card with you at all times. Build an emergency balance in your cheque or savings account that you can tap into if a crisis hits. Consider applying now for an emergency line of credit; for example a revolving credit facility on your mortgage or an overdraft on your check account – the idea being that you only access these funds in an emergency. Just make sure you don’t incur any fees on this service while you are not using it.
  •  Review in depth your home owner’s or renter’s (i.e. contents) insurance policy with your insurer. Ensure you understand every clause in your basic and/or special insurance policies and what the outcomes would be if you needed to claim on these policies. If you are in certain high risk areas, consider adding flood or earthquake insurance. Don’t overlook special coverage necessary for computers, home offices, jewellery, artwork or other expensive items not included in your basic insurance policy.
  •  Have spare keys cut and stored away.

Most importantly – get started today.

This article is based on ‘Preparing A Financial Survival Kit’ by Broderick Perkins

What is the difference between an Accountant and a Financial Adviser?

There are some fundamental differences between these two professions, one is backwards looking (accountant) and the other is forward looking (financial adviser).

The financial adviser can help you get where you want to be financially in the FUTURE. A financial adviser will write you a plan with actions to enable you to meet your goals, ensuring firstly that they achievable.  They can help with:

  • RISK REDUCTION (income protection insurance, house insurance, trauma insurance, life insurance etc)
  • ASSET PROTECTION (Family Trusts, Wills, Enduring Powers of Attorney)
  • INVESTMENT choices
  • DEBT REDUCTION plans and MORTGAGE/LOAN applications.

If you don’t know your starting point, how will you know if what you changed worked?

The answer to that is the accountant.

The accountant can determine your earnings, business setup, tax obligations, tax rates etc  They are helpful in defining the NOW financial picture.   The accountant is concerned with taxation liabilities, business cashflow and financial management on a day to day basis.

So, do you need help with tax or legal financial obligations, or do you want an overall plan for your financial future?


Did you know that someone who sells insurance is called a “Risk Adviser”?

Why risk?  Insurance is based on risk.  It is priced on equations that insurance companies run to determine how much you will need to pay to shift the “risk” of a possible unfortunate event happening and for them to compensate you for it if it does.

On the surface this looks quite simple, but as we are all different, with different experiences, genes, and daily activities, it can make a big difference to the insurance company.  What you declare, or don’t, on your application form is vital to getting compensated if the unfortunate does happen.  If they discover that you have not declared everything they can make the contract null and void and not pay out.

The trick is to make sure you have a good adviser who understands the types of information the insurance company is looking for.  Read More

The Seven Immutable Laws of Investing

I couldn’t resist showing you the wonderful words of James Montier from GMO.  I have more information on the seven laws he professes, please let me know if you would like the explanation.  Click here to email me for more information.

The Seven Immutable Laws of Investing by James Montier

In my previous missive I concluded that investors should stay true to the principles that have always guided (and should always guide) sensible investment, but I left readers hanging as to what I believe those principles might actually be. So, now, for the moment of truth, I present a set of principles that together form what I call The Seven Immutable Laws of Investing.

They are as follows:

  1. Always insist on a margin of safety
  2. This time is never different
  3. Be patient and wait for the fat pitch
  4. Be contrarian
  5. Risk is the permanent loss of capital, never a number
  6. Be leery of leverage
  7. Never invest in something you don’t understand

If you would like to know more please contact us…