Style: June 02, 2017

82 STYLE | finance
FINANCE
FOR THE
BRUNCHING
MILLENNIAL
Financial advisor Travis Hamilton gives us some tips on
how to save for our retirement.
Let’s face it, for the millennial generation there will be no
guarantee a future government will pay them a pension and it’s
likely that the retirement age will go up. These warnings are coming
loud and clear.
There remain many opportunities for millennials who want to
take steps to create a brighter financial future.
NINE THINGS ANY MILLENNIAL CAN DO:
KNOW YOUR GOALS
What do your 40s, 50s, 60s and retirement look like? If you’re going
to be that 70-year-old Kiwi that travels a lot, or wants income from
property investment, plan backwards from that and work out what
you need to do and how much money will be required.
MAKE KIWISAVER WORK FOR YOU
Negative attitudes around KiwiSaver benefits need to change. Balances
are getting higher and it’s becoming a significant asset for many people.
It’s worth noting that the minimum amount you should be putting
into KiwiSaver is $1,086 so you receive the government’s tax credit of
$543. This is a 50% return that you’ll struggle to find elsewhere.
Consider the risk level, too. If you’re saving for your first property,
you might want to be in a more conservative (or low-risk) fund, but if
retirement is your goal, a high-growth fund will likely deliver you the
best return, but at higher risk.
BUY A HOUSE WHERE YOU CAN AFFORD TO – NOW!
They say that the best time to buy a property was yesterday, but
that’s no use to millennials earning a decent wage but spending it on
high rents in New Zealand’s major cities.
Forget about where you can’t afford, carry on renting where you
are and buy what you can afford to rent it out. If where you can afford
is the “next big thing”, then the gains you make should be enough to
kick-start a property search in your preferred area.
TEAM UP WITH MATES FOR PROPERTY GAINS
If you can’t borrow your deposit from the equity gains in your parents’
or grandparents’ properties, unite with your fellow millennials.
Consider owning a property together, either to rent or for one
couple to part-own and part-rent. At least this gets you onto the
ladder. Lawyers can draft up all the necessary paperwork to make sure
the ownership arrangement is fully understood.