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blog http://www.midasconsulting.co.nz/mike-s-blog/ Year End http://www.midasconsulting.co.nz/year-end/ Christmas is fast approaching and it is timely to look back on the year and consider what we could have done differently and what fine-tuning of our lifestyle plans might need to be implemented in the year ahead.
If you would like to get out of debt faster, talk about property investment, your insurance, your loan or simply to say "hello", please <a href="http://www.midasconsulting.co.nz/contact-us/" target="_blank">give me a call.</a> Wed, 09 Nov 2011 10:24:40 +1300 http://www.midasconsulting.co.nz/year-end/ Floating Loan Reviews http://www.midasconsulting.co.nz/floating-loan-reviews/ Most of our clients now have multiple floating loan accounts as a consequence of fixed rate expiries. An opportunity therefore exists for clients to merge and reduce the number of accounts that they have. If this would be helpful, please let us know so we can work through the logistics with you. Wed, 09 Nov 2011 09:41:40 +1300 http://www.midasconsulting.co.nz/floating-loan-reviews/ Loan Repayment Strategy http://www.midasconsulting.co.nz/loan-repayment-strategy/ One way clients can get ahead with their loan repayment plans is to<a href="http://www.midasconsulting.co.nz/contact-us/" target="_blank"> ask our Client Care team</a> to take away some of their surplus funds from their loan account from time to time. You do lose the access to this money, but your loan balance reduces by the amount that is repaid; quite an effective way of shortening your loan’s life. You can do this as often as you like, and usually at no cost.
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Obviously, you should keep enough money available to help with emergencies and cover yourself for additional needs, but if you can do without a portion of your surplus funds, then it might just be useful to adopt this strategy every now and again.
Another way to achieve a similar outcome is to commit to paying more than is required on a monthly basis while you can afford it. 
 Wed, 09 Nov 2011 09:19:04 +1300 http://www.midasconsulting.co.nz/loan-repayment-strategy/ When Insurance Pays Off... http://www.midasconsulting.co.nz/when-insurance-pays-off/ You know that I am an ardent advocate of adequately insuring yourself and that I regard doing so as an investment in your future welfare. Imagine a neighbour. She is in her forties, has just been diagnosed with a cancer and requires an urgent operation. This is a most tragic situation.
On a somewhat positive side however, she has a living assurance and health insurance policy, which involves a significant lump sum payment that will ease any income concerns and ensure that she will gain the on-going home care she needs.
The policy also enables her to go to a private hospital of her choice and obtain the medical attention that she needs, now - all paid for!
Gaining the treatment that you require is one thing; dealing with a loss of income is quite another.
These things can happen to anyone. Are you adequately insured? If not, we can help you with appropriate covers. Mon, 07 Nov 2011 08:57:43 +1300 http://www.midasconsulting.co.nz/when-insurance-pays-off/ Interest Rates http://www.midasconsulting.co.nz/interest-rates/ The official cash rate was held at 2.5% by the Reserve Bank at this month’s review. Persuasive factors included our modest level of economic activity, a relatively high rate of unemployment, the acceptable rate of underlying inflation, and difficult international conditions.
Floating mortgage rates are still more competitive than fixed rates, although there has been some easing of the fixed rates, primarily (in my view) as a banking strategy to ‘tempt’ and lock-in consumers.
Global economies are still in turmoil and this could have an effect on us in New Zealand and the cost of borrowing money, but this general instability is more likely to signal that interest rates will stay lower for longer.
The NZ dollar is still comparatively high, which of course is a concern to exporters. Longer term, the re-construction of Christchurch will increase inflationary trends. Australia has just reduced its official cash rate indicating its desire to generate more economic activity. Fri, 04 Nov 2011 08:43:16 +1300 http://www.midasconsulting.co.nz/interest-rates/ New Property Insurer? http://www.midasconsulting.co.nz/new-property-insurer/ We are currently evaluating the potential services of another property insurer. I will let you know more once we have completed the evaluation, through my regular newsletter or through this blog.
If you would like to receive my newsletter, <a href="http://www.midasconsulting.co.nz/contact-us/" target="_blank">contact me</a>. Wed, 02 Nov 2011 10:22:32 +1300 http://www.midasconsulting.co.nz/new-property-insurer/ DebtNav http://www.midasconsulting.co.nz/debtnav/ I have been amazed at the extent that some clients are using Debt Nav to manage their monthly expenditure, even to the point of deciding if they can go out for a meal. The system certainly provides visibility as to where you are at with your loan repayment plan and of course, opens up new opportunities for potential savings. Read more about DebtNav <a href="http://www.midasconsulting.co.nz/home-loan-finance/" target="_blank">here</a>, or just <a href="http://www.midasconsulting.co.nz/contact-us/" target="_blank">give me a call. </a> Tue, 01 Nov 2011 10:17:36 +1300 http://www.midasconsulting.co.nz/debtnav/ Loan Affordability http://www.midasconsulting.co.nz/loan-affordability/ Over the past few years, we have been calculating our clients’ loan servicing ability at a higher than normal interest rate. We have generally used a rate of between 8 to 8.5% for this purpose. Our thinking is that if our clients can comfortably service their borrowings at these higher rates, then they should not be too disadvantaged if and once rates start to rise again.
Meanwhile of course, we should all be using our surpluses as wisely as we can. <a href="http://www.midasconsulting.co.nz/contact-us/" target="_blank">Give us a call</a> if you want to discuss interest rates. Mon, 10 Oct 2011 09:15:55 +1300 http://www.midasconsulting.co.nz/loan-affordability/ ARE WE NZ's BEST KEPT SECRET? http://www.midasconsulting.co.nz/are-we-nz-s-best-kept-secret/ Our client satisfaction surveys confirm that our clients rate our services very highly, yet we are not top of mind in the general market place. We rely very much on recommendations from our existing client base. Advertising isn't really an option for us as we would simply be compared against the banks and in most people's minds (who don't know any better) the banking system is the 'be all and end all'.
We have decided instead, to embrace the more modern day communications media, <a href="http://www.facebook.com/pages/New-Zealand-Home-Loans/185590638873?ref=ts" target="_blank">Facebook</a>, Linked-In, Twitter, <a href="http://www.youtube.com/nzhomeloans" target="_blank">YouTube</a> and the like, and a more active sponsorship programme, to enhance our community profile. Feel free to look us up on these media and become a friend!
The best compliment you can extend for the valued and professional service that we offer, is to recommend us to your families and friends. Wed, 21 Sep 2011 19:24:57 +1200 http://www.midasconsulting.co.nz/are-we-nz-s-best-kept-secret/ Insurance http://www.midasconsulting.co.nz/insurance/ The implications of a calamity or disaster (property or personal) on the achievement of your life plans must not be underated as I have mentioned many times. A solid risk management program, and one that can be reviewed every year, should be a serious consideration for us all.
We offer a full range of personal and property insurances and from recent reviews I have undertaken, I have found significant gaps in clients' covers and in many cases, a limited understanding of what is being covered.
There are many options that can be implemented to make the cost of insurance more affordable, so if you would like to schedule an appontment for a discussion, please let me know. Tue, 02 Aug 2011 19:30:59 +1200 http://www.midasconsulting.co.nz/insurance/ Interest Rates. Fix? http://www.midasconsulting.co.nz/interest-rates-fix/ There has been a lot of publicity about interest rates and when to fix and for how long. We need to remember that these articles are invariably sponsored by bankers and economists (marketers) who do not promote the concepts and processes that we do at NZ Home Loans, primarily income channeling. As a consequence look at the world in a very static way, based on the pure cost of lending.
Our clients know that if they truly channel their incomes and preserve their income and surpluses in their accounts for as long as possible, they will reduce the interest payable on their accounts and pay their loans off faster over time. We do need to be savvy about selective fixing (as a cost management strategy only), but this should not take priority over the fundamental concepts of our lending proposition.
Remember the days when everyone was fixing their rates and then wanting to un-fix them when the market eased. We need to be cautious about moving too quickly to fix, especially when there is such volatility in the world wide markets. Mon, 01 Aug 2011 19:08:59 +1200 http://www.midasconsulting.co.nz/interest-rates-fix/ Official Cash Rate http://www.midasconsulting.co.nz/official-cash-rate/ Over past weeks, a number of commentators have been suggesting that the Official Cash Rate (OCR) may rise as early as September and most certainly by December this year. The world-wide events of the past two weeks have certainly dampened the likelihood that rates will rise in the near term.
Our economy is still in a sensitive position.
Unemployment is still around 6%, youth unemployment is increasing at higher rates and retailers are finding it a particularly difficult trading environment. Exporters have suffered from the high exchange rate. There is some argument that we should cut our official cash rate further. Our OCR, at 2.5%, is still well above the US rate at a quarter of a percent, the UK at half a percent and the Eurozone at 1.5%. We are lower than Australia at 4.75% but they have a booming mining sector and we do not. Mon, 01 Aug 2011 19:05:52 +1200 http://www.midasconsulting.co.nz/official-cash-rate/ The Global Financial Crisis http://www.midasconsulting.co.nz/the-global-financial-crisis/ The global financial markets have experienced a marked degree of volatility over recent weeks. At home, we have seen fixed interest rates rise and then fall again (lower than where they were at the start) in the space of a week. We have also seen our exchange rate increase to 0.87 against the US dollar, only to fall back again to around the 0.82 level. New Zealanders are still continuing to head to Australia but not all is that well on the Australian job front. On the world stage, we have learned that the US economy has slowed and that Standard &amp; Poor have downgraded the US solvency rating. This volatility is likely to continue to surround us for sometime yet. The message would seem to be to "sit tight".
The global financial crisis of 2008, was all about individuals and companies (including banks) becoming overly geared. Some companies failed, while others recapitalised. The surviving companies are reportedly now enjoying healthier economic positions, due to lower gearing levels and their cash reserves. Individuals too, have cut back on their expenditure, and there is less of a debt mentality than there was 3 years ago. This in turn, has resulted in a more sluggish retail sector.
The latest crisis is more about the likely defaults of governments, and by implication, their banks. We have seen the US go to the brink of default, and there are concerns about Italy and Spain. This is much harder to fix as, unlike companies, governments are unable to call on their shareholders for more capital. They can resort to higher taxation but this might be unacceptable in most jurisdictions. Their main recourse is to cut expenditure on various services and this again can be unpopular with the electorate. The reality is they probably have no other choice.
In this environment, our NZ Home Loans model remains compelling, as it focuses on managing debt and increasing savings. Mon, 01 Aug 2011 19:04:20 +1200 http://www.midasconsulting.co.nz/the-global-financial-crisis/ Planning for Retirement http://www.midasconsulting.co.nz/planning-for-retirement-3/ Retirement means different things to different people and there is a school of thought these days that there are clear benefits from not (fully) retiring at all. We read of 80 year old billionaires who still go into the office every day. Why do they do this?
The resources we need to retire also vary considerably from one person to another. Some people will be able to live comfortably on a lot less income than others. Looking at retirement from purely a financial aspect (there are many other aspects such as health, social contact, keeping the mind active, hobbies, and the kind of accommodation we need), many of us wonder what we should invest in to enable us to retire in the manner we would like.
Obvious options are fixed term deposits, share trading (in its various forms), life and supperannuation products, property, and business, while there are lots of other possibilities, including art, collectibles, gold and silver, currency, annuities, and selling on the internet. We tend to gravitate towards the kinds of investment avenues that we are most familiar with (trust) and enjoy, and then we have to consider our strategies for investing, that is, whether we do it ourselves, or through others.
The level of our investment success is usually determined, in my view, by what we choose to do, the level of risk we are prepared to take, how well we do at it, and leverage. Leverage is the use of debt to supplement investment.
We are often motivated to take action, but then slide back into our comfortable suroundings and nothing changes as a result - sometimes for years. We do need to take stock now and again and try not to become too set in our ways. Mind you, if being set in our ways is delivering everything that we want, then there is no need to make any changes.
If you choose to do your own investing, a key requirement for success is knowledge - knowing the "ins and outs" of your particular investment selection and how to go about it. It is amazing how many real estate agents have come to me for property investment advice over the years, when they work in the industry but simply don't know the 'nitty gritty' of how to develop a property portfolio. You can gain knowledge from reading books on the subject, consulting with experts, and gaining direct experience.
Planning is another key requirement if you choose to do your own investing. Having a plan, writing it down, and putting detail around it, are vital ingredients for success. I write down what I am going to do, how I am going to do it, when I am going to do it, and my income and expenditure expectations. Then I closely monitor progress and regularly review and measure the returns on investment - such returns will be a combination of short and long term based outcomes.
If you decide to have someone else manage your investments - a broker, banker, solicitor, fund manager etc - then you need to have some way of checking their ability and integrity.
It is never too soon to begin preparing for your retirement, nor is ever too late, even if this simply involves a re-arrangement of your affairs to suit your living requirements.
Having been involved in the finance lending business for some years, I know that a great number of people have mortgages well into their lives and ponder their retirements, but that's about it. For most people, the opportunity to be become freehold and have enough money to live on is an achievement in itself. Some people however, seem to be able to do quite well for themselves and enjoy financial independence.
 So, what to do? Wed, 06 Oct 2010 13:39:59 +1300 http://www.midasconsulting.co.nz/planning-for-retirement-3/