As we wind down to the end of the year most of us reflect as to what we have and haven’t achieved throughout it. Of that mental list that we set ourselves eleven months ago – how much of it has actually been ticked off?
If you’re anything like us then the general pace of life probably got in the way of ticking off your “To Do” list. Something though that we shouldn’t keep putting off is starting that little savings plan or reviewing what we have already put in place. Savings generally are something we work hard towards to ensure that our needs and wants in the future are met.
With interest rates being so low, we are encouraging our clients to look beyond the banks for saving your hard earned money. Even if you only have a small amount to put away each week there are other options that are worth considering.
We all know of somebody who has been burnt by a bad investment and this has led to many to stick to what they know - the Banks. Whilst banks are generally safe, the recent banking collapse in Greece shows that this can happen. There is definitely a place for savings in the bank but our whole philosophy is diversification – do not keep all of your eggs in one basket. A spread of risk is imperative for a well thought out and stable investment plan.
It is possible to have a well thought out financial plan incorporating banks and other providers. Whatever risk strategy you want to adopt, you can easily achieve this with some thought and planning. Of course a bank will tell you to keep all of your savings on term deposit – they make their money by the onward lending of customer’s deposit funds for mortgages and loans etc. New Zealand’s five major banks posted a combined net profit of $1.69 billion for the first three months of the year, mainly by using your
money. How does that make you feel when they are paying you interest of 3% on your savings?
You may not realise it but depending on your total earnings, you could be paying income tax on your bank interest of up to 33% yet other diversified investments carry a maximum tax rate of 28%. That additional 5% tax saving could be money in your pocket. Get something else ticked off that list!
At Foresight Financial, we understand how hard we all work for our savings and we all want as much security and reward as possible. If you would like a no obligation financial review regarding either your investment or insurance planning then please do not hesitate to give us a call on (06) 751 4510 or email [email protected]
A free disclosure statement is available on request.