At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
In today’s blog post we share with you what we think about what you should do when it comes to Savings vs Investing.
Savings versus investing. What should I do?
Both! That is the answer.
Saving is the act of not spending your money. You need to do that because you’ve got to accumulate it.
We’ve got to go and earn our money. We spend some of it to survive and that which we don’t spend is savings.
Now that should be happening every single payday. Way too many New Zealanders spend to zero with every paycheck. They do that for a number of reasons, expenses, caring what other people think. Too many people spend all their money once they get it.
Therefore, when an emergency happens, they’ve got nothing and have to turn to debt. If they’ve done that too many times, they can’t even do that. Then it all turns to custard.
You should definitely be saving and everyone should do it. It is a crucial part of investing.
Earn, expenses, always have leftover, and that is savings.
Once you’ve built the savings up, that’s when you begin investing with some of that savings. Now you want to have some cash lying around for emergencies.
We recommend that you have at least three months of your ongoing expenses and financial obligations, always sitting somewhere ready to grab, anything on top of that is investing money.
How do you start your investment journey?
Now, I suppose you are thinking, how do I, how do I do that?
If you’re in KiwiSaver, you already are, what’s happening is you’re sending your money to a fund manager who’s investing for you.
You can do the same thing and it doesn’t have to be within KiwiSaver. We set up lots of investor accounts for people, and you don’t have to be rich. This is another illusion or falsehood that a lot of people think, oh, investing is only for rich people.
Well, that’s not true at all. Some people want to just open up an investor account and send 50 bucks a week to it, or 20 bucks a week to it.
Where should I get financial advice?
The best advice is to get advice. So go and talk to someone who’s licensed, who has the training and the education to be able to assist you with that.
They’ll simply sit down with you and say, here’s how it works. Here are some options. I’m going to ask some questions about you and that’s going to help me recommend an option for you. We’re going to find out what your goals are. We’re going to find out how nervous investing makes you, and we’re going to tailor up a package.
And then all you need to do is send the money in.
So there’s a misconception that you have to know everything about a company, financial markets, debt markets, all about the stock markets, all these sorts of things – to be an investor. It’s not true. You just have to have a good advisor who you understand, who you trust, who gives you the advice.
Now, most advisors don’t hold the money. They set it up an account with a fund manager for you, and then are there to give you advice along the way,
What does Super-Advice do?
We help people with their KiwiSaver, and part of that is explaining how KiwiSaver works.
You get a foundation understanding of investing. Then we suggest that you open up an investment account, which is exactly like the KiwiSaver like I said, and wait to start putting some money in there regularly.
When that starts to grow, we build a portfolio within that fund that you start to understand the more time goes along.
We also help customers set up an online investing platform. Now there are a few of them around like Sharesies and Hatch.
We recommend that you play around with little bits of money. If you’re putting 10 bucks a week in, or five bucks a week, you can invest and learn.
Saving or Investing?
It goes like this…
Step 1 Savings
Step 2 KiwiSaver
Step 3 Invest Account
Step 4 Investing Platform (like Hatch of Sharsies)
That’s a wrap
So what do you think? Will you be focusing on Savings or Investments?
If you need any financial help or advice please get in touch with us at Super-Advice.