Everyday Money

If anything underlines the need most New Zealander's have to take financial advice, a new survey has found that 60% of Kiwis are financially stressed - but most don't plan to change the way they spend or invest.

The survey, undertaken by the Financial Services Institute of Australasia (Finsia), found that 60% of women and 55% of men say the global financial crisis has made them feel financially stressed.

"The sudden collapse of finance companies, the significant loss incurred by investors and the notable rise in unemployment has left many New Zealander's grappling with spiralling levels of household debt, inadequate savings and the prospect of an uncertain environment," according to Finsia CEO Dr Martin Fahey.

The opportunity for financial advisers is clear - some 23% of Kiwis are saving nothing from their income while 36% are paying interest on credit card debt and 15% don't know what interest rate they're paying on their credit card debt.

Other key findings:

• 38% of respondents said they feel slightly worse off than a year ago.
• 12% feel significantly worse off.
• 41% say they're no better or worse off post GFC.
• 8% say they're better off since the GFC, due to lower interest rates

So what to do? Meet with a Financial Planner.
Source: Financial Alert, 2010.

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Womenomics

Few young women enter the trades where there are good career opportunities and it is possible to earn-while-you-learn.

Many jobs remain dominated by either men or women. While 99 percent of all plumbers, builders, and mechanics are men, over 90 percent of people working as caregivers, registered nurses, and secretaries are women. Male-dominated jobs tend to be higher paid than female-dominated jobs.

MWA commissioned research in 2008 on the factors that influence young people when they are deciding on a career and in particular, why so few young women enter the trades. The report Trading Choices: young people’s career decisions and gender segregation in the trades is available on the website: http://www.mwa.govt.nz/news-and-pubs/publications/trading-choices.

The overall objective of their women in trades work is to figure out how to promote the trades as a career option and remove barriers to women in trade training. They are looking across the trades where women are under-represented, and at emerging industries to see how they might prevent occupational segregation from repeating the patterns of history.

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Why?

Why am I reading yet another article telling me it is good business to have women in senior positions as well as fair! I have to say it exasperates me when I look at the management of the companies I work with – they are all men. The argument I get when I query this is the old “we cannot find women for senior positions” has worn thin.

Half of The National Australia Bank leadership are women; they have a programme of hiring 200 bankers this year, setting themselves a goal of 50-50 women and they say there’s no shortage of women! The talent exists but for most men, and companies, it doesn't make it on to their radar. Extraordinary!

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Finance and Investments

My favourite emerging market fund is managed by Dr Mark Mobius. He recently visited New Zealand. Some highlights from this presentation;

The Emerging Markets fund has performed exceptionally well. It has appreciated 18 fold since listing, which equates to an annual return over the past 21 years of around 15 per cent. Over the past decade it has gained 12 per cent a year in NZ dollars, trouncing both the emerging markets index which is up 6.5 per cent a year and the broader global markets MSCI index which has fallen 3.0 per cent a year over the past decade.

But 50% declines are almost ‘normal’

Emerging markets have indeed been the place to be over the past decade and Mobius and his team of 40 analysts and managers have delivered returns well about the market. But Mobius is the first to point out that this extra performance comes at a price.

Emerging markets can experience ferocious bouts of volatility. In 1994, 1998 and 2008Emerging markets, and the Templeton fund, fell by 50 per cent in a matter of months as global market weakness hit Emerging Markets hard.

Market outlook dominated by two issues: Money-printing and Derivatives

The first is the vast growth in money supply. Central banks around the world have addressed the financial crisis by slashing interest rates and pouring money into their respective economies. This has driven share markets upwards for two reasons.

First, the dramatic reductions in deposit rates mean many investors have exited their cash investments and shifted their money into shares as they seek higher returns and more income.

The fact that many central banks have effectively been printing money has raised concerns with many investors that inflation could rise sharply. These people are again buying shares as, like property, shares have historically provided a degree of protection against inflation.

The second elephant Mobius identified was derivatives contracts. Derivative contracts are investments like futures and options and other synthetic instruments. He sees the dramatic growth in the use of these investments as a major threat to the stability of markets.

For the record, he is relatively positive on the outlook for the global economy and believes the worst of the crisis is behind us. He does though continue to believe share markets across Emerging markets will continue to outperform the developed markets.

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Musings and Amusings

It amazes me that so many Kiwis are reluctant to write financial plans – only around 30% of us do so. Perhaps my profession needs to take a more creative approach. Consider the following as a base for your plan:

Write a mission statement for your life. What are you dedicated to? What can people count on from you? Leave this exercise for a day or two, then re-read it. Did you learn something about your goals and dreams? Can you incorporate what you have learned about who you are, and where you want to go, into an action plan that begins today? Keep the notes you make in response to this exercise – they will be a great source for you to refer to when you come to write your financial plan. Your goals will already be established.

Imagine your future – think about your goals, dream about your goals. The philosopher Henry David Thoreau writes in Walden, “If you built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.”

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Everyday Money

A recent survey undertaken by the Financial Services Institute of Australasian found that 60% of women and 55% of men say that the global crisis has made them feel financially stressed. The obvious response to this is simple; have a financial plan, accept that the best laid plans “gang aft agley” to quote the bard Robbie Burns. This means that once you and your financial planner have created a plan it needs to be revisited. Just as sometimes we have to detour to reach a destination. Be prepared to change your financial strategies to achieve your goals.

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Who's Counting?

Susan Pinker is counting. Women are 2.8 times more likely than men to leave science and engineering careers for other occupations and 13 times more likely to exit the labour force entirely.

Pinker makes it a point to show how males are genetically at a disadvantage; prone to disease, accidents, ADHD, autism, Asperger’s, dyslexia, and others. Many males experience an overlap, getting hit with two or three of these disorders throughout their development. Without political or social posturing she lays out case after case of genetic vulnerability and learning, behavioural, and social differences. All of which creates a wide range of male ability with huge numbers of both extremely low and high achievers. Boys are three times more likely to be placed in special education classes, twice as likely to repeat a grade, and a third more likely to drop out of high school. However, males also dominate the highest percentiles of achievement, from math competitions to scrabble tournaments.

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