Welcome to the Money Maven's Financial Blog

Money Maven Blog by Sheryl Sutherland, Authorised Financial Adviser and Director of The Financial Strategies Group

Recommended Reading

Recommended Reading by Sheryl Sutherland: Girls Just Want to Have Fund$ - Every Women’s Guide to Financial Independence, Money, Money, Money Ain't it Funny - How to Wire your Brain for Wealth, and Smart Money - How to structure your New Zealand business or investments and pay less tax.

The Financial Strategies Group

We think for ourselves and make unique recommendations. We only recommend investments and insurances that are in the best interest of our clients.

The Financial Strategies Group

Most of us spend 40 years working to secure our financial future; the most important investment you can make is to purchase appropriate financial planning advice.

Contact us for a review of your investments and insurances.

Begin to experience the serenity that accompanies financial responsibility and integrity: email sheryl@strategies.co.nz, call 0800 64MONEY or visit our website http://www.strategies.co.nz

Tuesday, 25 March 2008

Who's Counting?

Certainly the government can’t count correctly.

The IRD, Treasury and Dr Michael Cullen featured in a scenario the writers of Yes Minister would have loved. It seems that the $400 million “deficit” we had for the seven months to January was actually a surplus of $200 million – as Mae West said when she went into the movies “I just love those round figures”. What a massive balls up. Quite apart from the obvious questions – can we trust anything we are told by the unholy triumvirate? The so called “deficit” couldn’t have come at a worse time for those of us who worry about these things – and that would be all of us who have mortgages or buy petrol for example. Many Kiwis have been looking for Cullen’s tax breaks to help make ends meet. A “deficit” makes tax cuts unlikely and there is no doubt that it had helped undermine business and consumer confidence. What an absolute farce – weak comments explaining the mistake as “human error” just will not wash.

Musings and Amusings

Our brains lust after money with the same neurons that crave sex. And these are the same neurons which give us the high from cocaine. The pleasure of orgasm, the high from cocaine, the rush from buying, are governed by the same neural network.

Furthermore, these primal pleasure circuits can, and often do, override the functioning of the brains’ frontal cortex which governs rationality (read more about this in Money, Money, Money, Ain’t it Funny). In other words folks, money can drive you crazy.

I think I’ll go and buy a handbag, I need a rush!


Workers are fleeing the country at an alarming rate – but if you are a professional woman think twice. Women in senior jobs in Australia’s largest companies earn up to 50% less that men in similar positions.

The survey which was completed by the federal government’s Equal Employment for Women in the Workplace Agency (EOWA) found that women chief executives earn 32.3% less than men and the gap for chief operating officer and chief financial officer is about 50%. The largest pay gap is in the finance sector where top female earners make 48% less than men, followed by information technology and industries. These are bleak figures clearly demonstrating that discrimination is systematic throughout the work force. Once again women are underpaid and undervalued. In fact Australian women held only 7% of top earning jobs in ASX200 companies.

It is my fervent hope that sometime this century the economic table will be turned and we gain financial empowerment.

Footnote: A response to Brent Wheeler (check him out at www.brentwheeler.com) – yes, women in full time work do earn 80% of a man’s wage, but when you take all women’s employment into account it is around 60%. Not at all acceptable.

Finance and Investment

I feel for those investors who have been burned in the ongoing finance company saga, to add insult to injury it appears that some lawyers are demanding $5000 upfront before talking to investors about taking legal action. Some lawyers are offering a 50% discount on this fee.

If you are considering pursuing legal action make sure you know what you are getting your money for before you embark on what will be a costly and possibly fruitless exercise.

This would also be a good time for you to examine your own financial behaviour. Why did you invest in the finance company sector in the first place? For more on this read Money, Money, Money, Ain’t it Funny. Was the additional 2% or so worth the risk? Obviously not in hindsight!

Everyday Money

We work too hard for our everyday money to lose it.

It appears that people who are already victims of share-scams are being targeted a second time by fraudsters. Callers are making offers as part of a new wave of telephone share scams. Fraudsters have taken millions of dollars over the last decade, particularly targeting small business owners.

This time around the callers are claiming to have found purchasers for the bogus shares. If this sounds familiar to you, do not be tempted. You will be asked for more money as part of the selling process. Check out www.sharescams.org.nz. Bear in mind that not all fraudsters are listed as they frequently change names and identities and if it sounds too good to be true, it’s not true! All unsolicited calls should be treated with suspicion.


Why, given our prediction for trusts, are we not managing them appropriately?
A recent survey revealed that nearly 25% of family trusts are being run so badly they face being deemed a sham if tested in court. Furthermore, in an online survey only 29% of trusts were classified as adhering to good trust management principles. 32% of the 1000 surveyed handled the trust so poorly they had a high chance of being deemed a sham trust. This would mean the court would take the view that the trust never really existed and the assets never passed out of the ownership or control of the settlers, leaving them vulnerable to creditors or means testing for rest homes or could pull assets into the matrimonial property net.

Here are some tips for you
• All trustees should have copies of documents like the trust deed and have read them over the past 12 months
• All should be involved in trust decisions
• Have annual formal meetings
• Record decisions
• Have annual statements prepared each year

Additionally check if gifting is completed each year, create a written investment plan, are relevant insurances and investments in the name of the trust, do you have a separate trust bank account, is the trust free from borrowings and has all trust property been maintained?

If you can’t answer these questions satisfactorily your trust may be in danger of being a sham trust.