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, 16 September 2008

Everyday Money

Many of us have life insurance and in well over 90% of cases we have term insurance. Term insurance premiums increase each year to meet the rate for the insured’s age. To date most of us have just rolled our eyes and paid the extra however 2009 could see our eyes watering.

It has been suggested that life insurances are under taxed and legislation is planned to correct this. As always this will reflect on the consumer with premiums looking to increase between 20-30%.

I strongly urge you to talk to your advisor and examine the possibility of a level premium policy – it looks as if this will be the only way to avoid the potential increase in premiums.

And a note on KiwiSaver; on a salary of $70,000, you could have received $2193 in government contributions, and $274 in employer contributions – makes sense.

Musings and Amusings

I love my bed and I love snoozing – for those of you who feel the same way it is now official – sleep is good for your brain.

Until the mid 50’s, it was assumed that when we slept our brains shut down but are now familiar with the REM (Rapid Eye Movement) cycle evident in your sleeping patterns – the brain waves produced during this period look similar to those produced when are awake.

In fact the effects of sleep on memory are impressive. It appears that while we are asleep our brain is processing the day’s data. It sorts through recently formed memories, stabilising, copying and filing them so that they will be more useful allowing us to recall them for use more effectively the next morning.

Sleep not only strengthens memories, it seems likely that the brain sifts through memories identifying what is worth keeping and selectively maintaining or enhancing these aspects of memory. When a picture contains both emotional and unemotional elements sleep can save the important emotional parts and let the less relevant background drift away – perhaps helping us find the meaning in what we have learned.

It’s great when the latest scientific findings hear out the old adages – if you have a problem – sleep on it!


A few weeks ago and academic Paul Callister questioned the validity and continuation of specific scholarships for women, given, as we all know that women routinely gain higher educational qualifications than men. An op-ed piece in the Sunday Star Times commented that Mr Callister raised “fair” but “awkward” questions.

At arond the same time Fairfax printed a booklet listing the 100 Business Luminaries who have shaped our nation. Of the 100 business peoples, four were women, yes you read that right – four.

Women’s scholarships should continue until we are further down the track towards economic parity – bearing in mind that the right to education for women is still in its infancy in comparison to that of men. Possibly the reason behind our enthusiasm for learning we don’t accept it as a right.

Finance and Investments

The stark truth about managing our money these days is that we are mostly on our own.

Few employers want us around for 40 years, so our income is likely to have ups and downs and could disappear altogether for brief periods between jobs. Saving for retirement is now mostly our responsibility, too. Health insurance, for those of us who have it and manage to keep it, requires increasingly large amounts of money out of our pockets. The list goes on and on.

At the same time, all sorts of individuals and institutions have smelled opportunity and lined up to peddle their wares, resulting in an explosion of credit cards, bank products and advisers of various stripes. Some of this is helpful because competition has led to lower costs. But in other instances — say, newfangled adjustable-rate mortgages — the result has been painful.

Complicating all of this is the housing downturn, which has affected the largest asset in many portfolios. Rising fuel and food prices along with tougher loan standards do not help.

Given the stakes, it is hard to avoid the persistent low-grade fear that we have made wrong choices or cannot find the right ones, even though they are out there somewhere. There’s no guarantee that the choices will be available, attractive or appropriate for everyone.

Here are five basic guidelines.

Boiling down investing; Save regularly. Reallocate infrequently. Diversify.
For most of us, investing— and sticking with it— is the hardest part of the mantra to accept.

The fact is, however, beating the overall market in most investment classes is nearly impossible over long periods of time. Sure, it may be fun to try. But if you enjoy that sort of thing, do it with a tiny piece of your portfolio. And remember to call it what it actually is: gambling.

Investing is only one small part of your financial life. Mortgages, taxes, savings, insurance and debt are a few of the hugely important tasks we have to figure out.
Perhaps the best thing a versatile professional — whether it is a financial planner, accountant, stockbroker or lawyer — does is provide discipline. It is difficult to get most of this stuff right. And to get it done at the right time. Professionals help make sure it all happens on schedule.
Most of us would rather avoid paying for help but getting the right structure is well worth the cost.

Financial planners may not have all the answers, or the best answers, all of the time. Moreover, they tend to be stronger on core areas of money management like insurance and taxes and less so on day-to-day budget or purchasing consumer goods type financial decisions.

One of the great consumer-friendly innovations in the world of money in recent years has been the automation of bill paying.

This has a number of advantages: no stamps, no envelopes, no late fees. Then you can do things that are a lot more fun.

As fewer people have pensions and more retirees live longer, an increasing number of people may need financial help from their children. The question is whether your parents will be among them.

Trying to pry financial information out of your parents does not make for a pleasant conversation. But the fact is, we are entitled to demand some answers if our parents do not initiate the discussion themselves.

This is not a case for callousness. They took care of us for 20 or so years, and we will take care of them, too, if it comes to that. But it is not fair of them to withhold warnings of deteriorating finances. If we do not know what is coming, we cannot help them plan for it.

Just as we should talk about money with our parents, we should be less reticent about discussing it with others.


Why do I continually meet people who live from payday to payday and why do I have to keep parroting the same lines. Financial freedom is not rocket science. Follow these simple steps.

• Spend less than you earn
• Join a subsidised superannuation scheme or KiwiSaver
• If you are in the position of having short term expensive debt pay it off.
• Take out insurance – income protection is essential.
• Set aside an emergency fund.
• Buy a property and focus on paying off the mortgage as soon as you can.
• Set up an investment portfolio.
• Attend to legal issues such as writing a will.

If you can’t do this on your own, get hold of a financial planner to help you. Less than 30% of Kiwi’s have financial plans.

Who’s Counting?

I am – and I am up to five – five great ways to find extra money.

One: Slash your credit card rate – you could take a term loan, clear the balance and cut your card up; if you don’t want to do this transfer to a low interest rate card; or alternatively increase you mortgage to clear your card and finally – if you have money in your savings account or term deposit pay off your card! The interest you earn is less than a quarter of the rate on your card.

Two: Lower your entertainment costs; hire a DVD and make your own popcorn, play board games with your family, go for a walk – instead of going out for a meal, prepare your own dinner, light candles and enjoy a bottle of wine which is at least a third cheaper than that at your favourite restaurant.

Three: Have a garage sale, invite your neighbours to join in, you may be meeting some for the first time but making money together is a great bonding process.

Four: Sell your used books to a second hand book shop – and try not to be tempted by buying more!

And finally revisit all your insurances you may be able to prune costs by taking on an excess, you may find that you now have unnecessary insurances BUT remember insurance is the umbrella which prevents financial ruin!