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.

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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

Thursday, 2 July 2009

Everyday Money

You may think that in these straitened times philanthropy is the first thing we should reduce or cut out as we attempt to make ends meet. But, in an article featured in Portfolio, it was demonstrated that “... people grow wealthier when they give more.” The study from the Social Capital Benchmark Survey examined philanthropic behaviours and household income plus other factors such as age, religion education and more. It found that higher income related to higher charitable donations and that “more giving doesn’t just correlate to higher income; it causes higher income.”

This sounds crazy I hear you expostulate, but giving is usually linked with other behaviours. For example, donors are usually confident in their financial situation, have some level of knowledge regarding tax and most likely have a financial plan. Secondly donors are generous people, a characteristic which others find appealing. It is likely therefore that these generous people attract higher salaries or are more successful in business.

Maybe there is a kernel of truth in that old saying; you get back what you give out.


Why don’t we spare a thought for those collectors of contemporary art who are now inhabiting a classic investment bubble. Forget about the share market, the sub prime crisis, the tottering financial system and the world economy.

A recent article by Ben Lewis claims the bubble is about to pop. He cites the example of British house prices which took six years to double at the start of this century, contemporary art managed it in one, 2006-2007. Over the same period old masters only went up 7.6% and 17th to 19th Century watercolours actually lost value. In emerging economies the growth was eye watering; China was up 983 per cent in one year, in Russia 2,365 per cent in five years, while its stock market only increased by 300 per cent.

So spare a thought for the nouveau rich who fuelled the bubble and who have seen the value of their other assets go into freefall, their art collection is due to follow.

As Lewis puts it “like the Dutch merchants and their tulips, the obsession of the new rich with contemporary art is likely to be remembered as the epitome of the vanity and folly of the age. The bulbs are still in the ground but the spades are poised.”

Musings and Amusings

Following in the footsteps of Grecian courtesans that notorious woman Catherine d’Medici introduced Italian style by wearing high heels (she was rather short). Since then women have been crippling themselves in the search for the advantage kick-arse shoes give the wearer.

Latterly nine inch heels with four inch platforms have been gracing the feet of the ultra thin models we are supposed to emulate. What is it about our shoe fetish? Many of the most seductive styles can only be worn safely when lying down; a prophetic position perhaps? Feminism surely takes a back seat where high heels are involved. I was interested therefore, to read some comments from an article by Germaine Greer on this fashion which is surely not a fad:

Vivienne Westwood, fashion designer – “One can’t help but feel powerful, beautiful when wearing them.”

Alexandra Shulman, editor, British Vogue – “Men do find them attractive – wearing heels is certainly not all about women and other women.”

Plum Sykes, novelist and fashion journalist – “It’s really only for gay men and other women.”

Camille Paglia, academic and author – “It’s a shrewd social strategy to see and be seen. But long term mutilation of a crucial body part is inevitable for the compulsive fashionista.”


There have been many studies demonstrating the earnings gap between men and women; however a recent study by the Department of Sociology at Queens College in New York showed that full time female employees in their 20s were earning more than males same age, in large cities like Chicago, Boston, Minneapolis and New York. In Dallas 20% more than men, in New York 17% more.

But, and you knew there was a but, after age 30 women were no longer ahead.

The growth in women’s earnings has only occurred in the last 7 years, that the average earnings reduce after 30 is probably caused by women reducing or ceasing work to bring up families.

Still, these results augur well for our daughters since there is a definite narrowing of the gap and an increase in education for all women.

For more on women in NZ and the gender gap refer to page 3 of my latest newsletter by clicking here.

Who's Counting

I am pretty sure it was Winston Churchill who, when confronted with statistical proof growled; “There are lies, damned lies, and statistics.” His assertion is still pretty valid many decades later. Statistics are supposed to define what is true, false or merely anecdotal but; statistics can fool us. In fact as Nassim Taleb, author of The Black Swan points out, it is probably fooling governments right now.

When he talks about the limits of statistics he becomes outraged, “My outrage” he says, “is aimed at the scientist-charlatan putting society at risk using statistical methods. This is similar to the study of the doctor putting the patient at risk.” His view is that those who are putting society at risk are “no true statisticians” merely people using statistics either without understanding them, or in a self serving manner.

I fully endorse these views and exhort you, next time you are presented with ‘definitive statistics’ look very carefully and cynically at who is using them, and for what purpose. And if the mathematical or statistical analysis eludes you take comfort in the words of Einstein “Do not worry about your difficulties in mathematics. I can assure you mine are still greater.”