Moving On
Professional Development
Moving On
Slide 1
Welcome
• Introductions
• Health and Safety
• Housekeeping
• Icebreaker
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Slide 2
Albert Einstein
When someone asked Einstein they probably
expected an answer to do with physics
“What is the most powerful
force in the universe?”
“Compound Interest”
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Slide 3
Aim
To help budget advisers consider longer term planning
of financial goals and responsibilities when working
with clients, or reviewing their own personal options as
they start moving on towards better times and/or
expected or unexpected changes in circumstances.
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Slide 4
Objectives
1.
2.
3.
4.
Provide reasons to plan for the longer term
Match goals and values to the individual
Identify barriers to saving
Identify options to protect assets (keep what you
have)
5. Understand saving and accumulating wealth
6. Know limitations of giving financial advice as a
budget adviser
7. Seek further financial advice and information
when required
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Slide 5
Principles of good budgeting
• Live within your income
• Account for everything
• Plan ahead
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Slide 6
Source: Fig1. Last updated December 2014 on RBNZ website www.rbnz.govt.nz
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Slide 7
Benjamin Disraeli
A nineteenth century British politician once said
“There are three kinds of lies:
lies, damned lies, and statistics”
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Slide 8
Reading statistics and data
• What factual information does the statistical
data give?
• What issues does this information raise for us
as a society?
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Slide 9
Source: ANZ retirement commission Financial Knowledge and Behaviour
Survey(2013)
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Slide 10
Source: ANZ retirement commission Financial Knowledge and Behaviour
Survey(2013)
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Slide 11
Financial Capability
• Financial knowledge and understanding
• Financial skills and competence
• Financial responsibility
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Slide 12
Financial plan
• A budget
• Knowledge of your net worth
• Financial goals
• Understanding about the management of debt
• Understanding about the management of savings
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Slide 13
Source: The ANZ Retirement Commission Financial Knowledge and Behaviour
Survey (2013)
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Slide 14
Saving Through
• Debt repayment
• Superannuation
• Investment
– short term deposits
– property
– bonds
– shares
– specialist investments
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Slide 15
Source: ANZ retirement commission Financial Knowledge and Behaviour
Survey(2013)
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Slide 16
KiwiSaver
• Automatic membership on starting a new job with an opt-out period
within 2-8 weeks
• Employer compulsory contribution is 3% for staff over 18 years of age
• Deductions will be at a minimum rate of 3% of annual earnings (higher
rates are 4% and 8%)
• Money can be accessed before superannuation in the following
circumstances:
–
–
–
–
Death (but this may not be immediately)
Proven financial hardship
12 months after emigration to anywhere apart from Australia
Towards a first home deposit (conditions apply)
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Slide 17
Compound Interest
Age
Capital
Investment
Interest
Total
35
$10,400
$1390
$11,793
45
$20,800
$6090
$26,890
55
$31,200
$15,016
$46,216
65
$46,600
$29,354
$70,954
$20 a week saved from age 25
• These figures come from a calculator on the ‘sorted’ website.
• They are based on a net real rate of return of 2.5% after tax, fees and
inflation are taken into account.
• They use ‘today’s dollars’ meaning that the lump sum you get in the
future will have the same buying power as this many dollars today.
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Slide 18
Source: ANZ retirement commission Financial Knowledge and Behaviour Survey
(2013)
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Slide 19
Recap
1. Provide reasons to plan for the longer term
(statistics and data / household debt)
2. Match goals and values to the individual
(Financial capability/ Financial planning / SMART goals)
3.
Identify barriers to saving
(Societal pressures and attitudes)
4. Identify options to protect assets (keep what you have)
(Insurance/Wills and Power of attorney)
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Slide 20
Closure
5. Understand saving and accumulating wealth
(Debt repayment/Superannuation/KiwiSaver/Compound Interest)
6. Know limitations of giving financial advice as a budget
adviser
(budgeting advice versus financial advice)
7. Seek further financial advice and information when
required
(How and where to gain the right information)
Evaluations
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Slide 21