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A new podcast from RNZ, “No Stupid Questions,” featuring money expert susan Edmunds, is set to launch next month, aiming to address common financial concerns. Readers are encouraged to submit questions via email at [email protected], either in writing or as voice memos, to inform upcoming episodes. This comes as Kiwis grapple with critical questions about investment performance and teh complexities of managing assets.
Passive vs. Active KiwiSaver: Can You Beat Inflation?
A central question for many KiwiSaver investors revolves around the performance of passive funds. While these funds are designed to track, rather than outperform, their benchmark indexes, concerns remain about whether they can deliver sufficient long-term returns to outpace inflation. One investor questioned whether consistent,small contributions – such as $20 or $25 per month over two decades – would ultimately be eroded by rising prices.
Reader question:– can small, consistent KiwiSaver contributions withstand inflation over time? An investor wondered if $20 or $25 monthly contributions, made over two decades, would be eroded by rising prices. Experts advise considering growth assets to outpace inflation.
According to Dean Anderson, founder of Kernel Wealth, the risk of inflation considerably diminishing investment value is especially acute for those holding cash or conservative assets over extended periods. However, he emphasized that investing in growth assets is likely to generate returns sufficient to stay ahead of inflation.
“It’s more a question of what you’re invested in, rather than whether the fund manager is an active or passive one,” Anderson stated. While passive funds aim to mirror an index, they aren’t necessarily destined for lower performance. Active managers frequently enough struggle to consistently beat the market, and passive funds can sometimes offer better returns at a lower cost due to reduced fees. Recent analysis indicates that newer, passive options may lack the extensive 10-year performance data available for established funds, but still offer valuable insights.
Untangling Family Trusts: Costs and Legal Pathways
Beyond KiwiSaver,many New zealanders face challenges navigating the intricacies of family trusts. One individual encountered difficulty obtaining a clear price quote from Public Trust for dissolving a trust and transferring ownership of their home back into their name. The process was described as perhaps complex and expensive.
reader question:– Is it mandatory to use Public Trust’s legal services to dissolve a trust established with them? Experts say the trust deed dictates who handles the process. Costs can reach thousands of dollars, and refinancing may be required if a mortgage exists.
A key question arose: is it mandatory to use Public Trust’s legal services to dissolve a trust established with them, or can an self-reliant lawyer be engaged? The answer, according to experts, lies within the trust deed itself, which will specify who holds the legal authority to wind up the trust.
Generally, the trustee determines who handles the dissolution process – which could be Public Trust or an independent legal professional. Regardless of the chosen path, costs are expected to reach several thousands of dollars. A spokesperson for Public Trust, Georgie Hills, explained that if the trust property is subject to a mortgage, refinancing might potentially be required before the transfer can occur.
“There may also be tax implications that need to be considered,” Hills added. “When the trust holds assets, the trustees will consider whether an early wind-up is in the best interests of all beneficiaries.” Public Trust acknowledged the need for greater pricing openness and encouraged the customer to reconnect to discuss their options. They noted that pricing is dependent on the complexity of the assets held within the trust and the unique circumstances of each case, making upfront quotes challenging.
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