Apparently property investing is still considered safe.
Filed under: Interest Rates, Credit Cards & Mortgages in NZ, Property & General Investing, Retirement, Pensions and Kiwisaver
There was news in the Dom Post this weekend about how “wealthy investors” still keep their money in property. Cool. There is so much fear and uncertainty right now – it can be hard for many people not to run for the hills and panic that they may have made a ginormous mistake in investing in anything other than a sturdy mattress with a hidden compartment.
Kiwis are known for their love of property as an investment, fuelled partly by the fact that you can take advantage of some nice tax breaks here by investing through what is called an LAQC (Loss Attributing Qualifying Company). There are frequent calls for this to be removed, but I for one am making the most of it while it is still there. Also, I think, it is a lot easier to understand houses and renting than to understand buying shares sensibly.
Property is still seen as a “conservative” investment, and not as volatile or risky as the stockmarket. Personally I think any investing is risky if you don’t understand what you are doing – and it is well worth learning about it before parting with your hard earned cash.
The article is a nightmare to read – so I’m not even going to link to it. I really wish New Zealand journalists would learn to write coherent articles. What I did pull out of the article was that “wealthy investor” means US$100,000 – about $170,000 – $200,000 NZD. Wehey! Nice to know.
And also 63% of Kiwi investors in that bracket own property as investments.
I’m not sure that is really new news.
We have recently decided to sell most of our share investments. We still had an Endowment policy in the UK, and some IBM shares. We have decided that now is the time to sell them and use the funds to pay a chunk off the mortgage and cut our interest payments. I’m all for paying as little money to the banks right now, and the investments aren’t growing as much as the interest we are being charged.
It will also make life a bit easier in that we don’t have to keep sending money back to the UK to pay for the endowment policy – which I have to say is getting a bit irritating.
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- How not to be a property developer.
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