Have Less Than a 10% Deposit?  

This Video Will Help Explain Your Options  

Have Less Than a 10% Deposit?  

This Video Will Help Explain Your Options  

 

 

Let’s talk about other strategies to build your deposit. 

KiwiSaver – if you can afford it, increase your contribution to 8%, and make sure your money is in the correct fund with the correct provider because there is A LOT of variation. 

Debt – pay off the expensive debt first (the one with the higher interest rate) and think about a 0% credit card balance transfer.

Equity Gift – The fastest way to have over a 10% deposit is equity release from a friend or family’s home. This is when they have extra value in the home they own, they top-up their mortgage and then gift/lend you the money to help.

A lot of people do this option, but we understand that this may not be possible for everyone.

What can you do now? Make sure that your KiwiSaver is in the right fund, with the right provider and contributions for your individual situation. How can you do that? Talk to us below…

Not all KiwiSavers are created equal. 

“I’m fine I’m in a growth fund” is something we hear all the time. Unfortunately for those people just being in a growth fund doesn’t mean you will do well. 

The worst performing Growth fund as at the March 2019 quarter was 4.8% while the highest performing fund was 11.7% over the same period*

One of the biggest problems for everyday Kiwis is that you can call a KiwiSaver fund whatever you want within reason. Just because you name a fund a growth fund doesn’t mean it is a growth fund. It’s a similar concept to how a food company often claim a product is “healthy” but unless you check the label you never really know. 

One of the most recent examples of this is our brand new Juno KiwiSaver fund. Juno has a target to have 80% of the fund in growth shares. However, it is currently sitting with 55% of its funds in term deposits or savings accounts. That sounds more like a conservative or moderate fund to us.*

KiwiSaver is an investment, not a savings account. Your funds can vary in many different ways that you may never have thought about. It is always best to have a chat with someone who can explain these differences to you and find one that suits you. 

Currently, 42% of Kiwis have their funds sitting with the 2 biggest Kiwisaver providers, ANZ and ASB. With the biggest reason for people choosing to stay in those funds being that it is easy to see their current balance on their banking app. 

Now I don’t know about you but making investment decisions based on how easily you can see your fund balance on your banking app doesn’t sound like a smart investment strategy to us. To counter this, many providers have created apps that you can access once you join up. So there is no excuse not to make your investment decision based on actual fund performance. 

As always if you would like any more information on how to find out what your fund is made up of or to chat about any of the points raised in this blog please feel free to reach out to us.

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