Financial Advice

Money

Here is a New Zealand Herald article that contains some shitty and some good advice about money.

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Buying over renting

Buy property young, preferably in your 20s. Move heaven and earth to get the deposit. Rent is wasted money.

Buying a house is not for everyone. Sometimes it doesn’t make financial sense for a particular person. Insurance, rates, money spent on repairs (~$5k~ a year) etc. sometimes make renting a better choice. Run the numbers.

Avoid fines

It’s moronic to incur fines. Like the maniac driver in a big red American-style pickup truck who overtook me on State Highway 2 on December 17, just to be pulled over and fined.

Yes, you shouldn’t speed etc. etc., but this doesn’t contain any useful advice if you do get a fine. Actual advice would be to set up an automatic payment account to a ‘Stupid mistakes’ savings account so you have money to pay inevitable fines.

NEVER SPEND MONEY EVAAAA

Every dollar is precious. Think before you spend it.

I regret frittering money on coffees and unnecessary eating out. It would be better to direct that money towards savings.

Needs and wants are often confused. This is perhaps the biggest financial mistake that people make.

If you enjoy a coffee a day, buy a coffee a day. If you enjoy eating out, eat out. There’s no point earning money if you don’t spend it on stuff you love. Cut back on the stuff you don’t care about, optimize existing spending (subscriptions and phone/internet/TV/power etc. plans) and/or earn more money.

Have a [email protected]@111

Track your spending. You can’t budget if you don’t know what you’re spending.

Perhaps the most popular piece of financial advice ever given out. How many people who write this actually do in it in practice, I’m not sure. Tracking your spending by typing into a spreadsheet or basically anything with mainly manual entry is doomed to fail. Xero with BNZ and ASB by itself both offer spending tracking services within online banking. Or, Xero allows the import of other bank’s transactions. Do mainly electronic transactions (because they can automatically coded into categories) and use these.

Credit cards

Credit cards make you look rich. Anyone can live well for a few years, but the debt catches up.

Credit cards with benefits that are automatically paid off each month are excellent.

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Judging people

People are too quick to judge others’ financial decisions, me included.

1) No one wants unsolicited advice. 2) You have your own problems to worry about.

Pay bills

Pay your taxes on time. The IRD has a big stick.

Pay all bills on time. Automate them. The IRD and other companies are always up for negotiation around deadlines.

Experiences

Spending money on experiences is good spending. I am eternally grateful that I sold all but one of my shares at age 22 (by coincidence in August 1987) and went backpacking through Latin America. It’s good spending if the experience enriches life.

Yes. Also, give experiences as presents instead of physical things.

Save for things. Automatically.

Save before you buy. A bit of a radical concept in 2011, but it can change people’s financial future.

Enter into interest-free deals cautiously

Interest-free hire purchase deals are for suckers. You still pay ad establishment fee and the majority of people fail to clear the debt on time and pay interest anyway.

These places invariably have great clauses such as charging you if you pay anything over the set monthly amount. Once you’ve finished paying the item off you get mailed offers from the company for ever and ever.

Avoid interest

Interest payments on personal loans, credit cards and HP are “idiot tax”. Why throw money away unnecessarily?

Work out how much something will really cost when interest is added before jumping into these. There’s calculators online that will help.

KiwiSaver

KiwiSaver is good.

Get in it.

Advice

Take your advice from people who have been through several cycles. Johnny-come-latelies going through their first financial cycle underestimate the risks.

Ask older people what they would have liked to have known at your age. What would they save for if they could turn back the clock?

Read a book

You can learn more about money. The easiest and cheapest way to improve your knowledge is to get a book out of the library.

Image credit: 401k/401kcalculator.org

Judging a Book By Its Cover

A book on the deaths of the Kahui Twins, written by Ian Wishart in conjunction with Macsyna King, is going to be released soon. A bookshop advisory on new titles was leaked to TVNZ and publicity around the book started earlier than intended, unfortunately directly coinciding with the inquest into the death of the twins.

A Facebook group is calling for the boycott of the book, and apparently the boycott of shops who choose to sell the book, and a couple of bookstores listened. From reading some of the comments on the page, it is clear that some commenters are misinformed. Paper Plus and The Warehouse have both said that their stores won’t be stocking the book. Whitcoulls is still considering whether it will or not. Paper Plus chief executive Rob Smith said: “The health and wellbeing of children is always front of our mind when we are faced with decisions which might impact the stores and the communities in which they operate”. It’s not clear to me how stocking a book not intended for children, and which doesn’t encourage child abuse would impact the health and wellbeing of children. There actually isn’t a clear reason why the book is harmful at all, nor is there a clear reason why it shouldn’t be stocked, apart from “we don’t like it/Macsyna”. Like Steven Price says, no one has actually read the book, how can they make an informed decision that they don’t like it?

Censorship causes blindnessMacsyna King cooperated with the police and was a prosecution witness, she hasn’t just decided to speak now. She isn’t profiting from the book either, Ian says: “Apart from sharing a Domino’s pizza during lunch, Macsyna has never received anything nor will she.” Ian will earn money for the book, but points out that researching and publishing a book takes time and money and that media organizations get paid for their reporting too (apologies if there’s a country block on the video): “When I worked for TVNZ, I earned a six figure salary to do investigations into cases like this one. I had the luxury of expenses being covered, helicopters at my beck and call, and lots of lovely advertising to pay for all this.”

Books like Mein Kampf by Adolf Hitler (Amazon, Book Depository) are stocked not because the sellers agree with the content, or approve of the author, but because as a society we value all viewpoints, although don’t necessarily agree with them.

Booksellers New Zealand, which represents Paper Plus and many others, says such a move is rare, and dangerous.

“It would be an attack on democracy if we started banning books that some people didn’t like,” said Booksellers. “It’s a matter of personal choice and it’s something we cherish in our democracy”.

Perhaps ironically, criticism was directed towards family members who didn’t want to speak out at the time of the death of the twins. Now someone is speaking out and people don’t want to listen to her. It’s great that companies are taking feedback into consideration, but maybe this a case of the loud minority being listened to. Boycotting a book by deciding not to buy it yourself is fine, but those people shouldn’t make a decision on behalf of everyone else. Macsyna King wants to shed some light on how her lifestyle was molded, maybe we should be listening.

Do you think the book should be stocked? Will you read it?

Image credit: Tracey R