Latest news with #MoneyCorrespondent
RNZ News
6 hours ago
- Business
- RNZ News
Some divorced couples still living together due to property market
With the property market still slow, one divorce coach has told RNZ that it means some people, who've separated are still stuck living together. Money correspondent Susan Edmunds spoke to Ingrid Hipkiss. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.
Scoop
5 days ago
- Business
- Scoop
Long-Term Investment Is Guaranteed Lotto ‘Win'
Article – RNZ The odds of winning Lotto First Division are about one-in-3.84 million and Powerball is even less likely., Money Correspondent The money you're putting aside for your Lotto ticket could give you an almost certain $100,000 windfall. Lotto's Powerball is rolling over for a $20 million prize on Saturday, but while statistics show we spend a combined more than $700 million a year on Lotto products, investment experts say people might be missing out on a prize that they are much more likely to achieve. The odds of winning Lotto First Division are about one-in-3.84 million per line. Powerball is even less likely – at about one-in-38 million. On the other hand, if you put money away each week, fortnight or month, the power of compounding will deliver you a solid return, given time. Hamilton Hindin Greene investment advisor Grant Davies calculated the outcome for someone investing $25 a week over 45 years at just over $58,000, without any investment returns. If they received an after-tax and after-fee return of 4.5 percent, compounding weekly, they would grow their investment to $189,785. Adjusting for inflation, both in the weekly contribution and the future value of the investment, the investor would end up with about $160,000. 'The allure of Lotto is that big win and the hope that comes along with it,' Davies said. 'That's why people do it, but if you start to do the maths, it often doesn't stack up quite so well. 'The thing about compounding interest is that it does take a long time for small amounts to build up, but once they do build up, that's when you start to see the real benefit. 'Over 45 years, it's not until you get to the final 20 years that you see the real effects of compounding start to play out. 'That's part of the human condition – we're maybe more tuned to the short-term dopamine hit than the long-term one.' Over a long time horizon, he said most investments should perform, 'but when you're only dealing with small numbers at the beginning, it's hard to see that result at the end'. Hatch managing director Waimarie Marks said she knew people who spent a lot more than $25 a week on Lotto. 'I think it's because it's a habit they can't break,' she said. 'Although there is so much literature out there about the benefits of investing and compounding growth etc, the 'hit' of potentially striking big likely draws them in. 'I will say, though, an upside of Lotto is the good work this money can do in the community.' Koura KiwiSaver founder Rupert Carlyon said a big win was more alluring than a slow and steady return. 'Even though you know that it is a one-in-38 million chance of winning, you think maybe you will be that person. 'It's the same as a capital gains tax. Most people would benefit from it, yet it still polls negatively, because people think that one day they will benefit from a capital gain that they want to have tax free. 'Lotto are currently going through a process where they add an extra number. This will reduce the odds and allows them to offer bigger prizes. 'Their research is showing them that bigger prizes will mean more tickets sold. Unfortunately, it is human psychology. 'We love big numbers and love to believe we will be the lucky ones, despite what the logic says.' Fisher Funds chief executive Ana-Marie Lockyer, said it was behavioural economics. 'You only need to watch Lotto's latest TV ads to understand it isn't just about the money – it's about your dreams coming true overnight. 'The prospect of winning millions offers an immediate emotional payoff that saving or investing can't match, even though the odds of a big win are extremely low. 'Gambling a relatively small amount each week feels harmless and the occasional small win keeps people going back for more. 'Saving or investing, on the other hand, doesn't offer the same excitement, because the payoff is usually a long way off, and it's seen as complex and only for wealthy people. 'Most people don't realise investing $25 a week into a balanced KiwiSaver fund earning 3.5 percent a year for 10 years could add up to $15,500. 'We need to change those perceptions, so investing is seen as the best way of achieving those same dreams.'
RNZ News
5 days ago
- Business
- RNZ News
Money spent on Lotto tickets could lead to a $100k windfall
There's a way that the money you're putting aside for your Lotto ticket could give you an almost certain $100,000 windfall. Lotto's Powerball is rolling over for a $20 million prize on Saturday. But while we spend a combined more than $700 million a year on Lotto products, investment experts say people might be missing out on a prize that they are much more likely to achieve. Money correspondent Susan Edmunds spoke to Lisa Owen. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.
RNZ News
04-08-2025
- Business
- RNZ News
How does NZ's tax bill stack up?
In recent months, everyone from Treasury to Inland Revenue and an organisation representing accountants has suggested New Zealand needs a rethink of its tax settings. Money correspondent Susan Edmunds spoke to Corin Dann. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.
Scoop
02-08-2025
- Business
- Scoop
How Bad Is The Tariff News For NZ, Really?
, Money Correspondent New Zealand has been hit with a higher tariff rate than Australia on exports to the US - but economists say the situation could have been worse. It was revealed on Friday that New Zealand exports would have a 15 percent tariff applied, up from 10 percent announced earlier. Australia remains at 10 percent. Brad Olsen, chief executive at Infometrics, said that was a clear challenge for New Zealand. "There is now a wedge between us and Australia." There were other parts of the world that previously had a higher tariff rate that were now on the same level as New Zealand, such as Europe. "Wine, for example, under the original tariffs, we might have had a slight advantage. Now we don't." But he said it was not necessarily true that the country would have been better off had it negotiated a deal. He said New Zealand did not have a lot to "give up" in those negotiations, and it could have ended up being costly. "I'm a little bit surprised by comments, including from the opposition's trade spokesperson, that the government failed to achieve a lower tariff rate. "The comments seem to make the implication that New Zealand could have found a way to come up with a trade agreement that might have given us a lower tariff rate. "That might be true, but we have no idea what we would have had to give up to achieve that… some of what had to be given up by other countries to get a 15 percent tariffs rate is consequential - Japan and other countries had to give up to half a trillion dollars of further investment into the US." He said the impact on New Zealand's trading partners might not be as bad as had been expected, which should prove positive for the economy. "It will be slightly more challenging to export to the US from a New Zealand point of view, but our trading partner activity might not be hit as bad as was feared in April. That's probably a net benefit for us." Mike Jones, chief economist at BNZ, said the increase was not unexpected given indications of the past few weeks. "It's obviously unhelpful for NZ exports into the US, particularly how we line up with those coming from Australia and the UK, given the lower 10 percent baseline tariff rate for those countries. "Beef and wine exports could be affected. It's interesting in this context that we've seen the NZD/AUD exchange rate fall a little today in the wake of the announcements." Kelly Eckhold, chief economist at Westpac, said he thought New Zealand was in roughly the same position as in April. "On one hand, the tariff is higher, so there is a bigger direct cost, but it's a bit lower for a lot of our trading partners, so it's better for the economy than would otherwise be the case." He said how the lingering elements of uncertainty played out over the coming weeks would be important. "The legal basis of these tariffs, whether they're going to be able to continue or need to be replaced with a different type of tariff, is an issue. And the sectoral tariffs have not yet really been negotiated. "While I don't think these things affect the sort of goods New Zealand trades with the US, there may be some impact on our trading partners." He said it seemed strange that the US was calculating tariffs based on which countries exported more than they imported. "The concept that US authorities have had of countries ripping them off by selling more stuff to America than they're been buying is quite myopic. "We're only talking about goods trade here, we buy a lot of services from the US. "In large part, the trade imbalance is a cyclical rather than a structural story. "In the last few years, the economy has been relatively weak compared to the US. We're not sucking in as many imports, and the exchange rate has been lower than would normally be the case, which has encouraged export revenues. "I would have thought trade policy metrics like tariffs would be determined on the basis of structural, not cyclical factors. "All those things could easily be the other way around in a few years' time."
