Investments During Retirement

[Lewylewylewy]

Hi all,

I've been trying to think of investments that will suit me during retirement. These are ones that fit the following criteria:

- Are very safe (if the investment disappears, I don't want to have to go back to work when I'm 70)
- Are inflation protected or offer > 8% ROI, so I can reinvest 3% to cover inflation and take my 5%
- Give consistent year on year returns, even through events like the GFC
- Is zero effort to manage (or as close as possible to)

So far, the only things I can think of that fit my requirements best would be housing and some American shares (such as NYSE:O or possibly Diago). Unfortunately NZ FIF taxes make American shares useless as dividend returns (unless I've misunderstood the rules, it seems as though they basically take all your profits as tax), besides the prospect of having to fill in USA tax forms sounds nightmarish... Which leaves me with housing in NZ. P2P investing could possibly fit my requirements also, although P2P is young...

What are other peoples thoughts?

[fungus pudding]

Hi all,

I've been trying to think of investments that will suit me during retirement. These are ones that fit the following criteria:

- Are very safe (if the investment disappears, I don't want to have to go back to work when I'm 70)
- Are inflation protected or offer > 8% ROI, so I can reinvest 3% to cover inflation and take my 5%
- Give consistent year on year returns, even through events like the GFC
- Is zero effort to manage (or as close as possible to)

So far, the only things I can think of that fit my requirements best would be housing and some American shares (such as NYSE:O or possibly Diago). Unfortunately NZ FIF taxes make American shares useless as dividend returns (unless I've misunderstood the rules, it seems as though they basically take all your profits as tax), besides the prospect of having to fill in USA tax forms sounds nightmarish... Which leaves me with housing in NZ. P2P investing could possibly fit my requirements also, although P2P is young...

What are other peoples thoughts?

Disclaimer from the start: As far as sharemarket goes I only invest in listed property trusts. They give excellent income, tax effective - particularly for those on high tax brackets as most are PIES. I hold ARG, GMT, KPG, KIP, PFI, PCT and STR. I hold no other shares. I'm heading towards 70 and after many years as a landlord of residential and commercial stuff I find the opportunities in these pies is so much easier. Forget residential - maintenance and other costs will kill you. Commercial is great but requires huge capital tied up in a small number of assets - perhaps only one or two' and that's a risk. LPTs are low risk - easy to accumulate and provide a ready market if you ever want to sell, but just keep buying and stacking up that income. Once it starts to compound you will be in clover. Investments are things to produce income. Think like an investor. So many share market players I know think more like car-dealers. They only see the profit in selling.

[Lewylewylewy]

Thanks Fungus, that's something that I seriously considered, but noticed that for about 5 years during the GFC, the likes of PFI didn't pay any dividend (according to Google Finance). A good spread of residential (although more hassle) would keep paying during such a period.

Do you simply invest in these types of shares (ones with the security of the value held in the property they hold), then have a separate pot of money to get your through another GFC?

[fungus pudding]

Thanks Fungus, that's something that I seriously considered, but noticed that for about 5 years during the GFC, the likes of PFI didn't pay any dividend (according to Google Finance). A good spread of residential (although more hassle) would keep paying during such a period.

Do you simply invest in these types of shares (ones with the security of the value held in the property they hold), then have a separate pot of money to get your through another GFC?

Firstly, don't assume income is guaranteed from residential. Usually income is reasonably steady, but income is not profit. Vacancies and re letting are expensive. Tenants - even the good ones are hard on properties. Maintenance can be horrific. A blown cylinder, a leaky roof, and just normal wear and tear - bathroom renovations, new kitchen, new carpet etc believe me - it always costs more than you think it might to keep a house running.
As far as my investment goes, I do still hold one commercial property still which gives me a very good income; certainly enough to live on if that was all I had. I hold a lot of
LPT shares (also enough to live on if I had nothing else) which I started buying about 6 years ago. I have never missed a quarterly div. from any of them, and can't foresee it happening. I think NZ commercial and industrial property will hold up well in another GFC. The odd tenant may fail, but over several LPTs with hundreds of tenants and buildings of quality that the individual cant get a look into, the risk seems minimal. Mind you - nothing is risk free.
But what I'm really saying is learn about cash-flow (not in street talk sense, but its real meaning) and how to build an income by increasing income bit by bit. Once you are earning more than you are spending devote all your surplus to improving income and avoid the trap of becoming a flick over merchant. IOW aim to never sell anything. Many will disagree, particularly on sharetrader, but once you have a good regular predictable profit from your investments you can simply keep on building it up. I wrote on some other sharetrader forum about living with a cash-flow spreadsheet. ( how much capital do I need to comfortably retire on - post 203) It's worth doing. Just my ideas. Good luck.

http://www.sharetrader.co.nz/showthread.php?10228-How-much-capital-do-I-need-to-retire-comfortably-on&p=602074&viewfull=1#post602074

[Lewylewylewy]

I really like the idea of building investments by never selling, but this seems like a head in the sand approach unless you're really confident in the investment you're buying into. I suppose shares whose price is based around the companies NTA should be safe, providing those assets are not depreciating... Property should be a good bet. However I can still see a gfc causing dividend to stop due to poor performance and remaining revenue going to the management and running of the business... But then it seems you're protecting yourself with diversification.

I guess by the same theory this would make retirement villages a good long term buy... Since they're based on property with added value.

I'd love to hear some other views and what others are doing also.

[mshierlaw]

Hi all,

I've been trying to think of investments that will suit me during retirement. These are ones that fit the following criteria:

- Are very safe (if the investment disappears, I don't want to have to go back to work when I'm 70)
- Are inflation protected or offer > 8% ROI, so I can reinvest 3% to cover inflation and take my 5%
- Give consistent year on year returns, even through events like the GFC
- Is zero effort to manage (or as close as possible to)

Your not asking much here. FP has given sound advise here :), aim for consistant high dividend yields to minimise risk as I do with a different set than FP ....... MEL, GNE, MRP, IFT, PGW, SCL, SKL, NPX, HBY. Slowly slowly catchy monkey.

When interest rates change upwards then a fixed interest portfolio may suit you & ME better.

[Corporate]

FP

Do you have a list of all of the NZ listed Property Trusts?

Cheers

[fungus pudding]

FP

Do you have a list of all of the NZ listed Property Trusts?

Cheers


No. Apart from the ones I have named I know of Vital healthcare and NPT. There may be others. There is also Augusta, a property company but not a PIE and no doubt others.


To lewylewylewy
I don't share your concern about dividends in another GFC. Dividends depend on rent, and while ability to pay rent may be affected in dire financial circumstances, it's not a huge risk because of diversity, and also the asset remains. If commercial or industrial property goes down, it will be following everything else - not leading it. IOW it will weaken if and only if other businesses have failed first to such an extent that failed tenants cannot be replaced.

[BIRMANBOY]

Property Investment


Company Name
(Click on name to
go to their website)
Share Symbol
Dividend
Re-
investment
Program
Type of Business
Dividend History
Dividends
per share
last year
in NZD
Dividend
yield
%
Share
Price
History
Current
Share
Price
NZD
Important
Notes


Argosy Property Trust (http://www.argosy.co.nz/)
ARG
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=ARG)
0.060
5.170
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=ARG)
1.160
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Augusta Capital (http://www.augusta.co.nz/)
AUG
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=AUG)
0.050
5.000
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=AUG)
1.000
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Goodman Property Trust (http://investors.nz.goodman.com/phoenix.zhtml?c=164117&p=irol-IRHome)
GMT
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=GMT)
0.065
5.120
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=GMT)
1.260
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Kiwi Property Group Ltd. (http://www.kipt.co.nz/investor-information)
KPG
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=KPG)
0.066
4.820
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=KPG)
1.360
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


NPT (http://www.npt.co.nz/)
NPT
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=NPT)
0.036
5.300
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=NPT)
0.675
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Precinct Properties (http://www.precinct.co.nz/investor-relations/)
PCT
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=PCT)
0.054
4.370
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=PCT)
1.235
None


Property for Industry (http://www.propertyforindustry.co.nz/)
PFI
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=PFI)
0.072
4.500
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=PFI)
1.610
None


Stride Property (http://www.strideproperty.co.nz/investor-news/)
STR
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=STR)
0.107
4.990
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=STR)
2.155
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Vital Health Properties Trust (http://www.vitalhealthcareproperty.co.nz/investors)
VHP
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=VHP)
0.080
4.290
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=VHP)
1.870
None



FP

Do you have a list of all of the NZ listed Property Trusts?

Cheers

[777]

No. Apart from the ones I have named I know of Vital healthcare and NPT. There may be others. There is also Augusta, a property company but not a PIE and no doubt others.


To lewylewylewy
I don't share your concern about dividends in another GFC. Dividends depend on rent, and while ability to pay rent may be affected in dire financial circumstances, it's not a huge risk because of diversity, and also the asset remains. If commercial or industrial property goes down, it will be following everything else - not leading it. IOW it will weaken if and only if other businesses have failed first to such an extent that failed tenants cannot be replaced.


Augusta is a PIE.

[fungus pudding]

Property Investment


Company Name
(Click on name to
go to their website)
Share Symbol
Dividend
Re-
investment
Program
Type of Business
Dividend History
Dividends
per share
last year
in NZD
Dividend
yield
%
Share
Price
History
Current
Share
Price
NZD
Important
Notes


Argosy Property Trust (http://www.argosy.co.nz/)
ARG
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=ARG)
0.060
5.170
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=ARG)
1.160
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Augusta Capital (http://www.augusta.co.nz/)
AUG
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=AUG)
0.050
5.000
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=AUG)
1.000
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Goodman Property Trust (http://investors.nz.goodman.com/phoenix.zhtml?c=164117&p=irol-IRHome)
GMT
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=GMT)
0.065
5.120
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=GMT)
1.260
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Kiwi Property Group Ltd. (http://www.kipt.co.nz/investor-information)
KPG
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=KPG)
0.066
4.820
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=KPG)
1.360
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


NPT (http://www.npt.co.nz/)
NPT
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=NPT)
0.036
5.300
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=NPT)
0.675
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Precinct Properties (http://www.precinct.co.nz/investor-relations/)
PCT
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=PCT)
0.054
4.370
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=PCT)
1.235
None


Property for Industry (http://www.propertyforindustry.co.nz/)
PFI
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=PFI)
0.072
4.500
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=PFI)
1.610
None


Stride Property (http://www.strideproperty.co.nz/investor-news/)
STR
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=STR)
0.107
4.990
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=STR)
2.155
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Vital Health Properties Trust (http://www.vitalhealthcareproperty.co.nz/investors)
VHP
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=VHP)
0.080
4.290
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=VHP)
1.870
None




That's a list of property companies. Not all are LPTs and not all are PIES.

[fungus pudding]

Augusta is a PIE.

Augusta say they are not a PIE.

[777]

Augusta say they are not a PIE.


Well my last dividend statement suggests otherwise.

[fungus pudding]

Well my last dividend statement suggests otherwise.

Fair enough. I rang Augusta, probably about a year ago, and asked them if they were a PIE. I don't recall who I spoke to but was told they were not.

[777]

In fact all the above companies listed by Birmanboy are PIE's.

I have holdings in all of them.

[fungus pudding]

In fact all the above companies listed by Birmanboy are PIE's.

I have holdings in all of them.

Yes. My apologies, I knew the rest were PIES but thought Augusta was not - they told me they weren't. A friend of mine has Augusta and his accountant told him they were not a PIE. Perhaps they became a PIE after name change from Kermadec.

[Corporate]

Property Investment


Company Name
(Click on name to
go to their website)
Share Symbol
Dividend
Re-
investment
Program
Type of Business
Dividend History
Dividends
per share
last year
in NZD
Dividend
yield
%
Share
Price
History
Current
Share
Price
NZD
Important
Notes


Argosy Property Trust (http://www.argosy.co.nz/)
ARG
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=ARG)
0.060
5.170
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=ARG)
1.160
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Augusta Capital (http://www.augusta.co.nz/)
AUG
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=AUG)
0.050
5.000
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=AUG)
1.000
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Goodman Property Trust (http://investors.nz.goodman.com/phoenix.zhtml?c=164117&p=irol-IRHome)
GMT
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=GMT)
0.065
5.120
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=GMT)
1.260
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Kiwi Property Group Ltd. (http://www.kipt.co.nz/investor-information)
KPG
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=KPG)
0.066
4.820
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=KPG)
1.360
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


NPT (http://www.npt.co.nz/)
NPT
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=NPT)
0.036
5.300
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=NPT)
0.675
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Precinct Properties (http://www.precinct.co.nz/investor-relations/)
PCT
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=PCT)
0.054
4.370
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=PCT)
1.235
None


Property for Industry (http://www.propertyforindustry.co.nz/)
PFI
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=PFI)
0.072
4.500
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=PFI)
1.610
None


Stride Property (http://www.strideproperty.co.nz/investor-news/)
STR
No
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=STR)
0.107
4.990
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=STR)
2.155
Details... (http://www.dividendyield.co.nz/typeofbusiness.php#)


Vital Health Properties Trust (http://www.vitalhealthcareproperty.co.nz/investors)
VHP
Yes
Property Investment
Details... (http://www.dividendyield.co.nz/viewdetails.php?loc=VHP)
0.080
4.290
Details... (http://www.dividendyield.co.nz/viewhistory.php?sharesymbol=VHP)
1.870
None



Thank you!

Can i ask how you obtained that list?

Cheers

[BIRMANBOY]

You must be even less technically aware than me... :) click on any one of the dozen underlined links in the field and it will take you to the source and you should be able to jump round...or the website link at the bottom where the signature is shown. If those don't work try clicking this link. www.dividendyield.co.nz (http://www.dividendyield.co.nz) and have a look around. The website is basically geared to dividends but there is other info there as well. Its reasonably up to date but since its an amateur effort cannot guarantee perfection.
Thank you!

Can i ask how you obtained that list?

Cheers

[Lewylewylewy]

Thanks everyone for the suggestions. FP, I've taken your advice and put my own twist on it :) I've put some investment in some property based companies that I will likely never sell. These are property companies like NZE:PFI, but also some companies who have a high NTA based around property who are in a business that is unlikely to be affected by economic factors, such as NZE:SUM.

As I'm in my early 30s, I figured I'd put some of my never-sell spread into a few good companies also, such as NZE:POT and NZE:TME; Ones that have some good barriers to entry into their industry and growth prospects.

Also thanks to BM for the link to dividendyield.co.nz, which I didn't know had useful lists of business types!