We're fourth on the global wealth scale.

[fungus pudding]

Please yourself whether you believe this or not.

https://www.stuff.co.nz/business/300340466/new-zealanders-fourthrichest-in-the-world

'The report said 6.3 per cent of New Zealanders were US dollar millionaires'
I find that hard to believe.
U.S. Million = approx 1.4 NZD.
I thought it would be more like 20% of NZers worth at least 1.5 million odd.

Out of interest, does anyone have any recent figures to compare?

[Antipodean]

I suspect at least two major factors at play.

1) Property Market
2) Issues with using a Median value for an average

[mike2020]

I look at the average wage and often think of how many people work on min wage and under 40 hours and I know there were years I made enough to make the average myself and 6 or 7 low income earners. I see the same with wealth and it's largely perspective. I think the majority of NZ'ers are working class and we have historically been a low income country. Standard of living verses house price wealth affect. We used to look at our health, education and welfare systems as a judge of who we were and how we compared.

[850man]

6.3% of Kiwis are US$ millionaires, yeah I can believe that. 5M x 6.3% = 315,000 people, with the average house price at NZ$1M now, I can see how that many people likely have US$ 1M of equity.

What does concern me though is the trajectory overall for NZ with all the covid-fear restrictions that appear to have no actual hard and fast end under our helicopter parent PM in addition to the deep Socialist philosophies being forced upon the country and the huge damage these are doing to the productive sectors of NZ (meaning anyone who has a business or works for one). Similarly public spending in areas that result in lower productivity versus public spending to improve productivity. Political ideologists with nil practical business skills or experience implementing 1970's policies... path to ruin (IMHO)

[Beagle]

6.3% of Kiwis are US$ millionaires, yeah I can believe that. 5M x 6.3% = 315,000 people, with the average house price at NZ$1M now, I can see how that many people likely have US$ 1M of equity.

What does concern me though is the trajectory overall for NZ with all the covid-fear restrictions that appear to have no actual hard and fast end under our helicopter parent PM in addition to the deep Socialist philosophies being forced upon the country and the huge damage these are doing to the productive sectors of NZ (meaning anyone who has a business or works for one). Similarly public spending in areas that result in lower productivity versus public spending to improve productivity. Political ideologists with nil practical business skills or experience implementing 1970's policies... path to ruin (IMHO)

Agreed and that's what could be behind the market flatlining this year. If you were an overseas fund manager would you be considering the prospect of another term by Labour and be wondering how much damage they could do over the next 5 years ?

[mike2020]

Agreed and that's what could be behind the market flatlining this year. If you were an overseas fund manager would you be considering the prospect of another term by Labour and be wondering how much damage they could do over the next 5 years ?
I'm not sure about overseas fund managers but Labour have a history of destroying the economy more often than not, in the name of socialist policies that only end up hurting the very people they claimed to be aiming to help. Nuke free and gay rights etc is the lifeblood of the labour party. Nothing wrong with that either. Just clueless about money.

[Brain]

6.3% of Kiwis are US$ millionaires, yeah I can believe that. 5M x 6.3% = 315,000 people, with the average house price at NZ$1M now, I can see how that many people likely have US$ 1M of equity.



People have mortgages and houses are owned by families. Divide the house price by 2 to get
to adult individuals and then strip out the mortgage and see now who is a millionaire.

[Davexl]

I look at the average wage and often think of how many people work on min wage and under 40 hours and I know there were years I made enough to make the average myself and 6 or 7 low income earners. I see the same with wealth and it's largely perspective. I think the majority of NZ'ers are working class and we have historically been a low income country. Standard of living verses house price wealth affect. We used to look at our health, education and welfare systems as a judge of who we were and how we compared.

Perhaps the majority of NZers are working class NOW but I would disagree we have historically been a low income country.
Back in the 60's & 70's we were a very wealthy country with around the 3rd highest standard of living in the world, High wages, high dollar to the US, more egalitarian with high house ownership affordable by most of us.

Since the 20% shock devaluation in '84 - the sh*t has hit the fan. NZ has been getting progressively poorer, more backward technologically (Rocket Lab excepted) and way less egalitarian with everyman for himself. Perhaps we turned a corner in the mid 2010's, but our educational attainments (Maths & Science) are diabolically poor, our project management skills heavily rely on overseas expertise (we can barely build major infrastructure ourselves on time & on budget) and we have lost a generation of skill upgrades & training opportunity (recently re-instituted by Labour). Until we regain our ability to pay salaries at international market rates again, the brain drain will continue and we will export native NZers (our sons & daughters) and import low wages to replace them rather than the other way round. Hopefully this trend will reverse with all the overseas Kiwis returning to their homeland, thanks to Covid, and they & their international skills should be welcomed with open arms, and we should allow them to displace the zombie leadership that run our companies and institutions that fail to innovate and compete globally. Perhaps with the re-strengthening of the middle-class, we can regain the innovation & wealth we traditionally had once again...

[fungus pudding]

6.3% of Kiwis are US$ millionaires, yeah I can believe that. 5M x 6.3% = 315,000 people, with the average house price at NZ$1M now, I can see how that many people likely have US$ 1M of equity.


My point is surely there are far more than 6% of NZers worth at least 1.5 million NZD.

[Davexl]

My point is surely there are far more than 6% of NZers worth at least 1.5 million NZD.

Remember it's Net wealth (tons of debt)...

[850man]

I'm not sure about overseas fund managers but Labour have a history of destroying the economy more often than not, in the name of socialist policies that only end up hurting the very people they claimed to be aiming to help. Nuke free and gay rights etc is the lifeblood of the labour party. Nothing wrong with that either. Just clueless about money.

That's exactly how it's working out currently - totally clueless financially... Interest expenses denied for residential landlords, increase costs to landlords, offset by rent increases to tenants. Residential tenancy law changes to remove no cause terminations making it too hard for residential landlords to rent so they are selling up, removing rental property from the market, less supply. Many renters are not in a position to become 1st home buyers so are sufferering with higher rent costs and less supply of rental accommodation. I could go on but none of this is news to you guys and it's just spoiling a nice sunny Friday.

[artemis]

I'm not sure about overseas fund managers but Labour have a history of destroying the economy more often than not, in the name of socialist policies that only end up hurting the very people they claimed to be aiming to help. Nuke free and gay rights etc is the lifeblood of the labour party. Nothing wrong with that either. Just clueless about money.

Labour is usually good for asset owners, current one spectacularly so. They had a chance to bring in a CGT but blew it.

[Watchful]

They had a chance to bring in a CGT but blew it.

I wouldn’t be so sure. It actually feels like they’ve used that to lay the framework for Jacinda to step down early in a way that saves face, when she’s ready for her UN job and the chickens start coming home here.

Remember the oddly over-the-top and out-of-place “if we bring in a CGT then I will resign” statement?

Next time it’s going to be “I have decided to make this personal sacrifice to do what is best for New Zealand” yaddah yaddah yaddah. “I made a promise and I’m going to hold true to that, as much as I hate to leave (you with all this debt)”

She made her priorities clear when she said prior to the last election that if she lost, she wouldn’t stick around in NZ politics to serve in opposition. We’re just a stepping stone for her ambitions.

[Relaxed]

I think the majority of NZ'ers are working class and we have historically been a low income country.


This graph is interesting showing that NZ has become quite a lot better off (as defined by life expectancy and incomes) over the last 100 years and more.
The book (from this same website) discusses how well off we really are and was an interesting read.

https://www.gapminder.org/tools/#$ui$chart$opacitySelectDim:0.31;;&model$markers$bubble$encoding$trail$data$filter$ma rkers$nzl=1800;;;;;;;;&chart-type=bubbles&url=v1

[fungus pudding]

Remember it's Net wealth (tons of debt)...

I'm well aware of that. Think of those you know well; well enough to have a good idea of their assets and liabilities. Surely you will have friends and relatives with 1.5 million minimum - or have I got that all wrong?
There are a lot of people around with large sums of money who never display it. Read 'The millionaire next door' (author Stanley?) It's an old book now, written when a million was a fortune. It's about American society. What it reveals is most of the wealthy and very wealthy in the U.S. live in modest homes, typically drive mid-range vehicles which they buy second hand, and are generally quite moderate spenders. Even their life styles do not indicate wealth. There's a fascinating description of their preferences at a supper - most drank beer and by-passed anything fancy in food for a savoury or ordinary sandwhich. The most common characteristic was they were frugal. I'd be surprised if NZers are any different. Certainly I know quite a few worth well in excess of a couple of million, but if you didn't know - you wouldn't pick it. They follow Fungus' personal philosophy - learn to live below your means; although I don't claim credit for teaching them that!!.
Two million odd may be 'comfortable' but it's certainly not rich.

[Panda-NZ-]

That's exactly how it's working out currently - totally clueless financially... Interest expenses denied for residential landlords, increase costs to landlords, offset by rent increases to tenants. Residential tenancy law changes to remove no cause terminations making it too hard for residential landlords to rent so they are selling up, removing rental property from the market, less supply. Many renters are not in a position to become 1st home buyers so are sufferering with higher rent costs and less supply of rental accommodation. I could go on but none of this is news to you guys and it's just spoiling a nice sunny Friday.

Look at Australia though.

Listing to the side about to drop off under a conservative govt.

Kiwisaver and the super fund have been very good for NZ along with keeping our assets in NZ hands.

[bottomfeeder]

I believe the definition of a millionaire is net assets excluding your house or dwelling. I would presume that there would be more than 20% at least.

[Beagle]

Just adding to the debate here and I am sorry that I didn't save the links to the two articles I am referring too.
The first was in regard to what is considered "Wealthy" per se. If I remember correctly to meet this definition you needed to have U.S$1.7m investable assets, approx $N.Z2.4m Kiwi.
A different report I saw suggested to be in the top 1% of the wealthiest in the world you need to have net total assets inclusive of the net value of real estate and your home of $U.S2.8m = $NZ4m Kiwi.

My thoughts on 6.3% being $US millionaires' (as an accountant who sees a lot of people's books and their state of financial affairs) is that's quite probably somewhere about right, (although since 2020 the average price of real estate has gone up about 25%) so there will be more net $US millionaire's today.

Its very, very easy when you are comfortable to think a high percentage of others must be in the same situation. The reality from what I have seen in my role over 40 years is that the vast majority of people have very modest resources and investments apart from the equity in their family home.

6-7% of people have done really well. Yeah, I'd agree that seems about right. I would suggest most of them have achieved that through real estate.

[Topagent]

I would think that 6% would be correct. What I think changes our perception is that people on this forum are able to financially invest and we general mix within our economic classes when living. Maybe we don’t or aren’t as exposed to the part of society that are the have nots. I would assume also that it’s 1.4 after all debts paid

[Arthur]

I'm not sure about overseas fund managers but Labour have a history of destroying the economy more often than not, in the name of socialist policies that only end up hurting the very people they claimed to be aiming to help. Nuke free and gay rights etc is the lifeblood of the labour party. Nothing wrong with that either. Just clueless about money.

You mean the party that saved us from Muldoon, deregulated, paid down debt, introduced Kiwisaver, reduced the unemployment rate to one of the lowest in the world etc. The sharemarket is up 50% in the last 4 years, house prices have gone nuts. I'm not a Labour voter, but the facts suggest they are better money managers than National.

[fastbike]

I'm not sure about overseas fund managers but Labour have a history of destroying the economy more often than not, in the name of socialist policies that only end up hurting the very people they claimed to be aiming to help. Nuke free and gay rights etc is the lifeblood of the labour party. Nothing wrong with that either. Just clueless about money.
That old myth eh. Digging up coal to remove water from milk was National's idea of an economy, along with plane loads of tourists being served by minimum wage workers. House prices and growth in GDP driven by an unsustainable surge in immigration. And don't even get me started on failure to invest in infrastructure and housing.
On a personal note I've done much better in the last 4 years (wages growth, housing, investments) than during the previous 9.

[fastbike]

Look at Australia though.

Listing to the side about to drop off under a conservative govt.

Kiwisaver and the super fund have been very good for NZ along with keeping our assets in NZ hands.

I'd like to see our kiwisaver contribution rates increased. Super contribution rates in Auusie are at 10% and will increase to 12% over the next couple of years ! We have had no movement since 2013.

[Bjauck]

I believe the definition of a millionaire is net assets excluding your house or dwelling. I would presume that there would be more than 20% at least....and for those people who do not own an average NZ house....they would need at least two million bucks of assets to qualify as a millionaire then? What about the home owner who owns a 6 million dollar house in Remuera?

[Bjauck]

...

Kiwisaver and the super fund have been very good for NZ along with keeping our assets in NZ hands. I disagree. Kiwisaver funds invest very heavily overseas. On an international comparison, for the size of our economy, The NZ stock exchange capitalisation is very small. Residential property is still the prime pension scheme in NZ!

[fungus pudding]

I believe the definition of a millionaire is net assets excluding your house or dwelling.

By that definition someone who owns a debt free house worth five million, and is $100 overdrawn in his current account wouldn't make the grade.

[Panda-NZ-]

I disagree. Kiwisaver funds invest very heavily overseas. On an international comparison, for the size of our economy, The NZ stock exchange capitalisation is very small. Residential property is still the prime pension scheme in NZ!

It would be a pretty sorry state of affairs they weren't in place.

[bottomfeeder]

It would be a pretty sorry state of affairs they weren't in place.

It's not my definition, but I believe its quite a dynamic thing, which changes from person to person as well as personal circumstances. I would think it relates to at least a million of surplus assets which can be realised without affecting your living from day to day.

Your net worth may be over a million bucks, but you are not really a "millionaire" which is a flamboyant term unless you can spend it quite easily without being in the poor house. This is what I read many years ago, but seems to have fallen by the wayside, in favour of a strict accounting term of net asset value. O

[fungus pudding]

It's not my definition, but I believe its quite a dynamic thing, which changes from person to person as well as personal circumstances. I would think it relates to at least a million of surplus assets which can be realised without affecting your living from day to day.

Your net worth may be over a million bucks, but you are not really a "millionaire" which is a flamboyant term unless you can spend it quite easily without being in the poor house. This is what I read many years ago, but seems to have fallen by the wayside, in favour of a strict accounting term of net asset value. O

Regardless of what you read years ago, a million is a number. It's not an adjective, it's a number, a numerical measure, and the only thing that equals a million, is a million - as you say, a strict accounting term. There is no other definition possible, which is why I say there must surely be a lot more than 6% who meet the definition.

[Beagle]

Regardless of what you read years ago, a million is a number. It's not an adjective, it's a number, a numerical measure, and the only thing that equals a million, is a million - as you say, a strict accounting term. There is no other definition possible, which is why I say there must surely be a lot more than 6% who meet the definition.

First of all its a million US so that's $NZ1.43m net assets as at 2020 before real estate had another boomer year in 2021.
What are you basing your opinion on ? I've seen vast numbers of books and people's financial positions in my 40 year career as an accountant and I think 6% is probably pretty close to the mark. Maybe 7-8% with the recent strong surge in real estate prices ? Perhaps you've forgotten that vast numbers of people have nothing, or almost nothing ? There's also the vast majority with an average house with mortgage, a modest Kiwisaver balance and nothing else...

Its very easy to lose touch when you've done really well.

[fungus pudding]

First of all its a million US so that's $NZ1.43m net assets as at 2020 before real estate had another boomer year in 2021.
What are you basing your opinion on ? I've seen vast numbers of books and people's financial positions in my 40 year career as an accountant and I think 6% is probably pretty close to the mark. Maybe 7-8% with the recent strong surge in real estate prices ? Perhaps you've forgotten that vast numbers of people have nothing, or almost nothing ? There's also the vast majority with an average house with mortgage, a modest Kiwisaver balance and nothing else...

Its very easy to lose touch when you've done really well.

Real estate's booming year doesn't change the 1.43 mill. So hard to understand your first sentence.
I didn't base my opinion on anything other than observation and knowledge of those around me that I am familiar with. My opening post asked 'have I got this wrong?'
You undoubtedly have more insight to the typical Joe Blow's financial world than I do, so you are probably right.
I certainly haven't forgotten many have little or nothing, I know a good few of them too - but am still surprised that only 6-8% have around 1.4 mill. That's not a lot of money these days, and I certainly wouldn't class that as wealthy.
Anyway it was something I wondered about, so thanks for your input.

[Mrbuyit]

Are we talking per person? As a couple may have joint wealth over 1.4 mil, but it'd be a well above average house freehold plus other cash / investments when we look at 2.8 mil per couple.

[fungus pudding]

Are we talking per person? As a couple may have joint wealth over 1.4 mil, but it'd be a well above average house freehold plus other cash / investments when we look at 2.8 mil per couple.

The vast majority of NZ homes are freehold which in the simplest terms means not leasehold. The owners' equity is what matters.

[Beagle]

Real estate's booming year doesn't change the 1.43 mill. So hard to understand your first sentence.
I didn't base my opinion on anything other than observation and knowledge of those around me that I am familiar with. My opening post asked 'have I got this wrong?'
You undoubtedly have more insight to the typical Joe Blow's financial world than I do, so you are probably right.
I certainly haven't forgotten many have little or nothing, I know a good few of them too - but am still surprised that only 6-8% have around 1.4 mill. That's not a lot of money these days, and I certainly wouldn't class that as wealthy.
Anyway it was something I wondered about, so thanks for your input.

You're welcome. What I was getting at with my first sentence is that the report you referenced was as at 2020 and the average house price in N.Z. is up about $200K this year so that will lift more households into the $1.43m net worth category in 2021.

The US study I saw, from memory, was a survey of one of the investment bank's clients and the consensus opinion was that $US1.7m "investable" assets ($2.4m Kiwi) meets the consensus view of being wealthy.

My view is that if someone has $2.4m of investable N.Z. assets other than their debt free family home then they are most certainly comfortably well off. Wealthy per se...I am not so sure ? What do you think ?

[fungus pudding]

You're welcome. What I was getting at with my first sentence is that the report you referenced was as at 2020 and the average house price in N.Z. is up about $200K this year so that will lift more households into the $1.43m net worth category in 2021.

The US study I saw, from memory, was a survey of one of the investment bank's clients and the consensus opinion was that $US1.7m "investable" assets ($2.4m Kiwi) meets the consensus view of being wealthy.

My view is that if someone has $2.4m of investable N.Z. assets other than their debt free family home then they are most certainly comfortably well off. Wealthy per se...I am not so sure ? What do you think ?

Yes. I'd go along with comfortable and reasonably well off, but certainly not wealthy. Maybe if there is additional income from sources other than the invested funds e.g. salary, fees, etc then we're starting to talk.
Why I say that is I reckon with current returns available, 2.4 will provide a damn good income, but to hit a 'wealthy spending level' (is there such a thing?) would require nibbling away at the capital. That shouldn't be necessary to quailfy as wealthy in my view. (Would a wealthy man be living off his own money?)

[artemis]

I wouldn’t be so sure. It actually feels like they’ve used that to lay the framework for Jacinda to step down early in a way that saves face, when she’s ready for her UN job and the chickens start coming home here.

Remember the oddly over-the-top and out-of-place “if we bring in a CGT then I will resign” statement?

Next time it’s going to be “I have decided to make this personal sacrifice to do what is best for New Zealand” yaddah yaddah yaddah. “I made a promise and I’m going to hold true to that, as much as I hate to leave (you with all this debt)”

She made her priorities clear when she said prior to the last election that if she lost, she wouldn’t stick around in NZ politics to serve in opposition. We’re just a stepping stone for her ambitions.

Agree. But consider the scenarios.

1. She steps down before or after the next election and Grant Robertson gets a go at the top job. CGT will be at the front of his mind for sure though implementation might take a wee while. He will then need to lead the next government, with the Greens (current polling), to get a CGT cemented in. CGT will happen.

2. There is a different government in 2023. CGT unlikely.

1. looks most probable but there is a trend appearing. Grant Robertson will not be top of the pops for many, but that won't matter if Labour leads the 2023 government.

[nztx]

What happens when the steam comes off the Property market ? ;)

The piper may be busy & Labour may get the blame for the unfolding shambles ;)

[Panda-NZ-]

Agree. But consider the scenarios.

1. looks most probable but there is a trend appearing. Grant Robertson will not be top of the pops for many, but that won't matter if Labour leads the 2023 government.

My hope is for stuart nash. Moderate and the only person who can win a regional electorate election after successive elections (also damien o'conner).

[artemis]

That's exactly how it's working out currently - totally clueless financially... Interest expenses denied for residential landlords, increase costs to landlords, offset by rent increases to tenants. Residential tenancy law changes to remove no cause terminations making it too hard for residential landlords to rent so they are selling up, removing rental property from the market, less supply. Many renters are not in a position to become 1st home buyers so are sufferering with higher rent costs and less supply of rental accommodation. I could go on but none of this is news to you guys and it's just spoiling a nice sunny Friday.

Hear on the grapevine that some rental owners have done the sums and are biding their time until 2023 when 5 year bright line starts to expires so they don't have to give the government a big chunk of capital gains. In the meantime increasing the rent as much as poss.

[Panda-NZ-]

That's exactly how it's working out currently - totally clueless financially... Interest expenses denied for residential landlords, increase costs to landlords, offset by rent increases to tenants. Residential tenancy law changes to remove no cause terminations making it too hard for residential landlords to rent so they are selling up, removing rental property from the market, less supply. Many renters are not in a position to become 1st home buyers so are sufferering with higher rent costs and less supply of rental accommodation. I could go on but none of this is news to you guys and it's just spoiling a nice sunny Friday.


Faulty logic that rent will increase -- In a free market the maximum rent is being charged already independently of regulation. There is no room for more increases.

or are landlords a charity?

[nztx]

Faulty logic that rent will increase -- In a free market the maximum rent is being charged already independently of regulation. There is no room for more increases.

or are landlords a charity?


The Govt might think it is a charity at drop of a hat & quick twist of the rules as/when convenient ;)

But it hasn't solved anything for the homeless, potential new homeowners or even those looking at up or downsizing - has it ? ;)

The market, buyers & sellers have all continued waving the middle finger at both Govt & RB with values rising further .. :)

Let's face it, the increase in values probably only represents notional loss of value and invisible inflation
arising out of all the extra funny money created between the Govt & RB released into the economy,
and few are any better off (but many worse off) in real terms out of the creative scheme of things :)

Undoubtedly Labour would want to BS everyone on being better off until the penny drops out there :)

[Bjauck]

My point is surely there are far more than 6% of NZers worth at least 1.5 million NZD. A good chunk of that 6% would be NZers aged over 60 yo. NZ has increasingly become a gerontocracy in which political power and wealth has increasingly become concentrated in the real estate owning older generations. This phenomenon has been commented on in Forbes with respect to the USA. As realestate in NZ has increased far more in value than it has in the USA, the "graying of wealth" is probably far more pronounced here.

https://www.forbes.com/sites/neilhowe/2018/03/16/the-graying-of-wealth/?sh=6df5c98c302d

[Panda-NZ-]

In Trump, then Biden's united states there were eviction moratoriums.

I doubt many of the people here would have liked that. No incentive for tenants to pay rent.
It was put in place in Australia too I believe.

[artemis]

Faulty logic that rent will increase -- In a free market the maximum rent is being charged already independently of regulation. There is no room for more increases.

or are landlords a charity?

Maybe that is the case, though Trademe reported a few weeks ago that asking rents on their site were at an all time high. Earlier this month reported signs of slowing but too soon to see a trend.

Apart from ECON101, a couple of relevant factors. Values and costs continue to rise, and as they do so will market rents. Owning rentals is now highly complex and more owners will engage property managers. Already a majority do. And they have an obligation to engage good tenants for the best price for the owners. That is not necessarily the case with owners who self manage and might not be so clued up about market rents.

All things considered I reckon there is plenty of room to increase rents in most locations.

[artemis]

In Trump, then Bidens united states there were eviction moratoriums.

I doubt many of the people here would have liked that. No incentive for their tenants to pay rent.

It was in place in Australia too I believe.

There was an eviction moratorium here last year, starting March 2020.

[fungus pudding]

Faulty logic that rent will increase -- In a free market the maximum rent is being charged already independently of regulation. There is no room for more increases.

or are landlords a charity?

Yes they are, although most did not start out intending to be.

[Panda-NZ-]

A good chunk of that 6% would be NZers aged over 60 yo. NZ has increasingly become a gerontocracy in which political power and wealth has increasingly become concentrated in the real estate owning older generations. This phenomenon has been commented on in Forbes with respect to the USA. As realestate in NZ has increased far more in value than it has in the USA, the "graying of wealth" is probably far more pronounced here.

https://www.forbes.com/sites/neilhowe/2018/03/16/the-graying-of-wealth/?sh=6df5c98c302d

Yes it sounds like a dream from the anecdotal reports I've heard from the silent generation etc.

Company provided pension plans, a job for life, can't be fired, full employment policies.

[Panda-NZ-]

How is depreciation of property dealt with (genuine question - not sure).

Sounds like a pretty decent gig to recieve tax deductions for an asset which increases in value.

[Arthur]

There was an eviction moratorium here last year, starting March 2020.

In NZ, it was difficult, but you could evict tenants did not pay rent in our relatively short lock-downs. In USA there are tenants that paid no rent for well over a year. In Australia, even commercial business had very favourable rent paying options. Cindy was much more free market about the whole thing than Trump or whatshisname.

[Arthur]

Biden calls Australian PM 'that fellow down under' - BBC News. Even after signing the submarine deal that caused International ripples, Biden could not remember Scomo.

[Biscuit]

How is depreciation of property dealt with (genuine question - not sure).

Sounds like a pretty decent gig to recieve tax deductions for an asset which increases in value.

You can't claim depreciation on property anymore. Accumulated depreciation is taxable on sale.

[fungus pudding]

How is depreciation of property dealt with (genuine question - not sure).

Sounds like a pretty decent gig to recieve tax deductions for an asset which increases in value.

They may well appreciate in nominal terms but certainly not in real terms. They actually depeciate quite rapidly. IOW they are continually moving away from their replacement cost; particularly if money is not spent regularly on maintenance. Look at the current price of building on a square metre basis. You will find it's a lot more than you will pay per sq. m. for an existing house of 10, 20, 40 years old if you exclude locality value. That's depreciation. Nominal price rise is caused by inflation. Depreciation is caused by wear and tear, ageing, fashion and functional obsolesence.

[Biscuit]

They may well appreciate in nominal terms but certainly not in real terms. They actually depeciate quite rapidly. IOW they are continually moving away from their replacement cost; particularly if money is not spent regularly on maintenance. Look at the current price of building on a square metre basis. You will find it's a lot more than you will pay per sq. m. for an existing house of 10, 20, 40 years old if you exclude locality value. That's depreciation.

Agree with that. Am spending the first month of "retirement" doing heavy maintenance on a rental. Pretty certain depreciation is no longer tax deductible anyway. And it was only ever a deferred expense anyway.

[fungus pudding]

Agree with that. Am spending the first month of "retirement" doing heavy maintenance on a rental. Pretty certain depreciation is no longer tax deductible anyway. And it was only ever a deferred expense anyway.

True. From memory 'depreciation recovered' was taxable. (I added this sentence to the previous post "Nominal price rise is caused by inflation. Depreciation is caused by wear and tear, ageing, fashion and functional obsolesence." - hopefully some will get a grasp of it)

[Beagle]

Yes. I'd go along with comfortable and reasonably well off, but certainly not wealthy. Maybe if there is additional income from sources other than the invested funds e.g. salary, fees, etc then we're starting to talk.
Why I say that is I reckon with current returns available, 2.4 will provide a damn good income, but to hit a 'wealthy spending level' (is there such a thing?) would require nibbling away at the capital. That shouldn't be necessary to quailfy as wealthy in my view. (Would a wealthy man be living off his own money?)

Article out this week saying to enjoy a "choices lifestyle" (intended to include lots of choices, little luxuries and some international travel) in retirement you need after tax income of $1,480 per week for a couple if you live in one of the main cities. Superannuation is $677 per week, (covers only the bare necessities) so you need another $803 per week net investment income. Article went on to say you therefore need ~ $800K investable assets to enjoy a comfortable choices retirement.
It would appear therefore that they are assuming a 5% net return off that capital. I assume in them using that net figure they are assuming people invest in a well diversified portfolio of assets because you're not going to achieve that with bonds or term deposits.

For most people the goal of attaining $800K in investable assets is daunting. Coming back to your survey where only 6.3% of people had net assets of $1.4 million and looking at the average house value in N.Z. now which (my memory fails me but is probably over $800K now) this suggests only 6.3% of people have $600K investable assets.

What is comfortable and what is wealthy ? How long is a piece of string ? My opinion is the answer comes down to what lifestyle you want and expect.
Two extreme's. I've met a lovely lady who seems quite content on just the national superannuation. She bottles jam and pickles and sells it at the local farmers market and makes on average $300 per fortnight and seems well connected in the Turangi community and lives simply and happily...well she did until her health packed up recently.

On the other hand I've known people who earn about $400,000 per annum and can't pay their bills because they're always broke.

My opinion is the experts are about right and if you're smart with your investments you can lead a comfortable and contented retirement with $800,000 investable assets + superannuation of $677 per week for a couple and enjoy a choices lifestyle. I believe Mrs B and I can live a comfortable and contented retirement on $1,500 per week.

Going above that involves varying and increasing levels of indulgences to the point where perhaps real wealth encapsulates a lifestyle of excess.

If you want to live in a huge mansion, be seen to be wearing the latest designer clothes and jewelry, dining at only the finest culinary establishments, drinking the finest wine, throwing regular lavish catered parties for your friends, own collections of watches and art, drive a current model Bentley which you update every year, have a fancy holiday home on the waterfront at Pananui with a 60 ft fancy Riviera launch moored outside on your own jetty and jet off on first class flights to Europe every few months, then you tell me how much you're going to need ! Maybe $20m investable assets generating $1m per annum net ?

You can choose to live a truly indulgent lifestyle like that if you can attain it but food for thought. I have seen an article that suggests that if you have net assets of $4m you are one of the "one percenters" of this world. Maybe once you get over that figure there's more forfilling ways of enriching one's lifestyle than simply enjoying ever increasing level's of indulgence for oneself ?

If net asset accretion is the major goal of one's life will it ever be "enough" ?

[ronaldson]

Basically agree with the above. My yardstick is $200 per day after tax, and a mortgage free home ( which of course doesn't mean no expenditure on rates, insurance and maintenance ). I see that as a minimum, certainly for Auckland, although I know many in employment earn less and have significant accommodation costs on top. So that is tax paid income of $73000pa, but that includes the net superannuation receipt, so a bit less daunting. I don't think international travel is manageable within that but wine and the occasional ( cheap ) meal out should be.

[Beagle]

A couple of different perspectives. My brother is approaching retirement with a debt free home and reckons he and his wife can live on just the superannuation.
I guess a lot depends upon what hobbies you have and how you want to live. They're both really fit for their age and into eco things like electric bikes, canoeing, going for bush walks and they have a modest campervan and two modest cars. Unlike me, he's really good with his hands and fixes a lot of things himself, vehicles, plumbing, house repairs, all that sort of thing.

Another chap I was talking to the other day reckons he and his wife need $1,800-1,900 per week net to retire comfortably on.
Everyone has to work out their own answer.

[stoploss]

A couple of different perspectives. My brother is approaching retirement with a debt free home and reckons he and his wife can live on just the superannuation.
I guess a lot depends upon what hobbies you have and how you want to live. They're both really fit for their age and into eco things like electric bikes, canoeing, going for bush walks and they have a modest campervan and two modest cars. Unlike me, he's really good with his hands and fixes a lot of things himself, vehicles, plumbing, house repairs, all that sort of thing.

Another chap I was talking to the other day reckons he and his wife need $1,800-1,900 per week net to retire comfortably on.
Everyone has to work out their own answer.
As long as he doesn't need to repaint,reroof, or anything major like that . Be difficult to upgrade the Ebike on a pension only too

[Panda-NZ-]

As long as he doesn't need to repaint,reroof, or anything major like that . Be difficult to upgrade the Ebike on a pension only too

*edit - nvm

[Ggcc]

As long as he doesn't need to repaint,reroof, or anything major like that . Be difficult to upgrade the Ebike on a pension only too

I would agree. I’m already at that stage at 46, but with current inflation truly would be stressing with maintaining my house unless I had extra capital as well. Plus you have car insurance regos warrants all forms of insurance including health, rates. That alone is enough to swallow your pension.

[Arthur]

keeping things in perspective https://howrichami.givingwhatwecan.org/how-rich-am-i

[Ggcc]

keeping things in perspective https://howrichami.givingwhatwecan.org/how-rich-am-i

Geez if our household income is over $47,000 we are near the top 80% of the richest In the world. Although with an income of $47,000 you could not afford to live in nz if you didn’t own your own home with a household of kids.

[Arthur]

Good point Ggcc, although with that income and kids there would be a multiple welfare income top ups. Our expectations have changed, when NZ was poorer people lived in smaller houses, cycled, grew vegetables, didn't eat out, put on jackets when they were cold and holidayed locally. My parents felt National Super was too generous, so saved money on it and donated it to charity.

[Beagle]

Good point Ggcc, although with that income and kids there would be a multiple welfare income top ups. Our expectations have changed, when NZ was poorer people lived in smaller houses, cycled, grew vegetables, didn't eat out, put on jackets when they were cold and holidayed locally. My parents felt National Super was too generous, so saved money on it and donated it to charity.

We rented a 1950's small bach in Te Anau some years back on bookabach. It was quite an experience. Everything in it was from the 1950's right down to the original wire wove beds, bone handled utensils, furniture and coal range. Apart from having an aching back from the horrible old fashioned bed I really enjoyed our time there. Its was quite a cool experience to have to go out into the garage and shovel the coal into the metal bucket, chop up the kindling and start the fire. Really took me back to my childhood.
You are right, that's how people used to live, in small houses with just the basics.

[fungus pudding]

We rented a 1950's small bach in Te Anau some years back on bookabach. It was quite an experience. Everything in it was from the 1950's right down to the original wire wove beds, bone handled utensils, furniture and coal range. Apart from having an aching back from the horrible old fashioned bed I really enjoyed our time there. Its was quite a cool experience to have to go out into the garage and shovel the coal into the metal bucket, chop up the kindling and start the fire. Really took me back to my childhood.
You are right, that's how people used to live, in small houses with just the basics.

I remember as a kid going with my mother to see a neighbour's just purchased washing machine. Like most people, we had a copper with a coal burner to do the washing. Same thing as we were the first in the street to get a fridge. All the neighbours called around to see it, and no doubt wondered if it would be better than their built in safe. Telephones were mainly party line - if indeed you could even get one. I recall when TV started we used to try and spot the houses where antennas appeared. One radio per household was probably the norm. We used to sit around ours like people now do with TV. Transistors didn't exist. Many readers will remember buying a transistor and other goodies, illegally smuggled in, from a pub where the ships' crews drank. I recall getting an electric radiogram and saying goodbye to the wind up gramophone. My point is when I hear people complain about poor pay etc, it reminds me of those times. People were paid peanuts, and if today's mod-cons had existed - who the hell could have afforded them? Things were far more expensive than they are now. e.g. the first pocket transistors were about an average week's pay. Funny how memories fade - you'll ofen hear those times referred to as 'the good old days'.

[Beagle]

I remember as a kid going with my mother to see a neighbour's just purchased washing machine. Like most people, we had a copper with a coal burner to do the washing. Same thing as we were the first in the street to get a fridge. All the neighbours called around to see it, and no doubt wondered if it would be better than their built in safe. Telephones were mainly party line - if indeed you could even get one. I recall when TV started we used to try and spot the houses where antennas appeared. One radio per household was probably the norm. We used to sit around ours like people now do with TV. Transistors didn't exist. Many readers will remember buying a transistor and other goodies, illegally smuggled in, from a pub where the ships' crews drank. I recall getting an electric radiogram and saying goodbye to the wind up gramophone. My point is when I hear people complain about poor pay etc, it reminds me of those times. People were paid peanuts, and if today's mod-cons had existed - who the hell could have afforded them? Things were far more expensive than they are now. e.g. the first pocket transistors were about an average week's pay. Funny how memories fade - you'll ofen hear those times referred to as 'the good old days'.

Its fun swapping stories about the old days. I reckon that's half the reason people move into retirement villages, so they can sit around in the café all day chin wagging :)

[Arthur]

Enter Four Yorkshiremen sketch from Monty Python "...and if you tell that to the young people today, they won't believe you..."

[850man]

Enter Four Yorkshiremen sketch from Monty Python "...and if you tell that to the young people today, they won't believe you..."

"Cardboard box inth' middle o' road... luxury!"

Seeing you have brought up Python, here's an explanation of the traffic light system, so simple really :D - https://www.youtube.com/watch?v=pXw7LYWNi5E&t=21s (https://www.youtube.com/watch?v=pXw7LYWNi5E&t=21s)

Yes I know off topic but we need some levity these days