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Every cloud has a silver lining

Opportunities to protect and grow your wealth

With the number of new Covid-19 cases in the low single digits, there is a sense of optimism in the air. Our feet seemed lighter, the days seemed brighter, and the future seemed more manageable.

Whether your finances have taken a hit due to recent events or whether you are in a recession proof business, now is the time to take control of your financial health.

Here are some opportunities you can look into.

Reflect on your spending habits

Using the momentum created by the lockdown, while we have fewer opportunities to shop or go out, take this time to review your outgoings. Covid-19 has changed the way we spend our money – most Kiwis are spending less. Keep this up by shedding unnecessary expenses and implementing a budget. Stretch your dollar and get yourself in a good financial position.

Make the most of low interest rates

Home loan interest rates are at an all-time low, dropping below 3% for the first time. If you have a fixed rate loan expiring soon, take this opportunity to think about your mortgage and what could work better for you. 

If you have credit card debt, you could look at consolidating that debt into your mortgage to pay a much smaller interest rate.

Make the most of your KiwiSaver savings

To make the most of your KiwiSaver investment you need to be in the right fund and with the right provider. If you don't know who your provider is or which type of fund your are in - conservative, balanced or growth - it could be a sign that you need to look into it. Now is a great time to get this sorted.

Depending on the type of fund your KiwiSaver savings are in, you would have seen a drop in your KiwiSaver balance. High growth funds had the biggest drop in value - bear in mind that they generally have higher returns over time. 

If you were to switch funds immediately because you saw a decrease in your KiwiSaver balance, you could be cristalising your losses. Having said that, in certain circumstances switching funds could be the right thing to do. (Read: Things to consider before changing funds)

Look at investing

If you have always wanted to try your hand at investing, and have some spare cash lying around, or if you would like to boost your portfolio, here is your chance to do so. The market is essentially at a discount with many share prices below market value. Some companies are also looking at raising capital through share offers. A popular investing maxim is to buy low and sell high, and what better time to buy shares cheaply than right now? 

Get into the property market

If you have job security and can meet mortgage repayments, now could be a good time to buy your first home or an investment property. Property prices are expected to fall, interest rates are lower than ever, and the Reserve Bank has temporarily lifted LVR restrictions. This all means that you could get into your dream home sooner than you think. 

If you are a first home buyer, and you are wondering whether to buy or not to buy, read this blog post.

What next?

As we navigate this pandemic, even if there are still some uncertainties ahead, we must remember that this is also a time for opportunity. If you have questions about your financial situation - whether you are experiencing challenges or you have financial certainty - contact us.



 

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