Milford’s Nicky Reid explains why investing in yourself is the best place to start
There’s a common misconception that investing is something only high-net-worth individuals should be doing. But setting aside as little as $20 a week is all you need to get started, says Milford Private Wealth Adviser Nicky Reid. Starting an investment journey now could be one of the best things we do for ourselves, which is why she’s passionate about encouraging everyone to invest.
“It’s an easy thing to put into the too-hard basket, and wind up ignoring your finances,” says Nicky. “Confronting where you’re at financially can be really hard but taking control of our finances and planning for the future is really important.”
This is especially true when you consider that on average women outlive men, are generally paid less, and more likely than men to take time away from the workforce to raise children or care for family members.
While it can feel overwhelming to know where to start, Nicky recommends first getting to know the lay of the land by understanding exactly how much you owe and what you spend your money on, from regular payments to less predictable splurges (hello shoe sales!).
By getting to know your spending habits, you have a good foundation to tackle debt and set goals. Rather than viewing budgeting as an onerous task, Nicky likes to think of it as an empowering tool that can enable us to spend our money as we wish, even if it might feel restrictive in the short-term. The psychological benefits of having your finances sorted can also be huge, she says.
“Having a plan and setting goals makes an enormous difference,” she says. “It might be small things like establishing an emergency fund, ideally three to six months’ worth of expenses. Then if you get an unexpected bill or something goes wrong as it does from time to time in life, you are in a position where that’s not too much of a stress.”
From there, you’ll be better placed to invest in your financial future, which could mean simply ensuring you’re reaping all the benefits of investing in KiwiSaver. Investing wisely, and early, could speed up the time by which you pay off your mortgage. Or it might allow for a family holiday overseas, or the chance to do up your home.
“Even a small amount invested now is an important step. If you can’t do it right now, there will be a point where it does get better.”
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Advertise with NZME.For those interested in investing outside of KiwiSaver, it helps to know your purpose, says Nicky, as this can best determine the most appropriate fund to invest in. Saving for a house deposit, or something in the short-term might mean you’d be better off investing in lower-risk funds, to mitigate the risk of a market downturn impacting your investments and therefore your plans. Meanwhile, the magical power of compounding interest can make a profound difference to the amount you’ll be able to retire with by investing your money, as opposed to simply saving, which generally offers a lower return.
Investing in yourself also means further educating yourself, whether it’s listening to podcasts, reading books and articles, determining your risk tolerance, or getting sound financial advice. Nicky recommends women talk about their finances with friends and family, and to embrace their tendency to be collaborative decision makers.
“There’s a lot of benefit for women to break down the shyness around talking about money,” she says. “Women are typically less confident talking about their money than men so I think it’s really helpful to talk to friends and family about how they invest or look after their finances. Also getting really good advice is really important because investing in yourself financially means not just building your wealth and planning and doing all the right financial things, but not losing your money. This is where a Financial Adviser who lives and breathes investing can be invaluable.”
Find out more about investing in yourself financially at Milfordasset.com
If you are new to investing and find it all a bit scary, we’ve got a safe place for you to learn and gain confidence at theinvestingplace.co.nz
This article does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment of financial advice. Past performance is not a reliable indicator of future performance. Investment involves risks and returns can be negative as well as positive. Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at milfordasset.com. Before investing you may wish to seek financial advice. The Disclosure Statements for all Milford Financial Advisers contain more information and are available on request, free of charge. See our Financial Advice Provider Disclosure Statement at milfordasset.com/getting-advice.
