Spare money – what to do with it?

New Zealanders love to buy real estate as their investment for the future. New Zealanders are also very entrepreneurial but when they start businesses, they often seem to stop at the point where they can buy a holiday home, a nice car and a leisure craft (the old Bach, Boat, and BMW). Beyond that either they have no interest in growing their business to something that grows NZ exports, or they have limited, difficult or only foreign access to growth funding. Why? Because everyone with extra money here only wants to buy houses…Not that I’m encouraging us all to go drop our money into risky ventures. The housing market is relatively easy to understand and all of us have experience living in some kind of accommodation. For other investing maybe you have to be “in the scene” to feel comfortable putting your money there.

What if your marriage is going through difficulties because one of you does understand and wants to risk investing in stocks and bonds, yet the other is adamant that putting money in a high interest account is the best way to save for the future? How do you agree, if you do have extra money, what to do with it? Do you even bother saving it or just work on getting all your home comforts for the first few years – a new surround sound entertainment system, perhaps even a media room, a good varied wardrobe and plenty of nights out?

DISCUSSION QUESTIONS:

1. Consider the following scenario: you and your spouse own a rental property with great tenants, in there since you bought it. One day they give notice and your spouse begins to stress about finding good new tenants. Neither of you really know how to find good ones nor what to put in the agreement. Your spouse normally dealt with any queries of the former tenants because you were always reluctant to have that responsibility, and now they are saying they want to get a property manager because they don’t want to deal with it either. That means you will need to put more money into the mortgage to cover the added management costs, meaning less to spend on lunches and dinners out. DISCUSS TOGETHER HOW YOU WOULD DEAL WITH THIS SCENARIO – WHAT ARE YOUR OPTIONS AND WHAT WOULD YOU DO?
2. You own a business which means income varies greatly from month to month, although your wife works a regular 9-5 job and you pool all of your finances. She has a significant automatic payment deducted each month from her personal account to a charity she has donated to for 5 years, since before you met. Yet that amount of money could be used so much more effectively if you could use it towards an alarm system for the car which would reduce insurance costs. What’s more, it seems every time any beggar asks her for money, she gives it away. She gives away money that is both of yours. You know it’s important to her, but does it have to be that much? DISCUSS TOGETHER HOW YOU WOULD DEAL WITH THIS SCENARIO – WHAT ARE YOUR OPTIONS AND WHAT WOULD YOU DO?