ANZ Investments managing director Fiona Mackenzie said people should ask themselves what their goal was.
If they were saving for retirement or a first home, putting it into their KiwiSaver could be a good idea. “But if you’re saving for something sooner, like travel, other options may suit better.”
That could be an investment fund that works similarly to KiwiSaver but does not have the access restrictions.
She said people should consider their investment horizon – the longer they had, the more risk they could take – and their own level of comfort with risk.
“If market volatility makes you uneasy, a lower-risk investment fund or term deposit might be more appropriate. If you’re comfortable with short-term fluctuations, growth assets could offer higher long-term returns. There are a range of options available, including KiwiSaver, investment funds, stocks, bonds and term deposits.
“We’d also caution people, especially those with a lump sum to invest, to be wary of investment scams. Be cautious if you are researching investment options online. Scammers often target people looking to invest lump sums. If you come across an opportunity that seems too good to be true, verify it independently. Be particularly wary if someone contacts you claiming to be from a reputable financial institution, don’t just take their word for it. Look up the organisation online, their contact details will be listed, and get in touch to check the investment opportunity is real.”
Buy what’s been doing well
Pie Funds founder Mike Taylor said someone who wanted to continue with a theme that had worked all year could buy Rocket Lab, DroneShield and Palantir shares, as well as gold.
“But that would be a very high-risk portfolio. More conservative investors could opt for a managed fund or ETF that tracks world stocks and still benefit if the market goes up, but not risk getting wiped out if the market collapses.”
Bitcoin
Koura Wealth founder Rupert Carlyon said he would look at bitcoin because the price has fallen a bit.
“I would put $7000 into a diversified global equity fund and the remainder into bitcoin.”
Pay off debt
Financial adviser Tim Fairbrother said he would put the $10,000 into the mortgage on his home while interest rates are low.
Infometrics principal economist Nick Brunsdon agreed: “I’d put it straight on my mortgage and hopefully not adjust my spending habits. ”
NZ Compare chief executive Gavin Male said he would pay off high-interest debt such as a credit card. “That would also free up the interest cost.”
Invest in yourself
Float Mortgages’ head financial adviser Niran Iswar said he would recommend breaking the money up and use $1000 to invest in things such as books, podcasts and education to learn about growing wealth, and finances generally.
He said he’d also look at a gym membership in a community-based gym to build networks as well as physical fitness. About half the money could be put into an ETF such as the S&P500 and left there for 10, 15 or 20 years, he said. “I’d spend 12 months looking at what that does to my money.”
He said anyone who had high-interest debt would probably want to use some of the money to clear that. “That will help identify what your debt repayment timeframe is.”
There were also benefits from giving some to kids or family, he said.
Travel
Antony Boomer, owner of House of Travel Dunedin City, said he would spend it on travel.
“And yes, you would expect me to say that, but honestly, creating travel memories and spending time together as a family is priceless to me.
“One trip at the top of my list is a 14-day Discover South Africa walking trip through Mpumalanga’s Panorama Route. The small group size would be perfect for my wife and me, and it would be worth every penny to enjoy an active holiday with guided walks to see wildlife in Kruger National Park, hikes in the mountains of Eswatini, and learn about the history of Zululand and the Drakensberg.
“For me, spending money on travel moments like these is the best investment you can ever make.”
Get advice
Shirley McCombe, a financial mentor at Bay Financial Mentors, said she would advise people to sit down with someone who had no vested interest in the answer and work through their personal situation.
“So much of the answer depends on issues such as debt, interest rates, income, age and personal circumstance. There is a danger that clients read something online that suggests a one-size-fits-all – and that is generally not the case.”
– RNZ
