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Understanding investments

The basics of investing

There’s no ‘one size fits all’ with investments because everyone has different aspirations for their money, whether it’s saving for retirement, or buying a new home.

Before you invest it’s important to decide what goals you want to achieve with your savings. When you have your targets in mind it’s a good idea to work with a financial adviser on an investment strategy to help you reach them.

With an investment strategy in place you’ll be able to choose investments that fit with the direction you’ve set, and start on the path to achieving your financial aspirations.

Setting goals and developing a strategy to reach them

Before you determine how you want to invest your savings, you need to decide why you’re investing and what outcomes you want to achieve.

Sit down and think through what you are saving towards, and how much money you will need to achieve your goals. Your goals could be a mixture of short and long term, such as: a new home, a sabbatical, your children’s education, a new car, and early retirement.

Once you’ve listed your financial goals you need to think about timeframes. Put a date next to each goal to indicate when your savings will need to be made available to make that goal achievable.

You’ll also need to think about any debts you may have, and decide whether you’re better off to pay off your debts rather than investing your savings. Calculate the interest that your debts will accumulate overtime, and compare that with the interest your investment could provide to help you make this decision.

Now that you have a set of goals, timeframes and a sum of money in mind to invest you need to decide what type of investments you feel comfortable with.

We recommend you get professional advice from an Authorised Financial Adviser (AFA) at this stage, to work through what types of investments will best help you achieve your financial goals and get you where you want to go in life.

 

Making your hard-earned money work for you is the key to sound investing. You need to invest in a way that gives you the best possible chance of achieving your financial goals.

All investments have different levels of risk and return associated with them. You could choose options that are higher risk, but potentially have better returns over the longer term or you could choose more conservative investments. Another option could be to diversify, and have a mixture of both.

There are a number of different ways you can invest your savings, including:

  • KiwiSaver
  • through a private managed fund
  • term deposits
  • shares and bonds, or
  • property.

Before you choose to invest we recommend that you do some research, either on your own or by seeking professional advice from an adviser to ensure that your investment choices match your financial goals.

Once you decide on an investment option be sure to read all accompanying documentation, such as the investment statement, relating to the investment you’re considering. This will ensure you’re well aware of all the pros and cons surrounding the investment you’re making.

KiwiSaver is New Zealand’s most popular voluntary work-based savings initiative, set up by the government to help Kiwis save for retirement. It offers a number of great benefits, which may change from time to time. These may include:

  • an annual Member Tax Credit contribution of 50 cents for every dollar you contribute, up to a maximum of $521.43 per year
  • compulsory contributions from your employer 
  • flexibility to respond to changes in your situation
  • the option to contribute regularly or in lump sums
  • help with buying your first home.

Generally, KiwiSaver can only be accessed when you reach normal retirement age (currently 65), however there are a number of ways to access your savings before that date if you’re eligible.

With the AMP KiwiSaver Scheme you have a wide range of investment options to ensure that your KiwiSaver savings meet your short or long term financial goals.

Find out more about how you can use KiwiSaver.

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Important information

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AMP Wealth Management New Zealand Limited is the issuer and manager of the AMP KiwiSaver Scheme (the 'Scheme'). The Supervisor of the Scheme is The New Zealand Guardian Trust Company Limited.

For more information, download a copy of the AMP KiwiSaver Scheme Product Disclosure Statement and Fund Update Booklet, which have been lodged on the Scheme's offers register entry at https://www.companiesoffice.govt.nz/disclose.

While care has been taken to supply information on this website that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.

A disclosure statement is available from your adviser, on request and free of charge.