2021 has arrived hat-in-hand, bringing with it the conciliatory offer of a fresh start. A new year presents the perfect time to reset old habits and take some positive steps forward. When it comes to global new year’s resolutions lists, “earning more money” and “getting out of debt or to “organise finances” are consistently up there in the top ten.

In theory, you have a budget, staid and sensible. In practise, you seem to be at war with a money-hungry octopus, which delights in reaching its tentacles into your wallet and whipping out another chunk of cash as soon as your back is turned.

Meanwhile, you know you should be putting money aside into an emergency fund, but Murphy and his cursed law always seems to be lurking with the next financial foot trip. And why is it that paying off debt is hard, but that saving up that same money to buy things with cash feels like a far-fetched impossibility?

The plan to organise your finances can sit in your psyche as an important but fuzzy-edged goal. It can help to write down exactly what you want to achieve, even if you don’t know quite how to get there. For example, is your Kiwisaver still languishing in that default fund? Do you want to obliterate a certain debt that has been hanging over your head? Is it time to work backwards from the date of your planned retirement to figure out how to get you there safely and comfortably?

Kathryn Alborough from Motueka’s Castle Trust Financial Planning said that there are a host of money related goals that they work through with their clients.

“Each household has its own very unique financial situation, and that means a different set of solutions each time. We love having that initial conversation with our customers, where we start to get to know them and pin down their goals.”

Writing down everything that you spend can provide a sharp wake-up call, especially if you go back through your bank statements and categorise your last few months of spending. That way there can be no pretending that last month’s financial blow-outs were just anomalies that coincided with the Boxing Day sales. After all, budgets should be realistic, not idealistic.

“Our clients live in the real world, and so their finances need to work for them in the real world too,” – Kathryn said.

“We have seen over and over again that people have more success with their financial goals when the blueprint is balanced and sustainable.”

“The kids don’t care if you pay off the mortgage at 55 or 57 – but they care that you took them camping. It’s about balancing spending on today, paying off the mortgage and saving for tomorrow. We sit down with our customers to make a sensible plan that aligns with their life style.”

Like any other specialty area in life, it can be prudent to enlist professional help. That way, you’re not relying just on your own willpower to tick this one off your list of resolutions – you have their training and years of experience on your side, too. After last year’s upheavals, imagine striking this one off your list and moving forward with your finances, with confidence and purpose.

If you are ready, book in your free 15 minute consultation with castle trust financial planning and let them help you get your finances organised.

The post Sometimes you just have to be brutally honest about the limitations of your own willpower to organise finances. appeared first on Castle Trust Financial Planning.

It’s definitely worth popping in for that five-minute chat with Stu and Alan then.

“As the newest additions to the team at Motueka’s own Castle Trust Financial Planning, Stu Pope and Alan Atkins offer impartial  mortgage advice“

Stu has 20 years’ experience in the mortgage brokering field, where his vast expertise and personable manner made him almost too busy for his own comfort. 

He loves working for a company as “customer-centric” as Castle Trust, appreciating their holistic approach to their customer’s financial well-being.

Alongside Stu is Alan, a born-and-bred local who has recently completed his Certificate in Financial Services. A familiar Motueka face to many, Alan has spent 20 years working in the parallel field of real estate, including nine years as the owner of Motueka’s Ray White franchise.  This affords him excellent insight into the financial pressures and time restraints that home buyers face, and he is delighted to bring this synergy to the mortgage brokerage team.

The Castle Trust team understands what is both typical and possible when it comes to negotiating with lenders.  They are familiar with the discounts and sweeteners that each individual provider is able to offer.  Stu and Alan take care of the negotiations on their customers’ behalf, taking on the communication and legwork until they can present the best possible options.

“Because we’re doing it every day,” says Alan, “we know what a good deal from the bank is.”

Stu and Alan know the ins and outs of not only the banks, but specialist non-bank lenders, and they work with just about every single option out there.  And yes, Alan says, that does include NBS.

Most of the time, their impartial mortgage advice and services are completely free to their customers, and if there are to be any fees, they will be discussed well in advance.  No surprises, says Stu.  After all, this is not a single transaction for them.  They are working on establishing a lifelong relationship with each and every customer – and this is a key reason why Stuart allowed himself to be lured out of early retirement by Castle Trust owners Kathryn and Glyn. 

He appreciates that with their expertise in insurance and investments, Castle Trust’s mandate is to take care of “not just present needs, but future needs too”.

“I really like that part of the business,” he says. “Almost without exception, most banks and other providers don’t have that holistic approach.”

Unlike banks, which are restricted from giving mortgage structure advice, the Castle Trust team will use their expertise to help you design your mortgage offering impartial mortgage advice so that it is the best fit for your situation, both for the present and the future.

Sometimes people just want support to work with their existing bank to lock in the best rates when their fixed term ends.

“We have the benefit of looking at everything in your banking history and making sure you’re still getting the best deal,” Alan explains.

Castle Trust can also work with people whose circumstances don’t automatically tick the boxes for the banks – customers who are self-employed, for example, or who have bad credit, or those of retirement age who have assets behind them but no ongoing income.  Stu and Alan can work with families who would like assistance with setting up a “bank of Mum and Dad” structure, or for people who would like advice about commercial and business loans. 

With their combined wealth of experience, they’ve seen almost every imaginable scenario and can accommodate a variety of needs that mainstream lenders don’t want to know about.

After all, that’s what the team at Castle Trust really specialise in getting to know your situation and applying their knowledge and enthusiasm to help you get your finances organised.

The post It can feel like a Lotto win, in reverse appeared first on Castle Trust Financial Planning.

1. What is your name?
   Anna-May Martin
   
2. Where were you born?
   Ballymena, Co Antrim, N Ireland (very North East of Ireland, very near Bushmills Whiskey Distillery)
   
3. What are your qualifications?
   I studied at University in Edinburgh achieving a BA (Hons) from the business faculty, I also have my UK Financial Planning Certificate.
   
4. What is your role at Castle Trust Financial Planning?
   Business development and training to be an adviser
   
5. What made you take the job with Castle Trust Financial Planning?
   I have been a client of Castle Trust since I immigrated to NZ over a decade ago and I’ve always  been very happy with the service, advice and professionalism of the team – throughout changing life circumstances they have always been proactive and helped me keep everything on track.  So when Glyn and Kathryn asked me would I like to join them, I said yes – who wouldn’t want to be part of it?  I knew it was the right time to re-ignite my career in finance and be part of their business expansion.
   
6. Tell us about what you will do for clients?
   Along with the team I will help our clients get their finances organised.  I’ve seen first-hand how a healthy relationship between your money and your priorities can make an impact on your life. Finding the right financial professional to help you manage your money in a healthy and impactful way is crucial. Building an awareness of your values and priorities and a willingness to use money as a tool to advance them – that’s what really opens the doors to a whole world of possibility and that is where we can help.
   
7. Apart from finance what do you like to do?
   I enjoy designing houses inside and out, I have completed a few in my time and I am sure I will do more in the future.
   
8. Family?
   I’m a proud Mum of Niamh (9 years old).
   
9. If people want to speak with you in regards to their savings what’s the best way to contact you?
   Pop in or give me a call

The post Get to know Anna-May Martin appeared first on Castle Trust Financial Planning.

What’s that got to do with tax and mortgages?

Every time a self employed person or contractor claims a business expense that perhaps wasn’t really related to his business he reduces his profit and pays less tax. Or structures his financial or business affairs with the sole aim of reducing tax – which seems to be what Donald Trump has been doing for the past 15 years. Less tax is great isn’t it (or no tax in POTUS’s case) but stand on your desk for a moment and look at it from a different point of view.

Your profit affects your borrowing ability. So lower profits might mean less tax but also a reduction in your borrowing ability (and the value of your business). So be sure of your point of view.

And treat yourself – watch Dead Poet’s Society again. I love the scene of the boys learning how easy it is to conform to what everyone else is doing.

The post It depends on your point of view. Tax or Mortgage? appeared first on Castle Trust Financial Planning.

Recently, I came across a financial blog about the effect of the Ford  F-150 4wd truck on the retirement savings in the USA. The title of blog was ‘Pick-up trucks are a budget buster’. The writer pointed out that this truck had been the best selling vehicle in the USA for the past 40 years. Then the writer went on to compare the purchase and running costs of this $45,000 truck with that of an average $20,000 saloon car.

The difference was substantial. Furthermore, with tongue in cheek, he suggested that this expense was in some ways the reason that retirement savings in America were in a crisis. And apparently (after the first warm glow of driving a car like this) the ‘happiness’ feeling evaporates and you might as well be driving a $20k saloon.

Not only was this an entertaining read, it also held an element of truth. OK it’s simplistic and there are other factors (like safety and getting out of a field at an A&P show) but it gave me something to think about.

The Kiwisaver crisis

This simple analogy could also be applied to the New Zealand retirement savings problem – the Kiwisaver crisis. For us New Zealanders it’s not the Ford F150 but the Toyota Rav4. If Kiwis chose to purchase a cheaper car instead of the more expensive Rav4 and then instead put the equivalent to savings into their Kiwisaver account then this would make a huge difference to their retirement savings.

Furthermore it speaks to all unnecessary luxuries in our lives. Do we need to buy lunch everyday? What about those afternoon coffees? Can we limit them to once a week.

If you want to discuss your personal Kiwisaver crisis then please don’t hesitate to book a free consultation.

The post Are 4wd’s responsible for the Kiwisaver crisis? appeared first on Castle Trust Financial Planning.

It’s important to note, at this point that the conversation in New Zealand has largely been about a negative official cash rate i.e. the wholesale rate banks pay with the reserve bank and not the retail rates offered to customers.

What is a negative interest rate?

Traditionally, with a positive interest rate you get paid to save but in a negative interest rate environment it would be the opposite. In essence, there would be a fee charged to save money.

A negative official cash rate would mean that retail banks would be charged for holding their money with the Reserve Bank overnight, rather than lending it out. The impact, hopefully, would be to incentivise the bank to lend more.

Will I be charged for my savings account?

Aside from the fact that we’re already paying fees for bank accounts, a negative cash rate is unlikely to mean a penalty for having money in a bank savings account.

Will I get paid to have a loan?

Once again this is not a likely scenario. Traditionally, borrowers are charged at a higher rate than savers are paid (2.1 per cent margin on average across all banks in the last quarter of 2019). Unless banks are willing to charge savers then they couldn’t possibly pay borrowers.

What about mortgage rates?

Economist Gareth Kiernan, of Infometrics, stated that if the official cash rate dropped to -0.5 per cent then floating rates could drop to 3.75 per cent and fixed rates could fall below 2 percent (1 year fixed is currently at 2.55 per cent). It appears that mortgage rates are going to be very low for a long time.

Will it be easier to get a loan?

No one knows for sure. Banks in NZ are not set up or prepared for a negative interest rate environment so it may take them a while for them to get a grips with it.

If you are interested in more information about mortgage rates or getting a mortgage then contact our mortgage advice team.

The post How do negative interest rates affect me? appeared first on Castle Trust Financial Planning.

• 65% of respondents stating that they did not think much or at all about how much money they would need for retirement,
• 61% of people thinking that NZ Super and/or Kiwisaver would be their main source of income during retirement,
• although 75% of employed people had Kiwisaver only 73% of that number knew what type of fund they were in, and
• only 53% of respondents were able to save a portion of their income.

At Castle Trust we think “Informed clients make better decisions”. Choosing the right Kiwisaver is essential otherwise you’re just losing money. Getting organised with finances and having a plan makes saving easier. The sooner you start, the easier it is.

The post New survey finds Kiwis are not planning for retirement appeared first on Castle Trust Financial Planning.

We pay premiums year after year for the peace of mind of knowing that we’ll be covered should the worst happen – but also crossing our fingers that we never really have to find out what that would be like.

But every year, thousands of New Zealanders do call on insurers when they hit a crisis, and it’s then that the power of insurance is starkly obvious. It makes the difference between having to sell the house and turning to family and friends for financial help – and keeping the bills paid as much as normal.

So, how much do insurers really pay out?

Insurers pay out more than $1 billion a year, or $3.3 million a day, in personal insurance claims to New Zealanders. About 40 per cent of those are Life Insurance; Trauma policies are also a significant source of claims.

How does the claims process work?

If you have a financial adviser, the claims process is relatively simple.

Depending on the type of policy on which you’re claiming, you will be required to provide different information – details of your previous earnings for an income policy payout perhaps or medical records.

In the first instance, you contact your insurance adviser to start the claim.

They will provide you with the necessary documentation to fill in to submit to the insurance company and ensure that all the required details are supplied. Having someone to explain the process to you and guide you through can be invaluable at a time of high-stress, as insurance claims situations often are.

Your adviser will then liaise with the insurer, including helping to arrange any independent assessments that the insurer requires.

If the claim is accepted, the payout will be made as determined by your policy (type and details) – either immediately, or after a set period of time, if you have a stand-down clause in your policy.

If the insurer declines your claim, or if there are any aspects that are questioned, your insurance adviser will make your case for you – your adviser is your advocate at claim time.

What should your insurance adviser do?

While most people rarely claim on their insurance policies, your adviser has experience with the claims process and knows how the process works.

They will take the pressure off you and your family by dealing with the insurance company, arranging the required forms and files, answering your questions about the process and relaying information to you.

Your adviser will also be your advocate and will translate into plain English any communications from the insurance company that are difficult to understand – advisers are used to dealing with insurance small print. When you’re in a difficult situation, it can be hard to keep on top of basic life administration, so an insurance adviser is a big help to take the pressure off.

You hope you never have to claim on your insurance policies. But having an adviser on your side, can make all the difference in life’s hardest moments.

Like to speak to an insurance adviser?

Click the button below and book a 15 minute meeting with one of team

Please note that the content provided in this article is intended as an overview and as general information only. Please use your discretion and seek advice before making any decisions based on the information provided in this article.

The post Insurance when it counts appeared first on Castle Trust Financial Planning.

Buying a new home is an exciting time, but managing your mortgage needs from one property to another can be a bit of a juggling act. And as with all juggling acts, you’ll give yourself a much greater chance of finishing the show without dropping any balls, by doing some sound planning first.

Here’s a few things to think about when moving from A to B:

Sell then buy or buy then sell: What’s right for you?

Unfortunately, there is no simple answer to this question – the right way to go will depend on your property plans and financial circumstances, and may also be influenced by market conditions – i.e. whether it’s a buyer’s or seller’s market at the time. Here are a few things to ponder as you consider your approach:

The advantages of selling first: (1) you won’t fall into the all too common trap of overestimating what buyers will pay for your current property before you make an offer on your next home – i.e. you’ll know exactly how much money you have to spend, (2) you can avoid having to cover two mortgages during the transition from one property to the next.

The disadvantages of selling first: (1) depending on the settlement date of your current property, you might need to organise interim accommodation – i.e. renting or staying with family – which means two moves and extra cost, (2) in a rising property market, selling first can mean that you get less for your money if it takes a while to find your next property.

The advantages of buying first: (1) often buying first comes down to that perfect property being there for the taking, and not wanting it slip through your fingers… that’s a pretty big upside, (2) if finances allow, buying first means you can move from your current home straight into your new property – no extra rent / accommodation costs or the hassle of a double move.

The disadvantages of buying first: (1) you’ll need to cover the mortgage on your existing property as well as on your new property for a period of time, (2) a double mortgage commitment can create pressure to sell as fast as possible, and risks jumping at less than expected offers – particularly if the market is slow and time is ticking on.

Mortgage options for selling and buying

Bridging finance. If that perfect property is beckoning and buying before you sell is looking probable, one option could be Bridging Finance – an interest-only (usually) mortgage to buy your new house before you sell your existing home. Bare in mind this means you need to cover the cost of both mortgages until you sell. As with all options – there are pros and cons; we welcome you to get in touch to find out more.

Loan portability. If you sell first, one option you could consider is taking your existing mortgage with you on the move to your new property. This means you won’t need to establish a completely new mortgage – which will save you certain costs – and can make the whole process smoother. Basically, in this scenario, your lender would substitute your new property as security for the mortgage; it can be a good option if breaking fixed rate term(s) would be too costly (falling interest rate market), or if you have a sharp rate you’d like to keep (rising interest rate market).

Check out your options: Of course, buying a new property is also a great opportunity to review your mortgage options for the next leg of your home ownership journey. It’s a good time to peruse the market for not just a sharp rate, but a mortgage structure that will support your short and long-term goals. Getting some good advice at this time is a sound way to explore your goals and find out what would work best for your needs.

We hope this has been a handy read, but would guess that it has likely raised a few more questions. You’re welcome to get in touch to talk through your plans and options – any queries, just let us know.

The post The Juggling Act: Buying and Selling Property appeared first on Castle Trust Financial Planning.

First of all, keep this in mind: even small amounts over time can result in significant wins. That is, you don’t have to be in a position to double your repayments or contribute big lump sums on a regular basis to make an impressive dent in the time it will take to pay off your home loan. Every little bit – with the multiplying effect of time – counts. Here’s how…

Pay a little more every time

Let’s start with the obvious option of increasing your repayments, and the often not-so-well known impact that even $100 a month can make over time. Here’s an example:

$600,000 home loan, 25-year term at 5.5%, with a monthly repayment of $3,685:

If you’ve had a look at the budget and can see an opportunity to pay even a little extra off each month, now’s the time to do it: the sooner you start the greater the impact you can have over time. Get in touch if you would like to review your home loan structure and options for boosting your mortgage repayments.

Put lump sums to work

A bonus from work, maybe a tax refund or perhaps savings on the side that could work harder for you on the mortgage… If you have some extra cash, find out if your mortgage allows for lump sum payments (not all do) and consider putting that cash on the mortgage – it can have a considerable impact on interest savings.

Pay fortnightly

If your monthly repayment is a true monthly figure (ask us or check with your lender), you could pay an extra full month each year simply by splitting your monthly mortgage repayment in half and paying fortnightly instead.

Because there are slightly more than two fortnights in a month, by paying fortnightly, over a year you’ll end up paying an additional monthly repayment. This can be a great way to spread the impact of an extra payment across 12 months.

Consider a revolving credit mortgage

Revolving credit mortgages are essentially like a big overdraft – your whole salary is paid into the revolving credit account and you can use that account to pay bills and expenses.

Because interest is charged daily, the aim is to have as much income sitting on the mortgage and to minimize expenses coming out for as long as possible. This can also be achieved by using the interest free period on your credit card for bills and expenses during the month. Then when your credit card bill is due, you can use the revolving credit account to pay the balance before the monthly due date.

Revolving credit mortgages can shave years off your mortgage term and save considerable interest costs, but they definitely require discipline and planning. Blowing the expense budget regularly or dipping into the revolving credit account for an extra purchase here or there can swiftly have an eye-watering impact on the total cost of your mortgage.

Do what you’re doing now…

That is, give your mortgage and your goals some thought, do some research, get some advice and make a plan. Often the mortgage structure we start with needs to change over time. That can simply be making higher or lump repayments or a complete restructure to give you more options to become mortgage-free faster. Whatever your goals, we welcome you to get in touch. We’re here to answer any and all mortgage queries.

The post Imagine… Life Without a Mortgage appeared first on Castle Trust Financial Planning.