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To fix our home loan or not to fix our home loan, that is the question…

Written by Russell Johnson on December 3rd, 2013.      944 comments

Is it time to fix our mortgage interest rates ... my thoughts


Changes to Fire and General Insurance

Written by Russell Johnson on November 29th, 2013.      469 comments

Changes to Fire and General Insurance
The New Zealand Home Insurance industry is going through a significant change this year with a change from actual replacement cover to sum insured replacement cover. This means you are responsible for estimating the cost to rebuild your property when obtaining home insurance (Total Sum Insured).  This is the maximum amount payable in the event of a major loss.
This change is being driven by offshore reinsurers and brings the New Zealand Home Insurance industry into line with the global insurance industry where sum insured cover is standard.
When are the changes occurring?
This change is currently being implemented in the insurance industry.
What should you do?
Ensure that you are aware of the requirements for obtaining sum insured home insurance well in advance of your insurance renewal date.
If you are purchasing a new property set up your insurance early to avoid any last minute rush or potential settlement delays.
What tools are available?
You can access useful tools on which may help you obtain a rebuild cost estimate. This tool is free to use.
An alternative method for determining a sum insured amount is to obtain a building or professional valuation. To find a valuer in your area refer to the Property Institute of New Zealand directory

Work Life Balance

Written by Russell Johnson on June 27th, 2012.      765 comments

Work Life Balance
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20 Top Tips for a Better Work-Life Balance

Plan one hour’s relaxation time for you into every day. Block it out in your diary.

Get out into the fresh air for an hour every day.

Delegate - at home or at work- get others to contribute. Don’t be a martyr.

Say no - you don’t have to volunteer for everything you are asked to do.

Seek out some solitude each day - time alone is energising.

Plan a weekend event of some sort, or a day out, every 4-6weeks.

Make a list of what you must get through in a day, or week, and what you would like to get through. Tackle the former and ignore the latter.

Write a to-do list every night- and stick to it the following day.

Get a cleaner if you can afford to for 2-3 hours a week.

Internet shop for groceries- save yourself 2-3 hours a week.

Turn off your mobile or screen your calls -don’t take work calls at home.

Screen your landline calls. Let the answerphone take calls that are not urgent.

Don’t check your work emails when you are not at work.

Leave work on time at least two evenings a week.

Have some FUN! Spend time with friends who make you feel good, or do something that makes you feel good, at least twice a week.

Get a perspective - when you are frazzled, ask… Will this matter this time next week, next month, next year? If not, let go of the worry and anxiety.

Take up a new hobby- September is a great month to start new classes and courses.

Make one healthy eating change to boost your energy levels - such as reducing caffeine, alcohol, sugary snacks, or reliance on ready meals.

Seriously consider a career-change, or working part time, if your job dominates your life and is affecting your health. There are always alternatives, even if it means a reduction in your income.

Stop feeling guilty! Praise yourself for what you have achieved at the end of every day!

© Glynis Kozma Aspire Coaching August 2008 … printed with permission.


A successful payment.

Written by Russell Johnson on May 26th, 2012.      481 comments

I recently met a fellow financial adviser at a conference; he told me he wasn't working at present because he had suffered a head trauma injury.   After talking to him further he told me his insurance company had stopped paying his claim.  He wasn't sure why but it was clear he was suffering from a cognitive impairment.  We agreed I would look into it for him and a few days later he signed a form giving me authority to act for him.

Upon speaking to the insurer it was clear that they required additional information in order to assess the ongoing claim and the claimant (the adviser) had not supplied this.  His cognitive impairment made the whole complex claims process just too much for him; and this person is an experienced financial adviser who has handled hundreds of insurance claims on behalf of his clients over the years.

I was able to work with him and get the information to the insurance company so the ongoing assessment of his claim could be completed.  The insurance company immediately reinstated his benefits and made a back payment.

This bought home to me the importance of having a specialist financial adviser working for you to ensure that claims are handled efficiently and effectively.  It can be a highly complex process and you need someone in your court that you trust to ensure you get your claim handled and the money you need in a prompt and efficient manner.

It is also important that you contact your adviser as soon as you feel you may likely need to make a claim.

Why bother with Medical Insurance?

Written by Russell Johnson on April 25th, 2012.      571 comments

Person in hospital
I am often asked "Why should I have private medical insurance when we have a public health system in New Zealand?"  This is a perfectly understandable question; clearly private medical insurance costs money we could use for other things, yet why do so many Kiwis have their own private medical cover?

Our public health system offers excellent care and is staffed by dedicated, skilled professionals; yet it is under pressure; you do not need to look too hard to find newspaper articles on the length of the hospital waiting lists in this country.  Behind the story of waiting lists for elective surgery is the suffering of those affected and unable to get prompt treatment.

It is elective surgery that is the issue.  If you have an emergency, for example an accident or a heart attack, will are most likely to get the help you need in a public hospital in a timely manner; in these circumstances the system generally works.

However if your condition is not an emergency, for example the removal of a cancerous tumor, a hysterectomy, replacement knee or hip joints, heart surgery, then you’ll probably  affect any of us at any age, and completely without warning.  Even getting diagnostic services such as MRI scans, CT scans, colonoscopy, laparoscopy etc. can involve waiting … before you even know what your condition is.  Waiting times for such procedures can take up to a year or longer: a condition left untreated can cause unnecessary long-term suffering and worry.

Medical insurance is therefore designed to give you the peace of mind that expert medical treatment is there when you need it.  You get choice over the surgeon, the time and the place of the treatment … and you can get a wide choice over the drugs to treat your condition if you have insurance cover that allows for this.

You see there are two main classifications of drugs in New Zealand; the Medsafe list and the PHARMAC list:

The Medsafe list includes all of the drugs that are approved for use in NZ.  This list tends to include the latest and best advances in medication; and these drugs can cost serious money, often tens or even hundreds of thousands of dollars per course of treatment.  Often the NZ government cannot afford to fund these through the public health system, so they tend not to be available to those to do not have the medical insurance cover that will pay for these medications … and only two insurers in NZ do!

The PHARMAC list contains the medications that are funded by the government through the public health system.  Often the drugs on this list are older, generic and cheaper … but at least our tax dollars can afford them!
The question of whether you have medical insurance is basically the same as any other asset you own, do you insure or take the risk.  People often take the view that their health is the most valuable asset they have, and therefore having the best medical care when necessary is the right decision for them.  We must all make our own individual choice.

Startling Statistics
New Zealand residents have the highest levels of anxiety about health care of any country in the OECD: 42% of Kiwis feared they would not be able to afford private medical care in the event of an illness, 38% worried they would be forced to wait too long for non-emergency care and 38% believed they wouldn’t get advanced care if they became seriously ill.¹

In May 2005 (the latest statistics I could find) nearly 28,000 people were waiting for elective surgery; almost 8,000 of them had been waiting longer than six months; I cannot imagine the situation has improved any. ²

Health insurers pay for around 72% of the cost of surgery performed in private hospitals.  They reimburse the actual costs of health care services charged by the market. ³

Have you considered your options?
What outcome would you want for your family should they need non-emergency (but still important) medical treatment?  It is probably a question we should all ask … so we make an informed decision rather than no decision.  It is important to remember that there are generally no waiting lists for surgery in private hospitals.
If you would like to know more about which medical insurance options would be best suited for your family simply contact for a no cost, no obligation consultation.

1. Commonwealth Fund 1998 International Health Policy Survey.
2. Ministry of Health, May 2005
3. New Zealand Health Information Service 2002


Will your home be an asset you can use in retirement?

Written by Russell Johnson on April 8th, 2012.      873 comments

For most of us our home our single biggest purchase; and we were raised to believe that paying off our mortgage and owning our home is the key to our financial security.  Whilst it is true this is something we should all aim for, how much will home ownership contribute to our lifestyle in retirement?

Blogg house photo

Much of this thinking came from times of high inflation; in times of low inflation as we have now we need to ask ourselves if our home will appreciate as much as we expect.  The real cost of home ownership of course also includes the amount of interest paid over the term of the mortgage, maintenance, rates and insurance.  Markets also go down as well as up; consider the impact of a downturn in house prices just prior to your retirement.

Using the Equity in Your Home
To tap into the equity in your home comes with costs; you have to pay the interest costs on the money you borrow against your home.  Securing a traditional mortgage after you have retired and no longer have an income may be difficult, so it may be necessary to use one of the reverse equity mortgages that are now available.  With these you do not have to pay the interest until your house is sold, the interest will accumulate and could over time account for a good part of the value in your home.  Reverse equity mortgages do have a place in your financial planning.  If you outlive your retirement savings and are in a later stage of your retirement a reverse equity mortgage can be an excellent vehicle for maintaining your retirement income.  However they are best relied on as a backup plan and if used in the later stages of your retirement the impact of the compounding interest is dramatically reduced verses beginning the funding of your retirement this way.
Downsizing your home is of course another alternative.  If you have paid off your mortgage then you could sell your home and buy a smaller, cheaper house, perhaps in a less desirable area; living off the freed up capital.  Of course you would need to invest the freed up capital wisely so it continues to work for you until you need it.  More often than not though the amount of capital released will not fund your entire retirement.  At retirement people typically do not wish to trade down as much as they originally thought they would, therefore less equity than expected is released for retirement.
It is possible that your home will provide you with both a place to live in retirement and also some of the equity you need to contribute to your retirement lifestyle.  However it is also important to understand that you might not end up with what you expect.  You should consider making real estate a part of your larger retirement portfolio.  A Personal Financial Plan will help you to determine how your future may look relying solely on your home equity to fund your retirement verses using real estate in a broader portfolio.



Website is live!

Written by Russell Johnson on March 22nd, 2012.      754 comments

Well as you see we have our new website live.  We have spent a lot of time getting it to this stage, but it will continue to evolve.  We welcome your comments and constructive feedback so we can ensure it continues to provide the information you want.
Topics: website