Imagine you have had a cash windfall, won a lump sum of money, received an inheritance or finally have access to your retirement savings.What happens next?In an ideal scenario, you would have had time to contemplate retirement planning and how you intend to navigate it. However, for many of us, life is busy, making it challenging to fully consider our next chapter.It can feel overwhelming. Many of us have probably fantasised about how we'd spend a large sum of money, but imagining it is one thing and actually managing real money is another challenge altogether.So it's important to think about your financial plan. First, take a breath Before doing anything, the first step should always be to take a moment to understand the full extent of this new financial situation you're in. It's advisable to resist the urge to make any hasty decisions, as the sudden increase in wealth can lead to impulsive spending.Deal with your financial prioritiesIn most cases there may be personal debt to consider, the easiest approach is to pay off any high-interest debt, personal loans, credit card debt and so on. Then you can consider the mortgage, but you will want to understand any costs of repaying, also whether it may be worth continuing with the mortgage payment for now and assessing all the options going forward.It’s also essential to consider an emergency fund so you have a safety net for any unforeseen circumstances, and you don’t have to dip into your long-term investments or take on more debt.Consider investingInvesting is another critical aspect to consider.Investing large sums of money carries inherent risks, and whether this aligns with your risk tolerance determines its potential outcome as either advantageous or detrimental.It might be worth considering having a diversified portfolio. This means investing in a wide range of different asset classes. Making the strategic decision to invest in different types of assets, can help lower your level of risk and maximise returns over time.Seeking professional advice on your investment decision from a financial advisor who understands your personal goals, financial goals and risk tolerance is highly recommended. They can assist in creating a tailored investment strategy that aligns with your long-term objectives and can also help with the steps above.Plan for the future Include thinking about the future in your financial planning. Setting up retirement accounts or education funds for children (or grandchildren) can ensure that the financial windfall has a lasting impact.Additionally, consider contributing to charitable causes that are meaningful to you, this can provide personal fulfilment and in some cases tax benefits.In conclusion As you can see, a windfall of money requires a thought-out financial plan and disciplined decision-making.By taking strategic steps and seeking professional guidance that offers personalised financial advice, one can effectively manage and make informed decisions about their newfound wealth to secure a prosperous financial future.How we can helpWe at Collinson Wealth Partners would be happy to share our knowledge and experience in this area, help you step through the considerations and come up with a plan you can implement to make the most of your options.The information contained in this publication is general in nature and is not intended to be personalised financial advice. Before making any financial decisions, you should consult a professional financial adviser.Collinson Wealth Partners FSP 743091 believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation contained in this publication on the date of this publication.

As your family grows, it may be worth considering upgrading your current home.Upsizing your home isn’t as easy as upsizing your fast food. Accommodating a growing family is a significant decision that involves several considerations to ensure that the new space meets your needs and preferences.Here are a few things you should consider before making the change:Space Requirements:As your family grows, so do your needs for space. It can be challenging to live comfortably in a home that is bursting at the seams with belongings and people. Evaluate your current property and identify the areas where you feel cramped. Determine how much extra space you'll need to accommodate your family's needs comfortably.Budget:Before diving into the upsizing process headfirst, it is crucial to set a realistic budget. This means taking into account not only the cost of purchasing a larger property but also potential renovation expenses, moving costs, lawyers, and agency fees.Home Layout:Pay attention to the floor plan of the prospective homes you're considering. Look for features such as extra bedrooms, storage space, the layout of common areas, and any additional spaces you could need like a home office or playroom. For households with teenagers, it could be worth considering two separate living spaces/rooms and incorporating a media room, to provide everyone with their own space and entertainment options.Outdoor Space:Assess the outdoor space available with the new home, especially if you have children or pets who will need room to play. Consider factors such as yard size, landscaping, and outdoor amenities like a patio or deck.Location:Consider the location of your new home carefully. Choosing the right location can make a big difference in how smoothly your family transitions into a larger space. One of the first things to think about is proximity to schools. If you have school-aged children you may also want to consider the children's sports or after-school activities. Additionally, consider the proximity to work and other important destinations such as grocery stores, parks, and medical facilities.School Zoning:Speaking of school, if you have school-age children or plan to have them in the future, research the quality of the schools in the areas you're considering. A good school can significantly impact your children's education as well as your property's resale value.Commuting:Worth considering if you're choosing country over town. Often children who can walk or bike to after-school activities puts less stress on the family having to provide transport during work hours.Future Growth:Anticipate any future changes in your family size or lifestyle that might affect your space needs. While upsizing now may meet your current needs, it's essential to consider whether the new home will still be suitable in the long term.Resale Potential:While it's essential to choose a home that meets your current needs, also consider its resale potential. Look for features and proximity to amenities that appeal to a broad range of buyers and consider how the neighbourhood and local property market may affect resale value.Home Inspection:Before finalising the purchase of a new home, conduct a thorough home inspection to identify any potential issues or repairs needed. This can help you avoid unexpected expenses and ensure that the home is safe and structurally sound for your family. If unsure, get a builder through or better still get a comprehensive builder’s report.By taking these key considerations into account before you decide to leave your current space and upgrade to a larger house, you can ensure that your decision is well-informed before taking the plunge. For additional guidance, feel free to reach out to me at Tall Poppy.

Taking on your first employee is a massive step for any business, especially if you’re used to going it alone.Registering with Inland Revenue (IRD) as an employer is the easy part. An employment agreement that is fit for purpose can be easily obtained with the right advice, but the real challenge is bringing someone into the business who shares your vision and values.Therefore, both you and your new hire must have a clear understanding of why they've been brought on board. Before you start the recruitment process...As the business owner, you need to be clear about what is important to you, and why.If you can’t explain your expectations clearly to your new staff member, what chance do they have of representing you accurately in the marketplace?This means;Articulating your company culture and valuesProviding a job description that clearly indicates tasks, measurables, and expected outcomesIdentifying the skills and competencies needed for the roleProvide an induction plan when your successful candidate starts, so that you can maximise the chances of retaining them. Make it fit for your businessIn New Zealand, 97% of our businesses are small to medium enterprises (SMEs) with less than 20 employees.Even though it might not seem like typical ‘corporate’ stuff, being 'corporate' just means being united as a group or sharing things with others in the group. There is no size restriction to having a corporate identity.Nothing in the definition of “corporate” indicates you need to be “stuffy” or “bureaucratic” with your culture.Your vision and values may indicate a more relaxed “culture” supported by respect, integrity, quality and even fun! What’s important is that every single staff member and prospective employee understands exactly what is required of them. What does success look like to you?Becoming an employer puts you into a position of trust and one that you may well be held accountable for if you breach it.Providing clarity in the role within your job description, company strategy and business goals, can reduce your risk of future misunderstandings.Providing an objective and purpose for the new hire can also help identify how to measure “success”.What tasks will the person be doing on a day-to-day basis and what skills do they NEED to meet your business requirements?What skills do you WANT but are really just “nice to haves”?Is there an option to provide career development, or training so that you can acquire those skills when you need them?If you’re clear about what you need and how you’ll measure success, including the cultural expectations of the company, you’re much more likely to find the right type of person for your business. After the hiring process An induction process or an onboarding process is essential to ensure your new staff member is up and running as soon as possible.The first two to four weeks of employment provide the best window of opportunity to set the expectations of the job and deal with any immediate training issues.Need some help?For more information, professional advice, or assistance with your Human Resource queries, contact Cherilyn at Enterprise And Staffing Innovations NZ (EASI NZ) on [email protected] or phone 021 665 013. 

Buying or selling a residential property can be one of the most significant transactions in your life.Whether you're stepping into home ownership or transitioning to a new property, understanding the process is crucial. Here are some valuable insights that I would recommend looking into throughout your home buying or selling process: Sale and Purchase Agreement (S&P):The S&P agreement records the terms of the agreement. Ensure you fully understand all the terms, as it's not just about sealing the deal with a purchase price and the settlement date. The better your understanding the more certain you can be about the transaction. Choosing the Right Entity:Deciding what entity to purchase the property under can have legal and financial implications. Consulting with a lawyer and accountant can help you determine the most suitable structure, whether it's purchasing as an individual, a trust, or a company. Financing Approval:Securing finance is essential for many buyers. Understanding which entity to get finance approved through and ensuring you meet the lender’s requirements is vital. Work closely with your mortgage broker and lawyer to navigate this process smoothly.Title Review:Before signing an agreement or going unconditional, it's crucial to review the property's title. This includes checking for any registered instruments that may affect your intended use of the property, such as having design requirements or even restricting you as to what type of dog you can own. Building Inspection Report:Obtaining a builder's report can uncover any hidden defects or issues with the property's structure. This information is invaluable for making informed decisions and negotiating if necessary. Land Information Memorandum (LIM):A LIM provides valuable information about the property, including zoning, building consents, rates, and any known hazards. Obtaining a LIM report is essential for buyers to understand the property's history and potential issues before proceeding with the purchase. KiwiSaver:KiwiSaver can be a valuable resource for first-home buyers, offering assistance with the deposit or at settlement. Understanding when and how to use your KiwiSaver funds is crucial, discuss this with your lawyer and mortgage broker. Ownership Agreements:If you're purchasing the property with a partner, friend, or family member, it's essential to have a clear agreement in place. The agreement will outline each party's rights, responsibilities, and contributions to avoid potential conflicts in the future. Navigating the legal process of buying or selling a residential property in New Zealand requires attention to detail and expert guidance. By understanding these key insights and seeking professional advice when needed, you can ensure you are protected.For personalised legal assistance and guidance, don't hesitate to contact our experienced team of property lawyers. We're here to help you every step of the way. 

As a recruiter one of the questions I ask when speaking to potential employees is ‘What’s important to you in a role?'I can unequivocally say that in the last year ‘being able to make a difference/help with positive change’ has been the standout response. I have had candidates choose their values over their pay, and I think we can take a lot from that.People want to feel that what they're doing is good, and they're interested in doing positive things that actually make a difference. If that’s what motivates people, I feel like business owners need to listen up.This doesn't mean that professional development, flexible hours, bringing your dog to work, having your birthday off and the choice to work from home aren't also important!Values: So how can we look at authentically encompassing social or environmental positive change? See that word I snuck in there ‘authentically’? To be truly authentic you have to move in line with your values.To achieve this, you first need to develop your values, making them meaningful and relevant to your business. What do you want your company culture to look like? How do you want your business to behave? How should people feel? How should the business be seen or how should people feel about it?Your values do not have to be set in stone, they evolve and grow as you do and guess what? If you include your current employees in building these values you have their buy-in too, plus you’re all accountable. The values that you come up with should be revisited and visible for all to see.Team Culture:Feeling included, valued and listened to within the team is all the motivation people need to get out of bed in the morning. When people willingly invest their time in your team, it's a testament to the power of teamwork, as the saying goes, "Teamwork makes the dream work."On the flip side, if you claim 'teamwork' as a core value but experience weak communication, isolated departments, and a lack of team-building activities, it undermines collaboration and camaraderie among employees, leading to lower productivity and morale, which won't be great for your company culture.  Employee Well-being:Creating a positive employee experience and a workplace where everyone feels valued and supported boosts their happiness and engagement, leading to better productivity and job satisfaction. Keeping talented people around not only saves money on hiring but also keeps important knowledge within the company.On the flip side, a toxic work culture with long hours, high stress, and little care for mental and physical health brings down morale and makes people leave their jobs more often. This not only hurts individual performance but also puts the health of the whole company at risk.In conclusion It’s all common sense when you take a step back and look at the big picture. So, I challenge you to look at your values and ask yourself if you are using them to support decision-making within your team. Is it time for a refresh and can you ask your team their thoughts?Get them right, make them spread like wildfire around your organisation and see everyone thrive! Now that’s a key way of attracting amazing and qualified candidates and encouraging them to choose you. EASI NZ would love to help your local businesses and ensure that your operations, policies, and procedures all reflect your company values and how you would like to present your business to potential customers. Contact us for more information about aligning your HR strategy to fit your business needs. 

You may have seen recent articles in the news highlighting an update around studies on the human life expectancy and how it compares with how long people think they will live.A recent survey by Horizon Research showed that only 18% of people think they'll live to be 91 years old. But, interestingly, about 42% of women actually reach or go beyond 91. For men, it's around 30%. So, there's a difference between what people expect and what often happens when it comes to average life expectancy.The upshot is that, overall, we are living longer, and each generation is lasting longer than the previous one. Depending on your view this can be a reason to rejoice, however it does raise the question of whether we will outlive our financial resources or not.My thoughts on the possible implications are... Many people will have to work longer, save more or both.The idea of working longer as we get older doesn't have to be seen as a bad thing. Evidence shows that staying active in work, being productive, and enjoying the social aspects of a job are great for our well-being, especially for those who find fulfilment in their work.With the increasing popularity of working from home and flexible hours, the possibility of continuing to work as we age becomes more realistic and less challenging. This flexibility can have positive effects on our overall health and happiness.However, it's important to recognise that this may not be as simple for those in physically demanding jobs. For those in this position, it's recommended to focus on saving money and exploring less physically demanding career options as you get older. Planning for a transition to a less physically demanding job can be a smart move, ensuring more financial security and the ability to maintain a satisfying lifestyle and good quality of life as you age. Women are often overlooked in the financial planning world.  Women typically live longer than men. This means that, on average, women often end up with more financial responsibility as they outlive their partners. Despite the belief that men usually handle money matters in relationships, studies suggest that women can be better at investing.It's important for the financial industry to encourage more women to get involved in managing money. Since women live longer, there should be ongoing efforts to focus on their financial well-being. The longevity issue certainly highlights the importance of continued growth in focus on women and their financial future. Investors need to understand and define their time horizons.  When you start your retirement planning, the big challenge is not knowing how long you'll live and how long your retirement savings and investments need to last. While your human capital (earning power) in most cases will reduce in retirement and older age, your spending, which includes covering the cost of living, still needs to keep up with rising prices (inflation) to maintain your financial security. Therefore, your retirement savings and investments have to keep growing to support yourself for possibly a longer time than you expected.It's essential to take proactive steps now to secure a better retirement plan for the future as it affects how much risk you can take with your money and how you spend it now and in the future. Plus, it impacts how much money you can safely take out of your investment portfolio to cover your current expenses. So, taking action and planning ahead is really important to make sure your money lasts as long as you do. How we can help We at Collinson Wealth Partners would be happy to share our knowledge and experience in this area, explore the above considerations with you, and help you produce a plan to ensure security and peace of mind into your retirement.The information contained in this publication is general in nature and is not intended to be personalised financial advice. Before making any financial decisions, you should consult a professional financial adviser.Collinson Wealth Partners FSP 743091 believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation contained in this publication on the date of this publication. 

Tax is something I don’t typically write about as it doesn’t tend to be much of a crowd pleaser.However, as death and taxes are the only two certain things in life (as the saying goes) and the fact that there are a few key tax changes about to occur, I feel compelled to do so in this instance.On the 1st of April 2024, a few tax changes come into play that could impact how much net earnings you generate in the future. I'll talk about two changes below to help you understand how they might affect you (if they apply to you) and give you enough time to get ready. Trust Tax Rate ChangeFrom 1 April 2024, the basic tax rate for trustee income will increase from 33% to 39%. This adjustment will match the top marginal tax rate that applies to individuals earning over $180,000.Trustees must be aware of the implications this increase has on the taxation of trust income. The new trustee tax rate may influence decisions around the distribution of income to beneficiaries, as taxable distributions are generally taxed at the beneficiary's personal rate.If your trust holds shares in an operating company, you have until 31 March 2024 to raise a dividend in that operating company to clear out any imputation credits available.This is important to know because if you change the dividend before 31 March 2024 the Trust will be taxed at the existing 33% rate, whereas if you declare a dividend after 1 April 2024 the tax increases to 39%.I would recommend speaking to your accountant as soon as possible for clarity, as the potential cost savings may be significant.   The “App Tax” – GST changes impacting accommodation providersThe so-called "app tax," is also starting in April 2024. It is an adjustment to New Zealand's existing GST rules, expanding them to "listed services" like ride-sharing, food delivery, and short-term accommodation.This change will impact platforms such as Airbnb and Uber, requiring them to collect and pay GST on all transactions, even if the driver or host is not registered for GST themselves.How could this affect you? The ultimate impact will largely depend on the circumstances of the operator and underlying short-term accommodation provider.The following are the most common scenarios: Holiday homes that are not registered for GSTConsider Bob, an accommodation provider with a holiday home advertised on Holidays-R-US. As his turnover is below $60,000, he isn't GST registered. If Richie stays for one night at a cost of $100, the "App Tax" imposes 15% GST ($15), collected by Holidays-R-US. Bob receives a standard input credit of 8.5% ($8.50), resulting in a net payment of 6.5% ($6.50) to the Inland Revenue Department. Consequently, Bob experiences a 6.5% reduction in annual revenue from April 1, 2024, onwards.Overall, this will result in Bob receiving 6.5% less revenue from 1 April 2024 than he had inthe past. As such, you may want to review pricing so not to impact what you receive in thehand. Holiday homes that are already registered for GSTTaking the facts above, Bob’s neighbour, Jenny, is also an accommodation provider and advertises her holiday home via Holidays-R-US. Unlike Bob, Jenny is registered for GST as her turnover is greater than $60,000. Hence, Jenny already charges 15% GST for guests and claims GST on costs related to providing the accommodation. Richie stays one night at Jenny’s home for $100 + GST.The total 15% ($15) will now be paid by Holidays-R-US to Inland Revenue. Jenny will treat any income as a zero-rated supply for GST purposes (so as not to double pay GST) as Holidays-R-US has already collected the GST.GST-registered owners are allowed to opt-out of Holidays-R-US collecting GST on their behalf (and continue collecting and paying GST as you currently do), but if you don’t choose to opt-out it is important that moving forward sales via apps such as Holidays-R-US are zero rated for GST purposes so you don’t double pay. Large operators (hotels and holders of management rights)A large Hotel next door to Jenny’s home, Luxury Hotels, advertises homes via its website and through online intermediary websites such as Booking.com. Under the App tax, any Hotel/Hostel/etc. making taxable supplies of more than $500,000 have the option to opt out of the platform rules, without requiring the platform's consent.  In conclusion, staying informed and proactive about these upcoming tax changes is crucial for protecting your financial interests. If you have any questions or concerns, our team at BDO is ready to provide support and guidance tailored to your specific situation. Don't hesitate to reach out – we're here to help you navigate the evolving tax landscape. 

Beginning on the journey to purchase your first home is an exciting and significant milestone, but it can also be daunting and overwhelming. It's often hard to figure out where to even start! So let's delve into valuable information to simplify the process and make your home-buying experience more manageable.Sorting out your financesTo kick off your journey, start by assessing your current financial standing. It is crucial to get a clear understanding of the homes within your price range.Start by seeking the expertise of a mortgage broker to navigate the complexity of home loans, find favourable mortgage rates, explain loan options, and guide you through the application process.Prior to embarking on your house-hunting expedition, also take a moment to sit down and conduct a comprehensive evaluation of your financial situation. Calculate your affordability by factoring in your income, expenses, and mortgage rate. Online calculators can be great tools for estimating your borrowing capacity.Additionally, explore the possibility of utilising your KiwiSaver funds and check your eligibility for the first home grant. These government initiatives are designed to extend financial support to first-home buyers, enhancing your options as you step into homeownership.Research Once your budget is in order, it's time to research the right house for you.Look into exploring different neighbourhoods and homes in your budget, considering factors like proximity to schools, childcare, supermarkets, and local services. A house should align with your lifestyle, work, and amenities preferences.I would recommend researching at least six to 10 homes before making your final decision, this approach allows you to understand how your budget aligns with the options in the marketplace (value for money). Familiarising yourself with the market and property prices during this process can also provide valuable insights into the features that matter most to you in a home. Open homes are a great way to do this!While looking for your new home, consider areas with growth potential that could contribute to a good living environment and potential property value increase. But also be mindful of local council zoning rules, which can impact your ability to make future property modifications.Before the purchase You've signed up for a property! However, the journey doesn't conclude there. Initially, it involves a series of crucial steps, including a building inspection, valuation, obtaining a LIM report, securing pre-approval for house insurance, and having a lawyer examine the title and interests.Before committing to any deal, consider investing in a professional building inspection as a stipulation in your agreement. This ensures a thorough examination of the property, allowing you to spot potential issues and make well-informed decisions.Ask your agent to help you understand the legal aspects and contractual information involved in the home-buying process. They can guide you through the sale and purchase agreement and the offer process when you're about to make a purchase.You may also need to sharpen your negotiation skills. Be ready to discuss price, conditions, or inclusions before finalising the purchase. Online valuations are a valuable resource to gather facts and figures that can aid in negotiations. Additionally, leveraging insights from someone experienced in the property market can be advantageous.SecurityCongratulations on buying your house! Ensure its protection by finalising your home insurance. Compare policies to find one that suits your needs, covering potential risks like natural disasters or burglary.Additionally, consider establishing an emergency fund. You never know what may change, so allocating funds for unexpected expenses tied to homeownership, such as repairs or unforeseen financial shifts, is a wise move. This proactive measure not only creates a financial safety net but also reduces stress during the transition to home ownership.Need some more guidance on buying your first home?The REA (real estate authority) has developed Settled.govt.nz, which is a useful resource guiding first-home buyers through the home buying and selling process. Check it out for more information.If you have any more questions, want to discuss matters with an agent or need personalised guidance on your home-buying journey, feel free to reach out.Happy house hunting!   

With the change in government, the landscape for employees and employers is changing.Here are two of the main changes that will affect many employees and employers across New Zealand.90-day trial periodsStarting from December 23, 2023, every employer in New Zealand, regardless of their size, can now implement 90-day trial periods. Before this date, these trial periods were exclusive to employers with fewer than 20 employees. Now, all employers can utilise these trial periods.A 90-day trial period provides employers with greater confidence when hiring new employees but provides less security for employees.What you should know about 90-day trials:Before an employee begins their job, the employer and employee need to mutually agree in writing and in good faith to a trial period, as part of their employment agreement.The extension of 90-day trials will not affect other aspects of employment relations, such as the requirement to act in good faith, or worker protections regarding pay, conditions, leave, and health and safety.If employers are hiring people on certain work visas, they will also need to consider any immigration requirements relating to the use of trial periods. On January 6, 2024, the Worker Protection (Migrant and other Employees) Act 2023 takes effect, reinforcing immigration and employment regulations to enhance the safeguarding of employees from exploitation.Repeal of Fair Pay Agreements legislationAs of December 20, 2023, the Fair Pay Agreements (FPA) Act has been repealed. However, rights and obligations under other employment laws remain applicable for employers. Despite this change, employers, unions, and employees are still encouraged to work together to agree on suitable employment terms.If your organisation currently holds any personal information collected for the purpose of the Fair Pay Agreement activities, including bargaining, it must now be disposed of in line with the privacy laws. The Office of the Privacy Commissioner explains how you can do this.Disposing of information and documents safely – Office of the Privacy CommissionerUpdate to Minimum Wage RatesThe Government has also announced an increase in minimum wage rates from Monday, 1 April 2024.The details of the increase are:Adult minimum wage will go up from $22.70 to $23.15 per hour.Starting-out and training minimum wage will go up from $18.16 to $18.52 per hour.All rates are before tax and any lawful deductions, for example, PAYE tax, student loan repayment, and child support.If you are an employer or an employee - now is also an ideal time to ensure you know the details around the minimum wage, including that:It applies to all hours worked, unless both parties agree to a higher rate in the employment agreement.It applies to employees paid with a salary, or piece rates, or commission.Note the minimum wage does not apply in some situations including:Employees under the age of 16.Where a Labour Inspector has issued a minimum wage exemption permit to an employee who has a disability that limits them carrying out the requirements of their work.How we can helpAt Checketts McKay Law, we can help employees and employers work through any employment issues from preparing and reviewing employment contracts to dealing with personal grievances, we have an experienced team of employment lawyers ready to assist. For more information, please visit our website here www.cmlaw.co.nz and know you can always find us under Professional Services in The Central App. 

As we shift into the New Year, perhaps with refreshed enthusiasm or maybe with reluctant acceptance that the holidays are done, many of us are looking to the future and setting ourselves goals.'It is important that New Year’s resolutions don’t just apply to your personal life but also to your business goals. Business strategy can feel overwhelming – let's simplify it. It’s basically planning. A good plan or strategy will consider what you are trying to achieve, an honest assessment of where you are at and an intentional plan of how you will succeed.Often a lack of time can see planning pushed aside. However, having a clear plan will support you to recruit well, retain and develop your staff - saving you more time (and money!). Look at the past and present for the futureAssessing where your business is now, allows you to establish what you are doing well so that this can be built upon, as well as understanding what still needs attention.Reflecting on your plan is also an excellent way to measure success – there’s no better feeling than looking back and seeing the steps forward you have already taken. Ensure you reflect your core business valuesBefore you start planning it’s essential to be clear on the values or culture of your organisation– these should be genuine and reflected in how you conduct business and in how you manage staff.A mismatch of values in theory versus reality is a risk factor for burnout and staff attrition – so it’s important to get this right. Sharing your business plan has a huge impact on employee well-beingOnce you have a plan, share it with your current staff. Knowing the plan will help them grasp the context of decision-making, find purpose in their daily tasks, contribute valuable input, and cultivate a sense of ownership. This, in turn, enhances employee retention, engagement, productivity, fosters loyalty, and positively impacts staff well-being. Strategic actionNow you have your plan, what are you going to do with it? There’s no sense in “ticking the box” and then filing it away until next year. Your strategy should inform your staffing structure and planning for any changes required. Therefore it will need to be revisited on a regular basis. It should be used to consciously achieve your strategic objectives. This flows into staff development – knowing what you will need in future means you can develop current employees' strengths by intentionally upskilling them to meet these needs.Additionally, your plan should also guide the recruitment process, ensuring you design and hire for roles that align with your needs and seek individuals who not only resonate with your values but also possess the necessary skill set for your future demands. Need some help planning?Overall, the message is the old adage of “failing to plan is planning to fail” – it seems harsh but a well-thought-out plan will maximise the chances of business success, whatever that looks like to you.If this all seems overwhelming, we’re here to help – we offer all new clients a 1-hour free chat to discuss what you need and to find out whether we can help you achieve that. 

As we step into the new year, it's a perfect time to reflect on the journey of the previous 12 months and think about the path that lies ahead.From a financial adviser's perspective, this is especially crucial when thinking about your money goals for 2024 and beyond.There are three key items we at Collinson Wealth think you should focus on when mapping out your financial goals: Revisiting personal and family goalsExpecting the best and preparing for the worstBear in mind important dates e.g. tax, KiwiSaver, your ‘Review Day’Revisiting goalsFinancial plans are about mapping the future, showing how you are going to achieve your long-term goals with the finances to back them. It’s about structure and flexibility.Consider your aspirations: What do you aim to achieve, and when? Take into account the individuals in your life—partners, kids, and parents—who may require support. Figure out how much money you'll need to achieve these goals and understand the costs involved in making them happen.Flexibility is key. When life throws changes your way, you need to manage your personal circumstances and the finances connected to them. Be ready to adapt—life is full of surprises. As your personal situation changes, your plan should adjust too. While keeping long-term goals in mind, remember that the path to reaching them may shift.It’s a good time to look at performance. What is your current financial situation? Did things go as you planned? Should you adjust your expectations? Consider if your comfort level with taking risks has changed. Make sure the level of risk you're taking is suitable for your current situation.Explore new opportunities and constraints. Since the market is constantly changing, consider if there are fresh investment options worth exploring. At the same time, be mindful of what you should avoid. Expect the best but prepare for the worst.One very interesting aspect of 2023 was that despite economists forecasting negative outcomes for markets and economies, it turned out to be a surprisingly positive year for stocks and bonds. This highlights the importance of why you should approach forecasts, especially short-term ones, with a grain of salt and not take them as absolute predictions.The key here is developing the right mindset that guides you to take the right steps to mitigate risk, and a part of this involves being a ‘realistic optimist’ You don’t want to be crazy optimistic as that is how you end up piling into cryptocurrency or single stocks on the promise of big returns, while these investments can be rewarding when they rise, the downside is not pleasant when they crash. Similarly, too much cash on hand can cause you to miss out on the long-term positive effects of investing and compounding. Successful wealth builders blend the right mindset with the right financial plan.Ask yourself some key questions to test your mindset and thinking. Consider scenarios such as a 20% drop in stocks—would you sell everything? What if you lose your job? What would you do if you encountered a large unexpected expense? What's your plan if you fall short of your financial goals? Delving into these questions helps you better understand your preparedness and prompts thoughtful considerations for various situations.  Key deadlines and datesHere are some important dates in the year to keep in mind when you're planning for your financial goals and the year ahead. 31 March – The end of the tax year. Make sure to handle provisional tax and gather all your investment information for filing, along with taking care of any other financial matters. If your affairs are complicated, ask yourself if you have the right advice to help you complete your return and ensure you are meeting your obligations.30 June – KiwiSaver government contribution. Have you met the $1043 min to get the $521 government contribution?Your Review Day – Designate a day that you invest time in your future. Review your financial position and include your investment portfolios such as KiwiSaver. It’s like a warrant of fitness except it is for your personal financial goals.  What we can do to helpWe, at Collinson Wealth Partners, are experienced financial experts who are always happy to assist you in reviewing these key items and share our knowledge and experience in this area.The information contained in this publication is general and is not intended to be personalised financial advice. Before making any financial decisions, you should consult a professional financial adviser.Collinson Wealth Partners believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation contained in this publication on the date of this publication. 

Just like that the New Year is upon us, I certainly hope you all had a great break with family and friends.In my final column for 2023, I discussed the idea of utilising the Christmas break to establish business goals for the upcoming year. Now, I want to delve into the process of translating those business goals into reality by constructing a strategic plan for your business.A business plan serves as a vital tool for any business as it formalises the goals set for the year. The approach to creating a business plan can vary based on its purpose and the size of the business. But for me, any good business plan, particularly strategic planning, should revolve around four fundamental pillars: business, market, people, and risks.BusinessTo build a plan you first must fully understand what your business does. Are you a service provider or a manufacturer? What skills or goods do you offer to generate revenue? Answering these questions is crucial, as a clear definition of your business can lead to a better understanding of how to enhance your top line. This could involve expanding existing product/service offerings or introducing new ones.Key questions to consider:What are you selling?Who are you selling to?How can you increase your top line, whether through price/margin improvements or an uplift in sales volumes (organically or via new sales)?Taking the time to reflect on the core business aspects and its revenue drivers you will naturally learn potential avenues for growth.MarketUnderstanding the market in which your business operates is integral to consider for your business strategy to continue business success in the future. Regularly reviewing the market environment is crucial, since the market you operate in will continuously evolve. For instance, the recent developments in artificial intelligence and its potential impact on your specific market. Key things to consider:Begin by clearly defining the market you operate in, then take a closer look at the specific niches/smaller markets your business currently engages with or should consider entering.Identify the key competitors in your market, including both direct and indirect competition. Additionally, stay vigilant for any new entrants that might be entering your market that you may need to be aware of.What competitive advantages do you possess over your rivals? If there are none, consider whether there are opportunities to establish new advantages.A regular assessment of the market you operate in and who operates in it will keep you aware of any potential threats to your business, and allow you to evolve your business to be a market leader.  PeopleBusinesses are fundamentally about people. In my banking experience, we always emphasised putting people before businesses. It was a belief rooted in the understanding that, without a solid team of individuals, especially in the event of losing key members, businesses could experience a rapid setback.Key points to ask yourself:Who are my key people? Additionally, is there a risk if a key person leaves, and should we have a contingency plan?Do I have the right people in the right roles?Who else could be beneficial to support the future growth of the business?Do we have the right mix of people in governance, management, finance, operations, and customer service to make our business perform at its best?I highly recommend that all businesses look at this area to ensure a well-balanced team, a crucial factor for maximising business performance. RisksKnowing the possible risks for your business is really important. It's just as crucial to have plans in place to deal with those risks. Even though it feels great to see your hard work paying off in business, it's equally important to be ready to handle any big challenges that might pop up.Key questions to ask:What are the key risks to my business, be it financial, competition or regulatory?What potential new risks could arise, such as developments in products/services or market changes.Am I exposed to customer concentration risk? In other words, does a single customer contribute a significant portion of revenue, to the point that their departure would have a substantial impact on cash flow?Once you identify the main risks to your business, you can create plans to address them if needed. Implement these plans as swiftly as possible to reduce the potential impact on your business. Final thoughtsTaking the time to create a business plan focusing on these key areas of your strategic plan is a significant step toward sustaining and expanding a successful business, in my opinion.If time is a constraint, consider conducting a SWOT analysis (assessing Strengths, Weaknesses, Opportunities, and Threats) for your business. It provides a quick yet effective way to gain insights into your business and market dynamics. While you may need to explore key themes later on, it offers a snapshot of your business at any given moment.If really in doubt, or something is keeping you awake at night, don't hesitate to reach out to us at BDO. We're here to assist and leverage our experience to support you. 

The end of the holiday season can be a challenging time, especially if it coincides with the end of a relationship for some couples.During this emotional process, it can be an unsettling and difficult time, not to mention adding extra stress on top of your usual responsibilities.There can be a lot of challenging aspects, and if you're navigating the aftermath of a recent breakup, it's completely understandable to have a whirlwind of concerns about finances, property, childcare, and the division of assets—each adding to the emotional weight of separation. If this sounds like your current situation we are here to help. Relationship propertyIf you and your ex-partner were together for three years or more, you are likely entitled to a 50/50 split of relationship property. But every situation is unique.Relationship property usually includes the family home and chattels such as furniture, cars, tools, appliances and even pets.It can also include shares, investments, additional properties, Kiwisaver and Superannuation schemes. ParentingIf you and your partner have kids together,  you might be wondering about everyday child care.Sometimes it's hard to agree. If you are unable to reach an agreement with your ex-partner, you may wish to attend family mediation or seek a Parenting Order from the Family Court.Mediation in many cases can be a helpful and effective way to resolve disputes and come to agreements during a breakup. Mediation involves a neutral third party who helps facilitate communication between both parties and assists in finding mutually acceptable solutions.  What we can do to help Navigating the legal aspects of a breakup can be overwhelming, especially when emotions are high.It is highly recommended to seek legal advice from a qualified lawyer specialising in family law. They can provide guidance and support throughout the process, ensuring that your rights and interests are protected.At Checketts McKay, we can take you through all the steps to settle relationship property, find a workable childcare plan, protect your financial assets, and complete a dissolution of marriage.We have an experienced team of family lawyers ready to guide you through the process. For more information, please visit our website linked here: https://cmlaw.co.nz/     

Understanding property trends is important if you are thinking about buying, selling or renting, but it can be challenging trying to keep up. Whether you're a seasoned investor, a first-time homebuyer, or someone exploring the rental market, the key is to stay informed so you can make the best decisions possible.As someone who has been in the real estate field for a while now, I've had to observe and navigate the ever-evolving landscape over the years. I've learned what's important and which trends can significantly influence the property market, and from this experience I'd like to share with you what you can expect in 2024.Let's dive into the world of property, where knowledge is your greatest asset!More investors in the housing marketBig news for potential property investors in 2024! The new government announced pre xmas that key changes will be made to the brightline rules, which will start from the 1st July 2024. The new rule allows homes to be sold to be free of the bright line tax after two years instead of the previous ten. This change is expected to make the property market more appealing to investors.Another significant change is tax deductibility on interest which results in 80% being phased in by the 1st April 2024, and the balance next year. With the likely increase in investors it may affect first-time buyers, who have had an easier time in the housing market without as much investor competition. AvailabilityNew Zealand has seen a significant population shift, with approximately 30,000 people leaving the country, but 150,000 coming to New Zealand over the past year, leaving a net total of approximately 120,000 people by the end of November 2023. This has created a demand surge in the rental and property market, and will continue into 2024.Of note, at the end of 2023 the new government signalled a warning that this is not sustainable, so expect some moderation in next year's net migration figures. For individuals, first home buyers, and investors considering property investments, this trend suggests a steady growing market, with several economists picking growth this year at around  6% to 10%. The level of growth will also depend on your region. Additionally, for renters, it's wise to anticipate potential increases in rental prices so maybe a good time to explore home ownership options proactively to secure property amid heightened demand.  Retirement Over the past 30 - 40 years, Central Otago has seen a significant increase in its retiree population. With one of the highest populations of people aged over 65 in the country, many baby boomers are opting to downsize or move into retirement villages as they enter their golden years. The availability of many new retirement villages in the Central Otago and Lakes District have made it possible for people to move easily to retirement villages earlier than they would have before and notably not move away from the area through lack of good retirement village options.One notable local development in this regard is the beginning Stage Two of the Aurum retirement village in Clyde. This expansion will provide even more local homes for sale as more people move into these retirement villages.While it is great for locals, it is also appealing to those outside of the region. The increase in inquiries from outside Central Otago, including individuals from Dunedin, Invercargill, and even the North Island, suggests that more people are considering retiring in this region. The appeal of the beautiful landscape and peaceful lifestyle that Central Otago offers is drawing retirees from all over the country. Many people are starting to invest into Central Otago with the mind to retire later - getting their foot in the door while they can.  Interest RatesGood news for those looking for home loans! Banks are starting to reduce interest rates on various terms, providing borrowers with more confidence. Potentially resulting in reduced rates at the end of 2024 and early 2025. As an example Kiwibank recently reduced interest rates for the two-year term from 7.05% to 6.89%, the three-year term decreased from 6.89% to 6.75%, the four-year term decreased from 6.79% to 6.69%, and the five-year term decreased from 6.79% to 6.59%.  This downward trend in interest rates will give a massive amount of confidence to those borrowing money, as people feel that mortgage rates have peaked, and are now looking to lock in a good rate going forward. You can find out more information by clicking here Sections and Lifestyle In recent years, the property market has undergone significant changes, and these trends are expected to continue into 2024. Specifically, the past six months have seen a slowdown in new property development due to the escalating costs of building materials over the past two years, and land and section values increasing by 100% - 300% over the last four years. This has resulted in people shifting their focus from building their own homes to buying existing properties. The increase in existing-home sales with the lack of new builds has put additional pressure on the existing housing stock, leading to increased demand and will potentially drive up house prices.Given the increased demand for existing housing stock, consider working closely with real estate professionals who can provide insights into upcoming listings and potential opportunities. Be open to exploring neighbourhoods that may not have been your initial focus, as this flexibility could lead to more favourable options. Affordability has driven many buyers down river and the Omakau and Roxbrough areas are becoming more attractive. Rentals Over 2023 and into 2024, the rental market had continued experiencing significant changes and trends. One notable trend that has emerged in recent years is the continued high demand for rental properties across Central and Lakes and a substantial increase in rental prices. Over the past three years, the value of renting a property has gone up by 40% - 50% on average.  This increase in rental prices can be attributed to several factors, including changes in government policies. Changes in tenancy rules, tax deductibility, and the bright-line test have scared off many investors from the rental market. We may see a further reduction in rental stock with new tax benefits of selling earlier. Of note, rental accommodation in Alexandra and Clyde are catching up to similar prices that you would find in Cromwell, where they used to be around $450 for an average three bedroom home and now the market is closer to $600 - $650. This is due to the continued lack of affordable housing options in the Lakes region (Wanaka and Queenstown), requiring more workers to commute from nearby towns such as Cromwell, Alexandra, and Clyde. This further exacerbates the demand for housing in those areas, potentially driving up prices and limiting availability. So that's a glimpse of 2024...As you can see the property market is ever-evolving and influenced by numerous factors. As we look ahead to 2024, several market trends are expected to shape the industry, which will affect everyone at any stage of their property journey. While I've mentioned a few, there are many ways to avoid some bumps and potholes in the property market so if you are thinking about making a change feel free to contact me.  

As of 5 October 2023, the clock is now ticking for all Incorporated Societies (Societies) to review their operations and prepare for re-registration under the Incorporated Societies Act 2022 (the Act). There's no need for panic just yet as you have until 5 April 2026 to re-register.What has changed under the new Incorporated Society Act?The changes modernise existing procedures, call for more structured governance, and create more accountability and transparency for all involved. It's crucial that members, particularly those at the board/committee level, are aware of how the changes impact them and the processes they need to follow. There are useful online resources to guide your society through these changes; a good starting point is the incorporated societies website. How to re-register for the new Incorporated Societies ActThe re-registration process involves societies reviewing their existing constitutions and either making simple amendments, or fully re-drafting to comply with the Act.Once the Society is satisfied its constitution and processes meet the Act's requirements, it should complete and submit an application form for re-registration with the incorporated societies register.What happens to your Society if it doesn't register?If your Society does not re-register in time it will cease to exist, and the registrar could direct how to distribute any assets it owns. This removes the legal identity of the Society and will impact your operations going forward. Where else can we find help with the Incorporated Societies Act?At Checketts McKay Law, we're happy to help our local community groups. Please get in touch if you need any guidance on the process. You can find our contact details on our website by clicking here.

As we all juggle our business commitments with the pre-Christmas rush and the summer holiday period that follows, the hiring process can be daunting at a time when you are already busy – what if they do not have the skills they say they have? What if they struggle to cope under pressure? How do you know that they will be a good fit? How can you shorten the process?What is a "trial" shift?In positions where practical skills are required, employers are often keen to give candidates a “trial” as part of the interview process before offering them a job. It seems like a simple proposition – however, it is one that needs to be carefully navigated to prevent any future headaches.For a simple test of a candidate’s skill, the ideal situation is to complete a task as part of their interview process (e.g. make a coffee) which you do not then go on to sell or gain from. When conducted in this manner, the risks are negligible.However, if we take that example of interviewing a barista, yes, they can make one wonderful coffee, but can they maintain that quality in a busy shift? If you want to trial them for a shift or part of one, you must tread carefully.What should you know about trial shifts?Firstly, if you are going to make a commercial gain from their work then you MUST pay them! Employers cannot use trials as a source of free labour; you could easily be found in breach of the Employment Relations Act for that!For short seasonal fluctuations, you could offer casual work to fix your immediate problem however, casual employees aren’t obliged to accept any hours you offer, which may not provide the reliability you require. An alternative would be to offer a permanent or fixed-term position with a 90-day trial however, if they have done a trial shift, you may need to think again. Having prior knowledge of them in the workplace could invalidate your ability to implement a full 90-day trial.How the law would treat paid trial shifts is a little unclear. A definitive answer on whether you acted within your Employment Law obligations requires any personal grievance to be heard by the Employment Relations Authority. This could mean a process of approximately 12 months, unnecessary stress, and costly legal fees. So, what’s the solution?The easy option is to forgo the trial shift and rely on your 90-day trial. However, if you wish to include a trial shift as part of your selection process and have a 90-day trial included in your job offer, the potential employees must explicitly know about the 90-day trial before the trial shift, with reasonable time to consider the implications in advance of agreeing to it, for it to be legally relied on. This agreement should be in writing.The starting date for the 90 day trial period would be the date of the paid trial shift, even if this is two weeks prior to their actual start date. The updated terms of employment will be effective from the first shift of the permanent or fixed-term job offer.To support your new hires in the workplace and ensure a pathway to success with your organisation, you can minimise the need to invoke the 90-day trial period by developing and monitoring an internal induction programme to provide clarity around your expectations, and to quickly identify training needs for your new staff. Need help navigating employment law?At EASI NZ we specialise in supporting small to medium businesses to successfully navigate their employer obligations in line with organisational strategy and values.  

Buying and selling property, Wills and enduring powers of attorney, relationship property division and divorce, care of children arrangements and criminal proceedings all benefit from and often require – a lawyer’s expert advice.That’s why we at Checketts McKay have jumped at the opportunity to offer advice to the Central Otago community in 2024. Through regular columns, we hope to help you to better understand legal issues that impact your life.A new government, and consequently a likely raft of law and policy changes will be introduced in the next year or so. We’ll keep you informed regarding of some the changes you will need to be alert to, so you can be pre-emptive in sorting your affairs out and identify potential issues before they become problematic.Guiding locals through legal issues and changes is something we have been doing since the 1880s when Checketts McKay was first established.Our practice covers Central Otago and the Southern Lakes, and our team of experts are poised to respond to whatever life throws at our clients, serving individuals or businesses, townsfolk or rural residents, entrepreneurs or retirees.For many people, engaging a lawyer is a last resort and that’s okay. There’s plenty of scope for you to make good decisions, prepare well, and take care of details to mitigate the need for lengthy legal consultations. That’s how we can help.But we also know from experience, that there can be negative long-term consequences to not seeking legal advice when needed. Sometimes it is better to spend time and money on getting things right in advance to save in the long term – just ask anyone who has lost aloved one without a Will in place. One of our goals is also to help you to identify when you need the professional services of a lawyer.Community, Support, and Expertise are Checketts McKay’s guiding values. Our 40-odd staff are members of and contributors to the local community, and as a firm we love to give back which is why we are involved with supporting our region’s schools and community groups.Checketts McKay has actively grown with the district since the gold rush days, and we are excited to be able to offer you ongoing advice as Central Otago marches into the future. If you need local legal expertise, our door is always open, and you can find us on The Central App under Professional Services.

Summer is the ideal season for selling your home in New Zealand. More buyers are house hunting, the weather is beautiful, the days are longer, and the fact that properties simply look better under the sun means you may be able to fetch a better price for your property. As a real estate agent myself, here are my top tips to make sure you make the most of this season and get the best possible deal.Create the best first impressionWhen it comes to selling a house over the summer, entranceway presentation is essential. All potential buyers will form an immediate opinion of the property based on their first impression, so it's important to make sure the entranceway looks its best.I would recommend starting by sprucing up your front door, as it's the first thing visitors see, so make sure it looks attractive and inviting. Adding a nice welcome mat can also give it a charming touch. Don't forget to take out all the rubbish from the entranceway so that it remains clean and presentable.  Spruce up your gardenThe condition of your garden can be a major factor in how quickly it sells and for what price. A neat garden can make a huge difference in making potential buyers feel welcome and at home. To make sure your garden is as appealing as possible, I would recommend making sure your lawn and pathways are mowed neatly. Trimming and shaping any trees or bushes and removing any dead plants or debris from the garden can also notably improve the outdoor living space. To make your garden looks even better, add mulch to your garden/flower beds with attractive dark compost or wood chips to give them a fresh look and help retain moisture. Clean the windows A straightforward yet powerful way to enhance your home's appeal is by ensuring clean windows. This simple step allows natural light to flood in, creating a brighter, more spacious atmosphere that perfectly captures that summertime vibe. You'll even be able to show off the outdoor space that you've put so much effort into! Shampoo your carpets (especially if you have pets)When it comes to selling your home during the summer, the condition of your carpets can make a big difference. Imagine stepping into a house where the carpets are spotless and smell fresh—it immediately creates a positive impression on potential buyers. However, if you have pets, keeping your carpets in top shape becomes a bit more challenging. Pet fur, stains, and odours have a knack for embedding themselves in carpets, making it harder to remove them, so it's a good idea to tackle this issue head-on by shampooing your carpets early. Create a lived-in feel for home stagingStaging your home is an important step to take when selling your house this summer. Fortunately, it doesn't have to be a time-consuming or expensive process. A few simple updates can go a long way and help create a warm and inviting space for potential buyers.You can revamp each room by incorporating new throws, blankets and pillows. These additions infuse a cozy and lived-in charm that's perfect for the season. Additionally, decluttering is key—remove any unnecessary items or surplus furniture that might be crowding the area, allowing the home's inherent appeal to shine through. Introducing some greenery can work wonders too. Consider adding potted plants to breathe life into your space. Not only do plants add vibrancy, but they also inject a pop of colour, enhancing the overall visual appeal and creating a more inviting atmosphere. Enhance lighting If you want to make your home more attractive to potential buyers during the summer months, then lighting should be one of your top priorities. Natural light is always desirable, especially in the summertime, so pull back the curtains in every room to bring in more natural light and create a brighter atmosphere. For areas with limited natural light, consider upgrading to higher wattage lightbulbs. Creating a bright house can significantly improve the ambience and add a nicer overall feel to your home. Remove excess personal items While it's wonderful to cherish your family memories, when selling your home, it's advisable to minimise the number of personal items, especially multiple family pictures on every wall. These personal touches can inadvertently divert the attention of potential buyers, potentially detracting from the space's appeal. After all, you wouldn't want too many curious eyes wandering during showings. Use the warmer months for paintingPainting your house before selling it in the summer is also a great step in the right direction. A fresh coat can significantly boost curb appeal, a key factor in attracting potential buyers. Additionally, the summer's hot weather and dry conditions can work in your favour—the paint dries swiftly during this season. This quick drying process ensures you can complete the painting job efficiently without concerns about extended drying periods. Consider all the sensesHumans often rely on all their senses when making significant decisions. Whether it's buying a house, choosing a meal, or even selecting clothing, our senses—sight, smell, touch, taste, and hearing play vital roles in shaping our perceptions and influencing our choices. This means the smell of your home holds significant weight. To infuse your space with a fresh summer ambience, begin by opening all the windows to let stale air out—it's an instant turnoff for potential buyers. Additionally, consider using infusers or oil diffusers to introduce delightful scents that resonate with the season. These touches can truly elevate the overall appeal of your home.I hope these tips were helpful! Whether you're selling your home or simply refreshing your space, summer is the perfect time to begin.Need some help or tips on preparing your home for sale? Come in for a chat at the Tall Poppy office in Alexandra or you can contact us for more information.   

So, you are holding cash: Is it your emergency fund? Is it your savings? Is it the dry powder in your investment portfolio?It may feel comfortable, but over time it can erode your purchasing power and expose you to inflation risk. Let’s look at why leaving too much of your wealth in cash long term may not be the best decision, and what you can do instead to achieve your financial goals.Cash has lower expected returns compared to other asset classes, such as shares, bonds, real estate, or commodities.Data from Morningstar shows this, albeit using US figures, but given the US is the largest economy/financial market and much KiwiSaver money is now invested offshore, it’s a reasonable benchmark.The average annual return for cash (measured by the 3-month Treasury bill) from 1926 to 2020 was only 3.3%, while the average annual return of shares (measured by the S&P 500) was 10.2%.This means that $1 invested in cash in 1926 would have grown to $21 by 2020, while $1 invested in shares would have grown to $9,237. That is a dramatic difference in wealth accumulation over time.Cash also has a negative real return after accounting for inflation.Inflation is the general increase in the prices of goods and services over time, which reduces the purchasing power of money. The average annual inflation rate from 1926 to 2020 was 2.9%, which means that the real return of cash (after subtracting inflation) was only 0.4%.Consequently, $1 invested in cash in 1926 would have lost 95% of its value by 2020, while $1 invested in stocks would have increased its value by 1600 times.Cash is not always a good hedge against market volatility or downturns either.While cash is easily accessible and offers stability during periods of market stress, it also prevents you from participating in any market recovery and growth.For example, during the global financial crisis (2008-2009), many investors sold their stocks and moved to cash, hoping to avoid further losses. However, by doing so, they also missed out on the subsequent rebound and rally that followed.From March 2009 to December 2020, the S&P 500 returned 18.4% per year, while cash returned only 0.5% per year.After 2022’s dismal performance, cash might look tempting. While there has been some recovery this year it has not been without unsettling volatility.If you sat in cash over the last year until 31 October, you got a fairly decent NZD cash rate of 5.07%. Sounds good, but you would have missed the 10.37% rise in the MSCI World Share Index in New Zealand Dollar terms.So, what should you do instead of stashing cash over the long term?The answer depends on your risk tolerance, time horizon, and financial objectives.After allowing for emergency funds and any cash needed in the next two to three years, a general rule of thumb is to look to diversify your portfolio across different asset classes and sectors AND to rebalance it periodically to maintain your desired allocation and risk level.You should also have a clear investment plan and stick to it, regardless of market fluctuations or emotions.By doing so, you can increase your chances of achieving higher returns, preserving your purchasing power, and reaching your financial goals.We at Collinson Wealth Partners are only too happy to explore these options with you. We can help prioritise your goals and uses for cash that you may currently have sitting in your account or current investment portfolio.The information contained in this publication is general in nature and is not intended to be personalised financial advice. Before making any financial decisions, you should consult a professional financial adviser.Collinson Wealth Partners believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation contained in this publication on the date of this publication.