Nikko AM NZ Managing Director George Carter shares his own recent experience about the benefits of hindsight and the advantage of being a GoalsGetter
Financial planning and investment strategies can take many forms. But one enduringly solid piece of advice, as I re-discovered last year, is to “prepare for the unexpected”. And how we’ve been reminded of that recently.
For my particular story I can thank my daughter who, in her last year of school, expressed a desire to continue her studies in the UK. Being a family of dual nationals (I’m English, my wife Kiwi and my three kids all have dual nationality), her wanting to take advantage of the fantastic education she’s had here in New Zealand by continuing her studies at a British university filled me with pride (and, if I’m totally honest, also allowed me to reminisce about my own university days). I was therefore only too happy to help her with the application process. But it was early in this process that our unexpected discovery was made.
Although a British citizen, born in England and eligible to vote in the UK, we discovered that for fees purposes, the UK education system would be treating my daughter as an overseas student. Therefore, ineligible for either student loans in the UK or any support from the NZ government, we suddenly had to face the reality that a three-year English university degree was going to cost us what I’ll politely term a King’s ransom.
Of course my initial reaction was to rail against the perceived injustice of it all. But when emotion gave way to rationale, I saw that with a bit more foresight we could have been far better prepared. Particularly given that we, like many families, have been able to benefit from really only paying for about 10% of the real cost of our kids’ NZ schooling through the relatively modest donations and fees.
So using the GoalsGetter tool, I decided to check out what sort of a position we’d be in had we started to prepare for such an eventuality at the start of her education, some 13 years ago.
Based on an initial deposit of $5,000, and then a further $500 each month (an amount which with due sacrifice and discipline we felt would be in reach - and one we felt still felt like very good value for a quality education), we could have put away a total of $83,000. Choosing the Growth Fund, reasoning we could take the higher risk over 13 years of saving, GoalsGetter suggests we could have grown our investment to around $113,000 and gone a long way to easing the cost burden now.
As parents, our first instinct is to always want to help our children – be it physically, emotionally or financially. This financial help might be, as in my case here, helping to provide for a university education; or it might be for a first car, a first step on the property ladder; or even an investment in a business idea. You might not know now what it is when you start out, but when that unexpected event comes along, you’ll feel good to know that something that seemed like a small investment to begin with has become something very meaningful.
Take a look at goalsgetter.co.nz and start planning now – one day, you’ll be glad you did.
My daughter and me outside the Eagle & Child pub in Oxford
Nikko Asset Management NZ is the Issuer. The PDS can be found here. Past performance is not a guarantee of future returns.