Divesting In New Zealand

After thinking long and hard about the state of the global economy, and how New Zealand in particular has reacted and been influenced by it, I have decided to begin the process of moving all my investments into Australia. Now is Australia perfect? Far from it!
But looking at their long-term outcome, I believe two things.

1. Australia has a better outcome when it comes to investment earning potential and
2. We immigrated to Australia. Not moved over for an OE. This is home now, so it pays to have some skin in the game. Even though we have been afforded the privilege of not needing to.

Australia has more earning potential

Looking at the historical data of New Zealand shares, and you soon realise that managed investments hover around 6% to 8% return, in a best-case scenario. Similarly managed investments in Aussieland – well they’re getting up to 15% annualised return. By leaving money in New Zealand, I am potentially leaving money on the table. Especially considering my investment timeline.

Immigration to Australia

This is now home. We don’t know for how long. But we have been throwing phrases around like “forever-home” and similar stuff, indicating that, while not perfect, Australia is where we have decided to settle. At least for now. So, it makes sense to invest in your “home” country. And while I now have the privilege of having three home countries, I am only going to be living in one. It just makes sense to have a vested interest in the outcome of the country too. It ensures an attitude of gratitude while accepting the flaws and looking to what can be improved. In I.T. this is referred to as eating your own dogfood. And it’s something I have always been an advocate for, no matter the context.

And other reasons

Looking at New Zealand – what policies the government is enacting, how they are trying hard to crash the housing market, are engineering a recession without thought of what that could mean, and just their general attitude towards the rampant inflation. After all, inflation in New Zealand is outstripping Australia, and all the anecdotal evidence I’ve been giving ins that living in New Zealand is now more expensive that Australia.

I could point out how it’s a direct relation of the policies by the current government. But I won’t be complaining when I holiday in New Zealand and spend Aussie dollars in the future.

So how does this look?

The process will be slow. For example, if we don’t want to be hit by the 40% capital gains tax, our second house can only go onto the market in 2029… So much for the policies to get houses out of landlord’s hands and into homeowners. But I digress…

My main investments that will be moved next year will be our first house, my investments in the NZX and even my KiwiSaver. That’s right – we’re probably going to sell our house in Napier (if the market conditions are right of course). The idea behind this decision is simple – we could sell it, pay off the second house and bring enough money into Australia for a nice house deposit or two. One to live in, one to rent out. And then we’ll begin the process of expanding the Dunkerley Property Empire. But that’s another topic for another time.

KiwiSaver is almost too easy. At this stage, it’s almost a check box at the airport. In fact, I think there’s even a button in my Super app. I joke, but from what I’ve heard the process is simple. So simple, even I can do it. That will come across and be exposed to a bigger market here, therefore increasing its earning potential. And since the whole idea of FIRE is to retire early, the more in Super the better for the long term. While this will only be accessible when I’m 67, it does mean there’s an extra cushion to look forward to. Plus, while I work in Australia, that gets added to automatically. So, it will continue to grow nicely.

The NZX investments will be the tricky ones to move. You see, I don’t want to lose any money while moving them. And currently the New Zealand is down low. Lower than the world markets even. To combat this, I’ll be moving each one across as it earns enough profit to be feasible.
And where will these go? I’m glad you asked! I’ll be putting these into a managed fund. This way I’m not worried about it, it takes up less of my time and I get a pay out each year. And all it costs me is $2.50 a month. This makes investing in a lot of industries simple, straight forward and without the headache or research.

That’s the plan. That’s the way forward. For now, at least.

NOTE: And while I may be down 5%, a quick look shows the NZ S&P down 16%. So, I can take heart in knowing I have still outperformed the market, even while it’s going down in flames.

November 27th, 2022
Current Portfolio : $36,886.01
Current Loss : $2,053.10 (-5.3%)

And now I must put this in for the legal reasons…
I am not a financial advisor. All advice is taken with this in mind. I do not benefit from you using the same platform I do, or by using a different one. I do not have any insider knowledge of any company listed. Everything I will talk about – from the tools to the news – will be as available to me as it is to you. Again: I am not a financial advisor and never will be.