Establish a 3-6 month emergency fund for relocation, factor in costs. Explore KiwiSaver in NZ for long-term savings and consider low-risk options for an 8-month horizon. Prioritise financial education, diversify investments, and seek advisor guidance. Prep for UK's financial landscape, emphasizing tailored strategies for success.
___________________________________________
“23M making about 70-75k (+GST) in my 3rd year as a freelance contractor after graduating from a polytech. Due to ignorance and, I suppose, laziness on my part, I’ve neglected the money I’ve been making and just kept it in a savings account, which is currently at 30k. I don’t have a kiwisaver, and my only experience with the stock market is making a couple hundred bucks off GME during that whole thing. Where would one suggest I start in terms of doing something with these savings? I want to move to the UK in around eight months due to far better pay, work opportunities, and to do the whole travel/OE, which COVID-19 prevented from happening earlier (class of 2020).”
___________________________________________
First and foremost, establish a robust emergency fund to cover your living expenses for 3-6 months. This fund acts as a financial safety net, especially crucial during transitions like your move to the UK. Ensure you factor in potential relocation costs when calculating the amount needed.
Consider enrolling in KiwiSaver, a long-term savings initiative in New Zealand. It not only sets you on a path for retirement savings but could also assist with a first-home withdrawal if you decide to purchase property. Understand the different fund types within KiwiSaver to align your investment strategy with your financial goals.
For short-term investments with an 8-month horizon, focus on low-risk options like term deposits or conservative managed funds. While the returns may be more conservative, it aligns with your timeframe and minimises exposure to market volatility, preserving your capital for your imminent move.
Given your limited stock market experience, dedicate some time to financial education. Explore various investment vehicles, understand risk levels, and consider starting with a diversified portfolio. Online resources and financial literacy tools can provide valuable insights, helping you make informed decisions. If the investment landscape still feels overwhelming, seeking advice from a financial advisor can provide personalized guidance tailored to your specific goals, risk tolerance, and time horizon. As you plan your move to the UK, familiarize yourself with the financial landscape there, considering tax laws, banking options, and potential investment opportunities post-relocation. Remember, a well-informed and tailored approach is crucial for financial success.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
