Ken Holmes Financial Services

New Team Member Joins Ken Holmes Financial Services

Wed, 28 Oct 2009 00:00:00 +1300

Chris Baker has joined Orakei based Ken Holmes Financial Services as an adviser specialising in investment and small to medium enterprises.

Chris who is a qualified chartered accountant was previously a director, private clients at ANZ Private Bank and has broad experience in consulting to local government financial services.

Although brought up in Epsom and educated at Auckland University, Chris has worked extensively in the US and in London, with a special interest in importing and exporting.

He has four sons and has coached the university rugby and cricket club junior level teams for over 15 years.

Chris comments: `A big part of my role at KHFS will be assisting our clients in creating and maintaining their wealth and financial security. We try and focus on individual solutions based on each client's situations. A clear financial strategy is the key.'

KHFS principal Ken Holmes says: `I've known Chris for over 15 years and this is a great opportunity for us to work together. He has a great rapport with people and is an expert at providing tailor made solutions which cover all the elements.'

Source: New Team Member Joins Ken Holmes Financial Services

Ken Holmes voted AXA Adviser of the Year 2009

Tue, 13 Oct 2009 00:00:00 +1300

After only four years in the insurance business Aucklander Ken Holmes has been voted AXA Adviser of the Year.

The award, elected by AXA call centre and support staff throughout New Zealand for the adviser they most liked dealing with, was presented to Ken by AXA CEO Ralph Stewart at the AXA Advisers’ Association Conference in Queenstown on 24th September.

Ken, who started his insurance and financial services business in 2005 said: `To be recognised like this after such a comparatively short time in the business is quite an accolade and I’m very grateful to AXA and all the staff who supported my nomination.’

Source: Ken Holmes voted AXA Adviser of the Year 2009

Business Superannuation

Mon, 02 Feb 2009 00:00:00 +1300

If you own a business and have employees, a business superannuation scheme is good for your business because it:

Encourages staff loyalty.
Reduces recruitment costs.
Enhances productivity and motivation.

Establishing a superannuation scheme in your workplace sends important and positive signals to current and future employees. This in turn may lead to more successful recruitment and higher retention rates, encouraging motivated people to both join and stay with your business. It may also give you the flexibility to bundle up salary packages better to suit your needs and your employees’ needs.

With a more stable workforce, your business benefits from the reduced costs of recruiting and retraining - and of course the flow-on effects of employing a solid team of people who feel valued for the contribution they make to your business. With enhanced employee-employer relationships in the workplace, productivity and staff motivation are likely to be enhanced.

A Business Superannuation scheme also allows you to set in place a valuable ‘vesting’ component that encourages employee loyalty – the longer your employees stay with you, the greater the proportion of your contributions they can qualify for.

It’s good for your employees because it:

Provides enforced savings to meet their retirement goals
Deductions are made from their pay
Provides tax incentives for high earning employees.
Insurance is available at a lower cost

A business superannuation plan makes it easy and convenient for your employees to save for their retirement, with regular contributions deducted straight from their pay. They simply choose the best investment portfolio for their circumstances and retirement goals and agree with you on the amount they will contribute to the plan.

A business superannuation plan can offer your high earning employees the tax benefits of ‘salary sacrifice’ (with your approval). If they earn over $60,000 a year, any employer contributions you make to their account are taxed at 33% rather than at the 39% they would normally pay – saving them 6 cents in every dollar they contribute.

Then there’s the added incentive of your contributions, which will boost your employees’ confidence in both the plan and the importance of saving for long-term goals. They will be confident in the knowledge that they are taking important steps towards a comfortable and financially secure retirement.

An employer may offer superannuation insurance as part of the group scheme at a lower cost than an employee could obtain as an individual. Life insurance, Total and Permanent Disablement insurance and Trauma insurance are available. Under a group scheme, acceptance is automatic regardless of pre-existing medical conditions, smoking status or gender.

Source: Business Superannuation

Why save for retirement now?

Sun, 01 Feb 2009 00:00:00 +1300

Will there be a NZ Super when you retire?
How much money will you need when you retire?
Start saving early and you will meet your retirement goals.

Money! It’s important to most of us, especially in helping us to enjoy our lifestyle.

We’re living longer but we need to have a way to pay for our longer lives especially during our retirement years.

That’s why, while you are working and earning, it’s a good idea to think now about the time when you won’t have your work income to rely on – your retirement years.

That’s when any money you have saved will be important. Planning is the key to an enjoyable and worry-free retirement. If you’ve saved regularly and invested wisely, you’ll be able to enjoy a comfortable lifestyle with plenty of opportunities to do the things you’ve always wanted to do.

Over the next 20 years more people than ever before will reach retirement age. With more people retired and fewer in the workforce, it’s uncertain whether there will be sufficient funds to pay all retired New Zealanders the same level of New Zealand Superannuation that is paid today. And even at current levels NZ Super (which pays a married couple $200 a week each after tax) is hardly enough to sustain most peoples’ lifestyle expectations.

The good news is that most of us can look forward to living longer, the bad news is that NZ Super is likely to reduce. So it’s important that we need to have a way to pay for our longer lives and retirement years.

While it may seem a long time away, the longer you save for retirement, the more enjoyable it will be.

Find out about AXA Personal Superannuation.

Source: Why save for retirement now?

Odds & Probability

Thu, 01 Jan 2009 00:00:00 +1300

What are odds?

Odds are the likelihood of a thing occurring rather than not occurring

Probability is a measure of how likely it is that some event will occur

Odds = Probability / (1-Probability)

In common language, these numbers are often expressed as fractions or percentages, and must be converted to real number form to perform calculations with them.

For example, if two events are equally likely, such as a flipped coin landing heads-up or tails-up, we express the probability of each event as "1 in 2" or "50%" or "1/2", where the numerator (The term above the fraction bar in a fraction) of the fraction is the relative likelihood of the target event and the denominator (The term below the fraction bar in a fraction) is the total of relative likelihoods for all events

e.g. if the Probability of having a Heart Attack is 8 in a 100 (in other words 0.08 or 8.00%) then the Odds of having a Heart attack is 0.08 / (1-0.08) = 0.08 / 0.92 = 0.0869 = 8.69%

Probability comes from the Latin probare (to prove, or to test), the word probable means roughly "likely to occur" in the case of possible future occurences, or "likely to be true" in the case of inferences from evidence. While mathematicians and scientists all agree on how to calculate the probability of certain events and how to use those calculations in certain ways, there is considerable disagreement on what the numbers mean in reality.

The idea is most often broken into two concepts: aleatory probability, which represents the likelihood of future events whose occurence is governed by some random physical phenomenon like tossing dice or spinning a wheel; and epistemic probability, which represents our uncertainty of belief about past events that either did or did not occur, or uncertainty about the causes of future events.

The latter, for example, is what we are talking about when we say that it is "probable" that a certain suspect committed a crime based on the evidence presented. It is an open question whether aleatory probability is reducible to epistemic probability based on our inability to precisely predict every force that might affect the roll of a die, or whether such uncertainties exist in the nature of reality itself

Odds of getting a hole in one: 5,000 to 1

Odds of winning an Olympic medal: 662,000 to 1

Odds of injury from shaving: 6,585 to 1

Odds of injury from using a chain saw: 4,464 to 1

Odds of injury from mowing the lawn: 3,623 to 1

Odds of fatally slipping in bath or shower: 2,232 to 1

Odds of drowning in a bathtub: 685,000 to 1

Odds of being killed on a 5-mile bus trip: 500,000,000 to 1

Odds of being struck by lightning: 576,000 to 1

Odds of being murdered: 18,000 to 1

Odds of getting away with murder: 2 to 1

Odds of being the victim of serious crime in your lifetime: 20 to 1

Odds of dating a supermodel: 88,000 to 1

Odds of being audited by the IRS: 175 to 1

Odds of having your identity stolen: 200 to 1

Odds of finding a four-leaf clover on first try: 10,000 to 1

Odds of striking it rich on Antiques Road Show: 60,000 to 1

Odds of a meteor landing on your house: 182,138,880,000,000 to 1

Odds of dying from a shark attack: 1 in 300,000,000

Odds of getting prostate cancer: 1 in 6

Odds of getting breast cancer: 1 in 9

Odds of getting colon / rectal cancer: 1 in 26

Odds of having a stroke: 1 in 6

Odds of dying from heart disease: 1 in 3

Did you know

41% of New Zealanders have one child,

36% have two children and 23% have more than two children

Source: Odds & Probability

Why do I need life insurance?

Thu, 01 Jan 2009 00:00:00 +1300

Life insurance is important to your financial security. As a vital part of your financial plan, it needs to be reviewed regularly. As you experience changes in your life and career, your goals and protection needs change.

Why do I need life insurance?

Life insurance is an essential part of any financial program. Most people buy life insurance to replace income that would be lost at the death of a wage earner. The cash provided by life insurance also can help ensure your dependants are not burdened with significant debt when you die. Life insurance proceeds could mean your dependants won't have to sell assets to pay outstanding bills or taxes. An important feature of life insurance is that no income tax is payable on proceeds paid to beneficiaries. You need life insurance if you want to provide financial protection for your dependants (or to your creditors) in the event of your death. A business may want to use life insurance to fund its employee benefit plans, protect against the premature death of a key person or to provide for business continuation. The following are typical examples of family and business purposes to consider when assessing the need for life insurance:

family

Dependant children.
Dependant spouse, parent or grandparent.
Credit enhancement.
Key person indemnification.
Business continuation.
Employee benefit plans.

Should one or more of these examples apply to you,

the purchase of life insurance may be suitable for your needs.

How much life insurance do I need?

The amount of life insurance a person needs will depend on their own particular circumstances and the reasons for purchasing the policy. One approach to determine how much life insurance you should purchase is to analyse the various needs of your family in the event of the death of a family member. Life insurance may satisfy a number of these needs by providing a fund that can be used to:

Pay off an individual’s last debts such as medical bills and funeral expenses;
Meet estate taxes and other expenses in settling an estate;
Provide life income for the spouse;
Pay off a mortgage;
Pay for the children’s education;
Provide funds for retirement;
Provide an income for the policyholder’s spouse to give the family time to readjust to a new standard of living;
Draw interest to provide funds for some special purpose; or
Provide a monthly income until the children are grown and out of school.

Thus, the current and future financial needs particular to your family can be a significant consideration in determining the amount of life insurance that is right for you. Another factor that may be taken into consideration in determining how much life insurance you need is the amount of your annual salary.

How do I choose a beneficiary?

Designating a beneficiary is an important right of life insurance ownership. It lets you determine who receives your policy benefits. After determining whom you want to select as your beneficiary, you may then choose what percentage of the benefit each individual should receive.

What do I do if I have a claim?

Ken Holmes is committed to providing superior service to you and your family when you have a claim. Our goal is to process all claims promptly, fairly and courteously. Most claims are processed in 5-10 business days of receipt of the necessary claim information.

Where do I start?

Call me, Ken Holmes 0800 KENHOLMES, for a no commitment conversation about your particular requirements and together we can identify options for you to consider at your leisure. Planning and executing an insurance portfolio should be done carefully and not rushed.

Did you know …

For a minimum of $195, a US Insurance company will insure you against lots of things can go wrong at a wedding. The policy covers everything from rainouts to Uncle John break dancing down the aisle in his birthday suit. It also includes a Cold Feet Exclusion in case your prospective new wife is too busy with your best man to make it to the church on time.

Source: Why do I need life insurance?

Household Debt in New Zealand

Thu, 01 Jan 2009 00:00:00 +1300

One third of New Zealanders wrongly believe that Superannuation is asset tested
Since 1998, the number of NZ’ers with a Super Plan has dropped from 23% to 15%
If you start saving early, you can retire any time you like
Expect to live 15-20 years in retirement
Only 16% of Kiwis know what their retirement income will be
40% of women aged 65-74 live alone
Two thirds of retired women are totally dependent on NZ Superannuation
41% of NZ’ers plan to travel when they retire
Each year 1,800 NZ’ers suffer a stroke before they retire
16 New Zealanders die every day (1 every 90 minutes) of Coronary Heart Disease
Over 80% of lung cancer incidence among females result in death
1 in 10 men will lose a wife, sister or daughter to breast cancer

Household Debt in New Zealand
NZ Statistics By mid-2006 the outstanding debt of households had increased around five times in dollar terms since 1990, more than doubling as a percentage of households' disposable income. Weighted average interest rates however had fallen from over 15% to about 8.5% per annum (over 90% of household debt is housing debt, at an average rate of around 8%). Interest servicing of the increased debt, as a percentage of incomes, was about a third higher than in 1990. At current levels, the ratio of household debt to income (excluding student loans) is similar to those found in Australia, the UK and USA.

Source: Household Debt in New Zealand

Risk

Thu, 01 Jan 2009 00:00:00 +1300

Risk is a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event. In everyday usage, risk is often used synonymously with the probability of a known loss.

Risk communication and risk perception are essential factors for all human decision making. There are many more and less precise definitions of risk; they depend on specific applications and situational contexts. It can be assessed qualitatively or quantitatively.

Qualitatively, risk is considered proportional to the expected losses which can be caused by an event and to the probability of this event. The harsher the loss and the more likely the event, the greater the overall risk.

A definition of risk is: Risk = (probability of an accident) x (losses per accident)

Insurance is a risk-reducing investment in which the buyer pays a small fixed amount to be protected from a potential large loss.

Gambling is a risk-increasing investment, wherein money on hand is risked for a possible large return, but with the possibility of losing it all. Purchasing a lottery ticket is a very risky investment with a high chance of no return and a small chance of a very high return. In contrast, putting money in a bank at a defined rate of interest is a risk-averse action that gives a guaranteed return of a small gain and precludes other investments with possibly higher gain.

Risks in personal health may be reduced by primary prevention actions that decrease early causes of illness or by secondary prevention actions after a person has clearly measured clinical signs or symptoms recognized as risk factors. Tertiary prevention (medical) reduces the negative impact of an already established disease by restoring function and reducing disease-related complications. Ethical medical practice requires careful discussion of risk factors with individual patients to obtain informed consent for secondary and tertiary prevention efforts, whereas public health efforts in primary prevention require education of the entire population at risk. In each case, careful communication about risk factors, likely outcomes and certainty must distinguish between causal events that must be decreased and associated events that may be merely consequences rather than causes.

In finance, risk is the probability that an investment's actual return will be different than expected. This includes the possibility of losing some or all of the original investment.

A fundamental idea in finance is the relationship between risk and return. The greater the amount of risk that an investor is willing to take on, the greater the potential return. The reason for this is that investors need to be compensated for taking on additional risk

Insurance vs Gambling

Both gambling and insurance transfer risk and reward. Gambling transactions offer the possibility of either a loss or a gain. Gambling creates losers and winners. Insurance transactions do not present the possibility of gain. Insurance offers financial support sufficient to replace loss, not to create pure gain. Gamblers can continue spending, buying more risk than they can afford to pay for. Insurance buyers can only spend up to the limit of what carriers would accept to insure; their loss is limited to the amount of the premium. Gamblers, by creating new risk transfer, are risk seekers. Insurance buyers are risk avoiders, creating risk transfer in terms of their need to reduce exposure to large losses.

Gambling or gaming is designed at the start so that the odds are not affected by the players' conduct or behavior and not required to conduct risk mitigation practices. But players can prepare and increase their odds of winning in certain games such as poker or blackjack. In contrast to gambling or gaming, to obtain certain types of insurance, such as fire insurance, policyholders can be required to conduct risk mitigation practices, such as installing sprinklers and using fireproof building materials to reduce the odds of loss to fire. In addition, after a proven loss, insurers specialize in providing rehabilitation to minimize the total loss.

Insurance, the avoiding, mitigating and transferring of risk, creates greater predictability for individuals and organizations.

Source: Risk

Investment

Thu, 01 Jan 2009 00:00:00 +1300

The roots of insurance can be traced to Babylonia, where traders were encouraged to assume the risks of the caravan trade through loans that were repaid (with interest) only after the goods had arrived safely

Did you know?

A football fan in England took out a £1,000,000 insurance policy if England were knocked out of the World Cup early and he suffered trauma.

Ken’s Five Rules of Good Investment

Rule 1 : Understand your risk profile

Rule 2 : Diversify

Rule 3 : Plan wisely - get good advice

Rule 4 : Don’t buy junk

Rule 5 : Utilise dollar cost averaging

An average beaver can cut down two hundred trees a year
An average pig squeals at a range from 100 to 115 decibels
Average length of a coat hanger when straightened: 44 inches.
On average women say 7,000 words per day. Men manage just over 2000
On average, 42,000 balls are used at the Wimbledon tennis tournament.
On average, right-handed people live 9 years longer than their left-handed counterparts.
The average American will eat 35,000 cookies in a lifetime.
The average person walks the equivalent of twice around the world in a lifetime..
Every square inch of the human body has an average of 32 million bacteria on it.
The average bank teller loses about $250 every year.
The average lead pencil will draw a line 35 miles long or write approximately 50,000 English words
The average snail moves at a rate of approximately 0.000362005 miles per hour.
"The average man doesn't want to be free. He wants to be safe.” - Henry Louis Mencken (1880-1956)

Source: Investment

Work & Kiwisaver

Thu, 06 Dec 2007 00:00:00 +1300

New Zealand's population is 4,187,013
New Zealand's full-time workforce is 1,583,400 (37 percent of the population)
Each working person is in effect financially supporting 3 people
985,000 men work full-time, 598,400 women work full-time
244,000 people are employed as legislators, administrators and managers
359,000 people work in retail
Approx. 80,700 New Zealanders are unemployed
The average weekly pay in NZ is approx. $800
In 1990, the average weekly pay was $535
More than 19,000 New Zealanders work more than 80 hours per week !
Your most valuable asset is your ability to earn a living

6 December 2007

The number of people joining KiwiSaver continues to defy initial expectations with over 316,000 New Zealanders signing up in just the first five months, Finance Minister Michael Cullen and Revenue Minister Peter Dunne said today. As at 30 November, 316,865 New Zealanders were actively saving for their retirement through KiwiSaver. This news comes just a month after KiwiSaver numbers reached the quarter million mark. "New Zealanders are embracing KiwiSaver in huge numbers," the Ministers said. "They know that KiwiSaver makes saving for retirement easier than ever before. "One of the most encouraging signs is the large numbers of younger New Zealanders who are joining the scheme. "Nearly 20 per cent of KiwiSavers are younger than 25 and over 33,000 KiwiSavers are less than 20 years old. This is great news as these young New Zealanders are taking up the savings challenge early and will be able to build a substantial nest egg for retirement or in some cases for their first home. "It's also encouraging that over half of KiwiSavers are aged under 45. "While not all political parties have backed KiwiSaver, New Zealanders are showing that they know our savings problem is real and they know that KiwiSaver makes it easy to save. "It is also important to note that KiwiSaver will build up a substantial pool of domestic capital available for local firms to draw from for investment. "The large pool of savings built up as a result of superannuation schemes in Australia has been sighted by some commentators as the single most important factor behind the growing wealth across the Tasman."

Only 15% of those earning between $15,000 and $50,000 per year have any form of superannuation savings
KiwiSaver benefits are too good to be overlooked
Firstly, there is a $1,000 net kick start gift from the government into your account
Secondly, your contributions are matched by a tax credit of up to $20 per week ($1,040 per year)
From 1 April 2008, all employees contributing to KiwiSaver (and complying superannuation funds) will also be entitled to a compulsory matching employer contribution of 1% of gross pay rising by 1% each year until it reaches 4% in April 2011
After three years of saving, first home buyers may be eligible for a housing deposit subsidy
There is no Specified Superannuation Contribution Withholding Tax on the employer contributions of up to 4%
You can elect to have a 'contributions holiday' of up to 5 years after 12 months
Earlier withdrawals are permitted only in circumstances of serious financial hardship, permanent emigration or to assist with the purchase of a first home
KiwiSaver is a valuable asset

Source: Work & Kiwisaver