While most New Zealanders have signed up for a KiwiSaver scheme, many forget to think of it as a long-term investment.
Kiwi Wealth’s Joe Bishop reminds everyone with a KiwiSaver that it’s not a savings account, but rather an investment that should be considered carefully.
“Making a choice is really important because it has a real impact on how much money you’ll get later in life,” he told RadioLIVE’s Carly Flynn.
The type of investment fund you choose could make “a serious difference” in what will eventually accrue, Mr Bishop said. But despite this, there are some 400,000 New Zealanders who have kept their KiwiSaver in a default scheme.
The default scheme has a much lower return rate than other funds, explained Mr Bishop, which could seriously limit an investment’s full potential.
The expert recommends “putting your money to work” in a higher risk fund, like a growth or balanced fund.
While there will be occasional dips (as there is risk involved), Mr Bishop says it’s the best way to steadily grow your money over a lifetime.
“You’ll have to be prepared for some ups and downs along the way,” he added.
Mr Bishop breaks down the different types of funds and who they’re best suited for.
Listen to the full interview with Joe Bishop above.