This document provides a disclaimer and overview about achieving financial independence. It discusses that the information provided is general in nature and not personalized advice. It then covers some key topics around financial independence including: common barriers like debt and lack of savings; how much savings is typically needed to generate different levels of retirement income; why people don't plan and the benefits of seeking professional advice. It also briefly outlines investment concepts like balancing risk and return based on an investor's appetite, as well as the benefits of diversification. The overall message is that planning early, understanding spending and savings, not relying solely on the state pension, and seeking professional advice can help achieve financial independence.

1. Financial
Independence
How much is enough?

2. Disclaimer
•
The information provided in this presentation is of a general nature. To the extent that any
information in this presentation constitutes advice, it is class advice only, and is not
personalised to take into account an individual’s particular financial situation or goals.
•
You should not make an investment decision based solely on the information in this
presentation. To obtain advice that takes into account your particular financial situation or
goals, please contact one of our financial advisers.
•
Whilst every care has been taken in the preparation of this presentation, Spicers makes no
representation or warranty as to the accuracy or completeness of the information.
•
None of Spicers, any of its employees or agents, or any other party, guarantees the
performance of any of the investments mentioned in this presentation, gives any warranty
of reliability or accuracy, or accepts any responsibility arising in any way from any error or
omission.
•
Past performance is not an indication of future performance and is not guaranteed by any
party.
•
The future behaviour of investment markets is uncertain and calculations or projections
are estimates of possible results given certain assumptions, today's knowledge, market
conditions and outlook. These calculations should be regarded as estimates and
illustrations only. Investment performance and attaining investment objectives are not
guaranteed".
•
Spicers is paid by charging fees for its advisory services.
•
A disclosure statement is available on request and free of charge from your Spicers adviser.
Spicers Portfolio Management Limited
Leve 4, 32-34 Mahuhu Crescent, Auckland
Telephone: 09 347 1442

3. The Behavioural
Drivers

4. Financially Independent
Why so few?
• High levels of debt
• Lack of a savings culture
• Financial literacy
• Overly reliant on housing
• Welfare mentality

5. “Having sufficient financial resources to
provide you with the choice to do what
you want to do”.
How much is enough?

6. NZ population over age 65
* Statistics NZ. Demographics Aspects of New Zealand’s Aging Population
March 2006.

7. Life Expectancy at Age 65
Years to live
Year
Male
Female
1965
12.6
15.8
1980
13.3
17.1
1995
15.5
19.0
2005
18.0
20.6
2012 *
20.6
23.2
* Statistics NZ. Period Life Tables 2005 -2007

8. Not a great savings record
Income and spending : Year ended March 1999-2011
Source: Statistics NZ 2011.

9. How much?
Sum required to generate an income
Tax paid income
Lump sum*
$ 40,000
$ 654,000
$ 50,000
$ 817,500
$ 60,000
$ 981,000
$ 70,000
$ 1,144,500
*20 years at 2.0% “real” tax & 2% inflation.
*20 years at 2.0% “real” tax & 2% inflation
Source: Spicers Portfolio Management

10. Why Bother?
• It’s too complicated
• There’s no spare cash
• You’ll be right
• I ‘ll muddle along on my own – can’t trust
anyone else these days
• It’s unachievable
• What’s the point – everything changes so
quickly

11. Why Me?
• Qualified
• Experience
• Passion
• Successes
• Ethics

12. Steps to do this:
To become financially independent
•
Clarify your needs & objectives
•
Risk assessment and advice
•
Comprehensive financial planning & advice
•
Monitor and manage your progress
•
On-going professional advice

13. Solutions for financial
independence?

14. Investor’s appetite for risk will vary…
…and risk vs. long term return need to be balanced
against investment objectives
Shares
Property
Increasing
Return
Bonds
Cash
Increasing Price Variation
Higher returns
come with higher
price variability

15. Diversification
is a key ingredient in achieving investment objectives
The above is illustrative only and may not represent a particular Spicers portfolio.
The above asset allocations are an example only and not a recommendation to
invest in these proportions for any given investor.

16. Key Messages
• Start your planning early
• Understand your spending & saving
• Don’t rely on NZ Superannuation
• Professional advice is available