I recently met a professional couple who were keen to make good decisions about their next financial steps. Their household enjoyed the benefits of a pre-tax income above $500,000, and therefore they had a sizable monthly surplus of income over expenditure.
They mentioned that several of their friends suggested they buy a rental property and consider buying into Sharesies, and wanted to know what we thought they should do.
Their approach and initial thoughts about investing and questions raised concerns for me as they seemed unaware of their planned ventures’ risks. Purchasing a rental property in their position could have pushed their indebtedness above $2 million (this is not the first time I’ve seen this within the legal fraternity). The expectation that property prices will always increase is concerning.
Andrew Nuttall is a Financial Adviser with Cambridge Partners, an independent and fee-only advisory practice in Christchurch.
Andrew’s Disclosure Statement is available on-demand free of charge. Phone: (03) 364 9119
www.cambridgepartners.co.nz