Ask Kernel - any money question that's on your mind

Ask Kernel your Money Question

Have you been wondering something about money? We’re here to help! Ask us any money or investing question and get a personal response from our team.

Kernel originally ran this campaign during Sorted’s Money Week to such success, we want to continue the conversation.

Click here to ask your question

Who are we?

Check out the video below and we’ll tell you.

What are people asking.

See some of the previous money questions that Kiwi’s around NZ are wondering.

QUESTION

What is the going rate for pocket money? Should children be made to work for it or be given it to learn about money, and then learn to help around the house out of the kindness of their hearts? - Suze

ANSWER:

What a great question! Ruth from The Happy Saver writes about ways to teach kids about money and investment. Pocket money without having to do anything is similar to welfare and should be discouraged. It is more about learning that money is transactional, so providing effort can be financially rewarded.

QUESTION

How do I choose between two funds that offer similar investments but vary on fees? Do I just go with the cheapest? - John

ANSWER:

While fees are important, it is the investor’s overall return that really matters. This means looking at net returns (so returns after fees) of each fund to compare how well they are doing.

QUESTION:

I'm trying to save for a house deposit, but with interest rates as low as they are do we bother putting money into term deposits or should we be looking at a managed fund or index fund to help boost our savings? - Stacey

ANSWER:

Great question and a common one at the moment. It all depends on when you are buying that house or when you need the money back! It’s a concept called investment horizon, which we have written about on the blog. With a low risk investment such as a term deposit, if interest rates or inflation rises, those can prove to be poor investments, but your funds are secure. With a higher risk investment such as shares, your return will be higher in the long run but fluctuate in the short term.

QUESTION:

How much can I have in three years' time if l start my investment at $10,000? - Mark

ANSWER:

This question is like 'how long is a piece of string' - it depends on so many factors! What you're investing in, are you regularly investing, what fees you're paying, are you changing your investments frequently? You can test out various returns assumptions with something like a compounding calculator - but it's important to note that returns are not linear. This means that although one may assume an 'average' rate of return for equities is 7% p.a. - the return will not be 7% every year. Some years it will be negative and other years it may be 15%. We put together this calculator that uses real historical returns data to look at that scenario. You can edit the start investment amount and see how much that would grow to over different time periods.

QUESTION

I invest $350 per fortnight into my portfolio, rather than doing one lump sum. Is this the best way to cope with current sharemarket instability? - Henry

ANSWER:

You have the right idea here that this is definitely a good strategy for riding out market instability. If you haven't read it already, this is a really good case study on how investing regularly is the best strategy, rather than being concerned with market movements.

QUESTION

Should I invest or pay off my mortgage or both? I'm in no hurry to repay my mortgage quickly as possible. - Ricky

ANSWER:

Could you still afford the payments if interest rates were 2% higher? If not, the additional money might be better in the house as a buffer. Otherwise, we are generally a fan of diversifying your investments, i.e. not having all your wealth tied up in the one house/asset.