I am not sure if it is the norm but several recent weddings I have attended, and others I have heard discussed, show a changed trend from my days. (I am a fan of Gordon Parry's columns).
In getting married it used to be the tradition that guests would give household items such that the couple could set up house.
Most couples now seem to live together for some time before marriage, such that they have already set up house. Many do not seem to be interested in marriage. The trend is that, instead of household items, guests are encouraged to give money, which in the main seems to be spent on the honeymoon.
The availability of easy credit means that nearly all newlyweds begin with new modern appliances. Debt is the new norm. Second-hand goods are just not even considered. Modern appliances are not as robust as they used to be in our consumer society.
When I look at the utensil set we received 40 years ago it is as strong as ever despite regular treatment in the dishwasher from when (about 20 years ago) we could afford one.
As I said in these columns recently, the Y generation (born between 1978 and 1994) has never known hardship or put aside funds for a rainy day.
Imagine what they could do if they invested a small part of their wedding cash into long-term investments. In 1970, the price of BHP shares was $2 (Australian).
They are now trading at $A44.
Inflation, of course, has occurred such that in real terms the two, in terms of purchasing power, are about the same. The point is that time has manufactured the investment into a relevant asset.
Much of the Generation Y people's problem is that they are not financially savvy. It is a live-for-today lifestyle. If my grandfather had given me the equivalent of $1000 in an account similar to today's KiwiSaver I would probably have been annoyed. So it is really no different. What is required is more financial education.
Many grandparents have set up KiwiSaver accounts for their grandchildren. The $1000 is available but not the tax credits until they turn 18 and earning. It should be a learning curve for the recipients such that they will contribute automatically when they begin earning.
Also, in earlier days working for a government department meant that it was compulsory to join Government Super if you were aged under 25.
Many workers when 25 came round, having got used to the regular fortnightly deductions, continued on with the scheme which was one of the best in the country. (It has been closed to new members since 1991). As a result, apprentices at workplaces such as Hillside who began at age 15 could retire comfortably, if they wanted to, at age 55 after 40 years of service.
The Institute of Financial Advisers (IFA) is holding a Financial Awareness Week from August 15 to 19. In particular, the local branch of IFA plans a series of presentations to discuss the implications of the new Financial Markets legislation with other professionals such as lawyers and accountants.
Invitations will be forwarded shortly. During the Financial Awareness Week local IFA members will be available to talk to schools about KiwiSaver and other financial matters, if wanted. Contact is Don Broad 471-8050.
• Peter Smith is an authorised financial adviser and a certified financial planner and is the principal of Kepler Group Otago, Dunedin. Email: pete@keplergroup.co.nz. A disclosure statement is available on request and free of charge.
