Why do we care so much? I know the answer, it's attention. The PM has made a horrific loss on this investment. This article is probably the third I have seen about him listing or selling it and it sounds oh so sexy and triggering. It references: - A capital gain of $295,000 (which misses real estate + agent fees). - No tax - It's one of 7 - He's mortgage free It forgets to reference these 2 points: 1. It hasn't kept pace with housing inflation. RBNZ Inflation calculator: Housing that cost $650,000.00 in 2015 Q1 would cost...$1,191,580.76 in Q1 of 2024. I don't think it sold for that. Ouch! 2. It hasn't come remotely close to keeping up with the S&P500. The PM was debt free on this and made a terrible investment choice when he could have plonked the same money in the S&P500 instead and had an even bigger gain. What you and I need to understand is that WE each interpret what we read differently. We also determine how it makes us feel. That emotion is our choice. Once you know a bit more about finance, investments and tax, you get to look at things through a less emotional lens. Keep your learning going!
Baqir H.
2mo
Very helpful and insightful - looking through the headlines! Curious to know - had he invested in S&P500, would FIF tax rules apply? That's always confusing to me.
Diren Singh
2mo
This analysis is also missing rental income, so you can't really compare to the S&P the rental yield would likely have covered most of the gap. Additionally, FIF rules would have taxed a lot of the return out of the S&P, so think this investment would have been a push. Also, I expect the PM has a diversified portfolio, so likely is not a case of property or the S&P, but property and the S&P.
Brent Norling
2mo
Hey Luke Kemeys (CA), go post that on FB and watch the tall poppy weed hackers lobby together. In all seriousness, that is a good perspective. Perhaps Stuff needs some factual reporting in the form of Luke Kemeys.
If anything I'm surprised left-leaning journalists haven't turned this into an example of him making poor financial decisions (although like most high performing teams, there's probably diversification in there).
Sarah C.
2mo
Next up opinion column on stuff!
Kirsty M.
2mo
Stuff is MSM… made for clicks.
Business Improvement Catalyst @ Amazing Business ✈ Technologist 🎤 Speaker ⭐ Coach
2moI don't know about "horrific loss", that's pretty emotionally charged. Yes, based on inflation, it's been sold at a loss. But with no debt, there's no mortgage that he's paid over that time. Side note: had friends who bought their first home for $300k at a home owner sale, he had bought it 7 years earlier for $270k, and it had a mortgage during that time 🙀, now that's a loss! Has he made as much as he could of [definitely not], but if it's been rented the whole time, he's also received income from it - which probably wouldn't have happened with S&P, since they rarely pay dividends. I.e. it all depends on your goals and aspirations and where else you could put money and what you want from the investment. Another side related story, I had a friend who sold his house, banking $600k from the increase, I told him to put it straight back into an Auckland 2 bedroom unit. He invested $400k into shares instead [he's done well on shares in the past]. Shares lost all their value [liquidity is great, until it isn't]. There's pro's and con's to every approach, important to know what they are. Is Luxon behind where he could be, 100%, is he far far far ahead of average every day kiwi: yes. And that's why articles like this get clicks 😭.