How Kiwis can build real wealth for retirement
The rules of wealth building haven’t changed, but the market has. Property prices have cooled, and few people will double their house value in 18 months the way some did in 2021.
That doesn’t take property off the table. This article looks at the three main ways Kiwis build wealth for retirement, and why they work best together.
Property: still powerful, still productive
Property remains one of the most accessible and scalable ways to build wealth in New Zealand.
Leverage: you can borrow from the bank to buy an asset that ideally grows in value over time. That is hard to do with shares.
Income: residential or commercial property can deliver regular rental income. Managed well, that cash flow helps cover costs or build reserves.
Control: you can influence the value by renovating, developing, re tenanting or refinancing.
Growth may be slower now, but property is still an asset that earns and appreciates while someone else helps pay it off.
KiwiSaver and investment portfolios
Long term investing is essential. KiwiSaver is the starting point: low involvement, tax effective and supported by the government.
Beyond that, diversified portfolios of ETFs, managed funds or direct shares let you build wealth outside KiwiSaver, with more access to your money, more control and exposure to global markets.
Compounding returns over decades are hard to beat, if you are patient and disciplined.
Business ownership: the underrated asset
Owning a business is one of the most underrated paths to wealth.
Small and medium sized businesses make up 97% of all New Zealand companies, more than half a million businesses. For many owners, the business is their biggest financial asset. It generates income while they work and becomes a saleable asset when they want out.
If you need premises to operate from, consider owning the building yourself. Instead of paying rent, you build equity in a commercial property that can grow in value and deliver income in retirement.
Autonomy: direct control over income, branding and value creation.
Flexibility: you can reinvest profits where they suit your bigger plan.
Exit value: if you have built something valuable, buyers will pay for it.
Don’t wait until you are 65 to start planning the exit.
Combine, don’t rely on one
None of these tools works best on its own. If you own property, keep building your KiwiSaver and investments. If you run a business, use surplus cash to invest. If you are building a portfolio, use leverage where it makes sense.
Retirement shouldn’t be left to hope. It should be the result of years of coordinated action across property, shares, business value and well managed risk.
How Finsol can help
We help you bring property, KiwiSaver, investments and business planning into one retirement strategy.
Call us on 0800 346 765 or book a free consultation.
Finsol is a financial advisory business founded in Hawke’s Bay in 2010, looking after more than 6,000 clients across New Zealand. This article is general information only and does not take your personal circumstances into account.
