What’s good? What’s not? How can you tell?
Sometimes you can go by how you feel or connect with something or someone. Like the vibe you get when you gel with a new friend, or a feeling when you step into a fabulous place.
But most other times, to know if something’s good or not, you need to compare. Does this dish taste better than other things you’ve had? Is it sweeter, saltier, spicier? There’s usually a comparison that helps you decide.
The thing with money is that it’s hard to tell if something’s good. You need to compare a financial product to its peers, to put it in its proper context.
In the world of KiwiSaver and investing, Sorted’s new Smart Investor lets you compare meaningfully – precisely so you can see what’s good and what’s… not so much.
Let’s say I tell you a rate of 2%. Is that a good deal? Even if you know whether that is interest you have to pay or interest you will receive, you still need to put it in context. How does it compare?
A 2% fee you have to pay to be in KiwiSaver or a managed fund, for example, would be high – a lot to pay.
How do I know? Smart Investor shows us the average for all KiwiSaver funds (0.94%) and other managed funds (1.26%), which makes 2% look pretty pricey. (That said, the most expensive fund is a whopping 4.71%, so that says something too.)
On the other hand, a return of 2%, even after fees and taxes have been taken out, would be relatively low.
The average KiwiSaver return over the past five years has been 6.71%, and some of the high flyers have returned 11% or even as high as 12.59% to investors.
But again, it’s hard to tell until you put something in context. Smart Investor shows you the averages for all the major types of KiwiSaver funds, so you can see easily how yours stacks up.
Context is king – so have a look at Smart Investor to find out where you’re at, and where you could be.