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The Pencilsword: Rent rage

Friday 29th July 2016

Correction: A previous version of this story said 25 percent of 20-29 year-olds share a room with a non-partner, but the correct stat is in fact 25 percent of 20-24 year-olds (which is still crazy).

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“Hi Toby,
The way you pay rent when you're 80 is to build a financial asset base that will (by then) provide you with enough income to pay the rent at that time. A financial asset base consists of term deposits, mutual funds, ETF's, shares, bonds, perhaps some commodities such as gold or silver . Raise your Kiwi-Saver to the maximum level.
A financial adviser may well be very useful once you move into shares and bonds.
These financial assets are all available to you now and while it is true that these are moderately expensive as well (QE has had a big impact) it is Auckland property prices that are very expensive and do not provide good value at this point.
Enjoy the benefits of tenancy such as no maintenance, flexibility, no crippling deposit (apart from a bond), no exposure to interest rates (they will rise one day).
Don't let house prices prevent you from building your asset base other than by paying off a mortgage.

” — mc peat


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Toby Morris is an Auckland based illustrator and comic artist. He is the creator of the Pencilsword and also half of the Toby and Toby duo behind the series 'That is the question' at radionz.co.nz
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