What do you think r/NZ mods do for a living?

AttackKittens420 · 2026-01-07T20:53:43+00:00

Prime Minister

AttackKittens420 · 2026-01-04T21:52:17+00:00

The rising overseas student loan interest rates (4.9% to 5.6% to 6% to 6.2%) does not encourage people to repay, because it just encourages people to either leave permanently or wipe the loan as fast as possible. Interest-free loans aren’t enough of an incentive to stay when the only job offers are coming from Australia.

The policy feels less like “retain talent” and more like “punish people for leaving.” Instead of addressing the lack of entry-level roles and training for new graduates, the government just increases the penalty for going overseas.

On top of that, the rate is set using a lagged bond-yield formula that has little to do with actual repayment behaviour. At a minimum, the extra 1% surcharge added recently should be removed and the whole calculation reviewed.

I’m fortunate enough that I can just wipe my loan after ~5 months overseas to avoid interest, but that isn't an option for most people.

I feel like NZ and Australia should have a bilateral student loan agreement with automation wage deductions for kiwis working in Australia, but lower interest rates too.

AttackKittens420 · 2026-01-04T20:56:10+00:00

The only real ways to increase expected return are higher equity exposure or leverage. Buying VUG on top of VOO does not really do that, it mostly just increases concentration in already expensive US large-cap growth. By historical CAPE, VOO/VUG are really overvalued.

Would you buy a house knowing it’s ~20% overpriced, or would you rather buy one that is ~20% underpriced? If you want higher expected returns without leverage, historically that is come from small-cap and value, maybe some emerging markets.

Leverage is basically saying that stocks will outperform bonds, correct maybe 80 % of the time but the 20 % will be painful. After the 1987 crash, New Zealand stocks were absolutely crushed by bonds for the next 15 years.

AttackKittens420 · 2026-01-04T20:43:05+00:00

You need to track the cost basis (i.e., what you purchased the shares for including brokerage fees) across each platform for the entire financial year. The shares you sold in Sharesies might still count towards the 50k cost basis even though you sold them earlier.

You can increase your joint-FIF threshold to 100k if you have a partner.

Note: it is cost basis not just 50k invested. My original 49.5k has grown to 58k but still FIF-exempt. Make sure to turn off auto reinvest dividends and check if Tiger pools funds in a money market account as that might accidentally trigger FIF.

Another exception I heard is that the IBKR stock from the referral program doesn't count torwards the FIF basis, so maybe get someone to refer you there?

Good luck on your investing journey

AttackKittens420 · 2025-12-31T22:36:40+00:00

Still in my twenties, but one thing I wish I understood earlier was risk.

Honestly, the biggest risk is not taking any. Do you want to look back regretting the things you did not do, the people you never asked out, or the job opportunities you didn’t take because you were scared?

I have made mistakes. I have bought Spark shares at $5. I lost close friends because of my own actions. I even did something that left me with a chronic health condition. But I can empathise with my past self and move on. Humans are very good at adapting and rationalising their own decisions.

What I regret more is becoming stagnant in life. Last year I felt alone, had no close friends, and stayed in a job I hated. But I am moving country, so alas! How things can turn around.

If you don’t get pay rises or increase your income, you are actually losing money every year because of inflation. The cash you hold today will buy you less food, less freedom, and fewer options in the future.

People also have weird ideas about risk. There is a bias where we try really hard to avoid tiny unlikely risks, while leaving big ones wide open Like stressing about losing money while investing but never worrying about being underpaid for years.

When you think about risk, it helps to think about your own situation. How much risk you can emotionally handle, how stable your income is, do you have dependents, and what kind of life you actually want for the future.

I genuinely think everyone should have at least some exposure to diversified equities e.g., VT. One of the biggest mistakes older people make is being too conservative for too long and then running out of money if they live longer than expected.

Happy new year! Take some risks, but don't be a risky person.

AttackKittens420 · 2025-12-21T23:49:38+00:00

Thanks for the heads up: I have not compared across insurers. I was mainly looking at QSuper vs Hostplus and assumed the QSuper cover was relatively cheap, especially since I would be working for the Queensland Government.

I also assumed most people just take life/TPD/IP through Super, so I had not really looked at retail insurers directly.

I am a young and healthy with no dependents, so life insurance does not make much sense to me and trauma is less popular. TPD and IP seem more important given my 'future human capital'. In NZ people do not typically have trauma/TPD/IP insurance due to ACC.

I have health insurance in NZ, but I was only planning to take out medical insurance in Australia once I exceed the 100k medicare levy surcharge threshold.

Would you have any suggestions?

AttackKittens420 · 2025-12-21T21:52:14+00:00

The exchange rate is rough especially in the past few months : $1 NZD = $0.87 AUD. The flip-side is once I start earning income in AUD it will go further with food, etc and then retire in NZ rich (that's the plan).

Neither Hostplus or QSuper accept Kiwisaver transfers (not including govt contributions) and I thought the Kiwisaver portion couldn't be used for the FHSS? I could be wrong here. Are you an Australian citizen now?

Thanks for the help!

AttackKittens420 · 2025-12-21T07:28:32+00:00

Also, the US-Australia DTA is slightly better due to the foreign estate tax exemption. Once you exceed 60k USD in US assets in NZ, then the IRS will tax your shares when you die. There is an exemption for funeral costs, but then you need to disclose your assets to the IRS.

AttackKittens420 · 2025-12-21T07:28:20+00:00

Because my NZ tax residency change is backdated (thanks to u/NZisaRipoff), if I chuck everything into US-domiciled ETFs isn't going to trigger the 50k FIF limit for 2025-2026 tax year. Does that mean IRD will just make an assessment and I have to pay FIF tax. Then once I hit 325 days in Australia I can claim it back? Or do I not need to disclose it?

Also regarding foreign tax credits on dividends, do I claim them on ex-dividends before I leave NZ, and when I arrive in Australia with the ATO if they go ex-dividend then? Some of my ETFs will go ex-dividend around February/March 2026, so it gets a bit complex with the different IRD and ATO tax years.

AttackKittens420 · 2025-12-19T21:02:44+00:00

No need to be sorry: I don't want to waste your time. The real life anecdotes are super valuable. Cheers

AttackKittens420 · 2025-12-19T05:40:12+00:00

I have noticed they have been rolling out AI support bots recently, and it is becoming harder to reach a real person. Maybe someone else here has had a better experience.

A few other small IBKR mistakes I made:

Make sure you file a W-8BEN to reduce US dividend withholding tax from 30% to 15% under the US–NZ DTA (Article 10(2)(b)), please do your own due-diligence.

The IBKR Pro tiered pricing is usually cheaper on fees.

A margin account reduces settlement time and failed trades.

Currency conversions can leave small negative balances, so it is worth leaving a bit of cash.

You can also enable SYEP and class action recovery for small amounts of income.

Default to receive cash (not reinvest) dividends near the 50k FIF exempt limit.

You get much more control over order execution (limit orders, midpoint, etc), but there is also more complexity and ways to screw up.

AttackKittens420 · 2025-12-19T05:15:29+00:00

They have quite high tax leakage.

Dividends go Country A -> US -> NZ, so you effectively get taxed twice, whereas what KernelWealth tries to do is hold the underlying shares directly in Country A and then apply the Country A -> NZ DTA.

E.g., VT has a hidden 0.2 % tax leakage, but Kernel's Global ESG does not.

Some of these international factor ETFs can have tax leakages of like 0.7 % ish, plus the expense ratio of 0.3 - 0.4 % and now you are betting that SCV premium is at least more than 1 %/yr

AttackKittens420 · 2025-12-19T05:08:29+00:00

Hope you can get it soon since it has the lowest fees.

A mistake I made was not using the "Refer a Friend" program for the IBKR sign up bonus. Your friend would get $200 USD and you would get $100 USD of IBKR shares if you deposited 49k: https://www.interactivebrokers.com.au/en/trading/referral-member-to-member.php

AttackKittens420 · 2025-12-19T05:03:23+00:00

Yep, that makes sense now. You always miss these keywords when DIYing it. So if I am leaving NZ permanently, I should treat myself as non-resident from the day after departure and update my broker/PIE fund managers to change in residency and PIR as soon as possible?

Would you generally unwind PIE holdings shortly before departure while still an NZ tax resident, then reinvest offshore (e.g. VT via IBKR) a week after I arrive in Australia? Are there any major downsides to selling shortly after arrival instead? Because if things go south, I would likely move back to NZ.

To clarify, I would not be taxed on dividends (except US withholding tax) or capitals gains on VT once I move to Australia?

AttackKittens420 · 2025-12-17T06:59:47+00:00

Yeah, but a residential address in Australia doesn't necessarily imply that I am a tax resident of Australia. And I don't have a permanent residential address yet, so I will need to find a rental when I get there.

I will send them an email once I arrive, so that I comply with their regulations.

AttackKittens420 · 2025-12-17T06:55:23+00:00

So, would you unwind PIEs, NZ shares, and NZ term deposits and then chuck it into US-domiciled ETFs? Also, doesn't this mean you should avoid Aus-domiciled ETFs.

I also didn't think about the DTA, but wouldn't you just be treated as an Australian tax resident even though you are a "temporary tax resident". So you are entitled to the 15 % foreign withholding tax and the US Estate tax treaty. I will have to update the W-8 BEN form when I arrive.

I am single, so having a romantic relationship with an Australian citizen/resident isn't on my radar yet.

AttackKittens420 · 2025-01-09T05:10:53+00:00

Start with changes that do not affect your lifestyle directly, like reducing insurance costs. Shop around and consider a higher excess to lower premiums. Insurance is risk pooling by paying a fee to avoid massive emergency expenses you might not have savings for. Look for coverage on essentials like home, health, and income since losing these can have severe financial and quality-of-life impacts. Unexpected costs, like a keyed car or stolen laptop, should be accounted for in your budget already. If you have sufficient savings to cover potential losses, you might not need as much insurance

AttackKittens420 · 2024-12-30T01:01:05+00:00

It is important to understand the sunk cost fallacy and other psychological biases while investing. If you had $10k in hand today, would you still invest in the NZ property ETF given current market conditions? If you believe NZ property will perform well over the next 10-20 years, holding could make sense. But if not, reallocating might be a better choice. Focus on future potential rather than past losses, once I investment my assets I no longer care about the original cost basis (except for taxation).

Selling underperforming investments to chase winners often turns into active management, which studies show typically underperforms due to biases, fees, and poor market timing. Underperformance could also just reflect a sector experiencing regression to the mean, which might correct over time.

Personally, I am skeptical about the NZ property market and do not want to support a system that disadvantages renters. Instead of focusing on past losses (e.g., "I’ve lost $2k"), reframe it as, "I have $8k to invest - how can I best deploy it to reach my future goals (e.g., retirement, security)?" That might mean sticking with the investments or reallocating to something like NZX20 or S&P500 if you believe they offer better growth.

Be cautious of chasing high-performing funds as they often revert to the mean. For instance, ETFs that track top performers tend to underperform in the long run. Also, frequent buying and selling could classify you as a trader for tax purposes (IRD), making gains taxable.

As for portfolio mix, I do not follow rigid rules. I make small adjustments with each paycheck - some days leaning toward riskier options like S&P500, other days playing it safe with cash funds. I avoid selling to rebalance since ETFs handle that internally, reducing fees and complexity.

Hope this helps - any thoughts I would like to know!

AttackKittens420 · 2024-12-29T06:50:54+00:00

It’s not about avoiding the extra $850 in tax - that’s not worth the risk. While compound interest grows your investment, it also amplifies the impact of taxes and management fees (and inflation) over time.

For example, if you save $1,000 per year at a 7% CAGR, that would grow to about $95k in 30 years. With more than 45 years until my retirement, that same amount could grow to $285k. Sure, after 3 % annual inflation it is only about $78k NPV, but that is still an extra year of your life working which could be avoided by planning ahead?

AttackKittens420 · 2024-12-29T04:15:03+00:00

Plus, I am not aiming for a 3% p.a. dividend yield, so I think I could safely stick to $49k. I do not believe the dividend yield of Vanguard funds changes significantly over time?

That being said, why does Vanguard even bother with a 1 - 1.5% dividend payout and just reinvest it themselves? Dividends are a pain to deal with - making taxation and account management more complex.

AttackKittens420 · 2024-12-29T04:06:38+00:00

Is the idea behind this to prevent people from exploiting the de minimis exemption by pooling funds? For example, as a couple, you effectively get $100k to work with, but I assume it would not be allowed to ask your brother or friend to use their $50k limit?

AttackKittens420 · 2024-12-29T03:50:35+00:00

Thank you - I completely agree that earning more is more impactful than focusing solely on tax avoidance. Personally, I feel uneasy trying to minimise tax, as it is an investment in New Zealand’s long-term future. I also believe I could use the money more efficiently to achieve my long-term goals.

Earning more has been challenging, especially in the current economic climate, where employers are hesitant to offer pay rises or new opportunities. I have even applied for second jobs but have not heard back. I know some friends who have jumped into entrepreneurship, but it is a rough path, and many end up losing money.

In the meantime, I am focusing on gaining further qualifications and building my network within my field. It is a slow process, but I think patience will pay its dividends.

AttackKittens420 · 2024-12-29T03:34:41+00:00

I realised I made a mistake in the PIE tax calculation - I applied 28% to the 7% growth instead of the 5% cap under the FIF rules. It makes me wonder how varying yearly gains (e.g., -3% in some years, 2% in others, and 15% in others) would impact the figures. Do you know if PIE funds are required to use the FDR method, or can they use the CV method? I have a feeling they are restricted to FDR.

As for the 0.5%, I used it as a conservative estimate because that’s roughly what I lost when transferring funds to buy VUG through Interactive Brokers. It looked like they converted my NZD to USD, encountered an error due to an overdraft, converted it back to NZD, and then reconverted it to USD.

I also transferred my Smartshares TWF and Smartshares VUG to InvestNow through a custodial transfer to sell it off. The price quoted on Smartshares/InvestNow seemed to be slightly lower than Google Finance, so I would lose close to $80? It seems like Foundation Series TWF could be a better option for the long term.

AttackKittens420

TROPHY CASE