Ron Hoy Fong - Will The Next Boom Be The Boom Of All Booms?

[Julian]

Glenn, thanks for the reply. I hear what you say about Nelson residential property doubling in four years. But if one's purpose of buying is to sell isn't that trading rather than investing. Sure you can pull some of the equity out to help with the next purchase, but if prices have doubled quickly you can bet your bottom dollar rents have not kept pace, and therefore the next purchase is unlikely to throw off enough surplus cashflow to be a viable investment

I can see much merit in the trading of residential properties - without doubt - but from an investment point of view the rental return (yield), the bad tenants, the vacancies, the fact that you have to pay all the sundry costs despite the tenants getting all (or most of) the benefits indicate to me that commercial is a better horse to ride than residential.

The key with commercial (as I see it) is to buy in areas that are least likely to suffer a serious downturn and buy buildings that suit the widest range of tenants ie stay away from purpose built buildings such as motels. For example, if you bought a retail shop in Auckland's Queen St you could bank on it hardly ever being vacant for a length of time - even if the retail sector haemorrhaged.

You stated that you preferred your residential tenants to your commercial ones. Why? Commercial tenants are business people - just like you are. They understand that you are in business, and that your relationship is a business relationship. Residential tenants, on the other hand, sometimes think of you as a surrogate parent, a charity, an entity to take your frustrations out on, a greedy money-grabbing landlord, a dim-witted fool or anything else that can justify their poor behaviour - not all tenants are like this of course. Some residential teants are fantastic (I am one at the moment, myself), but too big a portion abuse the relationship.

However, the one thing I learned from reading Graeme Fowler's book is that every succesful investor seems to approach the game with their own rules, and the rules that work for one person can be discarded by the next. My questions are merely because of my curiosity. I am constantly learning, and when I hear people advocating a different path I wonder why. I wonder if there is room for me to change direction a little. At this point I think not, but this, like all of my rules, is NOT set in stone.

Julian

[RonHoyFong]

Booms caused by the baby boomers

Hi Forumites

Re Baby Boomers (BBs) - AUCKLAND

Besides the next Boom possibly being the Boom of all BOOMS, have you thought about what booms have been caused by the Baby Boomers of NZ since the end of the Second World War 11th November 1945 at 11:00 am in Europe. (Armistice Day)

First of all was the start of Baby Boom when everyone after the end of the war stared to have large families of around 5 children in the pursuing 10 years.

Maternity Hospital
Maternity Hospital around Auckland popping up all over the place. National Women’s was originally some barracks down the road in the grounds of Cornwall Park, St Helens maternity Hospital now a School campus, Mater Hospital, and many private Hospitals were busy with maternity, Bightside Hospital where I was born later became a place for the aged.

Schools
Soon came the Primary Schools that needed temporary classrooms (Pre-Fabs), the same problem followed through to Intermediate Schools and Grammar Schools and then onto extensions of the Universities as they baby boomer got older.

Unemployment
Record unemployment figures came in the 1969 to 1971 presumably as the peak of BB started clambering for jobs. Apprenticeships were the norm for the less academic. The academics who chose to work for an offices instead of the free University education were perhaps more fortunate because after the finish of University there weren’t too many jobs around for the masses appropriate to their qualifications.

Housing
The on came the housing boom like you never saw one before.

On North Shore: Chatswood, Birkenhead, Birkdale, Beachhaven, Glenfield, Sunny Nook, Forrest Hill, and running along thr East Coast Bay Road 1 km from the beach front from Mirangi Bay, Murray Bay, Norcross and Torbay were just bush or farmland where you could buy strawberries at the gate.

West Auckland: Kelston, Glen Eden, Sunnyvale, Mac Laurin Park, Ranui, Massey East and Massey West,

Cenral Auckland: Lynfield, Roskill South, New Windsor, and patches of Blockhouse Bay Avondale and New Lynn.

East Auckland was virtually everywhere from Pakuranga Heights, Sunny hills Farm Cove, Highland Park, Half Moon Bay, Golfland, however these areas grew as a result of both English migrants at first who were more into the up market houses, then by middle income earners and followed by the BBs.

South Auckland: Particularly Mangere, this came after the rest of Auckland, and was heavily supported by government housing for low-income earners. Similar areas were in Birkdale, Ranui, Otara and Manurewa.
Mangere although already establish saw huge areas of Market Gardens from Mangere Domain through to the Auckland Airport flattened. (Sadly down memory lane many of the places were not only my granddads who had several hundred acres feeding the US Army and trucking loads of veggies during the war days to the Sylvia Park army barracks but many of the places were farmed by the grand parents of today’s established Kiwi Chinese.) Mangere Central Township was established plus surrounding Mangere East.

Manukau City and surroundings, and Manurewa blossomed, then Clendon, Homai, Conifer grove and Wattle Down.

Gone are the days when we had group housing companies who were there at the peak of the Boom such as Keith Hay Homes, Neil Housing Ltd, SunLine Homes, Lockwood Homes, Universal Homes, to name a few, and all building the forever popular 3 bdrm "NO LEAKS" 900 to 1100 sq ft Homes on the 800 to 1000 sq meter sections.

Gone are the days when we had a Family benfit Allowance that could be Capitalised as a deposit for virtually a "no money down" home.

Immigration
During all this boom were the immigrations of Dutch in the late 1950s, and POMs during 1960s, and Polynesians in the 1960s and 1970s, supposedly to fill the skilled labour and freezing workers shortages to provide for the needs of the maturing BBs.
Gone are the days of dawn raids on overstayers, thank goodness. NZ originally invited the migratnts to work the Freezing work on to close down many of the slaughter houses later.

Multi Level Marketing
This started to be a marketing norm and if you think about it they survived on the mass markets opportunities BBs to buildthe essentila downlines. To name a few, Mothercare, Tupperware, World Books, Britannica Encyclopedias, Avon, Nutrimetrics, Emma Page, Amway, and now USANA directed at the soon to retire and want to live longer BBs

Retirement Boom
The next Boom to be caused by the BBs is obviously the “Retirement Boom”
And the effects of this will be Retirement Villages boom, retirement lifestyles, retirement travels for those that can afford it. For those that haven’t been able to prepare for it and haven't a home of there own will have to be dependant on the children of the BBs and double up on accommodation or keep working to survive. A boom in hospital beds has already started as we see the expansion of the Auckland Hospital. There will need to be a Boom of migrants to fill the boom in job vacancies, proposed boom in the Auckland infra structure at Albany and South Auckland from Botany to Karaka City to cater for what?

Final Chapter
Sadly the final chapter will see a boom in a Dying Business which sad to say when all is done “The Great Recession” will start follow. - almost 100 years after the last “Great Depression” of the 1920s.

But What of 2010 to 2012 will we have a balance immigration policy to replace the shrinking workforce and tax paying citizens to support the BBs?

And if NZ economy is to survive the disruptions will we not see 100.000 to 200,000 new migrants wanting a bed for themselves to live?

So the question again to you as a forumites Property Investors, (unless there is an alternative for NZ economic and labour shortage). If we the increase in an immigration policy “Will the Next Property Boom be the Boom of all Booms?”

If it is, then best we prepare our goals and take an advantage to making a “Profit from Property.”

“Set goals. Achieve them. Enjoy the journey.” - Julian

Cheers Ron

[Glenn]

Glenn, thanks for the reply. I hear what you say about Nelson residential property doubling in four years. But if one's purpose of buying is to sell isn't that trading rather than investing. Sure you can pull some of the equity out to help with the next purchase, but if prices have doubled quickly you can bet your bottom dollar rents have not kept pace, and therefore the next purchase is unlikely to throw off enough surplus cashflow to be a viable investment

Just because a property has doubled in value it is not necessary to sell that property to benefit from its value. Investors can refinance and buy something else. Rents in residential have gone up significantly. More so in percentage terms than commercial rents. However the returns have gone down. So yes you are correct partually. Surplus cash is not coming off the residentials. However many of us sold just one inflated residential to lower our debt to income ratios thus making the rest of our old portfolio look real good.

I can see much merit in the trading of residential properties - without doubt - but from an investment point of view the rental return (yield), the bad tenants, the vacancies, the fact that you have to pay all the sundry costs despite the tenants getting all (or most of) the benefits indicate to me that commercial is a better horse to ride than residential.

Well this is were people fall off their horses.
The return on a property is a combination of rent minus costs plus capital gain. When the owners tax postion is also taken into account this is what is called internal and external rate of return. It is all done with mirrors and pieces of cobweb.

The key with commercial (as I see it) is to buy in areas that are least likely to suffer a serious downturn and buy buildings that suit the widest range of tenants ie stay away from purpose built buildings such as motels. For example, if you bought a retail shop in Auckland's Queen St you could bank on it hardly ever being vacant for a length of time - even if the retail sector haemorrhaged.

This is all a great theory but the reality is that those types of properties are way outside the average investors ability to get into. Also often the low risk is taken into the price so you get a low rate of return. It is possible to enter this stuff via syndicates but not all syndicates are equal re entry exist costs and management costs.

You stated that you preferred your residential tenants to your commercial ones. Why? Commercial tenants are business people - just like you are. They understand that you are in business, and that your relationship is a business relationship.

Actually the commercial tenants are very different from me and are far more difficult to handle than the residential ones. Some are hard nosed national chains with property managers skilled in taking out poor landlords one at a time. They have heaps more assests than Mum and Pop investors so are really hard to squeeze more rent out of.
Then some are struggling businesses that might go under if squeezed resulting in an empty building that is impossible to re let.
Then many are on a different plain to me. What do I know about nail technicians full of half dressed lovely ladies lying under sun machines or retailers who might or might not be making a killing. They think I am rich or greedy or just have dirty hands and like looking at those ladies through my shades. Give me a residential tenant any day. No pay and out you go. Legal costs around $75 total. Try doing that some time with your commercial tenant when they do not pay.
Rent increases are a peice of cake. Issue a note to your tenant and that is it after 60 days. Again not so for commercial. You have to employ valuers who charge the earth and still you might not win.

However, the one thing I learned from reading Graeme Fowler's book is that every succesful investor seems to approach the game with their own rules, and the rules that work for one person can be discarded by the next.

Very true. Certainly that applies to me.
But then I have always been one who makes his own rules and creates a story or theory to go with it. This is how the world was discovered and society advanced. Reading all those books is just fine. But the best way to learn a skill has always been with ones hands actually doing the task.
So get off your butt and go out there and get your hands dirty doing a decent days work. Leave the dreaming to night time.

[Josko]

Re: BOOMS CAUSED BY THE BABY BOOMERS

Hello all ,

Hi Ron, (I have had an emergency family issue to contend with in the last two weeks so apologies for not getting to share with you the time you provided to the other forumites...it reads to be an exciting day, now who can I borrow the DVD from.. ),

It is a curious thing this talk of Boom of all Booms.

So the question again to you as a forumites Property Investors, (unless there is an alternative for NZ economic and labour shortage). If we the increase in an immigration policy “Will the Next Property Boom be the Boom of all Booms?”

If it is, then best we prepare our goals and take an advantage to making a “Profit from Property.”

Since goals are largely related to achievability, what would you suggest the difference be from the normal goals to the one if you were to take the Boom of all Booms into consideration?

[fudosan]

Hi Ron,

Thanks for this lengthy analysis. Really exciting topic! Here are some of my thoughts.

You expect the next boom to happen around 2010 to 2012. That's how I feel too. In the Dec 1999 "Prendos Property Talk" newsletter published by Prendos, there's an article analyzing property cycles starting from 1962. The chart shows there is a boom every 7 or 8 years. The author then predicted the next peak to occur in 2001 to 2002. That's a bit off the mark but nevertheless the boom did come, and it turned out to be a much bigger boom than the previous one. So, following this line of logic, I see the next boom to come around 2011/2012.

And if NZ economy is to survive the disruptions will we not see 100.000 to 200,000 new migrants wanting a bed for themselves to live?

I agree that when baby boomers start to retire, there will be more need for skilled immigrants, but 100,000 per year is just too large to be politically acceptable. Remember the storm we just had in the past year when the immigrant target was only 45,000? Therefore, the official number of immigrants will probably not exceed 50,000.

However, I fear illegal immigrants will greatly increase. As the young working population shrinks, they become very selective and so fewer of them want to do the low-paid, dirty, manual work. This attracts illegal immigrants to come. No strict border control in the world has succeeded in stopping them, yet. Look at the US and Europe. Even an island country such as Japan faced this problem in the late '80s/early 90s when a large number of Iranians, Nigerians and other Africans sneaked into Japan to take up the very low-paid jobs. Note that Japan's "immigration" policy (if any) is to discourage immigration.

Also, the continued brain drain will further add to the need for more immigrants.

I'd like our forumites to look at the impact of another issue on immigration: our chronic borrowing from the world. (If interested, see the Current Account Balance chart on page 7 of the 13 March, 2005 edition of Tony Alexander's Weekly Overview.) Since 1974, the country has been running a current account deficit every and each year. In fact, when the economy is "good", such as what we are having now, the deficit goes deeper. When you buy more than what you sell, you can solve the problem by either borrowing or by selling your family silver. Or, you can ask foreigners to bring money into the country. So, my question is: WILL THERE BE A "MONEY" SHORTAGE IN ADDITION TO "LABOUR" SHORTAGE?

So I believe the need for immigrants and the political resistance will continue to battle each other for years to come. The stop-go immigration policy dependent on the mood of the voters will make the number fluctuate greatly, making the property market (at least in Auckland) volatile, and volatility produces opportunities.

[Julian]

Glenn,

This is fun!

Just because a property has doubled in value it is not necessary to sell that property to benefit from its value. Investors can refinance and buy something else.

So what would you suggest buying with this new found equity? Apples?

The return on a property is a combination of rent minus costs plus capital gain.

I disagree. As with shares or money invested in anything the return is the money it earns - called the yield. In the case of shares it is called a dividend (the capital gain of the shares is not counted), in the case of banks it is called interest (and again the capital loss is not counted - loss because of depreciation). With property the return is called rent. Capital gain or loss is seperate - or at least that is how I see it.

This is all a great theory but the reality is that those types of properties are way outside the average investors ability to get into. Also often the low risk is taken into the price so you get a low rate of return.

I consider myself to be an average investor and this is just the sort of property I have got into, and not with syndicates, and returning in excess of 10% - but admittedly a couple of years ago and not today. Admittedly, also, I have bought into unit titles and not the whole shooting match.

Actually the commercial tenants are very different from me and are far more difficult to handle than the residential ones. Some are hard nosed national chains with property managers skilled in taking out poor landlords one at a time. They have heaps more assests than Mum and Pop investors so are really hard to squeeze more rent out of.

It's about knowing the rules of the game, and playing your hand as best you can.

Rent increases are a peice of cake. Issue a note to your tenant and that is it after 60 days. Again not so for commercial. You have to employ valuers who charge the earth and still you might not win.

Not true on all counts. Residential tenants can dispute a rent increase. And with commercial you are not obliged to employ a valuer - but you are obliged to justify that any increase is to market levels, and thirdly not all valuers charge the earth - some only charge a moon and a couple of continents.

So get off your butt and go out there and get your hands dirty doing a decent days work. Leave the dreaming to night time.

This comment is insulting. I don't know why you chose to make it. As it happens I am helping a friend with getting his fledgling earthmoving company off the ground, sometimes working 11 hour days, and running my property investing business outside these working hours.

I chose commercial property because for me it works best. I accept that this might not be the case for others. I only posed the original question to you because you invest in both fields and made the comment about how you wished you had invested more heavily in residential. I was curious. I am always willing to accept that there might be aspects to any investment vehicle that I have not taken into account. My question was certainly not meant as any form of attack on your comments, but merely a request for clarification.

Julian.

[RonHoyFong]

fudosan

Since goals are largely related to achievability, what would you suggest the difference be from the normal goals to the one if you were to take the Boom of all Booms into consideration?

ivi

I agree that when baby boomers start to retire, there will be more need for skilled immigrants, but 100,000 per year is just too large to be politically acceptable.

Its the 80/20 story, 20% of forumites will set their goals anyway. I guess what I am trying to do in this string is to stimulate the thought process and to have the other 80% of forumites see a reason to be definite in setting their goals.

Many of the 80% people will take the attitude of wait and see and just follow the 20% who take ACTION first. Trouble then is that the 80% will miss the boat to max out their chances of Profiting From Property.

My ulterior purpose of this string therefore is to generate self-thought and analysis, and to really motivate that 80% of forumites to accept what is to come. To also see the reason for making a 5-year goal now in starting a stronger a more aggressive purchasing program. Most of all to not allow their emotions to block their chances of achieving a greater goal through the appropriate planning.

Current immigration policy of 45000 to 50000 people per annum is merely to stabilize the current population numbers. So an additional 50,000 to migrants to make a total of 100,000 migrants pa would have to be a minimum to replace at least 100,000 retiring BBs.

We all like the Kiwi way of life to remain unchanged but if you really think about it, it’s been changing from the day it evolved. Its just the rapid change we find hard to adjust to.

Remember that Knowledge is Power, so use it to set your goals!

So again the question is 'Will the next Property Boom be the Boom of all Booms?"

Cheers Ron

“Set goals. Achieve them. Enjoy the journey.” - Julian

[Josko]

Its the 80/20 story, 20% of forumites will set their goals anyway. I guess what I am trying to do in this string is to stimulate the thought process and to have the other 80% of forumites see a reason to be definite in setting their goals.

Good on you Ron, this is noble and if just one does something about it it is a wothy effort.

Though the 80/20 or in some respects 90/10 rule has been evident and unchanged for so long now, (50 years or so) the truth to actualy changing this significantly lies in a societal shift, focusing on changing the education system.

Many of the 80% people will take the attitude of wait and see and just follow the 20% who take ACTION first. Trouble then is that the 80% will miss the boat to max out their chances of Profiting From Property.

I would subscribe to 99% of our forumites actualy being in the 20% segment.

My ulterior purpose of this string therefore is to generate self-thought and analysis, and to really motivate that 80% of forumites to accept what is to come. To also see the reason for making a 5-year goal now in starting a stronger a more aggressive purchasing program. Most of all to not allow their emotions to block their chances of achieving a greater goal through the appropriate planning.

OK, so this is the difference, more aggressive goals, yes I agree, you are a testment that it can be acheived, my respects to you on this.

Current immigration policy of 45000 to 50000 people per annum is merely to stabilize the current population numbers. So an additional 50,000 to migrants to make a total of 100,000 migrants pa would have to be a minimum to replace at least 100,000 retiring BBs.

I would prefer to see a strategy to get the 500,000 expats to return to NZ first.

We all like the Kiwi way of life to remain unchanged but if you really think about it, it’s been changing from the day it evolved. Its just the rapid change we find hard to adjust to.

You are right and it is not realy going to slow down is it, or maybe there will be a bust before the boom to shake things up a little.

Remember that Knowledge is Power, so use it to set your goals!

Here, here.

So again the question is 'Will the next Property Boom be the Boom of all Booms?"

Sure, but look out for the bust of all busts before the boom of all booms, make sure you can ride that out and the boom will take care of its self.

[STUMP]

Hi Ron

Am new invester or trying to invest,trying to understand the market when and where to buy and what makes good sence numbers wise

Enjoyed your piece on BB, time will tell who is most accurate NEVER say never something will or willnot happen make it a learning experince anyway i have some questions

When talking about CFI and MGRR you say a better/more accurate method is gross rent X70% what does this mean???

Also what do you know about NZ Invest in the Auckland market hardly cash flow properties but is it a good investment strategy

Regards Mike from Otago

Is there anyone else out there that can help me with market intelligence about NZ Invest and what they are doing in the Auckland market

[fudosan]

Hi Mike, welcome to the forum.



You can also do a search for more.

[Glenn]

Julian.

Yes you are right I am a little bit off the cuff at times.

Apologies if you are offended. It is just that forums are read by all and sundry.
The strange thing about words is that they can mean different things to different people.
One has to be careful to not make all this stuff about investing sound all too easy. The moment it becomes too easy lots of naive and gullible people can easily loose their shirts and bring down misery on themselves and their families.
So generally I try to point out to people that it is not all about luck or some magic skill that can be revealed to them if they keep asking and seeking for long enough. I can see you subscribe to my way of thinking in that you are a hard worker also.
I just get so impatient with people that are given the same number of hours as myself but do not seem to use them.
This is why I from time to time put in a little line about working hard.
Not necessarily directed to the person that it appears to be directed to but to those other timid types who specialise in only reading and not contributing to the forum.

So back to the subject now that I have prostrated myself in penance.

Yes I have found that commercial properties have been great suppliers of good positive cash flows.
I actually only have two residential IPs of my own one of which I have only recently purchased. The other and longest held residential brings me in 23% gross on original capital cost so no one could claim this was a bad thing to own !
Like most people in the business of investing as well as properties I also have income from a few other small ventures. This helped initially in the early days and these days well they just all add.

For instance I have a few shipping containers that earn their keep. By diversifying it is possible to ride the troughs and build the asset base.

No sensible person would or should ever suggest that a bunch of shipping containers were better than owning a house. But really they are great things. Very little effort, hard to damage, low in cost, relatively easy to move, and massive returns like 50 to 100% return on the cost. The down side is they suffer from total lack of capital appreciation and look plain ugly.

Glenn

[Julian]

Glenn

Thanks for your reply. I have made more than my share of "off the cuff" remarks, so perhaps a little come-back is to be expected from time to time.

I totally agree that some people dipping their toe in the property investing arena stand to get themselves burnt, especially those that are gearing themselves up to the eyeballs. With luck they will learn from the experience and come back all the stronger - if they are young and determined.

I would hazard a guess a good many successful property investors have, over the years, made a few big blunders - I know I have, and in fact I started a thread on this very topic so that others may learn from the mistakes.

I also agree with your comments that commercial tenants that are big national or international entities can be harder to deal with, but with a little compromise, a little respect, and an eye for detail good progress can be made. I have recently done some hard yards with a rent review with a national chain. Fortunately that is behind us now and things have returned to being altogether more amicable.

As for the containers - to my eyes - with returns like that - they seem like little boxes from heaven - not ugly at all!!!

Julian.

[fudosan]

Hi Glenn and Julian,

I'm delighted to see that we forumites avoid personal attack but stay focused on what we are here for -- property investment.

I have benefited a lot from the wisdom of both of you and I look forward to seeing more of your views on various aspects of property investment.

[ChiefWigum]

Does this mean the Baby Boomers of NZ will be happy to continue working until they are 70 tears of age before retirement ... etc

Alternatively what are the consequences of the NZ economy, if the retirement age remained at 65 years. How are we without change support 100,000 retiring people every year onto a Pension costing 1 billion the first year then, 2 billion per annum the 2nd year.......10 billion the 10th year plus hospitalization etc. Also each year if there is no change in immigration how are the reducing numbers of workers leaving the workforce to pay an ever increasing higher taxation bill. And who will replace the ever increasing numbers of vacancies in the workforce to keep the economy growing?

So what will it be? will it be a balance of immigration together with an acceptable increase of the retirement age?

Hi Ron (and everyone else!),

Great stuff you've written here. I'm always interested in 'fundamentals'.

My vote goes to your comment on an increase to the retirement age and an 'acceptable' increase to immigration (good luck to anyone that can define acceptable ).

1. We are indeed living longer and as a result surely we should therefore work longer and not rely on others to support us. The retirement age has been increasing over the years anyway - maybe it's time for another increase.

2. People should be planning their retirement from the day they leave their nest and not relying on the State to fund their retirement. Are we not doing this anyway with properties etc? By the time I retire I'm assumming I'll get not a cent from the Govt due to my assets etc (even in a trust etc). Maybe if more people thought like this they'd get theit A into G and save/plan for retirement like most of us here on the forum. Even when Winston Peters tried to start a compulsory Super scheme a few years back he was shot down - says a lot for NZers I guess.

3. Here in Hong Kong it's normal for children to support their parents when they retire. Children even give their parents about 10 - 30% of their salary while their parents are still working! Imagine that in NZ - No one leaving home would ever be able to afford their first home! As if it's not hard enough for them now.


Maybe NZers should have more children. Last year the Ozzy govt said people should have more children - two for themselves and 'one for their country' (I love that comment). Maybe we should have two for our country? Of course that would take longer than increased immigration to help solve a labour (tax payer) shortgage.

As I understand it Ron, you are saying that the problem is not with population numbers but population age distribution? or tax payer distribution. Solution?: increase retirement age and limited increase in quality immigrants.

I'm just not a fan of increasing population numbers - poor old earth is only so big and only has so many resources. It reminds of that scene in the Matrix 1 with Agent Smith and Neo/Mr Anderson where humans were described as viruses of Earth; we just reproduce and reproduce and totally take over the Earth with no thought of the consequences.

Just some ideas to keep the topic going...

Cheers,

PS: Armistace Day was 1100am, 11/11 1918, I think WWII ended 8 May 45 (Germany)/ 2 Sep 45 (Japan)

[fudosan]

2. People should be planning their retirement from the day they leave their nest and not relying on the State to fund their retirement. Are we not doing this anyway with properties etc? By the time I retire I'm assumming I'll get not a cent from the Govt due to my assets etc (even in a trust etc). Maybe if more people thought like this they'd get theit A into G and save/plan for retirement like most of us here on the forum. Even when Winston Peters tried to start a compulsory Super scheme a few years back he was shot down - says a lot for NZers I guess.

While we should all prepare for retirement, I feel very few people (hopefully most members on this forum) are actually doing something about it.

Solution?: increase retirement age and limited increase in quality immigrants.

This only delays the problem by few more years. Also, many developed countries are facing the same baby boomer problem and so competing for quality immigrants with us at the same time.