What’s inside Money King NZ’s investment portfolio (2024)

Curious to see how we invest? In this article we share our financial goals and reveal how we’ve set up our investment portfolio to support them.

The below is for entertainment purposes only, and is not a recommendation to invest in any of the following products. What works in our portfolio may not be suitable for your personal financial situation. Please do your own research or use a professional adviser before making any investment decisions.

Financial goals and strategy

We have a number of financial goals, and they can be grouped into three main categories:

  • Retirement (~20 years away)
  • Lifestyle upgrades (~5-10 years away)
  • Short-term expenses (daily)

To support these goals we invest our money across three different buckets. Each bucket contains investments and financial products that are aligned with one of our specific goals. We also have a fourth bucket with assets that don’t align to any particular goal.

In each section of this article we’ll share more about our goals and how each investment bucket is invested to help us achieve them.

Bucket 1 – Retirement

Percentage of net worth invested in this bucket: 63%

Imagine having the freedom to take on a lower paying but more exciting job, the ability to cut your working hours, or even retire altogether and spend your days doing what you’re most passionate about. This is our goal – To retire early or at least have the option to reduce our working hours at around age 50, so that we can spend more time with family, travelling, and writing Money King NZ articles, rather than working 9-5 in difficult jobs until age 65.

This goal needs a lot of money. Without our income from work we need money from another source (like an investment portfolio) to pay for everyday living expenses, as well as all the activities we want to do while retired. We don’t have a specific target in mind, but estimate we’d need at least a $2 million portfolio to achieve this goal. This is definitely a long-term goal (~20 years) due to the significant sum required.

With these factors in mind we have opted to invest this bucket in assets with higher potential returns by investing aggressively into index funds and individual shares. The downside of these higher potential returns is that it comes with more volatility (compared to “safer” assets like bonds and cash), but we have a long time horizon and a good level of risk tolerance to ride out any sharemarket downturns.

A. Index funds

Percentage of net worth invested in this asset class: 50%

Index funds are our key investment making up roughly 50% of our net worth. All of our index funds are NZ domiciled, almost entirely invested into equities, and come with these key benefits:

  • They save us from picking individual companies to invest in (which we don’t have time to do).
  • They have reasonable fees (which means more money invested and earning a return for us).
  • They allow us to diversify our investments internationally without having to pay paying FX and brokerage fees and the admin surrounding FIF tax.

Our funds

For our index fund investments, we have selected Kernel as our provider.

Mrs Money King NZ takes an incredibly simple approach for her index fund investments, holding just one fund:

For every $100 she invests into this fund:

  • ~$60 is invested into global shares, providing broad exposure to the international sharemarkets.
  • ~$30 is invested into NZ shares, providing broad exposure to our local sharemarket which comes with tax advantages.
  • ~$10 is invested into global infrastructure and property companies, providing an element of stability to the fund.

This asset mix is diversified enough for her to build a long-term investment portfolio without the complications and guesswork of picking multiple funds. And when combined with Kernel’s auto-invest functionality, we never even have to log in to the platform to make an investment order – The perfect set up for lazy investors.

Further reading:
4 steps to create an incredibly simple long-term investment portfolio

Mr Money King NZ has a more bespoke approach to building a portfolio, with a 70/20/10 split – 70% global shares, 20% NZ shares, and 10% infrastructure. His exact fund breakdown is:

This split is roughly based on Kernel’s High Growth Fund with the following key differences:

  • We have slightly less exposure to NZ shares (20% vs ~30% in the High Growth Fund), because we already have plenty of exposure to other domestic investments. This is replaced with more exposure towards international shares (70% vs ~60% in the High Growth Fund).
  • For the global shares portion of our portfolio, we’ve chosen the Global ESG Fund for both hedged and unhedged exposures (whereas the High Growth Fund invests in the Global 100 for their currency hedged exposure). This gives our portfolio slightly more diversification than the High Growth Fund.
  • For the NZ shares portion of our portfolio we only invest in the NZ 50 ESG Tilted Fund (whereas the High Growth Fund invests across both the NZ 20 and NZ Small & Mid Cap Opportunities Fund). This is to simplify our portfolio by investing in just one fund instead of two for our NZ shares exposure.
  • For the global infrastructure and property portion we only invest in the Global Infrastructure Fund. This is also to keep our portfolio simple, and because we already invest in property companies through our individual company holdings.

Despite its phenomenal popularity, we choose not to invest in a standalone S&P 500 index fund as our global funds provide a greater level of geographical diversification (the S&P 500 invests in US companies only), and because we already get plenty of exposure to US shares through our global funds (e.g. the Global ESG Fund has an almost 70% allocation to US shares).

Changes from 2023
Mr Money King NZ was previously invested in the following funds:
Kernel Global 100 Fund (60%)
Kernel NZ 50 ESG Fund (20%)
Kernel Global Infrastructure Fund (10%)
Kernel Global Dividends Aristocrats Fund (5%)
Kernel Moonshots Innovation Fund (2.5%)
Kernel Global Clean Energy Fund (2.5%)
Mid last year we sold most of these funds and reinvested them into Kernel’s new Global ESG funds. This simplifies the portfolio from 6 to 4 funds, adds diversity over the relatively concentrated Global 100 Fund and adds currency hedging to part of the portfolio.

Why we chose Kernel

There’s heaps of awesome index fund options available these days, and we sometimes get questions asking whether we’re considering switching to the likes of Simplicity’s or Foundation Series’ funds. While Kernel’s fees aren’t the lowest, we think they provide the best value for money for us:

  • Their funds have a great level of transparency. It’s important for us to see where our dollars are being invested, and Kernel helps with this by providing an easily accessible list of their funds’ holdings, as well as geographical and sector breakdowns of their funds. This data is updated monthly.
  • There’s no transaction fees. We don’t intend to constantly switch in and out of our index funds (being long-term investors), but having no buy or sell fees gives us the freedom to do so without being penalised.
  • Their funds don’t have any tax efficiency issues.
  • Kernel avoids investing in special initiatives like mortgage lending and build-to-rent housing, which Simplicity has in many of their funds. We prefer not to have exposure to the Auckland residential property market beyond our own home.
  • Their funds are aligned with our ethical views. While ethical/ESG investing isn’t of huge important to us, we think it’s a good thing that Kernel’s Global ESG Fund avoids investment in things like weapons manufacturers. At the same time we feel like they don’t go overboard with their ethical exclusions (unlike Simplicity who exclude the likes of Amazon and Meta from their funds).
  • We use Kernel’s other products outside of their index funds (like their cash fund and KiwiSaver), so it’s convenient having all of these under one roof.
  • In 2021 when we started investing with Kernel, Simplicity and Foundation Series didn’t even have the types of index funds that we wanted, so Kernel was one of the few choices back then. The new competing products that have launched aren’t compelling enough to justify the hassle of switching.

The main downside we face with Kernel is the $5 fee they charge every month if you have over $25,000 invested in their non-KiwiSaver funds. In future we may have several large Kernel accounts (e.g. individual accounts, joint account, kids accounts), and as a result may have to pay that fee multiple times. But we’re confident Kernel will have a solution for this someday, either with the ability to link accounts or by removing the fee altogether.

Further reading:
Kernel review – High quality index funds
The ultimate guide to index funds in New Zealand
S&P 500 vs Global index funds – What’s better?

B. Individual shares

Percentage of net worth invested in this asset class: 10%

Investing into individual companies was our first taste of share investing, which we started back in 2015. Since then we’ve built up a portfolio of several NZX-listed companies which today make up around 10% of our net worth.

Our companies

Our largest holdings include:

  • Infratil (IFT) – Infrastructure investment company with holdings in CDC, Vodafone NZ, Wellington Airport, Pacific Radiology, and Manawa Energy.
  • EBOS (EBO) – Healthcare company, distributing medical products, selling pharmaceuticals, pet food, and consumer goods.
  • Vital Healthcare Property (VHP) – REIT holding hospitals, medical centres, and healthcare related property.

We’ll likely keep these companies over the long-term, as they do operate in areas attractive to us. For example, Infratil has exposure to data centres and renewable energy, EBOS has a growing pet care business, and Vital Healthcare Property operates in the slow growing but stable healthcare property sector. But we also want to keep these companies just for fun, so that our retirement portfolio isn’t just full of relatively boring index funds.

We have several other companies in our portfolio like Contact Energy, Genesis Energy, Summerset, Heartland, and Investore Property, but these are all earmarked for sale.

Selling our shares

We haven’t been contributing to our individual share investments on a regular basis for a few years now, given our focus on index funds as our main long-term investments. The reasons for this are:

  • It’s too hard and requires too much effort to pick and keep track of individual companies. And we don’t trust that our efforts would result in outperforming the market.
  • In some cases we’re already investing in our individual companies through our index funds. For example, Contact Energy is already one of the largest companies in our Kernel High Growth and NZ 50 ESG Tilted Funds, so there’s no need to invest in the same company twice.
  • We also have too much exposure to the NZ sharemarket by having these shares alongside our Kernel index funds (which already have a significant weighting towards NZ).

That’s why we’re selling off most of our companies and reinvesting the money into index funds. The problem is that many of our holdings haven’t been performing well recently, and no one likes to sell their shares at a bad price. While we want to give our shares the chance to recover in value, this needs to be balanced against the opportunity cost of holding them. Therefore we’ll probably aim to sell at least one company every few months.

Further reading:
Shares 101 – How to buy shares, which companies to pick, and more
Investing in individual companies vs funds – What’s better?

D. Peer to Peer Lending

Percentage of net worth invested in this asset class: 3%

We have lots of experience in P2P Lending (which involves lending money to individuals and businesses to earn interest in return), with investments with three different platforms (Harmoney, Lending Crowd, Squirrel) at one stage. Although Harmoney and Lending Crowd no longer operate, we still have some active P2P loans with Squirrel. These include:

  • Personal loans – Earning between 7.75% and 8.25% p.a.
  • Construction loans – Earning 7.50% p.a.

Exiting our P2P loans

We’ve been withdrawing from our P2P loans as they’re repaid to us, with the asset class rapidly shrinking from 10% of our net worth to just 3% over the last year. The money is being reinvested into index funds, hence the categorisation of this asset class in our long-term retirement bucket.

We’d previously considered P2P lending to be a medium-term investment that delivered better returns than the bank, but was less volatile than shares, to support things like our house purchase and travel. But now that these purchases have been paid for, we think it’s better to invest the money into shares/index funds which should provide greater long-term returns.

Further reading:
Peer to Peer Lending review – Squirrel

Bucket 2 – Lifestyle upgrades

Percentage of net worth invested in this bucket: 1%

While retirement is a key goal in our lives, there’s lots of smaller things we want along the way, for example:

  • At some point we’ll outgrow our current house and will want to upgrade a bigger one.
  • We’ll probably want to buy new furnishings and appliances for our future home, and perhaps do some renovations and landscaping improvements.
  • One day our car will get so old and uneconomical to maintain, so we’ll want to replace it.
  • We may want to take an extended time off work to travel for a few months.
  • We’ll likely want to buy new toys over the years like new phones, laptops, gaming consoles, or tools.

These “lifestyle upgrades” aren’t immediate goals, but most are quite substantial objectives that will require lots of money. We don’t have a clear timeframe on when we’ll pursue them, and we don’t know exactly how much they’ll cost, or if they’ll even eventuate. But the main purpose of this investment bucket is to get a head start on putting money aside for these goals, and lessen the financial hit of them (so hopefully we won’t have to disturb our important long-term investments to meet them).

Because these goals likely have a much shorter timeframe than retirement, we need slightly lower risk investments than our index funds and shares. However, given these goals aren’t urgent either, we can afford to take on more risk than cash investments like bank deposits. Therefore in this bucket we’ve opted to invest in a couple of medium-risk investments.

A. Balanced investment fund

Percentage of net worth invested in this asset class: 0%

Our first investment in this bucket is the Kernel Balanced Fund. Being a brand new holding in our portfolio, the amount we have invested here is tiny, but we plan to add a few hundred dollars to the fund every month. We chose this fund because:

  • The fund has a ~40% exposure to bonds, which should make the fund less volatile compared to a high growth fund. This volatility dampening is important as our medium-term investment timeframe gives less time to recover from any potential market downturns.
  • We can sell the fund at anytime. As our goal for this money becomes clearer, we can easily access the money and redeploy where it’s needed. We wouldn’t have the same level of flexibility if we invested this money in KiwiSaver or used it to pay off our mortgage.
  • The fund is easy to add on to our portfolio as we already have a Kernel account for their other products.

B. Bonds

Percentage of net worth invested in this asset class: 1%

Bonds are an investment that’s leftover from our earlier days of investing. We’re no longer actively investing in them as they’re a bit painful to deal with – The brokerage fees are high, the NZ bond market is illiquid, and the minimum investment is high ($5,000+) making it hard to diversify our bond portfolio. We personally think it’s better to leave bond investments to the professionals, and invest in them either through something like a Balanced fund (like we have above), or through a standalone bond fund.

We still hold a small handful of individual NZ bond issues, and these will mature over the next few months and years. We intend to put the money from these towards our medium-term goals.

Further Reading:
Bonds 101 – 5 things to know about investing in bonds

Bucket 3 – Short-term spending

Percentage of net worth invested in this bucket: 5%

Our last financial goal is to simply be able to keep the lights on. We have plenty of short-term (i.e. next year or so) expenses to meet including:

  • Everyday living expenses – Like groceries, electricity, homewares, mortgage payments, and transportation costs.
  • Foreseeable large expenses – Like annual insurance or quarterly rates payments.
  • Fun stuff – Like eating out at cafes and restaurants, entertainment, and upcoming travel plans.
  • Emergency fund – Having money put aside for unexpected expenses.

The immediate nature of these expenses means having a safe and accessible place to put this money in. It would be inappropriate to invest this bucket into growth assets like shares – For example, what if the sharemarket crashed right before our holiday? We could be forced to sell our shares at a loss, leaving us with a lack of money to pay for our accommodation.

Therefore this bucket is made up of transactional and savings products. These come with lower potential returns than our above two buckets, but that’s fine because this bucket isn’t for growing wealth. Instead they provide us with a form of protection – firstly by protecting our short-term spending money from the volatility of the markets, and secondly by saving us from getting into expensive debt or having to sell off our long-term investments to meet these short-term expenses.

A. Transactional products

Percentage of net worth invested in this asset class: 0%

Bank transaction accounts

Firstly we have ordinary bank transaction accounts, which is where money from our salaries come into, and where most of our everyday expenses are paid from. Because these accounts earn no interest, there’s no incentive to keep a lot of money here. We just store a minimal amount of money here to meet our daily expenses.

  • ANZ Accounts (x3) – We have three ordinary transaction accounts with ANZ:
    • 1x household account: For household expenses like food, mortgage payments, and homeware.
    • 2x personal accounts: For personal expenses like clothes, and eating out.

These accounts are tied to debit cards and have direct debits set up to make paying for things easy.

Credit cards

We also have a couple of credit cards which we use for a relatively small amount of spending. This is so we can collect rewards points, as well as take advantage of our cards’ interest free periods (so that we can earn interest on this money in the meantime). Credit cards aren’t always worth it (due to the fees, interest, and the potential to get into debt), but we use the following simple strategies to make the cards work well for us:

  • We always pay these cards off in full before any interest charges kick in.
  • We don’t use them if a retailer imposes a credit card surcharge. These surcharges almost always outweigh the benefits of using a credit card.
  • Both our credit cards have no annual fees. That way there’s no pressure to spend more money on the card to make up for the fee.

Our two credit cards are:

  • American Express Airpoints Card – Lots of retailers don’t accept American Express, but it still works at most major stores. We use it mainly to pay for things at Pak’nSave and Bunnings, and earn 1 Airpoints Dollar for every $100 spent through the card.
  • ASB Visa Lite Card – We occasionally use this card for large purchases. That’s because the card gives us a generous 6 month interest free period for purchases of $1,000 and over. For example, we recently spent $2,600 on flights to Japan and instead of paying cash for this, we used our credit card and kept the money in our savings account to earn interest for the next six months.

B. Savings products

Percentage of net worth invested in this asset class: 5%

We use a combination of two savings products.

On-call account

Our first savings account is Squirrel’s On-Call account. This is used to store money we don’t need on a daily basis, though may still need access to in the near future, such as:

  • Quarterly and annual expenses – We put money aside for insurance and rates every month. But given these expenses are paid quarterly or annually, we store the money in this savings account until they’re due.
  • Major short-term expenses – This includes holidays and major purchases we’re saving up for, that we anticipate will happen in the next year or so.
  • Emergency fund – We’re big fans of having emergency money put aside in a safe and accessible place, to pay for any unexpected or nasty expenses that may come up.

Keeping this money here allows us to earn interest on it at a current rate of 5.25% p.a, with no fees or strings attached for withdrawing our money (unlike bonus saver or notice saver type accounts). This is one of the highest savings interest rates on the market, and we have no concerns about the product’s safety as the funds are held with BNZ and takes just 2 hours to withdraw the money to our main bank account. As a bonus we were already using Squirrel for P2P Lending, so there was zero effort required from us to sign up to this account.

The main downside of Squirrel’s account is that it’s not a PIE. That means any interest we earn is taxed at our marginal tax rate which is currently 33%. We are considering a switch to Booster Savvy for our savings (perhaps when all our P2P loans are repaid), as despite their lower headline interest rate of 5%, Savvy’s PIE status means it’s taxed at just 28% resulting in a slightly higher effective interest rate.

Changes from 2023
Last year our savings were held in Heartland’s Direct Call Account. However, we switched as Heartland’s interest rate (currently 4.60%) has fallen behind competing options, and because it takes slightly longer to withdraw money from.

Cash Fund

We also keep some savings in Kernel’s Cash Plus Fund. This offers higher potential returns, with the yield currently sitting at approximately 6.1%. The fund is also structured as a PIE so is more tax efficient than our Squirrel account. However, these benefits come with a downside. It’s relatively slow to get our money out of the fund (up to a few days), and this lower level of accessibility means the Cash Plus Fund isn’t suitable for us as our sole savings product.

That’s why we use it in conjunction with Squirrel’s On-Call account. For example, let’s say we face an emergency. In this scenario we could withdraw from Squirrel for any immediate needs, then top that up with money from our Kernel cash fund within a few days. Our Cash Plus Fund is essentially a secondary emergency fund, providing an additional safety cushion for big emergencies like losing a job, major health issues, and so on.

Further reading:
Emergency funds – Where should you keep your rainy day money?
Sharesies Save, Kernel Save, Squirrel On-Call – Good places to keep your money?
The ultimate guide to bank and savings accounts in New Zealand

Bucket 4 – Other assets

Percentage of net worth invested in this bucket: 31%

We also hold a few other assets, however, these aren’t aligned with any specific goal.

A. House

Percentage of net worth invested in this asset class: 20%

Buying a house is a dream for many, and the family home is likely to be the biggest “investment” for much of the population. People like to think about not having to pay their landlord’s mortgage, the stability of having a place to call their own, and the long-term capital gains from owning a house.

We like to think differently. We too bought a house in the middle of last year, but we don’t consider this to be a genuine investment. As a homeowner, there’s a lot of expenses we’re now incurring, which we wouldn’t be if we were still renting. This includes mortgage interest, rates, insurance, maintenance, as well as hidden costs such as the cost of travel to and from Bunnings and the opportunity cost of having our capital tied up in the house. Being a homeowner, we are no better off financially than our neighbours who are renting. Therefore we consider our home to be a lifestyle asset, something we use for enjoyment and to live our lives, rather than an investment asset used to make money.

Our house is a newly built 2 bedroom home in Auckland and makes up 20% of our net worth (this represents the value of our house, minus the value of our mortgage). Our mortgage is 100% floating (a variable interest rate that generally moves up and down in line with the OCR) with the rate currently sitting at 5.88%. This is a special rate offered by ANZ for purchasing new builds and lasts for 2 years.

Further Reading:
Buying a house – an overrated way to build wealth?

Pay off the mortgage vs invest?

The classic homeowner’s dilemma is deciding whether to use any spare cash to pay off the mortgage or invest in things like shares or index funds. The financially best answer depends on the interest rate and returns of each option. If we assume our investments will return an average of 6% p.a. after tax, we’d be slightly better off investing as it will beat our mortgage interest rate of 5.88%.

But regardless of the numbers (which currently don’t differ that much anyway), we’re big fans of doing both. Paying off the mortgage is a powerful way to improve our financial position, providing a guaranteed tax free return in the form of interest saved. On the other hand, index funds (while they involve more risk than paying off debt) allow us to diversify our wealth by investing it into owning companies all over the world operating in various industries – Why concentrate all our wealth towards a single building and piece of land? They also provide a greater level of accessibility, as we can sell our funds and get the money out easily, while money used to pay off our mortgage isn’t so accessible (no, we do not have access to revolving credit or offset products).

At the moment we’re only putting around 20% of our excess cash each month towards extra mortgage repayments, with the remaining 80% going into index funds, our Balanced fund, and savings products. That’s because we have a number of short-term expenses we’re working towards, but after these goals are met we’ll likely shift more money towards paying off the mortgage.

B. KiwiSaver

Percentage of net worth invested in this asset class: 1%

KiwiSaver is a poor investment for our goals. Given the withdrawal of our KiwiSaver for our recent house purchase, the next KiwiSaver milestone for us is at age 65 which is 30+ years away. That’s too long away for us to wait to withdraw the money, as we want to retire well before then. But we still think the financial incentives of KiwiSaver are worthwhile:

  • Our employers contribute 3% of our salaries.
  • The government contributes 50 cents for every dollar we put in, up to a maximum if $521.43 per year.

Therefore we both contribute the minimum 3% just to get these benefits. There’s no point for us to contribute more than that, as any additional money we want to invest can go into non-KiwiSaver investments, which don’t have any restrictions around when we can withdraw from them.

Further reading:
KiwiSaver 101 – How does KiwiSaver fit into your investment portfolio?

Our KiwiSaver funds

With 30+ year timeframes before we can withdraw from our KiwiSavers, we have both selected aggressive funds that invest almost entirely into shares:

  • Mrs Money King NZ invests in the Kernel High Growth Fund (same as her non-KiwiSaver index fund).
  • Mrs Money King NZ also invests in the Kernel High Growth Fund. We didn’t go the DIY route in constructing a portfolio here, as our KiwiSaver balances are small and not worth tinkering with.

Changes from 2023
Mr Money King was previously invested in the Kernel Cash Plus Fund, as the money in this fund was intended for withdrawing for our first home. Now that the house purchase is complete, he’s switched to the High Growth Fund.

C. Equity Crowdfunding

Percentage of net worth invested in this asset class: 3%

Equity crowdfunding represent investments into shares of companies that aren’t listed on any sharemarket. They’re typically higher risk but potentially higher growth companies. While we expect some of these companies will provide us with a positive contribution to our overall wealth, they’re largely on the speculative side of things, and that’s why we don’t consider equity crowdfunding to be part of our retirement/long-term bucket.

Our holdings

We’ve invested in a number of Equity Crowdfunding offers through Snowball Effect, Equitise, and PledgeMe. Some are decently sized, more serious holdings, and we might even see them listed on the NZX one day:

  • Punakaiki Fund – A fund primarily investing in high growth NZ technology related companies.
  • Squirrel – A mortgage broker and Peer to Peer Lending platform.

Most investments are more on the just for fun/speculative side:

There’s a few other companies we’ve dabbled in, but these have just a few hundred dollars invested in each.

Exiting these investments?

We no longer make any new investments into equity crowdfunding offers for similar reasons to why we no longer contribute to individual shares. It’s hard to pick companies and we prefer a simpler portfolio with fewer holdings. But unlike our listed shares, we can’t easily sell these investments because they’re not listed on the sharemarket. Fortunately we don’t have a big amount invested here and we’re happy to hold onto most of our companies. Though looking back, if we had the chance to start our portfolio again, we wouldn’t have invested in many of these companies (e.g. we have no good reason to invest in so many brewing companies), but rather used the money to concentrate on our index funds.

Further Reading:
4 things to know about investing in Equity Crowdfunding

D. Cryptocurrency

Percentage of net worth invested in this asset class: 7%

We have split views on cryptocurrency. Mrs Money King NZ thinks the crypto market is purely a casino. Mr Money King NZ likes it (mainly from a technology point of view), though recognises it’s a highly speculative asset class.

As a result we hold a small amount of crypto, but consider this as more of a gamble than a genuine investment. It makes up 7% of our net worth which is more than we’d like to have, but it’s only sitting this high because of the strong capital growth our coins have gone through recently (and not because we invested a lot in the first place). Despite this we don’t have any immediate plans to sell our coins. It’s a small enough investment that it won’t hurt us financially if it goes to zero, but could still make a substantially positive difference to our finances if they exploded in value sometime in the future.

Our coins

We keep our crypto holdings relatively simple, with the vast majority of our crypto portfolio being invested in the two largest cryptocurrencies, Bitcoin and Ethereum. We also use crypto to get exposure to gold through the Pax Gold token, essentially an alternative to investing through gold via an ETF.

We also keep the custody arrangements of our crypto relatively simple, holding our coins through a Ledger hardware wallet. We could put our coins on some sort of platform to earn interest from them, but feel that the risk of doing so outweighs the potential returns from such a small holding – especially when so many platforms have gone bust recently. Instead we’ve been using Easy Crypto to buy our coins who sends them straight to our wallet.

Further Reading:
Cryptocurrency 101 – Is it investing or gambling?


In summary our portfolio is made up of the following:

Bucket 1 – Retirement/Long-term

  • Index funds (~50% of net worth) – The primary way we’re investing for retirement.
  • Individual shares (~10% of net worth) – We’re selling down most of these in favour of index funds, apart from maybe 4-5 companies which we’ll keep long-term.
  • Peer to Peer Lending (~3% of net worth) – An investment we’re gradually pulling out of and reinvesting into index funds.

Bucket 2 – Lifestyle upgrades/Medium-term

  • Balanced fund (~0% of net worth) – A fund that’s less risky than our index funds but has higher potential returns than cash, used to invest for our medium-term goals.
  • Bonds (~1% of net worth) – An old investment that will be used to contribute towards our medium-term goals as they mature.

Bucket 3 – Short-term spending

  • Transactional products (~0% of net worth) – Transaction accounts and credit cards for everyday spending.
  • Savings products (~5% of net worth) – Money stored in on-call savings and a cash fund, so that we can earn interest on our emergency fund and money we need soon, while remaining accessible.

Bucket 4 – Other assets

  • House (~20% of net worth) – A lifestyle asset, rather than a genuine investment.
  • KiwiSaver (~1% of net worth) – We contribute the minimum just to harvest the employer and government contribution. Invested in High Growth, as our next opportunity to withdraw the money is 30+ years away.
  • Equity Crowdfunding (~3% of net worth) – Investments into unlisted companies. Some fun and speculative, some relatively serious long-term holds.
  • Cryptocurrency (~7% of net worth) – A completely speculative investment into Bitcoin, Ethereum, and gold.

Our portfolio certainly isn’t perfect (ideally we’d like to have fewer random investments like P2P lending, bonds, and equity crowdfunding). But what we hope our portfolio demonstrates is that investing isn’t just about trying to pick what’s going to deliver the highest returns, or trying to pick the hottest stock or sector for 2024 (our portfolio really hasn’t changed much since last year). But rather it’s about picking investments that best align with your financial goals.

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The content of this article is based on Money King NZ’s opinion and should not be considered financial advice. The information should never be used without first assessing your own personal and financial situation, and conducting your own research. You may wish to consult with an authorised financial adviser before making any investment decisions.


  1. Thanks for all the detail!
    It’s great to see how people are doing things in NZ as there don’t seem to be all THAT many active content creators in this space in NZ.
    I’m surprised you’re not using revolving credit or offset accounts with your mortgage as effective earnings would be higher than your on call accounts for shorter term savings. Or do the annual fees make this actually uneconomical?
    Is a debt recycling strategy something you’ve looked into if you’re investing while simultaneously paying off the mortgage? Or are you more about keeping things simple and more easily managed at this stage?

    1. Yes, it’s a relatively niche topic in a tiny market – the small audience makes things pretty hard for NZ content creators.

      The main reason we don’t have revolving credit or offset accounts is that our current mortgage structure doesn’t even allow us to add those products. We get a discounted floating rate from the bank and that’s it – no fixed rates, splitting the loan across multiple terms, no revolving credit. But that’s fine as the discount has been well worth it. We’ve been paying 5.88% vs the ~6.50% we’d have if we’d chosen a traditional loan structure.

      The second reason is simplicity. Adding revolving credit or offset would blur the line between our buckets and make the mortgage more complicated to manage. Maybe those products could be useful as a secondary emergency fund (to store money we never expect to touch), but we’d lean away from using them on a more transactional basis. Some people do use revolving credit and offset successfully, but we value simplicity over trying to optimise every dollar.

  2. Hey,

    I like your idea of the Kernel Balanced Fund for the medium term. Do you know how the US Bond part is taxed? As it’s an etf is taxed similar to shares? Or is the total return for the year just taxed at my PIR? Appreciate your insight.

    1. It’s a US domiciled ETF so taxed as a FIF, similar to any other US shares or ETFs. Kinda strange that it has the same tax treatment as equities, but that’s one of the limitations of the FIF regime – even cash funds are taxed the same!

      1. Geez that’s rough. Is Simplicity’s Global Bond fund they same? It looks like they hold the bonds direct?

      2. They hold the bonds direct so are taxed on income + capital gains/losses, rather than using the FDR calculation

  3. Hey! Love your work and how it’s helping us Kiwis out. It’s been awesome for brushing up on my financial know-how. Just got through J.L. Collins’ “The Simple Path to Wealth” – quite the read! Reckon you’d ever think about putting together something similar that’s a bit more Kiwi-focused, showing us a simple path to wealth right here in NZ?

    1. Probably not. Our content is probably better suited to website articles given it’s often investment product focused rather than theoretical/strategy focused. And the time it takes to put together a book would take time away from our articles. But never say never, maybe if we were unemployed for some reason we could give it a go!

  4. Hi, What’s your thesis behind splitting your high growth into both hedged and unhedged with the same weighting if you plan to hold for 20 years? I would have thought over the long term there would be no benefit.

    1. Hi there. There are certainly pros and cons of both approaches, but no clear answer as to whether hedged or unhedged is better over the long-term. So instead of trying to pick a specific side or trying to predict the currency market, we decided to pick both.

      While we don’t expect a 50/50 split to make a substantial difference to performance over 20 years (as you suggest), there is still a psychological benefit of picking both. Say hedged performs significantly better than unhedged over the short-term – We don’t want to feel bad about our portfolio falling behind because we only picked the unhedged fund. Or let’s say the market crashes, in which case unhedged tends to dampen the volatility better. We wouldn’t want to lose this benefit if we went for purely hedged. Again, this is just a psychological benefit (to reduce the volatility we experience) as we plan to hold long-term regardless of what the market does.

      We also want to align our portfolio with what professional fund managers do, most of which partially hedge their international equities (like Kernel whose High Growth Fund is 50% hedged). That should make our portfolio perform similarly to the Kernel High Growth Fund (the fund which our portfolio is based on).

  5. Hi MoneyKing,

    Been getting into the savings thing. How much do you generally split between squirrel and kernel cash plus fund? Been wondering because the cash fund plus does have a big delay.

    1. Maybe 30-40% of our savings go into Squirrel, and that should be more than enough to cover any short-term expenses and for immediate access in an emergency. Then 60-70% in Kernel Cash Plus. The delay isn’t too bad (maybe 2-3 days to get the money out), and we’ve never had a case where we’ve been short of money due to the delay.

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