Another Day, Another Finance Company Busts
August 20th, 2007You have to feel sorry for Kiwi investors as another finance company goes bust. Today it’s the turn of Nathans Finance to declare itself out of the game. They used to send me stuff through the mail every month. Who knows how many were seduced by the slightly higher interest rates on offer.
It may sound like i’m enjoying this but i’m not. I wrote several letters to the powers that be well over 3 years ago exhorting them to sort out the non-bank financial sector but to no avail.
Ultimately it’s a case of caveat emptor. Before you invest in anything understand the risks. I am amazed how many financial “advisors” have put their clients into these flaky companies. I use the term advisor loosely here. I seriously doubt whether many of them actually understand how the products they sell actually work and how to stress test them.
If you want higher yields then invest in a decent fund that buys the whole spectrum of bonds and therefore diversifies the risk. A couple of decent Kiwi funds are Fisher Funds and of course the self styled people’s champion, Gareth Morgan.
Check the fees and check what you are getting. Don’t listen too much to the experts. Learn about it yourself. There really is no free lunch out there except at the City Mission and if you’re down there the chances are you’ve blown your dough already.
It’s your money and your responsibility.
Tags: banking, credit, debt, finance companies, interest, investing, markets, new zealand, reserve bank of new zealand