downunderpom

Personally, I would not think so. They make their money by loaning to other members, for the purpose of buying property. That property is, therefore, collateral against the loan. Assuming no 'toxic' loans have been made, there's not much chance of losing out. However (the inevitable codicil) it also depends on the management of the mutual. Like the banks, there are the odd pratts who think they are mighty financiers, who embezzle, steal, and gamble with other people's money.

It all comes back to one thing, again and again - YOU are responsible for protecting your own money.

WRT your question about where to stash your wedge, your risk aversion limits your options. I would suggest real estate for you. In your position, with your requirements for a 'safe' harbour for your money, I would buy bare land. Rentals properties have problems of their own. You can hire a management company to run the rental for you, but again, you would be letting other people control your property. By buying bare land, and keeping enough back to cover expenses like rates, your money would be in something which could reasonably be expected to maintain its value. I would then, in your place, find a nice farmer who wanted to rent / lease the land for grazing. Making sure that the necessary safeguards are in place about what the lessee can and cannot do with the land (a good local lawyer would be an asset here, both for purchase, setting up a Trust so that there are no death duties at any time in the future, and the necessary watertight contracts between you and the farmer), and sit back and rake in the rent. Any profits could be used to buy more land, again in the name of the Trust. (Only poor people keep everything in their own names. I have nothing in my name, but my land, house, farm equipment and what have you are in Trusts and limited companies.) This is easy to do in NZ, and your lawyer would again be invaluable for this purpose. An initial meeting will tell you if you feel you can trust the guy/girl. Don't skimp on your lawyer or your accountant. They can be worth their weight in gold. Any fees I pay my lawyers and accountants are more than compensated for in the savings I get back in tax alone. Their advice on local issues is also invaluable.

As usual, this is a personal opinion, not financial advice. For financial advice, see your lawyer and accountant. A GOOD rural banker would also be an asset. That's three members of your wealth creation / preservation team. But remember - they work for YOU. Not the other way around, and the old adage of 'if it seems to good to be true, it probably is' also applies. Good luck.

Genesis

Thank you for your kind advice. Have often thought of buying a tract of land as they are not making it anymore apparently. But the fact galls me having to pay about 2-3k a year in rates. Not sure I can afford a tract of land such that a farmer would want to rent it off me, I was thinking of a 1000sq mts in a seaside town!!! I guess the capital increase would offset the rates. Cheers, Dom.

downunderpom

Well, I pay $1600 a year for 5 hectares (12.5 acres.) But if you want a seaside plot, make it 2000 sq.m. - the legendary 'kiwi half-acre'!

jmh

I prefer to invest in UK property because I don't have to pay rates (tenant pays the council tax) and I don't get hit with the bad exchange rate. So the problem is, what do I do with the rent that is rolling in? I don't think anyone in this thread is imagining that the govt will bail us out because of their high principles. Anyone who thinks politicians have high principles needs their head seeing too. (Having said this I've met a few politicians in my time who do care, but they don't seem to end up anywhere important!)

The reason the govt gives a guarantee is to stop a run on the banks. Of course anything is possible as we've seen in Cyprus (note that deposits below EU100,000 avoid a hair cut), but if you need to put your money somewhere and don't want to lock it away in property (which may take some years to realise a profit) put it in a bank that comes under some sort of guarantee scheme and spread your RISK. See that word - risk. You have higher risk in shares, lower risk in an interest bearing savings accounts. Still a risk, but probably less so. As I said earlier, probably a good idea to spread that risk.

Someone I know bought land as an investment and he let it out to a local farmer for grazing. Unfortunately a couple of years later the farmer down the road sold out to a local development which made his land less attractive for farming. He still owns the land, pays rates and earns no income. He hopes that one day the factory next door will want to expand and buy his land. In the meantime he still has savings earning .5% interest in Santander. Don't feel too sorry for him though. He owns a multi million dollar property in Mission Bay too. I think he has made a profit on this property.

Edited to add: I suppose in the interests of balance I should tell you that my mum bought a section on Waiheke Island some years ago for $9000. A year later neighbouring sections were selling for $45000. Today they are selling for $245000. Not a bad investment.

Rolfie

I may be going against the flow here, but I personally doubt the UK Govt' would renege on their £85k per account guarantee, and for two reasons.
1. Unlike economies such as Greece and Cyprus, and despite a minor downgrade, the ratings agencies still see the UK as a pretty safe bet in the longer term, (and FWIW, I think they're right).
2. I can't imagine any UK Government, of any persuasion, allowing the £85k guarantee to fail. This would be political suicide for the incumbent, and for a first-World economy, could bring not only a collapse of the UK banking system locally, but could leave it bankrupt globally as well. If things really did get that bad, I think there would be warnings of impending doom, allowing people to act, prior to the Government, 'doing a Cyprus'.
I know there are plenty out there that will say I'm a naive fool, but I don't believe I am

Engel

Remember not all UK account are covered. You may need to check each one. deposit accounts are usually covered, but the offern pay very little interest. Many schemes do not come under the gtee. Always read the small print.